The Budget and Finance Committee of Parliament has called for the enactment of a Debt Management Bill to curb Malawi’s soaring public debt now estimated at K24 trillion, about 90 percent of the country’s gross domestic product (GDP).
Committee chairperson Sosten Gwengwe, speaking during a National Debt Coalition meeting in Lilongwe on Friday, said that the legislation is critical because fiscal pressures make it difficult for Finance ministers to cut domestic borrowing without legal limits.
He said: “The committee’s position has always been consistent that we need clear laws that enforce reporting and set thresholds.
“For example, the Reserve Bank of Malawi Act of 2018 sets limits on borrowing on ways and means.”
Gwengwe, who served as minister of Finance and Economic Affairs from January 2022 to October 2023 during the Malawi Congress Party administration, argued that statutory limits could shield ministers from political pressure to overspend.
“If we have the law, the minister can say I would have wanted to help, but the law gives me a limit and I cannot breach it,” he said.
The meeting was convened to discuss how the country can deal with the current debt situation and it came at a time the World Bank earlier classified Malawi as being in “debt distress” with public debt at K24 trillion of public debt, which is an equivalent to 90.1 percent of the country’s gross domestic product and 65 percent of the domestic debt.
During this fiscal year that ends on March 31 2027, Treasury is expected to pay K2.7 trillion in interest on the country’s public debt.
In an interview, National Debt Coalition coordinator Dingaan Mithi said the proposed Bill will strengthen transparency and accountability by giving Parliament oversight, mandating independent debt sustainability analysis and empowering the National Audit Office to conduct regular debt audits.
“It is critical for Parliament to immediately table a Debt Management Bill that will result in a robust debt management law,” he said.
Mithi said the law will solve the institutional void by providing a strict legal mandate for parliamentary scrutiny and formalising independent debt sustainability analysis.
He said the coalition, which groups together 25 civil society organisations, sees Malawi’s debt crisis as no longer a technical fiscal issue, but a structural challenge that requires urgent redress.
ActionAid Malawi policy coordinator Tusayiwe Sikwese, whose organisation is part of the coalition, warned in an interview that debt servicing now consumes 40 percent of revenue, squeezing funding for health, education and agriculture.
“In line with Malawi’s obligations under international human rights law, health, education and agriculture needs to be safeguarded from excessive fiscal adjustment,” she said.
In its April 2026 Africa Economic Update, the World Bank said Malawi’s debt restructuring launched in mid-2022 has stalled with no comprehensive agreement reached following the lapse of the International Monetary Fund programme.
The Bretton Woods classified Malawi as being in debt distress, a situation that makes the government struggle to meet financial obligations, leading to high risk of default.
