Malawi external debt stock has grown by 219.5 percent in 10 years a recent survey by the National Association of Smallhoder Farmers in Malawi (Nasfam) has shown.
The report shows that Malawi’s debt has grown from $557.2 million in 2007 to $1.7 billion last year.
It further reveals a total public debt increase from $1.78 million in 2015 to $2.78 million in 2016, representing a 16.5 percentage point change of the country’s Gross Domestic Product.
The organisation, interest in loans targeting the agriculture sector uncovers that over $785 million has been invested in the sector in the past 10 years, with the loans accounting for more than 50 percent of the funding to agriculture.
However, the sector has not grown despite such huge investments and the report attributes the situation to lack of an enabling environment for access to debt management data and monitoring of the projects in the sector.
Nasfam Chief Executive Officer Dyborn Chibonga emphasised that the trend in debt accumulation revealed in the research are worrisome to smallholder farmers, let alone the entire private sector.
“As you know, Malawi’s debt was forgiven and what the research was trying to achieve was to look at the performance of the country and what we have done with the money that we should have been using to pay back the loan and what is the current status of the present loans,” Chibonga said.
He added: “what we have found out is that a lot of money has been spent on irrigation projects that have not achieved their purpose and it is a concern that, apart from us benefiting from being forgiven the debt, we are actually going back to owe a lot of money to various institutions around the world that give money in terms of loans and not grants”.
Commenting on the report, Chairperson of the Parliamentary Committee on Agriculture Joseph Chidanti Malunga pointed out the need for all stakeholders to join hands with members of Parliament in various committees to ensure accountability in government projects.
“It was our committee that asked Nasfam to go in-depth on this. It is pathetic to see that our country has accumulated a lot of debt but more worrisome is the fact that more than 50 percent is for the agriculture sector, yet when you go on the ground, there is nothing to point at,” Malunga said.
In a separate interview, Executive Director of the Malawi Economic Justice Network Dalitso Kubalasa said the findings of the research are not surprising as it has been a general concern that debt has been increasing, yet the country is failing to achieve meaningful economic development.
“We need to do a soul searching, we need to be patriotic enough and that has to start with those in the executive who are doing all the work, they have to uphold integrity at all times,” Kubalasa said.