The International Monetary Fund (IMF) has told Malawi’s government to sort out some ”pressure points” in its current budget before lending to the impoverished southern African nation can be resumed, a report said on Wednesday.
”The government is now faced with the uphill task of clearing out some pressure points,” Girma Begashaw, IMF resident representative was quoted as saying in the Daily Times. He said the government needs to sort out the importation of some 600 000 tons of maize, the staple food here, to stave off famine
which threatens up to 3,2-million people.
It must also deal with a rising wage bill fuelled by payments to hundreds of ”ghost employees” and do something about the country’s underperforming parastatal firms.
Alfred Kammer, leader of the IMF team which has just ended two weeks of talks with the government, was quoted as saying that the government neglected anti-poverty programmes in its national budget and instead condoned other spending.
Kammer said the food situation in Malawi ”remains difficult and the mission will work closely with authorities to monitor the situation and assist within IMF’s mandate.”
The IMF is giving Malawi $23-million to buy and import
maize. An IMF board meeting next month is expected to review Malawi’s economic performance before authorising the release of a delayed disbursement of $47-million out of a $55-million aid package because of concerns that the government is overspending.
Donors fund 80% of Malawi’s development budget and delays in disbursing the money have created serious financial problems in the country.
Former colonial power Britain is currently witholding the first part of a $12,5-million aid package until the IMF approves the country’s budget.
Malawi currently has a $45-million budget deficit. – Sapa-AFP