The new economic measures laid out by the U.K. government “will likely increase inequality”, according to a spokesperson from the International Monetary Fund. Yuri Gripas | Reuters

BLANTYRE, Dec 13 (Reuters) – The World Bank has approved $137 million of budget support for Malawi, with an immediate disbursement of $80 million, the bank said in a statement.

The funding will help the southern African country enhance fiscal sustainability, stimulate private sector-led growth, and increase resilience to shocks, the World Bank said.

After the initial $80 million, the remaining $57 million can be triggered in the event of a crisis, it added.

The support comes as Malawi battles chronic foreign-currency shortages that have led to a lack of fuel, medicines and fertilisers.

Malawi devalued its kwacha currency by 30% against the dollar last month.

“The Bank is now able to respond with a substantial budget support operation that supports an ongoing program of reforms,” said Nathan Belete, World Bank country director for Malawi, Zambia, Zimbabwe and Tanzania.

The International Monetary Fund, which approved a loan of about $178 million to Malawi in November, has said the country needs almost $1 billion in debt relief by 2027.

Advertisement

(Reporting by Frank Phiri; Writing by Bhargav Acharya; Editing by Alexander Winning and Alison Williams)