Malawi’s $175 Million IMF Credit Facility Lapses Amid Economic and Political Challenges
Published on May 15, 2025 at 9:20 AM by Edgar Naitha
The four-year, $175 million (about K306 billion) Extended Credit Facility (ECF) between the International Monetary Fund (IMF) and the Government of Malawi has officially lapsed, following a mutual agreement between both parties to suspend the programme until further notice.
Confirming the development, Secretary to the Treasury Betchani Tchereni said in a statement that the decision reflects a shared understanding between the Malawi Government and the IMF in light of persistent economic hurdles.
Reads the statement in part: “The programme faced a number of exogenous shocks which made it difficult for the supply side to assist both increased revenue and enhanced production.”
The Treasury noted that the lapse will provide the necessary political space to refocus on the programme after Malawi’s upcoming elections. “This resolution allows the political environment necessary for the progression of the ECF programme to normalise as is expected after the elections in September 2025, thus enabling government to leverage its fresh electoral mandate in negotiating a more sustainable extended credit facility package for Malawi’s macroeconomic stability going forward,” the statement added.
A separate government letter confirmed that “the two sides had agreed to suspend the arrangement until further notice,” acknowledging that a number of challenges had made it difficult for the IMF to continue providing financial support.
The IMF’s suspension of support comes amid ongoing financial difficulties that have affected the implementation of the programme, which was originally intended to restore macroeconomic stability in Malawi.
Despite this setback, both the Malawi Government and the IMF have expressed optimism that negotiations could resume following the general elections scheduled for September 16, 2025.
President Lazarus Chakwera had previously expressed confidence in the programme, stating in 2023 that the IMF loan would help the country’s economy recover.
