Malawi: Second Review Under the Staff-Monitored Program with Executive Board Involvement and Request for an Arrangement Under the Extended Credit Facility-Press Release; Staff Report

International Monetary Fund

No 2023/375, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper discusses Malawi’s Second Review under the Staff-Monitored Program with Executive Board Involvement (PMB) and Request for an Arrangement under the Extended Credit Facility (ECF). Malawi continues to face a challenging macroeconomic environment. Years of unsustainable domestic and external borrowing and the adverse impact of multiple external shocks have resulted in the widening of macroeconomic imbalances, including protracted balance of payment needs. The ECF-supported program will support the authorities’ macroeconomic adjustment and reform agenda aimed at restoring macroeconomic stability, building a foundation for inclusive and sustainable growth, and addressing weaknesses in governance. Further delays in the restructuring of Malawi’s external debt would put at risk macroeconomic stabilization. The risks of moving forward with the ECF arrangement without an agreement in principle between the Malawian authorities and their commercial creditors are significant. IMF staff assesses that the PMB remains on track to achieve its objectives. It supports the authorities’ request for the ECF arrangement, conditional upon receipt of financing assurances.

Keywords: authorized dealer banks; ECF arrangement; staff appraisal; executive board involvement; financing gap; Debt service; International reserves; Global; Africa; Sub-Saharan Africa (search for similar items in EconPapers)
Pages: 141
Date: 2023-11-22
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