Malawi requires new IMF programme

Malawi became the first country to implement a year-long IMF low interest loan programme called Exogenous shocks Facility (ESF) where it used US$77.1m to support the terms of trade shocks as a result of hiking prices of fuel and fertiliser.

Since the expiry of this programme last year, Malawi has been anxiously waiting for another economic programme, which will be the bedrock of its economic activities.

“It is a do or die situation,” said Dr. Perks Ligoya, Malawi's central bank governor, to a local daily adding that they are doing everything possible for this to work saying they “need this programme to save the economy.”

Already, indicators of how bad things might get have started showing; Malawi, which needs a minimum of three months of import cover as per international recommendation, now has an equivalent of 1.38 months of import cover.

According to latest minutes of the Monetary Policy Committee of the central bank as of 13 November 2009, official foreign reserves had dropped to US$177.9 million.