LILONGWE (Reuters) – The International Monetary Fund will resume Malawi’s $150 million extended facility programme which was suspended last year after a scandal involving abuse of state money, the country’s finance minister said on Thursday.
“The IMF has given us a green-light to the resumption of the programme which allows them to disburse about $30 million of the remainder of the total $150 million,” Goodall Gondwe told Reuters.
“The advice we get from the IMF is very important because they provide a very valuable yardstick of how we can manage our economy and we will continue doing well especially on public finance management so that we are not off track again.”
The IMF had suspended the programme following a scandal in which senior government officials siphoned millions of dollars from state coffers. Other international donors, led by Malawi’s former colonial ruler, Britain, also halted direct aid to the southern African nation over the scandal.
IMF Mission Chief Oral Williams said in a statement on Wednesday that Malawi had demonstrated a concerted effort to put the programme back on track, including improvements in public financial management.
Malawi has struggled to grow its economy due to declining export earnings from tobacco and in the absence of aid, which had previously accounted for 40 percent of its budget.
The IMF said it expects Malawi’s economy to grow by 3 to 4 percent this year after expanding by 3 percent in 2015.
But growth may be weather-dependent the Fund said, after an El Nino weather pattern triggered drought and heatwaves, threatening the staple maize and other crops.
(Reporting by Mabvuto Banda; Editing by Catherine Evans)