MALAWI: IMF Loan Suspension & more – 20th May 2025

Muli bwanji from Keswick Village! This is the Rorshok Malawi Update from the 20th of May twenty twenty-five. A quick summary of what's going down in Malawi.

The International Monetary Fund (or IMF) terminated its 175 million dollar Extended Credit Facility after the Malawi government failed to complete a single review for over eighteen months, which made it hard for the IMF to track funds. The agency gave the country thirty-five million dollars in November twenty twenty-three and was supposed to provide the remaining funds over four years.

According to the IMF website, Malawi struggled with financial discipline because of forex shortages, high inflation, and external shocks like the cholera outbreak and cyclones, which destabilized the economy.

This is the third time in the last five years that the IMF has dropped Malawi. The President said the loan suspension was mutual and that they would negotiate a new agreement with the IMF after the September elections, but the government might just be saving face.

After the news of the IMF’s departure, there were concerns about the government devaluing the Kwacha to make up for the forex shortage, as there was a statement on social media that looked like it was an official document from the Reserve Bank about an impending Kwacha devaluation. However, the Bank said it was fake.

On Tuesday the 20th, MacDonald Mafuta Mwale, the Reserve Bank Governor, assured that they would not devalue the Kwacha and that plans are in place to boost local forex reserves, such as long-term investments in agriculture and mining.

Mwale also said Malawi’s relationship with the IMF is still strong, and that a team from the agency will visit Malawi on Thursday the 22nd to discuss a new partnership.

On the flipside, not all donors have backed out. On Friday the 16th, the World Bank approved a 350 million dollar grant for Malawi’s Mpatamanga Hydropower Storage Project, which is expected to generate over 1,500 gigawatt hours of clean energy per year and connect over one million people to the national power grid.

According to local news, this is the biggest direct foreign investment in Malawi’s history.

Ibrahim Matola, the Energy Minister, said the project will help meet Malawi’s rising energy demands and support sectors that use a lot of energy, such as mining, agri-business, and tourism. He said that thousands of jobs will be created during implementation.

Meanwhile, the government is moving to improve its financial sector. On Saturday the 17th, the Ministry of Finance and Economic Affairs launched a series of nationwide training sessions for accountants in Ministries, Departments, and Agencies. The Ministry is working on improving its public financial reporting systems by transitioning from cash-based to accrual-based accounting.

Chifundo Kapulula, the Accountant General, told local media that this is part of Malawi’s broader financial reform strategy, which will see Malawi adopt internationally recognized public accounting standards by twenty twenty-eight. He said making this change will help Malawi have transparent financial statements, which can be understood globally.

On a more public approach, on Thursday the 15th, the National Audit Office launched the twenty twenty-five–twenty twenty-nine Citizen Engagement Strategy, which aims to help citizens understand government audits and become more active in ensuring that public funds are used accordingly.

Thomas Makiwa, the General Auditor at the Office, said that the plan works in three ways: It will reach people directly through community meetings, social media and outreach events; it will work closely with civil society groups; and it will also share information on mass media like the radio and television.

Going back to the Reserve Bank for a bit, on Tuesday the 20th, it announced that it had partnered with the International Finance Corporation to allow individuals and small businesses to get loans using movable assets, where traditional collateral like land or buildings is not an option. According to the central bank, movable assets include livestock, agricultural machinery, insured motor vehicles, computers, and unpaid invoices.

The bank told local media that this is a part of a nationwide awareness campaign that aims to make finance more inclusive, especially for micro, small, and medium enterprises. They said they want to make sure that anything that has value can be used as collateral when accessing loans.

On another note, the police in Lilongwe in the Central Region arrested four Zambian nationals who were caught trying to smuggle over 200 kilograms, or a little over 440 pounds, of live crayfish into Malawi. Authorities said that, if put into any of the country’s water bodies, the crayfish can make local fish species like the popular chambo extinct because crayfish prey on other fish and disrupt natural habitats.

On Saturday the 17th, the Department of Fisheries burnt the crayfish after getting permission from the Principal Magistrate Court.

The four suspects will be appearing in court soon to answer charges for illegal importation and environmental endangerment. The incidents raised questions about whether this was attempted sabotage or an honest mistake.

Over the past few months, the prices of goods have risen sharply, prompting some locals to turn to soya pieces, which are considered a cheap and healthy meat alternative. However, local news reports indicate that the commodity has now become scarce in local markets.

On Monday the 19th, the Nyasa Times reported that major stores like Chipiku are now rationing soya pieces because of the shortage. They did spot checks in several stores across Lilongwe, but they did not confirm whether the shortage is a nationwide issue.

The report said they have yet to get feedback from the soya pieces manufacturers to understand why there’s a shortage.

There is a sugar shortage as well, and people are queuing for the commodity in major stores across the country. The news broke out on Saturday the 17th when Jack McBrams, a local journalist, shared live footage of the queues on Twitter and questioned why people were queuing for sugar when local sugar manufacturers were still meeting their export demands.

On Tuesday the 20th, local news revealed that the shortage had hit other districts like Mzimba in the Northern Region, and that local sellers were taking advantage of the shortage and making up their own sugar prices, which were very high.

Authorities, including those from local sugar manufacturers like Illovo and Salima Sugar Companies, have yet to comment on the matter.

In education, students will start writing exams administered by the Malawi National Examinations Board from Wednesday the 21st until the 25th of July. These include the Primary School Leaving Certificate exams for Standard 8 learners, the Junior Certificate of Education exams for Form 2 learners, and the Malawi School Certificate of Education exams for Form 4 learners. Students won’t be writing their exams for two months as the tests are administered in phases, starting from the youngest classes to the oldest.

According to a social media post by the Board, nearly 627 thousand candidates registered to sit for the twenty twenty-five national exams, indicating a two percent increase from last year’s 611 thousand.

Atupele Muluzi, the President of the opposition party United Democratic Front, was named among the 100 Most Reputable Africans in twenty twenty-five by the Global Reputation Forum on Friday the 17th. His party has since taken this as an opportunity to boost their political campaign ahead of the September presidential elections. They took to social media to say the recognition is proof that Malawians can trust that Muluzi has quality leadership skills.

Some local media houses also said that Muluzi’s recognition might affect the upcoming elections by swaying voter preference since it boosts his credibility.

And to close this edition, the rights of all the albums belonging to the late Lucius Banda, a legendary musician, were signed over to the Universal Music Group on Thursday the 15th. The deal also includes all the music that Banda wrote and recorded.

Tapps Bandawe, a veteran producer, led the deal signings under his brand, the Gold Mountain Music. He worked with Banda on numerous projects and said this new deal means Banda’s music catalogue, which is arguably the biggest in Malawi, can be used in movies and other media on the international market.

Bandawe and the Banda family believe this is a great way to preserve the legacy and works of Lucius, who died last year.

Aaand that’s it for this week! Thank you for joining us!

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Pitani bwino!