Malawi: IMF, stakeholders take stock of Malawi’s economic performance

Lilongwe, Malawi (PANA) – Any future economic programme engagement for Malawi with the International Monetary Fund (IMF) should focus on increasing growth and reducing poverty, while consolidating the hard-won achievement of macroeconomic stability, a high-level international stakeholders’ conference on the southern Africa country has agreed.

The stakeholders, meeting in Lilongwe from 28-30 August 2017 to take stock of Malawi’s economic performance under the recently completed Extended Credit Facility (ECF), have concluded that priorities should include reinforcing economic resilience to climate shocks, sustaining public financial management reforms, and improving debt management in view of the large infrastructure needs.

According to a statement issued Wednesday by the IMF, the stakeholders’ gathering has also emphasised safeguarding and strengthening of Malawi’s financial sector stability and improving the business environment to foster job creation and inclusive growth.

“Given the scarce resources and significant needs, careful sequencing and prioritization will be required to address infrastructural gaps and enhance competitiveness,” said the statement.

The IMF and the Government of Malawi co-sponsored the high-level international stakeholders conference that brought together senior government officials, development partners, and representatives from the private sector, civil society, and academia.

Participants agreed that the ECF programme broadly achieved its macroeconomic policy stabilization objectives, including reducing inflation and increasing international reserves, but fell short on achieving sustained and inclusive growth.

After having remained in persistently high double digits since the 2012, Malawi’s inflation began declining since end-2016, reflecting tight monetary policy and good agricultural harvest, reaching 10.2 percent in July 2017.

“However,” the statement pointed out, “uneven policy and structural reform implementation, the sizable recourse to domestic financing after the large-scale theft of public funds, and weather related shocks collectively stymied economic growth and poverty reduction efforts.”

Malawi’s ECF-supported arrangement was approved in July 2012 for US$143.5 million. In June 2016, the IMF’s Executive Board approved an augmentation of access under the arrangement to help Malawi address its worst humanitarian crisis after two consecutive years of drought.

It further extended the arrangement through end-June 2017 to accommodate the authorities’ efforts in responding to humanitarian crisis.
-0- PANA AR/MA 30Aug2017

30 august 2017 07:09:32

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