Govt on track to meet IMF target

Post was last updated: December 16, 2015

The International Monitory Fund (IMF) says the Malawi government is on track on the domestic borrowing target which is one of the major determinants for a possible restoration of the Extended Credit Facility (ECF) programme which was declared offtrack in October.

However, IMF resident representative, Geoffrey Oestreicher, said in an interview, that the fund is still waiting for consolidated figures to give a detailed outlook of the situation.

“The borrowing target is the main concern with us but is not the only factor to consider,” said Oestreicher.

In September, the IMF declared the US$150 million programme with Malawi off-track following the government’s failure to meet agreed targets with the fund.

Oestreicher, however, called on both fiscal and monetary authorities to work tirelessly and come up with measures that would help stabilise the macro-economic environment which is currently faced with various shocks.

He said improving the various indicators would help the economy to stand on a better footing in 2016.

According to Oestreicher, there is still hope for restored economic growth in the medium term which may, however, be attained if the critical economic indicators such as inflation and bank borrowing rates improved.

Malawi’s economic performance in the year ending has been characterised by economic challenges which include high inflation, depreciating exchange rate, rising interest rates as well as rising food and other commodity prices.

Inflation – the rate at which commodity prices change at a given period – is now at 24.7 percent, probably the highest in the region, while the local unit, the kwacha has been depreciation in the months and was by yesterday trading at around K640 against the dollar.

Ministry of Finance Spokesperson Nations Msowoya said in an interview on Tuesday that treasury has attempted to balance its cash books to meet the set targets under the programme.

“We have aligned most of the expenditures in line with the revenues, so that is one explanation for the reducing trend for domestic borrowing. The borrowing is on downward trend, and the massages this is sending is the most important,” said Msowoya.

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