IMF Suspends Malawi ECF Program Amid Economic Challenges, Zambia Recovery Gains Pace

The International Monetary Fund (IMF) has concluded its Extended Credit Facility (ECF) program with Malawi due to poor macroeconomic performance and failure to complete a review over 18 months. Malawi faced severe economic challenges including over 30% inflation, a 44% currency devaluation, insufficient foreign exchange reserves, and unsustainable public debt, which hindered fiscal discipline and revenue mobilization. The IMF noted that external shocks and structural issues complicated economic recovery, and the external debt restructuring necessary for debt sustainability remains unfinished. Malawi's government, led by the Malawi Congress Party, views the suspension as a strategic decision prioritizing national welfare over conditional aid, emphasizing transparency and domestic revenue mobilization. However, critics warn that the suspension undermines investor confidence and stresses the urgent need for reforms to attract foreign direct investment and promote export growth. Discussions are underway to restore IMF support post-elections, while Zambia progresses with IMF negotiations, showing expected economic growth and ongoing reforms under its ECF arrangement.