The Malawi Government says it is happy that it has managed to reduce the amount of money it borrows from within the country.
According to spokesperson in the ministry of finance and economic planning, Nations Msowoya, domestic borrowing has fallen from 36.2 billion kwacha to 4.3 billion kwacha.
Msowoya said it is a welcome development and it has shown that government is willing to commit itself to fiscal discipline.
”This is a welcome development as it portrays that Malawi government is committed to fiscal discipline,” said Msowoya.
He added that when government borrows a lot from the domestic market, interest rate increases which lead to the rise of the cost of living.
”Economically what was happening is that the domestic borrowing was pushing up interest rates as government was competing with the private sector and this fuelled inflation,” he said.
Msowoya further said as one of the measures to stabilize the economy, government had to stick to the approved budget and to only spend money it received from Malawi Revenue Authority.