Experts Caution Government As It Flipped Out With IMF-Rapid Credit Facility

Mzuzu, Malawi: Recently, the International Monetary Fund (IMF) said Malawi expressed commitment to qualify for the life saving Rapid Credit Facility (RPD), minister of Finance Sosten Gwengwe told the nation.

RCF are temporary measures for depleting import cover which Malawi government opted for considering its economic conditions that has led to the short in supply of fuel across the country.

In a statement the IMF described as productive the discussions it had with the government of Malawi over a request by authorities for emergency funding under the Rapid Credit Facility-RPD- Food Shock Window.

This follows a series of meetings which the IMF team led by its Chief to Malawi Mika Saito held with various government officials including President Lazarus Chakwera, Minister of Finance and Economic Affairs Sosten Gwengwe , Reserve Bank of Malawi Governor Wilson Banda and other senior government officials.

The RPD – Food Shock Window provides low access to finance to low income countries facing balance of payment.

But writing on the Malawi Independent Facebook page, one of the social media advocates, Kingsley Mbayani said despite the credit facility being a relief to Malawi there is a lot more need to be done considering that, Rapid Credit Facility (RCF) is always a temporary remedy though for Malawi it is quite important having a sick economy just like in war torn countries.

“This facility is provided to failed economies like what Malawi is currently as we are being compared to those war torn countries,” Mbayani writes.

But in an interview with local media Finance Minister, Sosten Gwengwe said the facility would allow Malawi get half of the US$350 million it applied under the Extended Credit Facility (ECF).

“This facility will help us deal immediately with some challenges, such as lack of forex,” Gwengwe said.

Another socioeconomic commentator based in United Kingdom, Allan Mandindi Banda expressed optimism with the way the country’s economic affairs are being managed giving hope that soon things will be on the right track.

“According to the recent IMF report our economy is focused to grow to 2.5 of our Gross Domestic Products (GDP) and we were at this before 2019, It’s great indication that things might get better and it might be due to the financial support that we are now getting,” Mandindi said.

He further said the economy needs to stabilize so the credit facility comes at a right time where farmers who are the drivers of the country’s economy will be engaged in farming activities such as procurement of fertilizers and other farm implements.

Meanwhile, the Governance and Human Rights Expert, Undule Mwakasungula has cautioned Government to move away from lip service in terms of dealing with austerity measures by putting in place proper mechanism to control expenditure in terms of implementation and enforcement.

“The rapid credit facility is a relief to the nation as it will help cushioning our struggling economy for some time, but what is important is for government to prioritize and focus on essential needs and services for Malawians to ease their suffering,” said Mwakasungula.

In a statement issued at the end of the visit to Malawi, the IMF team said the fund had productive discussions with authorities and made good progress on the request for disbursement of the emergency funds under–Food Shock Window but discussions will continue from 11 – 17th October this year in United States during the IMF- World Bank Annual Meeting.