IMF hails Malawi’s Macro economic reforms says foundation set for new ECF program

Malawi Exclusive

The International Monetary Fund has hailed Malawi for implementing strong reforms to restore macroeconomic stability, saying the reforms provide a good foundation for a new IMF-supported programme under the Extended Credit Facility (ECF).

In its End-of-Mission press release issued Monday at the end of a two-week visit, the IMF said the authorities and the Fund team have made considerable progress in designing a comprehensive package of policies that could underpin the ECF arrangement.

“The authorities have been implementing strong reforms to tighten fiscal discipline, reduce the public debt burden, and improve how markets function. These reforms provide a good foundation for an IMF-supported program,” the Fund said.

The IMF team led by Mission Chief for Malawi Justin Tyson held meetings in Lilongwe from September 22 to October 6, 2026, with Minister of Finance, Economic Planning and Decentralization Hon. Joseph Mwanamvekha, Reserve Bank Governor Dr. George Partridge, Secretary to the Treasury Dr. Cliff Chiunda, Deputy Governor Henry Mathanga and other senior officials, as well as development partners.

At the conclusion of the mission, Mr. Tyson said:

“The authorities have made progress on major reforms to restore macroeconomic stability under the National Economic Recovery Plan (NERP). In line with the 2026/27 budget targets, domestic revenue is increasing, and expenditure has been tightly controlled. It will be important for execution of the budget to remain on track.”

He said authorities have also taken decisive actions, such as fuel and sugar pricing reforms, which helped improve market functioning, and that discussions are advanced on measures to reduce the burden of high public debt.

“Inflation has been moderating in recent months, supported by low food inflation, though non-food inflation remains high,” Tyson added.

The IMF noted that Malawi’s economy is navigating a challenging environment, with growth affected by climate shocks and a decline in demand for tobacco, the country’s largest export item, while terms-of-trade shocks since the beginning of the war in the Middle East are an added strain.

“While growth is expected to recover in the medium term, risks to the outlook are tilted towards the downside. In the short-run, adverse weather shocks caused by the El Niño event could impact agricultural production and intensify food insecurity across the region,” Tyson said.

According to the Fund, a programme under the ECF would support government’s objectives under the NERP to restore and preserve macroeconomic stability and promote inclusive and resilient growth.

The comprehensive package would aim to sustain medium-term fiscal consolidation while protecting social spending for vulnerable households, strengthen and tighten monetary policy, preserve financial sector stability, and remove market distortions to promote growth and productivity.

“Strengthening governance and structural reforms will be key to macroeconomic stabilization. Facilitated by good collaboration and the positive reform path, discussions will continue to finalize the policy package that could underpin an ECF-supported program,” the statement reads.

The team thanked authorities for candid and constructive discussions and said it looks forward to finalizing the policy package that will be presented to the IMF Executive Board for discussion and decision.