IMF Staff Concludes Mission for the First Review under Malawi’s Staff-Monitored Program with Executive Board Involvement

IMF News, May 22, 2023

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Canonical URL: IMF Staff Concludes Mission for the First Review under Malawi’s Staff-Monitored Program with Executive Board Involvement

An IMF team led by Ms. Mika Saito held discussions with the Malawian authorities during May 16-22, 2023, in Lilongwe on the First Review of Malawi’s Staff Monitored Program with Executive Board Involvement (PMB).
The PMB was approved by IMF Management in November 2022, together with a disbursement of US$88.3 million under the Rapid Credit Facility--Food Shock Window.
End-of-mission press release dated May 22, 2023.
The mission will not result in a Board discussion; the views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.

Performance under the PMB based on end-December 2022 targets was mixed.
Mixed performance "partly reflects implementation challenges linked to the fact that the macroeconomic adjustment program was put in place late in the fiscal year."
Late adoption made "it thus difficult to reverse course on government spending, and in turn, money growth and foreign exchange reserve accumulation."

The PMB approval in November 2022 included a disbursement of US$88.3 million under the Rapid Credit Facility--Food Shock Window.
The PMB was intended to support the authorities’ efforts in building a track record for an Extended Credit Facility (ECF) and to improve the lives of Malawians.

The authorities are "committed to taking the necessary steps to deliver on the agreed program targets and objectives, including through strong corrective actions."
The authorities "continue to work closely with their debt advisors to achieve tangible and expedited progress on their debt restructuring process in line with their published strategy that underpinned the PMB request."

Virtual discussions will continue to pin down modifications of the program targets to reflect negative shocks from Cyclone Freddy.
Cyclone Freddy hit Malawi in March causing "loss of lives, displacement of families and destruction of infrastructure and crops."

The staff team met with:
- His Excellency President Lazarus Chakwera,
- Minister of Finance and Economic Affairs, Hon. Sosten Gwengwe,
- Reserve Bank of Malawi Governor, Dr. Wilson Banda,
- other senior government officials.
The team also engaged with the Public Accounts Parliamentary Committee, civil society organizations, and development partners.

IMF Staff Concludes Mission for the First Review under Malawi’s Staff-Monitored Program with Executive Board Involvement — May 22, 2023.