Malawians have to brace for more tough times ahead as the International Monetary Fund (IMF) has declared that Malawi’s Extended Credit Facility is off-track, calling for immediate remedial measures to be implemented.
The IMF team led by Oral Williams disclosed this on Wednesday during the presentation of their review findings on the programme.
Williams said IMF will not be able to release the second chunk of the funding of about US$20 million under the programme due to President Professor Arthur Peter Mutharika’s administration failure to meet some of the measures.
“Fiscal slippages equivalent to about two percent of the GDP emerged during the second half of the 2014/15 fiscal year, in part because of overspending on the wage bill and these were exacerbated by revenue and external financing shortfalls,” said Williams.
IMF recommended that government should among other things slash the current fiscal year’s MK900 billion budget.
“ To this end, tight monetary and fiscal policies are needed. Given ongoing external financing shortfalls, the budget should be financed in a sustainable manner and expenditures prioritized with a view to safeguard social spending,” said IMF.
Meanwhile, Finance Minister Goodall Gondwe says government would cut the budget estimates and will present the new figures during the mid-term budget review meeting in parliament.
He said among others government would “cut on travels.