Govt urged to act on K15.1tn public debt
National Advocacy Platform (NAP) has asked President Lazarus Chakwera and his administration to cut back on non-essential expenditures and boost revenue collection to address surging public debt currently at over 80 percent of the economy.
In a statement dated August 5 2024 co-signed by NAP chairperson Benedicto Kondowe and national coordinator Buxton Nkhoma, the platform said in the spirit of transparency and accountability, government must evaluate debt volume and deliverables therein.
Reads the statement in part: “Malawians deserve to know how the various loan facilities have been utilised and the tangible impact on their lives.”
Public debt currently stands at K15.17 trillion or 81 percent of gross domestic product, according to a Ministry of Finance and Economic Affairs quarterly debt bulletin released last month.
NAP has also asked Parliament to improve on its scrutiny of loan bills in line with the Public Finance Management Act to safeguard national interests.
It also advised government to ensure fiscal discipline and boost revenue collection mechanisms, apart from making efforts to pursue debt cancellation.
Further reads the statement: “Today, every Malawian shoulders a financial burden of K758 500. This rapid and unsustainable debt growth poses a serious threat to the country’s economic stability and future development.
“It is devouring a significant portion of the national budget, crippling the government’s ability to fund vital development projects. Rising debt diverts essential funds from crucial public services.”
Treasury spokesperson Williams Banda said in an interview yesterday that government has been rejecting non-concessional loans, adding that currently, they are implementing commitment controls to prevent accumulation of arrears.
He said apart from improving revenue collection, government is engaging commercial and bilateral creditors on debt restructuring.
“More revenues will lessen the burden from borrowing. Government developed regulations to guide the debt operations.
“Government is optimistic that the turnaround resource mobilisation strategies and the ATM [Agriculture, Tourism and Mining] strategy will improve the situation,” he said.
In July this year Malawi’s public debt stock sparked a blame game with Secretary to the Treasury Betchani Tchereni accusing citizens of contributing to the situation by resisting implementation of policies meant to boost revenue and ease pressure on the fiscus.
On the other hand, First Deputy Speaker of Parliament Madalitso Kazombo felt the Legislature was also at fault for “rubber stamping” fast-tracked money Bills without proper scrutiny.
But Centre for Social Accountability and Transparency said this conduct has been tolerated for decades and undermines the integrity of Parliament.
