As of September 2024, Malawi’s public debt has reached K16.19 trillion, or 86.4% of GDP. External debt totals K7.39 trillion, and domestic debt K8.79 trillion. The government is negotiating with creditors to restructure this debt while planning to enhance management and focus on priority sector investments.
Malawi’s public debt has ascended to K16.19 trillion as of September 2024, representing 86.4% of the nation’s GDP. This alarming increase was disclosed by Minister of Finance Simplex Chithyola Banda during the presentation of the 2025/2026 national budget.
The current financial breakdown indicates that external debt has reached K7.39 trillion, while domestic debt has increased to K8.79 trillion. This surge in debt primarily results from the government’s ongoing reliance on borrowing to finance its expenditure.
Minister Chithyola Banda highlighted that the government is in talks with official bilateral creditors and engaging with commercial creditors to restructure debt, emphasizing that successful negotiations will alleviate pressure on foreign exchange and create necessary fiscal space for productive investments.
To address the mounting debt, the government intends to enhance its debt and cash management strategies, focus on contracting concessional loans, and prioritize borrowing for critical sectors. The Minister stated, “To tame the growing debt, the Government has stepped up its efforts to strengthen debt and cash management.”
Key initiatives include establishing commitment controls, limiting the issuance of guarantees, and constructing a comprehensive framework to assess and govern the borrowing activities of state-owned enterprises. Additionally, the government has developed the Integrated National Finance Framework to facilitate sustainable national development through diversified resource mobilization.
In conclusion, Malawi’s public debt has reached a critical level, necessitating urgent measures from the government. By restructuring existing debts and focusing on sustainable financial practices, the administration aims to mitigate future risks associated with high debt levels. The commitment to improved management strategies and targeted investments signifies a proactive approach towards fostering economic stability.
Original Source: malawi24.com
