IMF ends Malawi’s credit program over poor fiscal Management

The International Monetary Fund (IMF) has terminated the EFC Program with the Malawi government due to poor economic management and waits new government in September to renew the program

According to the statement we have seen released by Secretary to the Treasury Betchani Tchereni, Malawi is currently in self inflicting economic mood as the IMF has terminated the $175 million ( K306 billion) Extended Credit Facility (EFC) that was meant to restore macroeconomic stability and boost investor confidence in the country.

“There will be no forex cushion for the government as well until elections are conducted in September. The programme faced several exogenous shocks which made it difficult for the supply side to assist both increased revenue and enhanced production,” reads part of the statement.

Tchereni further stated that the resolution allows the political environment necessary for the progression of the ECF programme to normalise, as is expected after the elections in September 2025.

According to the other statement we have seen released by the IMF, the program implementation faced numerous challenges and, importantly, was not able to achieve macroeconomic stability. Notably, fiscal discipline has proven difficult to maintain in the current environment due to elevated spending pressures and insufficient revenue mobilisation efforts.

“Rebuilding international reserve buffers has been challenging with the current foreign exchange system.

The external debt restructuring process needed to restore debt sustainability has not yet been concluded,” as it reads.

Malawi24