(Agence Ecofin) – In the grip of growing food insecurity, Malawi is negotiating financing to improve its balance of payments before facilitating the import of basic foodstuffs. In addition to emergency financing from the IMF, the country wants to deploy reforms led by the institution.
Malawi will benefit from an emergency financing of $88 million from the International Monetary Fund (IMF), we learned from a communiqué published by the institution on Monday 21 November.
The funds are part of the window “food shock” set up by the IMF to help poor countries cope with the global food crisis. They will be used to meet urgent balance of payments needs and mitigate the impact of severe weather on the national food supply chain.
« Food insecurity in Malawi has increased significantly due to multiple tropical storms, below average agricultural production and rising prices of food and agricultural inputs such as fertilizers and seeds. As a result, around 20 percent of the population is expected to be acutely food insecure during the upcoming 2022/23 lean season (October 2022-March 2023), more than twice as many people as in 2021 “, said the Fund in its press release.
In October, Malawi had started negotiations to obtain an emergency fund, but the amount announced at the time by sources familiar with the matter was $54 million. In addition to the emergency financing obtained, Lilongwe wants to implement a series of reforms, financed by the Fund, to strengthen its economic balance.
« The Management Approved Reference Program (PR) is robust enough to achieve the objectives stated by the authorities, and its implementation should achieve the objective of building a case for a quality program of the upper tranche of credit backed by a Fund agreement said Mr. Bo Li (photo), Deputy Managing Director of the IMF.
And to add: Malawi’s implementation of the RP will benefit from limited Board involvement, given the concerted international effort by creditors and donors to provide new financing and debt relief to Malawi, as well as of the Fund’s large outstanding credits under the emergency financing instruments ».