The government is expected to part ways with at least K898.7 billion during the first three months of 2024 in servicing debts it acquired through Treasury Securities.
According to a Market Developments Report of the Reserve Bank of Malawi, Treasury Securities worth K453.2 billion matured in January 2023 alone.
The report shows that in February, the government will spend about K152.6 billion in debt repayment while K292.9 billion will be settled in March.
Delivering the 2023-24 mid-year budget statement in Parliament last month, Minister of Finance and Economic Affairs Simplex Chithyola Banda said the provision for interest payments on debt had increased by K16.62 billion to K931.48 billion.
- Advertisement -
The increase is on account of exchange rate correction for the foreign interest and a lower than projected interest payment on the domestic debt, according to Chithyola Banda.
- Advertisement -
While acknowledging that debt has been a burden to the economy, Banda said the government will ensure that in the medium-term, public debt levels go down by containing the budget deficit.
He added that the government will continue mobilising domestic resources to finance the budget and spending will be done according to available resources.
He said the on-going debt restructuring strategy will assist to bring public debt levels to moderate risk in the medium term.
“Taking cognisance of the high public debt levels which currently stands at K12.56 trillion, government will not unnecessarily contract loans but for development purposes.
- Advertisement -
“It is for this reason that government is implementing the Local Currency Infrastructure Development Bond Programme whereby funds borrowed domestically are targeting projects that will propel development,” he said.
By November last year, Malawi’s total public debt stock increased to K12.56 trillion.
External debt now accounts for 53 percent of the revised total debt stock while the remaining 47 percent is domestic debt.
Prior to the realignment, external debt accounted for 44 percent of the total debt stock while 56 percent was for domestic debt.
