IMF to review Malawi's performance

The International Monetary Fund (IMF) has yet to complete a review of Malawi's fiscal discipline and therefore cannot release a further US $47 million in Poverty Reduction and Growth Facility (PRGF) funding.

IMF representative Girma Begashaw told IRIN that the IMF could not release any of the US $58 million in PRGF funding promised to Malawi - apart from an initial US $8 million in December 2000 - because a review of Malawi's economic reform programmme had not been completed.

Many of Malawi's donors, who have for the most part withheld aid to the country, have waited for signals from the IMF before deciding whether to recommit themselves.

In late February the British government reiterated in Lilongwe that it would continue to withhold at least US $18,6 million until the IMF approved the country's macro-economic policy.

Begashaw told IRIN that an IMF mission would be in Malawi from the end of April to early May and would hold meetings with the Malawian government.

He said: "We had an IMF mission here from 25 February to 7 March ... they are coming back and they will do another assessment. When they go back [to the US] they will submit a report to the IMF executive board, based on that report a decision will be made on whether to disburse [the next tranche of the PRGF]."

Whether donors choose to follow the IMF cue was not up to the IMF, Begashaw said.

"A mistake a lot of people make is that they link the IMF [with donors]. The IMF does not decide for [donors such as] the EU (European Union) and DANIDA (Danish Aid). People tend to link the two, we do our reviews, some donors may use our reviews, they might take that into account to make their decision, but we have in no way an organisational link with any of them," he added.

The IMF loan was to be released in tranches over three years.