World Bank bashes Malawi govt subsidies, excessive borrowing

The World Bank has described the Malawi government bankrolled subsidies as inefficiencies that are worsening the economic situation.

Finance Minister Gondwe: Gloomy outlook

Finance Minister Gondwe: Malawi government has drastically cut on borrowing

However, the bank’s Malawi Economic Monitor, a by-annual newsletter has not said whether the government should abolish the subsidies or not.

The World Bank statement came as opposition parliamentarians in the National Assembly on Tuesday called on the government to discontinue the malata and cement subsidies programme and relocate the resources to the collapsing public education sector.

Donors and local experts are also increasingly putting pressure on the Peter Mutharika administration to find an exit strategy for the popular farm input programme but has been rocked with problems due to the prevailing economic climate.

The newsletter, entitled ‘adjusting in turbulent times,’ accuses the government of excessive borrowing, saying the government has borrowed four times the amount agreed in the national budget and asked the government to adjust massively if the current economic situation is to be reversed.

“Policy makers should tighten expenditure and adhere to budget ceilings,” says the World Bank newsletter in part.

The Bretton Woods institution also laments huge wage bill in government.

Finance minister Goodall Gondwe at an economic symposium on Tuesday in Lilongwe organised by the Reserve Bank of Malawi, however said the government has drastically cut on borrowing through treasury bills, saying infact, the government had not borrowed.

Gondwe was upbeat Malawi would be back on track on extended credit facility come February, a move that will bring back donors.

But economics professor at Chancellor College Ben Kalua said economic fundamentals clear show the government is over borrowing saying it is now issuing two year bonds.

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25 thoughts on “World Bank bashes Malawi govt subsidies, excessive borrowing”

  1. Biti NAC says:

    Hire Mbendela kkkkkkkkk the Arsehole who put us in this mess! Stupid Dpp

  2. Chizeleza Ngwira says:

    Peter Mutharika should hire the Right People for Critical Economic Positions not stupid Yes Bwana Lhomwes

  3. Balamanthu says:

    Malawi government officials should constantly be reading Proverbs chapter 22 verse 7

  4. akuntinji anamuona says:

    The problem is see here is misplaced opposition from the rich trying to surpress the poor in trying to serve the economy. They receive millions as their salary and they want to take that belongs to the poor for their figures improvement.

    Surrender your riches to the poor and lift them up to the level where they can buy using free market prices.

    Let’s not advocate issues because we are on the better side and we can afford. What you should know the little subsidy we get it assists us a lot.

    You have plenty with your books, how many have you assisted? You continue to get better and better while testing your solutions on us and yet we continue to get poor.

    I would wish to hear from the poor to say we no longer need subsidy then that action we help us.

    It’s time to be honest here. You told to devalue our kwacha which literally meant more resource for our services. Today you can stand a far watching us to raise funds on our own inorder to fill the gap we created by your so called economic wisdom.

  5. Jimbo says:

    The Malawi Kwacha is currently trading at MK902 to £1 GB. This means that MK1 is worth nothing! At the time of the change over in 1971 the kwacha was worth 50pence or MK2 to £1. So much for independence. Kamuzu, Muluzi, Bingu and now APM have ruined the economy of Malawi.

  6. Prince Edward rsa says:

    With dpp as agovernment malawians must expect more and very dengerous problems ahead.Dpp is aparty with bad record since the dawn of democracy udf messed but dpp doubled it stealing 577billions this is too much.

  7. Tione says:

    The problem the government just borrows money and diverts it into very few people’s pockets and not for the intended purposes. They don’t even bother to pay back ndiye ma arrears ali thoooo! When they borrow next, they use the money for the repayment of previous loans not on the projects for which they lied to be borrowing. This way, can the country develop? Kumangodziwa kungongola koma kubweza ayi. Ana a Malawi akufa ndi njala, mitengo ya zinthu itakwera. Bolanso mu nthawi ya Kamuzu he was making sure prices of commodities were the same countrywide. Pano aliyense akugulitsa zinthu pa mtengo womwe iye mwini wafuna. Packet ya sugar ya 1kg mpakana K560 yet in those days timagula bale K40. Misonkho imene mutiberenso. Peter ndi cabinet yake yonse ayambe kukhoma misonkho aone mmene zikuwawira. Apo ayi, tisiyeni ndi ndalama zathu tiziona nazo chochita osati kukapatsa Kaliati ndi ambuyake Petulo ndi Getuluda ndi kukamwaza ku parliament komwe anthu akke behave like prescholars. Prescholars are even better than the Malawi MP’s and ministers as they do listen to being rebuked when they make noise in class. These animals do not deserve to be called honourales as they do not behave honourably.

