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Press Release No. 02/38
September 3, 2002
International Monetary Fund
700 19th Street, NW
Washington, D.C. 20431 USA

IMF Executive Board Approves US$23 Million in Emergency Credit to Malawi

The Executive Board of the International Monetary Fund (IMF) approved today SDR 17.35 million (about US$23 million) in emergency credit to Malawi, which will support imports of food to prevent large shortages expected later this year.

Malawi experienced a severe food crisis in early 2002, causing immense human suffering. The food shortages resulted in widespread malnutrition and starvation, particularly for those infected with HIV/AIDS. Many households still have not recovered, and, with another bad harvest this year, decisive action is required.

"Malawi is facing a serious food shortage, " said IMF Managing Director Horst Köhler, who, with World Bank President James Wolfensohn, has called on donor countries to step forward to support Malawi and other nations in southern Africa currently facing severe famine (see News Brief No. 02/81). "Our emergency assistance is a step toward helping the nation deal with its current food needs."

Malawi's food shortage is expected to be addressed through a combination of humanitarian aid of about 210,000 metric tons of grain, which will be distributed to about 30 percent of Malawi's population, or about 3.2 million people, and maize imports by the government of up to 350,000 metric tons.

The IMF provides emergency assistance to member countries hit by natural disasters so that they can meet immediate balance of payments financing needs, and maintain or restore macroeconomic stability. The emergency loan, which currently carries a charge of 2.96%, will be repaid in eight equal installments over 3¼ and 5 years.




IMF EXTERNAL RELATIONS DEPARTMENT

Public Affairs    Media Relations
E-mail: publicaffairs@imf.org E-mail: media@imf.org
Fax: 202-623-6278 Phone: 202-623-7100