Malawi Misses Out on IMF Social Spending Target
Malawi will have to wait until March to know its fate on whether the International Monitory Fund - IMF – will disburse the third trench of about US$ 20 million under the Extended Credit Facility programme.
This follows a successful second review of the new ECF by the fund’s mission team led by Tsidi Tsikata.
Addressing journalists at the end of the two week review period, Tsikata said overall performance under the programme has been satisfactory but the country failed to meet agreed targets on social spending.
“There is growing public outcry over falling standards and perceived wasteful spending and fraudulent activities in the government sector,” noted Mr Tsikata.
He however said the fund is encouraged by indications that economic recovery is underway, aided by increased availability of foreign exchange among others.
Ironically the optimisms come at a time civil servants are on strike demanding harmonization and an increment in their pay.
While appearing to be sympathetic with the striking civil servants Tsikata said there is need for Government to deploy immediate measures that would help address the challenges.
“Against the back drop, the mission discussed with the authorities their policy intentions with respect to addressing growing pressure on the budget,
“Given the government limited resources, the mission recommended a tightening of expenditure controls and identification of lower priority activities that can be cut or postponed to make room for higher priorities,” he said.
He then called on government to stay within budget resource envelope.
For the past two weeks an IMF mission team has been in the country assessing Malawi’s economic performance in line with the new Extended Credit Facility programme.
Finance Minister Dr Ken Lipenga on the other hand the country’s economic recovery remains on track in line with the recently approved reform measures.
This is the second review after IMF - and the Malawi government agreed in June last year to a $157 million aid package to be disbursed over a period of three years to support the country's economic recovery.—Zodiak Online
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