Malawi has allowed the four-year International Monetary Fund (IMF) $175 million (about K306 billion) Extended Credit Facility (ECF) to lapse until further notice, according to a statement by Ministry of Finance and Economic Affairs.
The extended credit facility that was approved on 14th November, 2023 was aimed at restoring macroeconomic stability.
Secretary to Treasury Betchani Tchereni has also confirmed the development with the media.
He said following the recent Spring meetings in Washington DC, the Government and IMF mutually resolved to allow the facility program to lapse until further notice.
“The General public may wish to note that Malawi’s extended credit facility that was approved on 14th November, 2023 was aimed at restoring macroeconomic stability. However, the program faced a number of exogenous shocks which made it difficult for the supply side to assist both increased revenue and enhanced production. In view of this, Government and the International Monetary Fund have resolved to allow the program to lapse.
“This resolution allows the political environment necessary for the progression of the ECF program to normalize as is expected after the elections in September, 2025, thus enabling Government to leverage its fresh electoral mandate in negotiating a more sustainable extended credit facility package for Malawis macroeconomic stability going forward.
“Government remains confident that post-elections, the partnership with the IMF will continue the progress made thus far in restoring international donor confidence in Malawi’s commitment to the macroeconomic reforms necessary for staying on the path of recovery and debt sustainability, which Government has pursued despite the unsustainable debt stock inherited in 2020, coupled with exogenous shocks such as Covid-19, Cyclone Ana in 2021, price inflations precipitated by the war in Eastern Europe in 2022, cholera outbreak and cyclone Freddy in 2023, and El Nino Drought conditions in 2024.
“Recognizing the extent of the exogenous shocks that affected the country, the IMF has agreed to send A Mission end of May 2025, to conduct a monitoring and consultation for Malawi’s economic main stays in preparation for a tailor made Malawi Programme in the future.
“As such, the Ministry of Finance and Economic affairs assures the public that during the period in which the ECF program will be in the state of suspension, the economic reforms protocols established to exercise fiscal discipline in compliance with the Public Finance Management Act (2022) will continue in force,” reads the statement in part