  8. Kumamvetsa says:

    Those who comment try to understand roll of World Bank.
    It’s not a donor. It’s an organization composing all countries, Malawi included
    One of the World Bank is to offer advice to member countries. Is up to Malawi to take the advice.

    But simple economics tells us that its not prudent for any reasonable governments to keep on borrowing. You should not be spending what we don’t have

  9. Phinifolo says:

    Zinali zachidziwikire izi. Munthalika satha chilichonse, koma munamusankha nokha. Ndiye ndizimenezotu.

  10. Dumisani says:

    Tell them bro George

  11. Nathenje trading centre says:

    Farmers and poor people in Europe and America enjoy subsidies in almost everything nobody talks,but for Malawi government to subsdies only Seeds and Malata the whole world is crying foul,they are saying Malawian poor people are less humans than European poor people.

    And if possible they say Malawian poor people should just die than bothering governments to borrow money for their survival because they are just useless.

    Bingu was fighting this,stupid Malawian CSO’s were sponsored by westerners to systematically fight him back pretending that he is becoming intolerant and undemocratic

    Now they are happy that they are dictating things as they want.
    I wish Malawians had eyes and brain unfortunately they don’t

  12. George Kamanga says:

    the crooks hide in the name of suffering Malawians. Kenyatta Nyirenda and Maxon Mbendera where are you guys? You did a clean job to help these dogs get into power but why not help them to rig the economy.

  13. patricia kaliyati says:

    Who is saying the truth and who is lying? Are we over borrowing or not? Its either the minister is lying or the world bank is lying.

  14. matombodya says:

    To hell World Bonk

  15. mphatso says:

    World bank why cant Malawi borrow you dont give aid then how do you expect 17m Malawians to survive our national budget is less than a muncipal budget for a small city in the western world, look at examples of the USA and Europe there econmies when struggling have continued borrowing and now they are better off, please world bank be fair, africa and dont bully us just because we are poor

  16. Eugene says:

    577 BILLION woyeeee

  17. housing is a need for any human and property development is one of the priorities in Malawi. Yes I know that Malawi borrowed more than enough but stopping Malata (Iron sheet)and cement subsidy is worsening the weak economy of Malawi. World Bank are you happy when you see the grass thatched and mud houses in Malawian villages and towns?

  18. SONG says:

    John Tembo guided DPP govt under Bingu to abolish subsidies and introduce farmers club very important. The system will boost agriculture to become serious business in Malawi. This is what Kamuzu did to ensuring that there is food sustainability in the country and also that Malawians out there find money to buy what they want. But this was turned town and you go on podium and start challenging opposition to provide solutions to hell. Today the same opposition says don’t raise fees and don’t abolish JCE please this is a solution to be considered.

  19. Tiyanjane says:

    How will they exit the malata thing when they have already shared the K7 billion among themselves. Brothers and sisters from the South, bambo Mbendela, a Kenyatta Nyirenda do you see now what you have done to Malawi?

  20. pido says:

    World Bank, you need to be serious in how you are handling issues. In the first place, you are refusing us any aid. Now you are busy telling us what to do with what never came from you. It would make more sense if you guys were to show your concern while doing something. But what you are suggesting is tantamount to aggrevating our already pathetic condition. May you kindly shut up and let us deal with our mess or avail us some aid and give us your piece of advice

  21. ben phiri says:

    Kodi anthu awa adzamva ????

  22. Nangodutsamo says:

    Nkasa anati
    “osauka akulira”
    “olemera akulira”
    “sindikudziwa kuti ndi chani”
    “ku phirinso akulira”

    Ife tidikira point yomalizayi chifukwatu pakali pano akunjoya.

  23. Josophat Returns says:

    These guys dont know how to tighten their belts. These subsidies have just enriched politicians. For sure they can not exit something which they are thriving on greedily.Thats why they wanted to win the last elections badly through hook or crook

    1. Angel of Doom says:

      Everybody wanted to win the election badly. nenani zina.

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