Chaponda Blames Government for IMF Credit Facility Cancellation

By Smile Hamilton, Malawi

The Leader of the Opposition, Dr. George Chaponda has told the visiting International Monetary Fund (IMF) delegation that the government’s failure to maintain fiscal discipline led to the cancellation of the Extended Credit Facility (ECF).

Dr. Chaponda made these remarks during a consultation meeting held by the IMF mission with various stakeholders in the country.

He accused the administration of excessive borrowing and reckless spending, which he claims undermined confidence in Malawi’s economic management and ultimately resulted in the suspension of the $175 million four-year facility.

“The government has failed to prioritize transparency and accountability in the management of public finances,” Dr. Chaponda said.

“This failure has now cost the nation a critical financial lifeline.”

The IMF’s ECF is designed to support low-income countries with balance of payment problems by providing concessional financing to implement necessary economic reforms. For Malawi, the facility was aimed at supporting economic recovery, strengthening public finance management, and ensuring macroeconomic stability.

However, Chaponda argued that instead of adhering to agreed-upon targets, the current administration has expanded the budget without proper revenue backing, worsened inflation, and increased public debt burden. He further warned that the cancellation could erode investor confidence and deepen the economic challenges facing ordinary Malawians.

In response, Secretary to the Treasury, Dr. Betchani Tchereni downplayed suggestions of a breakdown in relations between Malawi and the IMF. He said the decision to allow the facility to lapse was a mutual understanding between both parties, as the country reassessed its macroeconomic framework.

“The government remains committed to engaging with the IMF and other development partners. We are currently working on a new framework that reflects the realities on the ground,” Dr. Tchereni said.

The IMF team is in the country as part of its routine assessment of Malawi’s economic situation and to discuss potential pathways for renewed support. Stakeholders, including civil society organizations, business leaders, and economists, are also expected to meet with the delegation.