Minister of Finance Simplex Chithyola Banda has reiterated that the local economy is poised to rebound in the short to medium terms owing to inroads made to build foreign exchange reserves, economic diversification and debt restructuring in recent months.
Chithyola Banda believes the economy is steady due to availability and stability in prices, of strategic commodities such as fuel and an increase in foreign exchange reserves from below one month to over 2.5 months.
“I am happy that some of the strategies that we have put in place are now paying dividends.
“For the past three months, we have been able to build up forex reserves, but also spending exactly what has been allocated to us for spending. These are remarkable achievements that are indicating that we are moving towards economic stability,” Chithyola Banda said.
On debt restructuring, Chithola Banda said efforts have been enhanced and negotiations are ongoing with China, the India Exim bank and commercial creditors, to have uniform conditions.
“We want conditions to be uniform and standardised so that no lender is given preferential treatment. I had a meeting with IMF officials agreeing on what we believe should be realistic assumptions. But when we are being measured with those characteristics, people should be able to say these are realistic characteristics. We are moving forward with the debt restructuring. We are also moving forward with the reforms,” he said.
He said the reforms go beyond a quest to sustain the Extended Credit Facility of the International Monetary Fund but also help the country recover quickly.
But the United States government recently said Malawi may not meet the commitments necessary to receive a second tranche of the ECF in the coming months due to low revenue collection, ballooning expenditures and delayed full implementation of the Integrated Financial Management and Information System (Ifmis).
US Department of Treasury Deputy Assistant Secretary for Africa and the Middle East Eric Meyer told reporters in Lilongwe at the end of his four-day visit to Malawi recently that there had been delays by Malawian authorities in reaching an agreement on necessary debt restructuring with some of Malawi’s international creditors.
Since the IMF concluded its first review of the $175 million four-year ECF Programme on May 23, there has been deafening silence on the future of the programme.
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