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IMF hails Malawi for taming humanitarian crisis

The International Monetary Fund (IMF) has praised Malawi for taming an unprecedented humanitarian crisis that placed 40 percent of its population at r...

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CSJ Contributor3 min read
March 25, 2017Blantyre, Malawi
The International Monetary Fund (IMF) has praised Malawi for taming an unprecedented humanitarian crisis that placed 40 percent of its population at risk of food insecurity. The Breton Wood institution made the observation at the end of its Staff Review Mission to Malawi, which was in the southern African nation conducting discussions on the ninth and final review under the Extended Credit Facility (ECF) arrangement. According to IMF, the stabilisation of maize prices was very instrumental in the alleviation of the adverse impact of the drought on the vulnerable population “Malawi, with the help of development partners, effectively addressed the worst humanitarian crisis in the country’s history. The crisis was caused by the second consecutive year of the El Niño-induced drought that placed an estimated 6.7 million people—or 40 percent of the population—at risk of food insecurity,” said leader of the IMF staff delegation Oral Williams. William said the intervention helped stabilize maize prices. Malawi’s economy was hit hard by the negative impacts of the drought, but the economic outlook is improving with better prospects of agricultural output including the maize harvest. IMF statistics show that real GDP growth after two consecutive years of drought fell below 3 percent in 2016 “but is expected to pick up in the range of 4 to 5 percent in 2017.” “The consumption-led recovery is expected to be driven mainly by a rebound in the agriculture, wholesale and retail, and telecommunications sectors. Annual inflation has now fallen to 16.1 percent (year-on-year) in February 2017—its lowest level in recent years. Both food and non-food inflation rates have contributed to the downward trend, reflecting prudent monetary and fiscal policies and the stabilization of food prices on account of humanitarian response,” Williams said in a statement. While Malawi is being praised for successfully managing to tame the hunger crisis, the procurement of its staple food maize caused a storm. The scandal was about Malawi’s importation of 100,000 metric tonnes  of maize from neighbouring Zambia. Senior politicians and bureaucrats in Malawi and Zambia have been under fire over  their controversial handling of $34.5 million maize deal. Media reports alleged possible irregularities during a government purchase of 100,000 metric tonnes of maize from Zambia. Malawi’s state-owned grain marketer, Admarc, is alleged to have purchased a consignment of maize for $34.5 million from a private company instead of buying the maize directly from the Zambian government at $21.5 million. Following the scandal Malawi President Peter Mutharika fired Agriculture Minister George Chaponda who is being probed by graft-busters.
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CSJ Contributor

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Reporting for the Centre for Solutions Journalism.

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