Africa-Press – Malawi. Several analysts have commended the Chinese Government for writing off $5.5 million (approximately K5.5 billion) of the money that Malawi owes the Asian country. In an interview, Minister of Finance Sosten Gwengwe confirmed China’s clemency to Malawi.
“I can confirm that the Malawi Government will not pay about K5.5 billion loan we got from China for the Karonga—Chitipa Road and the Malawi Revenue Authority (MRA) scanners projects,” Gwengwe said.
He added that government will use the savings for budgetary support. Gwengwe said the loan was taken from China Development Bank and that the Malawi Government had not yet started servicing it.
The minister, however, indicated that Malawi is still servicing loans that were obtained from the Export and Import Bank of China for the construction of the Bingu International Convention Centre, the Bingu National Stadium, the Malawi University of Science and Technology and the National Fibre Project.
“We are servicing the loans twice a year, in March and September,” Gwengwe said. This week, China announced that it was writing off 23 interest-free loans for 17 African countries.
Scotland-based business and economic analyst Velli Nyirongo welcomed China’s move, which he said has come at the right time when the economy is experiencing economic stress caused by both indigenous and exogenous factors.
“I would have loved for China to forgive all the debt; however, half a loaf is better than none. The money that would have been used to make these payments will go a long way to ease the economic burden the country is experiencing,” Nyirongo said.
He, however, said Malawi needs to learn from previous experience when its debts were written off so that the latest development is impactful. “It is very important to realise that writing off debt is not giving us money, but that the money we were supposed to use to service back the loan will be channelled to other development needs,” Nyirongo said.
Economic analyst Betchani Tchereni also welcomed the development. “I am advising government not to look at this as a room to get new loans. It is paramount for the Ministry of Finance to look at the challenges we are facing in the energy sector and probably consider boosting generation,” Tchereni said.
For More News And Analysis About Malawi Follow Africa-Press
