Malawi again shut out of IMF debt relief
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Malawi has once again failed to qualify for the International Monetary Fund (IMF) 100 percent debt relief but government has said the country is yet to be assessed early next year as it has other conditions to satisfy before it gets any relief, local media reported Tuesday. Malawi`s independent newspaper The Nation quoted a statement from the IMF as saying on its website the fund`s Executive Board completed the assessment of the first group of countries that are eligible for relief under the Multilateral Debt Relief Initiative (MDRI). The paper said a total of 19 countries were granted 100 percent debt relief by IMF, but Malawi was excluded from this group. This is the second time in the year for the poor southern African country to lose the opportunity of attaining debt relief from IMF. Having failed to qualify in August, Malawi was given another chance for six months to show good economic performance. Malawi Economic Justice Network Acting National Coordinator Mabvuto Bamusi was quoted as saying it is a disaster that Malawi has failed to qualify for the much wanted debt relief. “It is catastrophic to the nation because we are living with a huge debt overhung that is hovering at around 300 billion kwacha ( about 2.4 billion US dollars) and each year the government is setting aside a lot of money to service these debts at the expense of other important services such as health, security and education, ” said Bamusi. He said Malawi might not have qualified because of failure to meet the Heavily Indebted Poor Countries (HIPC) completion point, adding that other factors could also have contributed to the failure such as the political bickering recently seen within parliament. Bamusi said government has to ensure that the public finance system must be put in order if the country is to qualify in future considerations. Institute for Policy Interaction (IPI) Executive Director Rafiq Hajat also said it was another tragedy for Malawi which spends about 30 percent of its Gross Domestic Product (GDP) on debt repayment. But Acting Secretary to Treasury Patrick Kabambe said Malawi might not have failed to qualify for the debt relief because the period donors gave the country to show good economic performance has not yet expired and that the assessment falls in February next year. “Upon expiry of the six months we will be required to submit our report based on the indicators, and the donors will assess us and that will take place probably in February next year,” said Kabambe. |