Voice of America
22 Nov 2022, 23:35 GMT+10
BLANTYRE - The International Monetary Fund (IMF) has approved financing to cope with rising global food prices for Malawi, the first low-income country to receive the help. The number of Malawians facing food insecurity has doubled to 20% of the population due to low crop production and increasing prices for fertilizers and seeds. Malawi's government says the funds will also help address a lack of foreign exchange that has caused a fuel shortage in the country.
Malawi is facing a challenging economic and humanitarian situation, with foreign exchange shortages and an exchange rate misalignment that has led to a sharp decline in imports including fuel, fertilizer, medicine, and food.
The IMF said in a statement released Monday that about 20 percent of the country's population was projected to be acutely food insecure during the 2022/23 lean season which starts from October to March, more than twice as many people as during the same time last year.
Government authorities say the approval of $88 million to Malawi under the new 'food shock window' of the IMF's Rapid Credit Facility will help address some of those challenges.
Sosten Gwengwe is Malawi's finance minister.
"Of course, every little (bit) helps. Most important is to be able to have a forex market that is efficient, that is able to work on its own and we are working very hard to build reserves at the Reserve Bank of Malawi so that we are able to normalize the forex market"
The IMF introduced the food shock loan in September for countries that have urgent balance-of-payment needs due to food insecurity, a sharp increase in their food import bill or a shock to their cereal exports.
Malawi President Lazarus Chakwera wrote on his Twitter account Tuesday that the funding "signals new dispensation of trust from bilateral and multilateral global institutions."
Chakwera said his administration is currently reorienting the fiscal and monetary system to achieve sustainable economic growth.
The issue also brought excitement in the Malawi Parliament Tuesday when the leader of the Malawi National Assembly, Richard Chimwendo Banda, briefed lawmakers.
"Madam deputy speaker, this is a celebration and people who are against me may not be Malawians," said ChimwendoI. "Today,I am celebrating, and I am happy. Malawi shall rise again, and Malawi is rising again"
However economic experts say Malawi should find its own means of addressing economic challenges rather than relying on borrowing money from lending institutions.
They say, for example, Malawi should invest in programs that would increase its exports base rather than relying on imports.
The IMF funding comes at a time when Malawi is facing fuel problems largely because of lack of foreign exchange.
He told the state-run Malawi Broadcasting Corporation Tuesday that the IMF assistance does not mean an immediate end to all challenges facing Malawi.
"It does not mean that things will change by next week. It doesn't mean that things are going to change tomorrow. Because we still need to do much more, we still need to work very, very hard. We want to come up with an economy that is built on concrete and an economy that is strong."
In the meantime, Malawi is waiting for approval of another chunk of funding from the IMF known as Extended Credit Facility.
Get a daily dose of Sierra Leone Times news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Sierra Leone Times.
More InformationHONG KONG: China has fired back at the European Union in an escalating trade dispute by imposing new restrictions on medical device...
NEW YORK, New York - Monday's trading session saw mixed performances across U.S. and global markets, with several major indices posting...
WASHINGTON, D.C.: The U.S. government has granted GE Aerospace permission to resume jet engine shipments to China's COMAC, a person...
DUBAI, U.A.E.: Saudi Aramco is exploring asset sales as part of a broader push to unlock capital, with gas-fired power plants among...
MILAN, Italy: Italian regulators have flagged four non-EU countries—including Russia—as carrying systemic financial risk for domestic...
NEW YORK CITY, New York: With just weeks to spare before a potential government default, U.S. lawmakers passed a sweeping tax and spending...
Wellington [New Zealand], July 8 (ANI): Right-arm seamer Matthew Fisher received a maiden call-up from the national team asthe squad...
(250708) -- KAMPALA, July 8, 2025 (Xinhua) -- Players of Uganda attend a training session for the upcoming men's Rugby Africa Cup Championship...
Washington, DC [US], July 8 (ANI): President Donald Trump said on Monday night (local time) that the US is close to reaching a trade...
Washington, DC [US], July 8 (ANI): US President Donald Trump on Monday (local time) shared letters sent by his administration to 14...
Brasilia [Brazil], July 8 (ANI): Prime Minister Narendra Modi greeted and interacted with members of the Indian diaspora upon his arrival...
In his letters addressed to the leaders of Japan and the ROK, Trump said the new tariffs will be separate from all other sectoral tariffs....