IMF Cautions Malawi, Sub-Saharan Economies to Improve on Local Resource Mobilization

The International Monetary Fund (IMF) has advised Malawi and other Sub-Saharan nations to strengthen domestic revenue mobilization and debt management, for their economies to remain steady amidst global uncertainties.

An IMF regional economic outlook report for the month of October,  warns of a high likelihood of major disruptions to public services like health and education, following aid cuts by some traditional donor partners.

The Bretton Woods Institution therefore emphasizes that reforms are crucial to overcome external financing challenges, and debt service burden, which it notes is elevated for most of the countries.

Now, economist Edward Leman, describes the recommendations as not surprising, saying the donor community is cutting aid to African nations because their economies are also struggling.

"Most of the countries, for example the US, are now focusing on themselves, the are trying to reorganize thier economies,

"We also see that these countries are also facing some fiscal pressures, and because of this financing to African countries, including Malawi, has gone down," he observes.

However, Leman is optimistic the country has vast resources that if properly managed, the concerns by the IMF can be addressed.

Abel Mwenibanda, another economist says domestic revenue mobilization is the best approach to fix the prevailing economic challenges such as high levels of debt.

He says, "Looking at the debt levels even for Malawi, are such at high level, eating up over half of our GDP. That puts pressure on sustainability and delivery of services both for short and long term."

Mweniwanda proposes that authorities should first review existing tax measures, before sealing loopholes like tax evasion and corruption.

The new DPP led administration says debt restructuring negotiations are top of it's agenda. Currently, Malawi's debt hovers around K16 trillion.

Kenphord Mdima's Avatar

Kenphord Mdima

Kenphord Mdima is a journalist, who has reported across radio, television and print since 2014. He brings stories to life with clarity, depth and purpose.

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