Malawi: IMF set to give $157m loan after Banda reforms

The International Monetary Fund has said it will lend Malawi $157m (£101m) to help its ailing economy.

Malawi has been beset with economic problems since the IMF sharply curtailed lending facilities last year.

Former leader Bingu wa Mutharika, who died in office in April, was widely criticised for a poor human rights record and mismanaging the economy.

His successor, President Joyce Banda, has taken steps to appease donors with a series of reforms.

Malawi is one of the poorest countries in the world and aid has been used to make up a large proportion of the national budget.

Last month, Mrs Banda devalued Malawi's currency, the kwacha, by one third against the dollar - a move Mr Mutharika resisted, despite demands from the IMF.

She also introduced a floating exchange rate regime and lifted controls on currency trading.

The IMF's mission head for Malawi, Tsidi Tsikata, said the new arrangement was subject to approval next month by the organisation's executive board.

The BBC Raphael Tenthani in Blantyre says that Mrs Banda has been on a charm offensive to regain much-needed aid, following a year of shortages of fuel and foreign currency.

She has also said she wants Malawi to overturn its ban on homosexual acts.

Some Western leaders have suggested they could cut aid to countries which did not recognise gay rights.

Last week, the UK announced a £33m ($51m) aid package for Malawi.

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Source: BBC News