Joyce Banda Warns of Tough Times Ahead After IMF Suspends Credit Facility

Former President Joyce Banda has warned Malawians to brace for tough economic times following the suspension of the International Monetary Fund’s (IMF) Extended Credit Facility (ECF) program with Malawi.

Speaking to the media this afternoon, Banda said the development could have been avoided if the government had exercised fiscal discipline. She stressed that the IMF’s decision sends a negative signal to other development partners, who may now hesitate to support Malawi financially.

“This was avoidable. The suspension tells donors that there is a lack of financial responsibility, and that will make it harder to attract future assistance,” said the People’s Party leader.

The US$175 million credit facility, intended to support Malawi’s economic reforms, was suspended due to what Treasury officials described as “several exogenous shocks” that made it difficult for the country to meet the program’s conditions.

Banda also pointed to Malawi’s persistent balance of payment issues, highlighting the continued mismatch between imports and exports. She called for strong political will to boost agricultural exports and invest in the mining sector as long-term solutions.

Meanwhile, speaking at a graduation ceremony at Mzuzu University, President Lazarus Chakwera defended the decision, saying continued participation in the ECF would have compromised key programs under his administration.

The suspension of the IMF program is expected to have significant implications for Malawi’s economy, particularly as the country continues to face rising inflation and foreign exchange shortages.

Source: ZodiakOnline