Minister of Finance Simplex Chithyola Banda has indicated that China and India are responding positively to Malawi’s request to have its debt with the two countries restructured.
This came out on Monday in Parliament when the minister responded to input various committees weighed in on the 2024-25 financial blueprint, particularly on debt restructuring and debt swap negotiations with commercial and bilateral lenders.
Chithyola said the government is on course with debt restructuring negotiations with bilateral and commercial creditors, stressing that Capital Hill has received assurances from the governments of China and India on the intention to restructure the debt.
“With regard to the other bilateral creditors such as Kuwait Fund and the Saudi Fund, negotiations are at an advanced stage and now centred on agreeing on the revised term sheets and it is hoped that this will be concluded soon. In terms of actionable plan for dealing with domestic debt, all the measures that I have already alluded to, that aim at boosting the economy, would also address the issue of rising debt through improved production and revenue collection enhancement, among others,” Chithyola said.
Recently, Budget and Finance Committee Chairperson Gladys Ganda underscored the need for Parliament to thoroughly scrutinise domestic borrowing.
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Ganda’s sentiments come at a time Malawi’s public debts is hovering at around K13.1 trillion, more than double the 2024-25 national budget.
According to Ganda, unlike foreign borrowing whose individual loans are brought to Parliament for approval, the same does not happen for domestic borrowing.
“We do give a blanket approval to the Minister of Finance to borrow on the foreign front. Individual loan authorisation bills are also brought to Parliament for approval, but not the domestic side.
“So, moving forward, we need to agree with the Minister of Finance on how best we could play our oversight role on the domestic side,” Ganda said.
