from MAVHUTO BANDA in Lilongwe, Malawi
LILONGWE, (CAJ News) – AMID a worsening outlook, accelerating spread of the coronavirus (COVID-19) and deteriorating global and regional economic situation, a credit facility amounting to over US$101 million (R1.7 billion) comes as boost to Malawi’s revival prospects.
The funds, secured from the International Monetary Fund (IMF), also complement the efforts by the new administration to retain macroeconomic stability months after coming into office.
It is the second disbursement under the Rapid Credit Facility (RCF), bringing total IMF COVID-19 emergency support to the Southern African country to $193 million (R3.2 billion).
It is an endorsement of the policies of the administration of Lazarus Chakwera, who became president in June.
His is the newest administration in the Southern African region.
Key steps pursued by the government include strengthening the health care system, stepping up social spending, ensuring food security and easing liquidity constraints in the banking system.
“The authorities are actively implementing measures to mitigate the impact of the pandemic and preserve macroeconomic stability,” Tao Zhang, the IMF Deputy Managing Director and Acting Chair, endorsed.
He reiterated that Chakwera’s government was committed to preserving macroeconomic stability, pursuing reforms in support of higher, more resilient, and broad-based medium-term growth as well as improving governance.
“They (authorities) have expressed their strong interest in a new Extended Credit Facility arrangement that is aligned with the long-term growth strategy currently under development,” the IMF executive stated.
Chakwera’s government has also pledged to promote transparency and accountability.
Recently addressing Parliament, the president said he was reforming the executive and revamping the public sector.
This is in line with his so-called Super Hi5 Agenda.
The blueprint is based on unity, prosperity, fighting corruption, entrenching the rule of law and people-oriented governance.
“This will happen across the public sector over the next year,” Chakwera assured.
The process will be key in developing a successor plan of Vision 2020, Malawi’s long-term development plan.
The country of over 18,6 million has not been spared the impact of COVID-19.
At the time of publication, Malawi had 5 783 confirmed cases, including 179 deaths.
According to the World Bank, the pandemic has interrupted Malawi’s fast economic growth.
The economy grew by 4,4 percent in 2019, a marked increase from 3,5 percent in 2018.
The World Bank states that while the full extent of the pandemic’s negative impact is still uncertain as the crisis unfolds, however, the widespread impact is expected to be felt in the current, fourth quarter and beyond.
This is attributed to reductions in tax revenue paired with increased expenditure on health and economic policy responses.
In September, the World Bank announced the approval of an $86 million credit facility for Malawi.
This is aimed at increasing access to financial services and promoting the entrepreneurship and capabilities of micro, small, and medium enterprises (MSMEs) in Malawi, including addressing the negative economic effects of COVID-19.
– CAJ News