IMF mission to visit Malawi, recommend new loans
An IMF mission hopes to recommend new loan programmes for Malawi following a visit next week, an official said Wednesday, after the country devalued its currency to boost the economy.
The mission had been in “regular contact” with Malawian authorities and would get donors to contribute funds for political reforms, IMF representative Ruby Randall told reporters.
The IMF expects to recommend the approval of a new programme for Malawi to its executive board after the mission returns to Washington in June, she said.
The impoverished southern African country this week devalued its kwacha by a third against the dollar, a key IMF demand to put the economy back on track.
Randall welcomed the “important measures” that would help liberalise the foreign exchange market, increase foreign exchange and bolster investor confidence in the country.
“In short, ensuring that the exchange rate continues to reflect foreign exchange market conditions will help to encourage private investment and diversified growth,” she told journalists.
Relations with the IMF had broken down last year and the global lender suspended a $79.4-million (55.7-million-euro) credit facility meant to cushion chronic foreign exchange shortages.
New President Joyce Banda has moved swiftly to heal breaches with international donors following the sudden death of her predecessor Bingu wa Mutharika from a heart attack last month.
Mutharika had resisted devaluation, arguing it would trigger inflation and hurt the poor in the southern African nation, where 39 percent of the 13 million citizens live on less than a dollar a day.
Several key donors — including former colonial power Britain — suspended aid to the impoverished southern African country, citing concerns about growing authoritarian tendencies in Mutharika’s government.
Now donors appear ready to resume aid once the IMF endorses the new government’s policies, said Andrew Mwaba, country representative of the African Development Bank (AfDB).
“The IMF letter of comfort will allow us to intervene immediately and so far the AfDB and the World Bank have indicated that we will expedite the release of funds,” Mwaba told a donor group’s review meeting.
The AfDB wants to pour $445 million into the country, while the World Bank eyes budget support and protection programmes for the poor.
Banda asked the United States and former colonial master Britain to resume funding only a few days after she was swore in last month.