Malawi granted IMF food-shock funding to mitigate impact of global food shortage – The North Africa Post

The International Monetary Fund (IMF), the first low-income country to receive financing under a new tool to aid countries in coping with global food price shocks, has approved financing for Malawi to deal with rising food prices.

Due to decreased crop production and rising prices for fertilizers, the number of Malawians living in food insecurity has increased to 20%. Malawi’s government says the funds will also help address a lack of foreign exchange that has caused a fuel shortage in the country.

The IMF stated that Malawi is in a difficult economic and humanitarian situation. There are foreign currency shortages and an imbalanced exchange rate. This has caused a sharp drop in imports, including fuel, fertilizer and food. Annual food inflation has more than doubled to 34.5% since the beginning of the Russia – Ukraine war in February.

Therefore, the Washington-based institution agreed to lend the southern African nation $88.3m to “address urgent balance-of-payments needs and mitigate the impact of the food shock,” according to an IMF statement. It also said that about 20% of the country’s population was projected to be acutely food insecure “during the 2022/23 lean season which starts from October to March, more than twice as many people as during the same time last year.”

Government authorities say the approval of the $88.3 million loan to Malawi under the new ‘food shock window’ of the IMF’s Rapid Credit Facility will help address some of those challenges.