Economists have warned that weak debt transparency and incomplete reporting could expose Malawi to higher borrowing costs and fiscal instability.
Economics Association of Malawi (Ecama) president Bertha Bangara-Chikadza said in an interview on Friday that gaps in debt reporting risk were undermining fiscal credibility and investor confidence.
She was commenting on the International Monetary Fund and World Bank reports which have highlighted serious weaknesses in debt management of the country’s sovereign debt recorded at K16.1 trillion as of September 2024, accounting for 86.4 percent of the country’s gross domestic product.
Bangara-Chikadza, who also teaches economics at the University of Malawi, said: “Reliable debt statistics are fundamental to sound economic management, and gaps in reporting create significant risks,” she said in response to the IMF’s findings.
“Policymakers may struggle to make informed fiscal decisions without a full picture of the country’s debt obligations.”
She cautioned that without improvements, Malawi could face higher interest rates and reduced access to concessional financing.
On his part, governance advocate Willy Kambwandira warned that the risk of selective disclosure or political manipulation of debt data remains high.
“Incomplete or delayed debt data significantly undermines the country’s ability to manage public finances prudently, weakens public accountability and fiscal transparency Given the current fiscal and political context, the risk of selective disclosure or political manipulation remains high,” he said.
Kambwandira cited weak institutional oversight, opaque bilateral financing and election-year incentives as converging factors increasing the risk.
He called for stronger debt reporting laws and mandatory public disclosure of all loan agreements.
Kambwandira said that improving transparency is now a priority and called for a standardised debt publication framework, embedded in law, aligned with international best practice and covering all public liabilities.
He urged the government and development partners to make debt transparency a binding condition for future financing.
The IMF Technical Assistance Report on Data Quality Assessment for Malawi’s Public Sector Debt Statistics indicated that large portions of public liabilities such as expenditure arrears and non-guaranteed debt of State-owned enterprises and local governments remain off the books.
Reads the IMF report: “A significant part of public sector liabilities in Malawi have been incurred in the form of arrears.
“For transparency and fiscal analysis, it is important to have clarity on the magnitude of these outstanding accounts payable.”
The report also flagged a serious incident last year when Malawi’s core debt management system, CS Meridian, was offline for two months due to network failures, paralysing debt validation and reporting.
Ministry of Finance and Economic Affairs officials could not be reached for comment on the suggestions by the economists and the IMF.
