## Malawi: Second Review Under the Staff-Monitored Program with Executive Board Involvement and Request for an Arrangement Under the Extended Credit Facility-Press Release; Staff Report

_IMF Staff Country Reports, November 22, 2023_

## Source details

**Canonical URL:** [Malawi: Second Review Under the Staff-Monitored Program with Executive Board Involvement and Request for an Arrangement Under the Extended Credit Facility-Press Release; Staff Report](https://www.imf.org/en/publications/cr/issues/2023/11/22/malawi-second-review-under-the-staff-monitored-program-with-executive-board-involvement-and-541708)

## Other formats

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## Bibliographic details
- Published: November 22, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400259302.002

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### Executive summary and context
- Document title: Malawi: Second Review Under the Staff-Monitored Program with Executive Board Involvement and Request for an Arrangement Under the Extended Credit Facility-Press Release; Staff Report
- Date: November 22, 2023
- Core purpose: Discusses Malawi’s Second Review under the Staff-Monitored Program with Executive Board Involvement (PMB) and the authorities’ request for an arrangement under the Extended Credit Facility (ECF).
- Macroeconomic situation:
  - Years of unsustainable domestic and external borrowing and the adverse impact of multiple external shocks have resulted in the widening of macroeconomic imbalances, including protracted balance of payment needs.
  - The ECF-supported program is designed to support the authorities’ macroeconomic adjustment and reform agenda aimed at restoring macroeconomic stability, building a foundation for inclusive and sustainable growth, and addressing weaknesses in governance.

### Key findings and staff assessment
- IMF staff assesses that the PMB remains on track to achieve its objectives.
- Staff supports the authorities’ request for the ECF arrangement, conditional upon receipt of financing assurances.
- Risks and vulnerabilities:
  - Further delays in the restructuring of Malawi’s external debt would put at risk macroeconomic stabilization.
  - The risks of moving forward with the ECF arrangement without an agreement in principle between the Malawian authorities and their commercial creditors are significant.

### Policy implications and recommended conditions
- Primary policy recommendation:
  - Proceed with the ECF-supported program to support macroeconomic adjustment and governance reforms, but only upon receipt of adequate financing assurances.
- Debt-restructuring imperative:
  - Prioritize timely restructuring of external debt to avoid jeopardizing macroeconomic stabilization.
- Engagement with creditors:
  - Secure an agreement in principle with commercial creditors before advancing the ECF arrangement to reduce significant implementation risks.

### Subjects, keywords, and publication identifiers
- Subjects: Central banks, Debt service, External debt, Foreign exchange, International organization, International reserves, Monetary policy, Public debt
- Keywords: Africa, authorized dealer banks, Debt service, ECF arrangement, executive board involvement, financing gap, Global, International reserves, staff appraisal, Sub-Saharan Africa
- Publication details:
  - Pages: 141
  - Volume: 2023
  - Issue: 375
  - Series: Country Report No. 2023/375
  - DOI: https://doi.org/10.5089/9798400259302.002
  - Stock No: 1MWIEA2023002
  - ISBN: 9798400259302
  - ISSN: 1934-7685

*International Monetary Fund. Malawi: Second Review Under the Staff-Monitored Program with Executive Board Involvement and Request for an Arrangement Under the Extended Credit Facility-Press Release; Staff Report. November 22, 2023.*

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_Source: https://www.imf.org/en/publications/cr/issues/2023/11/22/malawi-second-review-under-the-staff-monitored-program-with-executive-board-involvement-and-541708_