Malawi Congress Party (MCP) and United Democratic Front (UDF) have given official response to the 2019/20 national budget statement in Parliament as UTM and People’s Party (PP) will not be making formal statements as parties owing to their diminutive number in the House according to Standing Order 190(1) (d).
Presenting an official response on behalf of MCP, Member of Parliament (MP) for Lilongwe Mpenu Nkhoma Collins Kajawa bemoaned the country’s borrowing levels.
“Our debt has more than doubled from just over 30 percent of GDP (Gross Domestic Product) in 2009 to 62 percent of GDP at the moment,” Kajawa said.
“The tendency of continuing to spend as if everything is normal even when revenues show an early and clear trajectory that they will fall short of projected levels is worth remembering,” he said.
Kajawa said Malawi debt composition has progressively shifted from external to the more expensive domestic borrowing due to, among others, sustained large fiscal deficits and careless securitization of domestic arrears.
He said the increasing national debt is affecting the private sector because government borrows a lot from commercial banks where the private sector also borrows which in turn leaves the private sector servicing exorbitant interests.
Kajawa, therefore, suggested that the country focuses on borrowing for investment rather than for consumption.
On his part, UDF spokesman on finance, Blantyre Malabada Member of Parliament, Ishmael Nkumba, also expressed concern that the country’s borrowing has reached “alarming levels” as the country’s debts have gone beyond the fiscal policy.
“UDF says government needs to be avoiding debts which do not bring any tangible development to the country citing the infamous India line of credit where government bought tractors only to realise that it no longer needed them,” said Nkumba.
Chairperson of the Budget and Finance Committee of Parliament, Sosten Gwengwe, also asked government to live within the means to avoid budget deficit, which leads to unnecessary borrowing.
Malawi’s debt levels have reached worrying levels such that recently the Reserve Bank of Malawi (RBM) Governor Dalitso Kabambe advised Treasury to contain the rate of borrowing.Follow and Subscribe Nyasa TV :