Malawi Government has picked a French firm to advise the government on debt sustainability.
Minister of Finance Sosten Gwengwe revealed this at a press conference last week in Lilongwe, saying the firm is called Global Sovereign Advisory (GSA).
The independent firm focuses on advising States and State-owned entities around the world on strategic, economic and financial issues, according to its website.
Malawi has a debt of K5.5 trillion and spends 15 million US dollars a month on servicing the debt.
The Minister of Finance during the briefing argued that Malawi’s challenge is not the size of the debt, which he said is less than 60 percent of the country’s Gross Domestic Product, but the management of the debt.
“Our key challenge is that we run a high debt servicing risk, because of forex shortage,” said Gwengwe.
He then revealed that Malawi has procured Global Sovereign Advisory with assistance from the European Union (EU) to help the country navigate through debt sustainability analysis.
He added that the Chakwera has prioritized a return to the International Monetary Fund (IMF) Extended Credit Facility (ECF) program as one way of getting back to macroeconomic stability.
He, however, warned that fixing the Malawi economy is not an event but a process.
“And now is the time to walk that path. Things might get worse before they get better and we will lay a foundation for sustainable microeconomic policies that last,” said Gwengwe.
He also urged Malawians to support the Chakwera administration’s economic agenda.
“We need to be more focused on the economics and not the politics for these reforms to yield the much-needed results. A better economy is good for us all regardless of our affiliations, political, religion or ethnic origin,” Gwengwe said.
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