Malawi’s external public debt stock now stands at $3.74 billion (approximately K6.55 trillion), with the World Bank as the country’s single largest external creditor.
The Bretton Woods institution holds 50 percent of the country’s long-term public and publicly guaranteed (PPG) external debt, representing over $1.8 billion.
The current external debt stock represents over 76 percent of the 2025-26 national debt at K8.58 billion, and almost double the total revenue and grants for the second half of the current fiscal year projected at K3.078 trillion.
Malawi’s debt profile, contained in the latest International Debt Report of 2025 by the World Bank, shows that out of the $3.74 billion debt stock as of 2024, the public sector accounts for the entire long-term portion of $3 billion.
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Multilateral creditors collectively hold 89 percent of this debt, while bilateral creditors account for the remaining 11 percent.
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Within the multilateral share, the World Bank’s International Development Association (IDA) is by far the largest lender, carrying 50 percent of Malawi’s PPG external debt.
It is followed by the African Development Bank, which holds 13 percent, while other multilaterals, including the International Monetary Fund (IMF) and regional institutions, make up 26 percent.
The country’s overall public debt stock has increased exponentially over the years and now stands at K21.6 trillion, representing 86 percent of the GDP.
The external debt stock has also increased by 26.4 percent from 2020 to 2024 according to World Bank figures, worsening the already strained fiscal space, with high debt servicing.
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Meanwhile the government has allocated K1.260 trillion to repay public debt interests in the second half of the current financial year, according to the Mid-Year budget statement presented by Finance Minister Joseph Mwanamveka recently.
But the government is expected to borrow K107.1 billion from foreign creditors and K984.3 billion from the domestic market to finance its fiscal deficit projected at K1.091 trillion.
Finance Minister Joseph Mwanamvekha attributed the widened fiscal deficit to higher-than-planned expenditures for the second half of the financial year.
Meanwhile, Mwanamvekha has said the government had already agreed with all, but one, bilateral creditors on external debt restructuring, and continues to engage the commercial creditors on restructuring terms.
Economist Marvin Banda made a fresh call on the need to restructure both domestic and foreign debt to create fiscal space.
“Internal inconsistencies in the policy stance allowed for an unimaginable accumulation of unproductive public debt and a gross misallocation of domestic credit that has led Malawi to the worst five-year economic performance in the history of the nation,” Banda said.
