Treasury has borrowed about K346 billion on the domestic market, two months into the 2022/23 financial year second half, surpassing its debt projection, figures show.

In his 2022/23 Mid-Year Budget Review Statement presented in Parliament on November 25, Minister of Finance and Economic Affairs Sosten Gwengwe indicated that Treasury has revised domestic borrowing plan from K653 billion to K580 billion and expects domestic borrowing at K127.1 billion in the second half of the financial year.

But the figures contained in investment advisory firm Bridgepath Capital Limited’s Monthly Economic Review Report indicate that Treasury raised K91 billion from the domestic marketin October and K255 billion in November.

At K346 billion, the debt is K219 billion more than the projected K127.1 billion which Treasury projected to borrow from the domestic market in the last half of this financial year which ends in March 2023.

In an interview on Thursday, Catholic University based economist Hopkins Kawaye cautioned against the borrowing, saying government should consider spending within means.

He said: “What is critical at this juncture is for the government to implement and put in practice the various debt management tools and policies that are in place because we cannot continue to borrow.

“By doing such [borrowing heavily] we are only milking the already thin cow that is the country.”

Kawaye also urged government to close gaps in public finance management tools, saying the rooting of government funds is also costing the country. He also said -funds that are being stolen are equlal to the funds the government is paying as budget deficits.

Economic commentator and consultant Exley Silumbu said the borrowing is coming at a time when the economy is not performing well, adimitting tere is pressure to fund a lot of activities.

He said: “What is also at stake are issues of conditions of international financing organisations, which have limits for borrowing.

“Government thus has to watch out for these for fear of violating the same, especially when we are pushing for a deal.”

Malawi University of Business and Applied Sciences associate professor of economics Betchani Tchereni said the major concern is and has always been costs and terms of such loans.

“With the devaluation of the kwacha and the not-so-good revenue collection, it means that government activities are ongoing based on borrowing,” he said.

Meanwhile, Treasury figures show that as at end September 2022 Malawi’s public debt stood at K7.3 trillion, up from K6.38 trillion in March 2022, representing an increase of 14 percent.

Out of the debt, external debt accounted for 45 percent orK3.3 trillion while domestic debt accounted for 55 percent or K4 trillion of the total debt.

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