Moni Malawi 
Betchani Tchereni
The Treasury will, yet again in the 2022-23 financial year, have to part ways with about K523.75 billion in settling part of the cumulative public debt interest.
When delivering his budget statement in Parliament on Friday, Finance Minister Sosten Gwengwe said the amount, which represents four percent of gross domestic product, is up from K299.73 billion estimated in the 2021-22 financial year.
Of the estimated interest, K22.69 billion is for foreign debt while K501.06 billion is for domestic loans.
Gwengwe said the increase is on account of huge maturities of promissory notes used to clear arrears.
“Domestic debt has in the recent past grown substantially on account of consistent recording of budget deficits due to the rising expenditures against slow growth in revenues as well as a drop in budget support,” he said.
Public debt stock was seen at K5.5 trillion as at mid-2021
Economist from the Malawi University of Business and Applied Sciences Betchani Tchereni said the fiscal space remains volatile as the government is duty-bound to settles the arrears.
He said this would affect the pace toward recovery as money meant for national economic development will have to be channeled to debt settlement plus interests.
“We have to be a self-reliant nation and live within our means so that borrowing should be for investments and not recurrent expenses,” he said.
In the State of the Nation Address, President Lazarus Chakwera said the primary budget deficit incurred during the financial year ending March 31 2022 is projected to decline from 8.8 percent of GDP in the 2020-21 Financial Year to 7.3 percent.
Chakwera added that, though the decline is moderate, it does signal his administration’s intentions to reduce the rate of borrowing and effect stringent measures to control public spending.
Malawi’s foreign and domestic debt is at K5.1 trillion, which is double the country’s annual national budget.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.
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