IMF approves USD 91 million loan to Malawi for COVID-19 trade balance woes

BLANTYRE (Reuters) - The International Monetary Fund (IMF) has approved a $91 million loan for Malawi to help fund a balance of payments deficit exacerbated by the COVID-19 pandemic, the Fund said in a statement.

“The COVID-19 pandemic is having a severe impact on Malawi, creating an urgent balance of payments need,” Tao Zhang, deputy manager of the IMF, said in the statement.

“The authorities have been proactive in mitigating the impact of the pandemic, including through increased spending on health care and social assistance ... and ensuring food security through purchase and storage of agricultural harvests,” he added.

The low-income southeast African country, which so far has reported 37 coronavirus cases and three deaths, was already suffering from economic stagnation linked to drought, leading to increasing unrest over falling living standards.

Malawi’s main export is tobacco, which makes up about half of export earnings, alongside other crops such as tea and sugar.

The World Bank said last month it had approved a $37 million funding package to help Malawi respond to the coronavirus.