IMF team in today for Extended Credit Facility review

Post was last updated: September 10, 2019

An International Monetary Fund (IMF) Mission team arrives in the country today for review of its $112.3 million (K85 billion) Extended Credit Facility (ECF) programme.

Minister of Finance and Economic Development, Josephy Mwanamvekha told Parliament Monday, when presenting his inaugural full budget, that the Treasury was upbeat of positive outcome from the review.

Among other things, the IMF mission team will meet top government officials.

The ECF-supported programme is aimed at entrenching macroeconomic stability and fostering higher, more inclusive, and resilient growth.

The three-year ECF arrangement was approved in April 2018 to support the country’s economic and financial reforms.

Mwanamvekha said the fund was also committed to continue supporting the country in hedging against effects of cyclone Idai which affected agriculture production this season.

In a recent interview, new IMF Resident Representative, Farayi Gwenhamo, said the Bretton Woods’ institution was closely monitoring the political situation in the country

Earlier, the fund postponed two technical assistance (TA) missions that were initially scheduled for this month due to the political turmoil.

However, the TA mission postponement would not have any bearing on the ECF programme.

Under the last ECF review in March this year, the fund cautioned the government to improve debt and public finance management including undertaking regular bank reconciliations, improving commitment control and cash management.

It further urged Capital hill to enhance transparency of the budget process and improve revenue administration.

Gwenhamo said the country had attained progress in achieving macroeconomic stability in the recent past evidenced by improvements in key macroeconomic indicators such as inflation and foreign exchange availability.

“Looking ahead, deep structural reforms are needed to address key issues including closing infrastructure gaps especially electricity, roads, telecommunications, water and irrigation, improving the quality and coverage of social spending, access to credit, human capital, agriculture market dynamics and creating a better and innovative business environment conducive for diversification.

“At the same time, there is a need to pay attention to debt sustainability and to press ahead with ongoing public finance management reforms,” Gwenhamo said.

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