The IMF said Friday that it reached a staff-level agreement with Malawi for up to $88.3 million in emergency funding to tackle food crisis needs, making this the first low-income country to reach such a deal.
The disbursement comes under the International Monetary Fund’s Food Shock Window, a new emergency lending facility to help countries struggling with acute food insecurity as prices rise globally, reports BSS.
The facility, approved in September, comes as countries grapple with climate shocks, conflict and fallout from the Covid-19 pandemic — which have disrupted food production and distribution.
“This emergency financing… will help Malawi address urgent balance of payments needs related to the global food crisis,” said the IMF in a statement on Friday.
The funds will also help to support the East African nation’s economic adjustment and structural reforms, the fund added.
It noted that Malawi is also implementing debt restructuring needed to restore debt sustainability.
The new facility will operate for one year, IMF chief Kristalina Georgieva earlier said, and it is part of two emergency aid programs created to help countries deal with the impacts of the pandemic.
The programs are the Rapid Credit Facility, providing zero-interest loans for up to 10 years for the poorest countries, and the Rapid Financing Instrument for wealthier economies and must be repaid in five years at most.
In September, Georgieva met with Malawi’s President Lazarus McCarthy Chakwera and committed to support the country as it faced economic challenges and unsustainable public debt.
Malawi’s government has been in discussions with the Washington-based crisis lender for months on its request for an aid program.
