An economic expert in the country has said that too much borrowing by the Malawi government will not strengthen fiscal and monetary policies.
The economist, Ben Kalua who is a professor of economics at Chancellor College was reacting to a statement by the minister of finance Goodall Gondwe in which he said government is working on strengthening the country’s fiscal policy.
Kalua said too much borrowing will not strengthen fiscal policy and the government need to observe fiscal discipline for now.
”Fiscal and monitoring policy can’t be strong if there is too much borrowing and there is need to still implement fiscal discipline at all costs,” said Kalua.
He added that fiscal reforms could have transformed the country but they have been ignored by political leaders. Kalua said that politicians are focusing on their interests and not on the aspirations of Malawians.
However, some quarters have argued that fiscal deficit – When a government’s total expenditures exceed the revenue that it generates – is not necessarily a bad thing provided that it does not create additional debts without corresponding solvency.