IMF agrees on new $157M package for Malawi

Malawi may be a step closer to winning back funding from donors after an International Monetary Fund mission that visited the country agreed to a new support package for the African nation.

The three-year package, worth $157 million, will replace the $79 million loan program with Malawi that IMF approved in 2010. The funding agency suspended the program last year after the late President Bingu wa Mutharika failed to address IMF’s economic concerns, including financial sector reforms and transparency.

Malawian authorities, according to mission chief Tsidi Tsikata, requested for a new program in order to “start on a clean state.” The package, however, is still subject for approval by IMF’s executive board in July.

The news could encourage donors to resume aid to Malawi. A number of them have suspended or ended budget support to the country over human rights and governance issues, and set the resumption of IMF support as a precondition for restarting aid to the African country. But under the new leadership of President Joyce Banda, donors have started warming up to Malawi.

Just this May, the United Kingdom announced the revival of its budget support to Malawi. In addition, the Millennium Challenge Corp., which formally suspended its $350 million compact in March, reopened its office in the country. Banda, according to Voice of America, will be meeting with MCC officials during her trip to the United States next week, presumably to discuss the suspended compact.

Find jobs, projects & tenders in Malawi. Read more development aid news online, and subscribe to The Development Newswire to receive top international development headlines from the world’s leading donors, news sources and opinion leaders — emailed to you FREE every business day.