Govt grapple with ECF implementation – Capital Radio Malawi
29 May, 2024

Leading the Malawi team in US -Chithyola Banda

Finance authorities have faced challenges in tracking implementation of the Extended Credit Facility (ECF) programme.

This, according to finance minister Simplex Chithyola Banda, is due to external circumstances, domestic dynamics and fiscal and external targets.

Chithyola Banda made the remarks in USA where he is leading a Malawi delegation for the Annual Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group.

Addressing the delegates, Chithyola underscored Malawi’s commitment to bringing the fiscal position back on track.

“The 2024-25 budget aims at a primary deficit in line with the program, which will require a stronger fiscal adjustment effort than previously envisaged. The government is working on detailing the tax policy and tax administration measures underpinning the ambitious revenue projections,” explained Chithyola.

Chithyola Banda further highlighted that devaluation did not lead to the expected dynamics in terms of Reserve Bank of Malawi (RBM) capacity to become a net purchaser of forex from the market.

He however pointed out that they are set to explore possible reforms to make the foreign exchange market more liquid and efficient and restore debt sustainability.

In his remarks, head of the IMF African Department, Abebe Selassie said it is important to enhance both resilience of the people and microeconomic resilience especially in the wake of incessant natural disasters such as El Nino induced drought and floods.

“The IMF ability to move forward with the ECF requires strong fiscal policies despite the numerous challenges Malawi faces,’’ said Selassie.

Also commenting on the issue, IMF Mission Chief for Malawi, Mika Saito said good programme performance and debt restructuring progress will ensure that Malawi stays on course with the hard-won ECF programme.

Meanwhile RBM Governor Wilson Banda has pointed out that the ECF programme has underperformed because of challenges emanating from natural calamities such as El Nino.

The IMF and WBG meeting focus on macroeconomic and financial stability as well as long-term economic development and poverty reduction.

About The Author

Leave a Reply

Your email address will not be published. Required fields are marked *