* President Banda says Malawi on right track after IMF
* Banda hopes donors will free funds frozen by graft charges
* IMF says Malawi performance "broadly satisfactory"
By Mabvuto Banda
LILONGWE, Jan 18 President Joyce Banda said on
Saturday that Malawi was on the right track after an economic
review by the International Monetary Fund and expressed hopes
that donors would release funds frozen over graft allegations.
The IMF on Friday rated the southern African nation's
economic performance "broadly satisfactory" after completing its
third and fourth reviews under a credit facility, enabling the
IMF to disburse around $20 million.
"This decision ... is a signal that we are on the right
track and it also boosts donor confidence in what we are doing
and hopefully this will unlock frozen funds we desperately
need," Banda told Reuters in an interview.
Banda, who took office in April 2012, implemented austerity
measures that led to a restoration of a $79 million IMF aid
programme suspended due to a conflict with her predecessor Bingu
wa Mutharika. She also took a personal pay cut and put
Mutharika's presidential jet up for sale.
But recent revelations of corruption led the country's key
donors to withhold millions of dollars in budget support and to
demand that Banda's administration investigate and prosecute
those involved in stealing state funds.
Foreign aid has traditionally accounted for about 40 percent
of the national budget.
The scandal, known locally as "cash-gate", forced the
government to shut down its payment system last year to
investigate allegations that $100 million had been stolen by
officials, delaying payment of salaries to teachers, nurses and
Banda, who faces an election this year, said she had called
for a forensic audit backdated to 2005 that would help reveal
the extent of corruption in the aid-dependent, impoverished
"This is my commitment to fighting corruption," she said.
"So far over 81 people have been arrested and 35 bank accounts
In a statement on Friday, IMF Deputy Managing Director
Naoyuki Shinohara said Malawi's macroeconomic performance under
the IMF-supported programme has remained "broadly satisfactory."
"To restore confidence in the authorities' management of the
economy, it will be important for the government to investigate
the fraud thoroughly and to implement the action plan to address
the weaknesses in public financial management exposed by the
fraud," he said.
(Editing by Tosin Sulaiman and Alister Doyle)