LILONGWE--Technical experts from global lenders the International Monetary Fund (IMF) arrived in Malawi on Wednesday for a week-long mission to offer technical assistance that seeks to revive a stalled programme meant to cushion foreign exchange shortages.
Ruby Randall, an IMF resident representative told reporters the team, co-led by Etibar Jafarow and Nadia Rendak, comprises monetary capital markets and legal experts whose findings will be “expected to help authorities implement key extended credit facility (ECF) programme commitments.”
The IMF, amid a worsening of ties between the southern African country and donors, in June said its programme with Malawi was "off-track" as the government had failed to review a $79.4-million (55.7-million Euro) credit facility meant to cushion the chronic foreign exchange shortages.
The global lender had also disagreed with Malawi on the exchange rate, saying it was over-valued and discouraged foreign investment to the impoverished nation which depends on agriculture and donor inflows for economic survival.
As it sought to revive the stalled programme with the IMF, Malawi, which had been adamant about devaluing the country's curreny, saying doing so would hurt the poor as prices of basic goods would go up, later devalued the Kwacha, which had been fixed for many years by about 10 percent. One United States dollar which used to be equivalent to K150, went up to K167.
The programme however remains suspended.
The suspension of the IMF programme followed Malawi's expulsion of Britain's envoy in April over a leaked diplomatic cable critical of Pres Bingu wa Mutharika.
The former colonial power followed with a tit-for-tat expulsion of Malawi's envoy and cut direct aid over economic management and governance concerns.
The United States put on hold a $350 million grant for Malawi's energy sector out of concern over the authorities' crackdown on street protests.
Reserve Bank of Malawi governor Perks Ligoya has said in the past that Malawi, which depends on tobacco to generate most of its foreign exchange, had a “little impasse with our donors regarding budget support which they suspended...we as Malawi government have discussed those issues and we are inviting back the donors through the IMF.”
Donors, who provide 40 percent of the development budget that also pays salaries for the country’s nearly 170,000 civil servants, will wait for the IMF green-light in order to resume budget support.
Ligoya hopes the issues with the IMF will be resolved very soon."We hope the donors will come back with their support,” Ligoya said.
Randall has said the revival of the ECF programme would require a subsequent review mission after the current technical assistance mission is over.
©2011 The Maravi Post. Reproduction authorised, with usual acknowledgment