Washington, DC:
An International Monetary Fund (IMF) team led by Mika Saito held
discussions during May 25-June 3, 2022, via hybrid and in-person
meetings in Lilongwe on the authorities’ Request for a Four-Year
Extended Credit Facility (ECF) Arrangement.
The authorities have requested an arrangement in the back of the
protracted balance of payments problem. While IMF support and its
catalytic role in mobilizing donor support are critical at this
juncture, being able to restore debt sustainability and resolving
the misreporting case are pre-requisites for such support. While
the authorities are addressing these issues, the IMF team conducted
a mission to agree on macroeconomic framework, policies, and
reforms.
At the conclusion of these discussions, Ms. Saito issued the following
statement:
"We had positive and productive discussions with the authorities on the
current macroeconomic conditions and policies to steer the country
towards macroeconomic stability and a sustainable debt path.
"We welcome the authorities’ recent steps to normalize the forex market
in line with the recommendations of
Article IV Consultation concluded by the IMF Executive Board in
December 2021
to help to improve foreign exchange availability.
"The special audit of the official foreign exchange reserves of the
Reserve Bank of Malawi (RBM) is now in the final stages. This report
will form the basis for consideration of the pending misreporting of
RBM Foreign Exchange Reserves by the Executive Board of the IMF.
"The authorities have engaged a debt advisor to support their efforts in
addressing Malawi’s unsustainable public debt. As this work progresses,
the discussions with the authorities will resume towards a staff-level
agreement.
"The IMF staff 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, and the
private sector. The mission team thanks the Malawian authorities for
their hospitality and productive discussions.”