Malawi which is currently mauling over how to close financing gaps in the 2014/2015 national budget due to aid freeze, is again faced with another challenge of dealing with the ever soaring debt stocks now standing at K320 billion.
The current debt stock means that the country has accumulated more than K100 billion debt just within twelve months, according to Secretary to the Treasury Newby Kumwembe.
“In June, 2013, the country’s debt stock was at K227 billion but as of June 2014, the debt stock is K320 billion,” said Kumwembe in an interview.
Kumwembe described this as a ‘sad’ fact that unfortunately cannot be changed.
“That’s a fact and we cannot change the figures,” he added.
The country’s Minister of Finance, Economic Planning and Development Goodall Gondwe recently disclosed that government is having trouble coming up with workable 2014/2015 national budget figures following the suspension of aid by some of the country’s partners.
He also said that the development means that the country is likely to face a huge fiscal deficit in the year.
Malawi national budget this year is expected to rise to K743 billion (US$1 790 361 446), a 16 percent jump compared to the previous K640 billion (US$1 542 168 675).
To add salt to the country’s economic wounds the Global Fund to fight Aids, Tuberculosis and Malaria recently wrote the administration demanding it to pay back US$937,905 (almost K394 million).
The money is an outstanding installment of US43,994,764 (almost K1.8 billion) which an audit carried out by the Office of the Inspector General (OIG) of the Global Found discovered in 2010 to have been abused out of the funds disbursed for rounds 1, 2, 5, 7 of the fund’s assistance covering a seven-year period.
To close the budgetary gaps, Malawi Government announced that it would look towards punitive tax measures, an announcement that has already raised an outcry among commentators and the country’s citizens.
One of the likely sectors to be affected by the budgetary constraints is health which is already faced with a myriad of problems including some hospitals suspending some of their services. In a bid to at least bail out the health sector Gondwe had a rude awakening when the donors turned back his begging bowl for K200 billion support towards the sector.Follow and Subscribe Nyasa TV :