Wednesday, 29 May, 2002, 14:35 GMT 15:35 UK
IMF denies telling Malawi to sell food
Three-quarters of Malawians are short of food
The International Monetary Fund (IMF) has
denied that it recommended the sale of
Malawi's strategic maize reserves just before a
crop failure occurred.
President Bakili Muluzi declared a state of
national disaster in April and has asked for
$21m (£14.4m; 22.6m euros) in international
assistance for food relief.
Up to 76% of Malawians lack food and more
than 300 people are reported to have died of
hunger this year.
"We did not instruct
government or the
NFRA (National Food
Reserve Agency) to
dispose of the
reserves," the IMF
Reuters news agency.
"We have no expertise
in food security
Agriculture Minister Aleke Banda reportedly said
last week that the IMF had encouraged the
government to sell at least part of the reserve
in 2000 to reduce debt.
"International donors have argued that we do
not have to keep reserves at those (high)
levels," Mr Banda told the BBC's World Business
Food for thought
The IMF's Mr Begashaw countered that Malawi
sold the maize after advice from a food
consultant, hired by the government in a
European Union-funded project.
He added that the country cut the reserve by
two-thirds on the basis of inaccurate crop
"They thought they would have a good harvest
in 2001, so they went ahead and sold all the
167,000 metric tonnes in the reserve," Mr
"They did not even keep the 60,000 tonnes
that their own policy required them to keep,"
Finance Minister Friday Jumbe told Reuters last
week the government had been urged by the
IMF and other donors to settle commercial
Malawi then sold the food reserve to pay off a
one-year commercial loan taken in 1999 to
establish the reserve, he added.
Despite the food shortages, the IMF has
suspended Malawi's poverty-reduction
programme until it cuts government spending in
its budget in June.
Malawi produced more than two million tonnes
of maize in 1999, a national record after free
seed and agricultural goods were given to
three million farmers.
Mr Banda said the forecasts had predicted
another bumper harvest from March 2001 but
the crop failed.
Mr Jumbe said the reserve was sold in the last
six months of 2000 at an average loss of more
When news broke in January 2001 that the
next crop would be well below average, prices
The government called on Monday for tenders
for 40,000 tonnes of locally grown maize to
begin rebuilding the strategic reserve under an
Britain will be a major sponsor of this year's
programme to distribute free maize seeds and
fertiliser to farmers, Mr Banda said on