Lipenga upbeat on IMF

Finance Minister Ken Lipenga admits that the International Monetary Fund (IMF) staff mission team, which arrived in the country yesterday for a first review of its new programme with Malawi, will find some “small issues” but was confident the assessment will generally come out successfully.

“I think they will find that Malawi government is very much in line with the programme. They might find small issues here and there but generally they will find that government is committed to the programme,” said Lipenga in an interview on Monday.

He could not specify the hitches but government’s reversal of last months’ fuel prices is likely to be one of the issues the IMF team will seek explanations on as they look for assurance about the authority’s commitment to stay the course of the economic recovery programme.

IMF Director for the African Department Antionette Sayeh said recently that there has been significant external shocks that have impacted on the outcomes of the IMF programme.

She said the IMF mission team will look at the full macro picture with the government and establish whether any of the targets agreed in the ECF would have to be adjusted and why.

“But all in all, we think that the government is absolutely on the path that it needs to be to address difficulties inherited and we are very supportive of the effort so far,” she said.

Results of the IMF review, if successful, would benefit the country through an additional tranche of balance of payment financing from the IMF as well as disbursements in budgetary support from some Common Approach to Budgetary Support (Cabs) donors.

The six member mission, headed by IMF Mission Chief for Malawi, Tsidi Tsikata includes the Senior Adviser to Malawi’s Executive Director’s Office at the IMF, Haimanot Tefera, according to IMF Resident Representative, Ruby Randall.

Randall said on Monday in undertaking this review, the team will consult with a wide range of stakeholders, including the government, the Reserve Bank of Malawi (RBM), banking sector, private sector, development partners, trade unions, and civil society.

She said the review is expected to be discussed by the IMF Executive Board by mid December 2012.

“If the review is approved by the Executive Board, an additional tranche of about US$19.5 million in balance of payments support will be disbursed by the IMF to the RBM,” said Randall.

During the visit, the team will also take part in the IMF co-sponsored multi-stakeholder conference under the theme: ‘Malawi-Toward More Inclusive Growth’ to be officially opened by President Joyce Banda with the IMF Deputy Managing Director, David Owen, in attendance.

“The purpose of the conference is to provide an opportunity for reflection and strategizing on critical policies and measures and objectives needed to help implement the Malawi Economic Recovery Plan (ERP), which was discussed and formulated last June during the National Dialogue on the Economy, and the ECF-supported program,” explained Randall.

Out of the six donors under the Common Approach to Budgetary Support, only the World Bank and the African Development Bank have disbursed their support totalling US$90 million to Malawi four months after the approval of a new facility for Malawi by the IMF.