- The Malawian authorities and IMF staff had productive discussions on Malawi's performance in the context of the First Review of the Staff Monitored Program with Executive Board Involvement (PMB).
- Performance under the PMB, based on end-December 2022 targets, was mixed, partly reflecting implementation challenges linked to difficulties in reversing course on government spending in the context of a macroeconomic adjustment program which was adopted late in the fiscal year.
- Virtual discussions will continue to pin down modifications of the program targets to reflect negative shocks from Cyclone Freddy.
Lilongwe: An International Monetary Fund (IMF) team led by Ms. Mika Saito held discussions with the Malawian authorities during May 16-22, 2023, in Lilongwe, on the First Review of Malawi's Staff Monitored Program with Executive Board Involvement (PMB) . The PMB was approved by IMF Management in November 2022, together with a disbursement of US$88.3 million under the Rapid Credit Facility--Food Shock Window , with a view to support the authorities' efforts in building a track record for an Extended Credit Facility (ECF) and to improve the lives of Malawians.
At the end of the mission, Ms. Saito issued the following statement:
"We had productive discussions with the authorities on Malawi's performance under the first review of the PMB and the next steps. Performance under the PMB based on end-December 2022 targets was mixed. This partly reflects implementation challenges linked to the fact that the macroeconomic adjustment program was put in place late in the fiscal year. It was thus difficult to reverse course on government spending, and in turn, money growth and foreign exchange reserve accumulation .
"The authorities are committed to taking the necessary steps to deliver on the agreed program targets and objectives, including through strong corrective actions. Meanwhile, the authorities continue to work closely with their debt advisors to achieve tangible and expedited progress on their debt restructuring process in line with their published strategy that underpinned the PMB request.
"Virtual discussions will continue to pin down modifications of the program targets to reflect negative shocks from Cyclone Freddy, which hit Malawi in March causing loss of lives, displacement of families and destruction of infrastructure and crops."
The staff team met with His Excellency President Lazarus Chakwera, Minister of Finance and Economic Affairs, Hon. Sosten Gwengwe, Reserve Bank of Malawi Governor, Dr. Wilson Banda, and other senior government officials. The team also engaged with the Public Accounts Parliamentary Committee, civil society organizations, and development partners.
