The International Monetary Fund (IMF) has certified that Malawi’s extended credit facility arrangement is back on track.
Making the announcement in Lilongwe, team leader of the mission that was in the country from 9-23 March, Oral Williams said Malawi has put up a considerable zeal in taming internal borrowing which had gone down tremendously.
Williams said commitment to flexible exchange rate regime and automatic fuel pricing have helped Malawi to respond to external shocks.
The IMF team leader observed that the depreciation of the Kwacha from July 2015 to March 2016 has now began to stabilize a situation which is expected to bring down inflation that has been above 20 percent since 2012 to a single digit.
“We would like to convey our sincere appreciation for the hard work and dedication of the Malawian authorities to bring this program back on track. Regarding to where do we go from here, there are some structural reforms that need to be done in the public financial management domain, particularly referred to having bank reconciliations so that we can give an account of the execution of the budget as well as reporting on the arrears if they do arise. So these are the two key elements that we would need to go forward,” said Williams.
He said while in the country his team held discussions with government officials and relevant authorities on the next national budget.
“In addition while we were here we also took the opportunity to have broad discussions on what elements could go into 2016/17 budget, and these are just preliminary discussions but at least in terms of keeping the program on a viable and sustained par to stay on track we thought that it would be useful to lend a helping hand to the authorities in this regard,” Williams explained.
In his response, Minister of Finance and Economic Development Goodal Gondwe expressed gratitude that the IMF mission came to assess Malawi after it did not do well last September.
Gondwe said Malawi will continue to work extra hard to improve the economic situation of the country which is now showing positive signs of improvement.
“Last time we didn’t do well, this time we’ve done better. The question is that whether we can continue to do well so that the economy as such should improve. I hope very much that it would be possible for my colleagues and myself to continue working hard as we’ve done so that next time Mr. Williams comes he will say the same thing that we are doing a little bit better,” said Gondwe.
As for the public finance management reforms Gondwe said these are very important so as to keep the economy on track.
“It’s really important that we reform so that at this time when we are short of resources we can use our resources wisely, some would say prudently. In other words we should have a system where resources are used where they are planned to be used and they are productive,” Gondwe explained.
