Malawi aid programme with IMF stalls -finmin

Tue Jun 14, 2011 10:48am GMT

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* Malawi fails to complete second performance review

* Future donor funding could be at risk

* IMF wants Malawian kwacha devalued

LILONGWE, June 14 (Reuters) - Malawi's programme with the IMF has stalled after the African nation failed to complete successfully a second review of its economic performance, Finance Minister Ken Kandodo told Reuters on Tuesday.

Failure to complete the assessment under an Extended Credit Facility puts future support in jeopardy after donors said they would link aid to a positive review from the IMF.

The International Monetary Fund approved a three-year $79.4 million facility for Malawi in February last year, which amounts to 75 percent of its quota in the fund.

But the programme has been hit by the government's failure to devalue the Malawian kwacha and implement public finance management reforms, among other issues.

"Our programme with IMF has stalled because we have failed to complete successfully our second performance review but I am confident that we will be back on track and unlock the funds that are being withheld by donors this fiscal year," Kandodo said. Continued...

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