Lilongwe, Malawi: An International Monetary Fund (IMF) team led by Mika Saito held discussions during October 5-8, 2022, on the authorities' request for a disbursement under the IMF Rapid Credit Facility's (RCF)-Food Shock Window and for a Staff Monitored Program with Executive Board Involvement.
The authorities have requested a Fund-supported program to help address Malawi's urgent Balance of Payments (BOP) financing needs and restore macroeconomic stability and set the foundation for inclusive growth that would improve the life of the Malawian people. The authorities have embarked on a debt restructuring process to help restore debt sustainability and pave the way for an Extended Credit Facility Arrangement (ECF). In the interim, the authorities have requested a disbursement under the IMFRapid Credit Facility-Food Shock Window and a Staff Monitored Program with Executive Board Involvement. This will help address Malawi's immediate financing needs and support its reform program while the authorities continue to make progress on debt restructuring.
At the conclusion of these discussions, Ms. Saito issued the following statement:
"We had productive discussions with the authorities and made good progress on their request for a disbursement under the Food Shock Window of up to 50 percent of quota and the Staff Monitored Program with Executive Board Involvement. The disbursement under the Food Shock Window combined with the Staff Monitored Program would help address Malawi's urgent financing needs and support reforms while providing the country with sufficient time to make progress on the debt restructuring process.
"We were reassured by the authorities' commitment to advance structural reforms and to steer the country towards macroeconomic stability and a sustainable debt path, including through the debt restructuring process underway. We reached broad understandings on the macroeconomic framework and reforms underpinning the Food Shock Window and PMB request.
"Discussions will continue in Washington, DC during October 11–17 on the sidelines of the IMF-World Bank Annual Meetings with a view to making sufficient progress to be able to present the authorities' request for emergency financing under the Food Shock Window and PMB to the IMF's Executive Board, as soon as possible.
"The authorities reiterated their commitment to steadfastly move to an Extended Credit Facility arrangement once sufficient progress has been achieved on the debt restructuring process. IMF staff stands ready to support the authorities in this endeavor.
"The IMF mission held meetings with Minister of Finance and Economic Affairs Sosten Gwengwe, Reserve Bank of Malawi Governor Wilson Banda, and senior government and Reserve Bank of Malawi officials. The mission also paid a courtesy call to H.E. President Chakwera and met with development partners as well as private sector representatives. The mission team thanks the Malawian authorities for their hospitality and productive discussions."
