‘Public money theft’ hindered IMF Malawi growth programme

1 Sep 17

Large scale theft of public money was among factors that stymied an International Monetary Fund programme to promote growth in Malawi.

That was among conclusions from an international stakeholders' conference in Lilongwe, held to take stock of the IMF’s recently completed extended credit facility and lessons for future engagement with the fund.

The credit facility worth $143.5m was designed to help Malawi address its worst humanitarian crisis after two consecutive years of drought.

Participants concluded it broadly achieved its macroeconomic stabilisation objectives, including reduced inflation and increased international reserves, but fell short on achieving sustained and inclusive growth.

High double digit inflation prevalent since 2012 began declining after 2016, reflecting tight monetary policy and a good agricultural harvest, reaching 10.2% in July 2017.

“Uneven policy and structural reform implementation, the sizable recourse to domestic financing after the large-scale theft of public funds, and weather related shocks collectively stymied economic growth and poverty reduction efforts,” the IMF said.

It added that any future engagement by Malawi with the IMF should focus on increasing growth and reducing poverty, while consolidating macroeconomic stability.

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