Malawi debt hits K2.5 trillion

Dec 06, 2017 Politics 70
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Goodall Gondwe

The Malawi government has up to K2.5 trillion public debt to settle, at a time the nation is sailing through troubled waters.

However Finance Minister in his speech in Parliament on Tuesday was upbeat the debt is manageable.

Goodal Gondwe
Goodall Gondwe says the debt is manageable.

“Mr. Speaker Sir, it is worth noting that the amount of external debt contracted in each era as presented in the Report on External Loans Contracted from 1964 to 2017 (which has been circulated to all the Honourable Members of Parliament) cannot be comparable across the five political administrations we have had since independence in 1964. This is on account of two reasons; one – each era had its own rate of US Dollar inflation and two – both the operating environment and duration of the political administrations varied across the five eras. On the basis of these arguments.”

Gondwe added: “Mr. Speaker Sir, it would be inappropriate for us today to be debating as to which administration contracted more external debt than the other. Instead, we need to acknowledge the fact that each administration faced challenges that could be specific.I would like to inform the Honourable Members in this House that Malawi mostly borrows from multilateral financial institutions, key among them being the International Development Association of the World Bank Group and the African Development Fund of the African Development Bank Group. Financial support from the United Nations and the European Union is largely received in form of grants.”

Gondwe also noted that bilateral partners such as the United States of America, the United Kingdom, Japan, Germany among others have been playing a key role in Malawi’s economic endeavors.

He then said that the Peter Mutharika led government remains satisfied with the tendency of borrowing externally saying Malawi has through that achieved notable infrastructural development over the years.

He has since disclosed that government has plans to reduce domestic borrowing in a bid to bring ‘down the debt stock to a more sustainable level’.

“In line with this policy direction, the Government has consistently reduced domestic borrowing over the past three financial years from 2014/15 both in nominal amounts as well as in proportion to GDP,” said Gondwe when he briefed the August House on the status of public debt.
Malawi has over the years kept banking on donor support in its budget even though donor free budgets have been executed before.

Ministries of Education, Agriculture and Health continue to get lions share of resources in Malawi’s national budget as evident in the budgets the Mutharika regime has been deploying including the current 2017-18 national budget pegged at K1.2 trillion.

Despite the fact that Malawi’s inflation rates are decreasing, on the ground the cost of living is on the rise as evidenced by prices of basic commodities and transportation.

(More reactions to follow)

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70 Comments

  4. all these trillion went into government officials pocket, Ministers and Capital hill staff, Had it been it was used efficiently for the intended purposes Malawi Would have been grown ecomically and we wouldnt have been facing all these prblems we are facing now. the country would have been the better place to live.

    The consequence of Servicing such Huge Government Debt that never benefit Malawian will cause our Economy to shrink further, More money to be collected in taxes from poor malawians who are striving to make a living.

  5. all these trillion went into government officials pocket, Ministers and Capital hill staff, Had it been it was used efficiently for the intended purposes Malawi Would have been grown ecomically and we wouldnt have been facing all these prblems we are facing now. the country would have been the better place to live.

    The consequence of Servicing such Huge Government Debt that never benefit Malawian will cause our Economy to shrink further, More money to be collected in taxes from poor malawians who are striving to make a living.

  6. all these trillion went into government officials pocket, Ministers and Capital hill staff, Had it been it was used efficiently for the intended purposes Malawi Would have been grown ecomically and we wouldnt have been facing all these prblems we are facing now. the country would have been the better place to live.

    The consequence of Servicing such Huge Government Debt that never benefit Malawian will cause our Economy to shrink further, More money to be collected in taxes from poor malawians who are striving to make a living.

  13. All words in the Bible/ Quorum are beautiful when used accordingly.. But words like Democratic Progressive Party are worst than ever as it harmonise evil deeds.. ” Truly Malawians need a government today “!!!.

  14. It was the time of Goodall when debts were written off and the time if the same Goodall when they have reached rocket high including zogula ma tractor aka anagawana aja and zokumbira zimbudzi zimene anakakumba kunyumba zawo. What do you make of this? To me l call it rise and fall

  17. We are just a developing nation, high levels of debts is one of the characteristics. We can not deny that unless we work to improve on our economy.

  18. BOMA LA PAPM LAYESESA ZAMBIRI NGATI MISEWU ZINA NDIZINA, ZANGOVUTA NDIZAMAGESIZI BASI AND YAMAGESI YOKHAYO NDE ANTHU AKUVUTIKA KWABASI

  24. Wow!!! How is the gvt of ours which is pretending to be following a zero budget,going to pay back such huge sum,where is warm heart of Africa,is there any reason for boasting that inflation rate is appreciating yet its heading to a nose dive,kkkkk.

  27. Very bad for astruggled economy like ours and the sad thing is that the borrowed money which is being talked here end up in some few individuals pocket mavuto alipo

  30. Why cant we force all those who have stolen our cash to cough out at once by way of confistications of their property and pay

  36. Only few greedy politicians from ruling party benefited from this katapira. And this katapira will put our children in trouble.

  39. Zapa Malawi izi,,,,, Vuto niloti anthu akutsogolo I mean those in higher offices are the ones who teaches how to steal,,,, even okolopa mnyumba kumagula njare yoyendera kkkkkkkkkkk APM asova!!!!!!!!

  42. Our budget z almost 1 trillion of which almost half the amount timadalira donors yet we see ourselves having the muscle kutenga ngongole up to 2.5 trillion.more blackouts,zipatala no medicine,poor road networks kumafunsa kuti ndalamazo mukatenga mumachitiranji.Ambuye ingobwerani mutiweluza basi

  45. Very bad situation. In Malawi no government will ever say it found the coffers with money if this is the trend. It I’d a taboo to consume beyond your means! This is common if no money is put to productive use but mostly spent on consumption!

  47. Wait a minute!! What did you do with that money? I mean where did it go? Is there any Report that indicates how much was spent on what?

  48. Not long ago our national dept was zeroed by the lenders. At that time I thought fantastic what a great opportunity for Malawi to.be dept free. All we had to do.is ensure we don’t spend more than we produce or we export more than import in terms of value..
    .it was a simple concept but again we did not stick to this simple rule. Now we have a dept that we cannot even pay off the interest. We have no electricity and will run out of forex shortly due to the requirement to bring in fuel to power the massive generators required. Chaps Malawi is well on its way to being a failed state. I am not even sure if blind luck can change this course we are heading on.

    3. very sad indeed but these loans were taken to feed these monsters the failed academic who for decades works in overseas and came back with tittles and blackmail the uneducated population in order to loot the state .

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