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The International Monetary Fund (IMF) is expected back to Malawi mid April ahead of budget presentation in July, the Ministry of Finance has confirmed.
Secretary to the Treasury Milton Kutengule said last week the meeting will finalise agreements that could lead to talks on a new economic package with the Fund.
But Kutengule was quick to say the Fund has not officially told the Malawi Government when discussions for the new Poverty Reduction Growth Facility (PRGF) will start.
PRGF is the Fund’s low interest lending facility for poor countries which is framed in line with the countries’s poverty reduction strategy papers.
Carrying an annual interest rate of 0.5 percent, the facility is used as a yard stick against which donors assess a country before releasing aid support.
Malawi failed to successfully complete the three-year programme worth SDR45 million as it remained suspended until it expired last December.
As a result, leading bilateral donors like Britain, European Union, Norway and Sweden withdrew budgetary support.
In order to win back donor confidence, Malawi Government asked the IMF for a 12-month staff monitored programme (SMP) from June last year to establish a new track record of good public finance management.
Good performance under the SMP will help Malawi get a new programme with the Fund, a move government says will attract significant donor funding.
So far, the IMF has indicated that it is impressed with the present economic management despite fears that food deficit this year could derail progress if not well managed.
Asked when government would like to have a new programme with the Fund, Kutengule said “immediately.”
But the chief fiscal manager said the IMF will only grant the new facility if Malawi meets agreed targets. Kutengule said the country is on track to meet benchmarks.
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