The International Monetary Fund (IMF) and the Government of Malawi co-sponsored a high-level international stakeholders conference in Lilongwe on 28–30 August 2017
The conference aimed at taking stock of the objectives and performance under the recently completed Extended Credit Facility (ECF), and the lessons for future engagement with the IMF. The conference brought together senior government officials, development partners, and representatives from the private sector, civil society, and academia.
The conference aimed at taking stock of the objectives and performance under the recently completed Extended Credit Facility (ECF), and the lessons for future engagement with the IMF. The conference brought together senior government officials, development partners, and representatives from the private sector, civil society, and academia.
The ECF-supported arrangement, approved in July 2012 for the equivalent of SDR104.1mn (about US$143.5mn, or 150 per cent of quota). 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.
Participants agreed that the ECF program broadly achieved its macroeconomic policy stabilisation 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, inflation began declining since end-2016, reflecting tight monetary policy and good agricultural harvest, reaching 10.2 per cent in July 2017.
However, 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.
Participants concurred that any future economic program engagement with the IMF should focus on increasing growth and reducing poverty, while consolidating the hard-won achievement of macroeconomic stability. Priorities should include reinforcing economic resilience to climate shocks, sustaining public financial management reforms, improving debt management in view of the large infrastructure needs, safeguarding and strengthening 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 prioritisation will be required to address infrastructural gaps and enhance competitiveness.
