IMF Gives Final Approval of Malawi's PRGF Arrangement Review

The Executive Board of the International Monetary Fund (IMF) has finalized its earlier in-principle approval of the completion of the first review of Malawi's economic performance under its Poverty Reduction and Growth Facility arrangement (see Press Release No. 03/174). This decision followed the World Bank's Executive Board review of Malawi's Poverty Reduction Strategy Paper Progress Report on October 23, 2003.

The three-year IMF arrangement was approved on December 21, 2000 (see Press Release No. 00/79) for a total of SDR 45.11 million (about US$64.8 million). So far, Malawi has drawn SDR 6.44 million (about US$9.3 million).

The PRGF is the IMF's concessional facility for low-income countries. It is intended that PRGF-supported programs will in time be based on country-owned poverty reduction strategies adopted in a participatory process involving civil society and development partners, and articulated in a Poverty Reduction Strategy Paper (PRSP). This is intended to ensure that each PRGF-supported program is consistent with a comprehensive framework for macroeconomic, structural, and social policies to foster growth and reduce poverty. PRGF loans carry an annual interest rate of 0.5 percent, and are repayable over 10 years with a 5 ½-year grace period on principal payments.