By Gift Sitima:
The Malawi Economic Justice Network (Mejn) has said high public debt and a wide trade deficit remain top on the list of challenges to economic growth.
Mejn Regional Coordinator Mike Banda said this in Blantyre when the firm engaged civil society organisations (CSOs) to solicit views to be form part of a document for submission to the Treasury as part of the pre-budget consultation process.
This comes as Malawi is among countries in the sub-Saharan African region with high public debt leading to limited fiscal space and increased borrowing costs.
Total public debt stock rose by 38 percent from K6.84 trillion, or 63 percent of gross domestic product (GDP), as at the end of March 2022, to K9.4 trillion or 75 percent of GDP in March 2023.
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Out of the total public debt stock, external debt was seen at $3.94 billion, or 32 percent of GDP, while K5.36 trillion ($5.22 billion), or 43 percent of GDP, was domestic debt.
The external debt stock, according to the recent Annual Public Debt Report by the Ministry of Finance, consisted of 73 percent Central Government debt and 27 percent central bank debt as at end-March 2023.
Banda called on the Treasury to work towards narrowing the budget deficit when crafting the next financial plan as a step towards dealing with soaring public debt.
“Apart from trade imbalance and high debt levels, inadequate revenue and corruption are among factors hindering economic growth,” Banda said.
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Banda said the country—a net importer—continued to struggle to balance exports and imports.
He then called on CSOs and other stakeholders to work towards aligning their projects and interventions with Malawi 2063 aspirations.
One of the participants Maynard Nyirenda said the expectation is that the next budget should be crafted in a way that it propels growth.
“Effort has already been deployed through initiatives like the megafarm concept, and strides in tourism and mining sectors. We expect that the funds that will be allocated should be accounted for,” he said.
Parliamentarians are expected to start the 2024-25 budget deliberations on February 9 2024.
