Malawi’s public debt hit K16.19 trillion by September 2024, marking 86.4% of GDP. The government is negotiating with creditors for debt restructuring and is focused on improving debt management and prioritizing key sectors for borrowing. The Integrated National Finance Framework aims to ensure sustainable national development.
As of September 2024, Malawi’s public debt has surged to K16.19 trillion, which equates to 86.4% of the country’s GDP. This alarming increase was disclosed by Finance Minister Simplex Chithyola Banda during the presentation of the 2025/2026 national budget. The external debt is recorded at K7.39 trillion, while domestic debt amounts to K8.79 trillion, highlighting the government’s reliance on borrowing to fund its expenditures.
Minister Chithyola Banda confirmed that the government has been negotiating with both official bilateral creditors and commercial creditors to restructure its debts. He stated, “Once the negotiations are completed, the initiative will ease the pressure on foreign exchange and provide fiscal space necessary for productive investment.”
To tackle the escalating debt levels, the government aims to enhance debt and cash management practices. This includes contracting concessional loans and focusing its borrowing on priority sectors. He elaborated, “To tame the growing debt, the Government has stepped up its efforts to strengthen debt and cash management.”
Key strategies being employed by the government include implementing commitment controls, limiting the issuance of guarantees, and creating a framework for assessing and managing guarantees and borrowing for state-owned enterprises. Furthermore, the Integrated National Finance Framework has been developed to promote sustainable national development through diversified resource mobilization.
In summary, Malawi’s public debt crisis has reached K16.19 trillion, necessitating government action. By negotiating debt restructuring with creditors and enhancing debt management practices, the government seeks to stabilize its finances. The emphasis on concessional loans and targeted borrowing for priority sectors reflects a strategic approach to managing fiscal challenges and promoting sustainable development.
Original Source: malawi24.com
