Malawi RBF - Ng'ambi - Jan11 - final

Throughout the ECF programme especially in the second phase (2011-2012), the disagreements between, the Malawi government on one hand and the IMF and the CABS donors on the other regarding the failure by the Malawi government to control public expenditure and domestic borrowing has been the major bone of contention between the two sides. [...] The signing of the ECF IMF programme, signalled to the rest of the donor community Malawi’s willingness to stick to the IMF macro-economic reforms despite the 13 | P a g e Analysis of the IMF Crises Solutions: The Case of Exogenous Shock Facility Loan and Extended Credit Facility to Malawi termination of the ESF program. [...] In contrast to the ESF, the Malawi government initially secured positive reviews from the IMF for its performance under the ECF, until March 2011 when the programme showed cracks and crumbling due to slippages by the Malawi government to stick to the terms for the ECF. [...] In the Letter of Intent to the IMF board sent by the Malawi Government on November 13 2008, the Malawi Government requested for the high-access Exogenous Shocks Facility (ESF) to address the severe terms of trade shocks that the country was facing from increased costs of fertilizers and fuel in the 2007-2008 financial year.24 The programme was expected to last from December 2008 and expire in Dece. [...] To liberalize exchange rates of the MK to the $ so as to give a true reflection of cost of the dollar to the MK as opposed to the repressed official rates that the Reserve Bank of Malawi uses 9.3 Outcomes of the ESF Credit What the ESF programme managed to achieve in the short term perspective was to bring back confidence of the development partners in CABS arrangement to support Malawi, but it di.