Malawi and the International Monetary Fund (IMF) have made significant progress in discussions on a possible Extended Credit Facility (ECF) programme to support the country’s economic recovery and restore macroeconomic stability.
An IMF team led by Malawi Mission Chief Justin Tyson held meetings in Lilongwe from September 22 to October 6, 2026, focusing on recent economic developments, fiscal and monetary policies and reforms under the government’s National Economic Recovery Plan (NERP).
Tyson said Malawi had made progress on major reforms, including increasing domestic revenue and controlling expenditure in line with the 2026/27 national budget.
He said fuel and sugar pricing reforms had also helped improve market functioning, while discussions on measures to reduce the burden of public debt were advanced.
“Inflation has been moderating in recent months, supported by low food inflation, though non-food inflation remains high,” Tyson said.
However, the IMF warned that Malawi’s economic outlook remains challenging, with growth affected by climate shocks and declining demand for tobacco, the country’s largest export.
The Fund also said terms-of-trade shocks linked to the war in the Middle East were adding pressure, while adverse weather associated with El Niño could further affect agricultural production and food security.
According to Tyson, an ECF programme would support Malawi’s efforts to maintain fiscal discipline while protecting social spending for vulnerable households.
The proposed programme would also seek to strengthen monetary policy, preserve financial sector stability, remove market distortions and promote growth and productivity.
The IMF stressed that stronger governance and structural reforms would be critical to achieving lasting macroeconomic stability.
The team met Finance Minister Joseph Mwanamvekha, Reserve Bank of Malawi Governor George Partridge, Secretary to the Treasury Cliff Chiunda, RBM Deputy Governor Henry Mathanga and other senior government officials.
Discussions will continue as the two sides work to finalise the policy package that could underpin an IMF-supported programme.
