The International Monetary Fund (IMF) has unveiled an emergency loan of over $100 million to Malawi to enable the southern African country to strengthen its health care system and revive its economy in the aftermath of the COVID-19 pandemic.IMF deputy managing director Tao Zhang said in a statement on Saturday that the Fund’s executive board has approved a disbursement of US$101.96 million or 52.1 percent of Malawi’s quota under the Rapid Credit Facility (RCF).
He said this is the second emergency disbursement to Malawi since the onset of the COVID-19 pandemic and is expected to help finance Lilongwe’s urgent balance of payment and fiscal needs.
It follows the Executive Board’s approval of the disbursement of US$91 million in May.
“The IMF’s emergency financing under the second RCF will help close the immediate additional external and fiscal financing gaps,” Zhang said.
He added: “Further concessional assistance from the international community will be critical to close the remaining external financing gaps during 2020 and 2021 and help ease the adverse economic and social impacts of the pandemic, while preserving Malawi’s hard-earned macroeconomic stability.”
According to the IMF, Malawi’s economic outlook has worsened since the first RCF, with the accelerated spread of the pandemic in the country and the deteriorating global and regional economic situation.
The fiscal situation has also deteriorated, with revenue losses and channeling of budget resources toward critical spending, including to support incomes and food security of the most vulnerable and increased health sector outlays.