International Monetary Fund (IMF) and Malawian Authorities have reached a staff level agreement on the second (and last) review of the Staff Monitored Program with Executive Board Involvement (PMB), and a microeconomic and financial policies and reforms to be supported by a new 48-month financing arrangement under the Extended Credit Facility (ECF) of about $174.00 million.

According to a press release issued by IMF on September 21, 2023, the agreement is subject to IMF Management and Executive Board approval and receipt of the necessary financing assurances.

The statement further says the proposed ECF is going to support Malawi’s ongoing efforts to restore a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth as envisaged under Malawi 2063.

“The arrangement is expected to catalyze grant financing to support such efforts,” reads the statement in part.

To reach this stage where the agreement between Malawi and IMF has been made, Malawi stepped up efforts to reach the stage and meet fiscal targets under the PMB. Among the efforts made were; adjusting expenditure to offset a shortfall in revenue, containing government borrowing, tightening the monetary policy to contain inflationary pressures and resuming foreign exchange auctions.

IMF team led by Mika Saito held discussions with Malawian authorities during August 29 – September 20 via hybrid and in-person meetings in Lilongwe.