The International Monetary Fund (IMF) is giving Malawi three months to improve its finances before it will resume talks on fresh aid, the poor southern African country’s finance minister said on Wednesday.
”The IMF wants to see if the new government can establish a new track record,” Goodall Gondwe told the daily Nation.
A former top IMF official himself, Gondwe said however a team from the international lender would return to Malawi next month to ”help us implement the three month programme” which would end in September.
The fund’s representative, Michael Nowak said the country’s finances ”are not in good shape and needed to be strengthened,” as the talks ended with Malawian officials.
The IMF visited Malawi in early June following the election to office of President Bingu wa Mutharika and his government, saying it was ready help improve finances as a step towards resuming aid, suspended two years ago.
The IMF said in a statement it was ”committed to helping the new government achieve macro-economic stabilisation, sustainable growth and poverty reduction by fleshing out a strong adjustment and reform programme”.
Mutharika had also asked the IMF to return for further talks. More than $75-million (61-million euros) in aid were suspended in 2002 by the IMF and donor countries because of concern about overspending by former President Bakili Muluzi’s administration, who handed over power to his chosen successor Mutharika.
Mutharika, who won the country’s third free elections since 1994, has promised to carry out wide-ranging economic reforms to win back donor confidence and turn around the sluggish economy.
Malawi is being battered by a national deficit of $600-million and a foreign debt of $2,9-billion.
Donors such as Britain and the European Union have said they will release aid only if the IMF gives its approval to the reform policies.
Wedged between Mozambique and Zambia, Malawi is one of the world’s poorest nations with the majority of its 11,3-million-strong population living on less than a dollar a day.
The former British colony is also one of the hardest-hit by the Aids crisis, which has brought life expectancy down to 36 years. – Sapa-AFP