LILONGWE (Malawi NewsNow) – The Reserve Bank of Malawi has said the country’s economy grew by 3 percent in 2015 from 6.2 percent in the previous year as the agricultural sector was ravaged by a drought, but forecast a rebound.
In a statement, Reserve Bank said gross domestic product would recover to 5.1 percent in 2016.
The bank added however, that the growth rate could be revised downwards due to the impact of El Nino weather conditions on the agricultural sector.
The International Monetary Fund (IMF) has since announced that it will resume a $150 million bailout (or “extended facility programme”) that was suspended last year following the revelation of an embezzlement scandal.
Finance Minister Goodall Gondwe, stressed the importance of resuming its relationship with the IMF and underscored how valuable receiving the last fifth of its bailout funds will be for the Malawi economy.
“The advice we get from the IMF is very important because they provide a very valuable yardstick of how we can manage our economy and we will continue doing well especially on public finance management so that we are not off track again.”
In 2015, the IMF suspended its financing of the African nation following the revelation that senior Malawian government officials had been skimming millions of dollars out of state coffers. The scandal left the Malawian economy in a tailspin, as dozens of other international lenders and donors suspended funding. Great Britain, the former colonial power in control of Malawi was among the nations that ceased providing aid over the embezzlement scandal.
IMF Mission Chief Oral Williams issued a statement regarding the restoration of its relationship with Malawi. He praised Malawi for demonstrating a significant and meaningful effort to clean house and correct the conditions that had allowed the scandal to occur in the first place.
He was also pleased by the nation’s efforts to get the bailout program back on track, which included obtaining new public financial management services.
Malawi has struggled economically over the last several years due, primarily, to steadily declining export earnings from its once thriving tobacco fields. Economic aid has also slowly dwindled as the nation continued to struggle to reach self-sufficiency. Such aid, at one point, accounted for as much as 40 percent of the nation’s total budget.