Africa-Press – Zambia. Former finance minister Joseph Mwanamvekha has described the decision by Treasury to raise K1 trillion through the issuance of Long Term Local Development Bond as practically impossible.
But Malawi Stock Exchange Chief Executive Officer John Kamanga Tuesday faulted Mwanamvekha’s claims, saying it was practical to raise the money as the funds would be raised in tranches over a period of time.
Responding to the budget statement in Parliament on Monday, Mwanamvekha said failure by the government to raise funds would result in its failure to implement 15 flagship development projects whose rollout depends on mobilisation of the funds.
Mwanamvekha said, it was practically impossible to raise the required sum of money from the local market. He said there are times when RBM even fails to raise K10 billion using Treasury Bills from the market and wondered where the K1 trillion would come from
“It is impossible. And I worry that the Finance Minister [Felix Mlusu] has attached the bond to the implementation of some development projects and, if he fails to raise the money, it would mean the projects would also fail,” Mwanamvekha said.
But Kamanga said, over the past three years, the central bank had raised K952 billion from the capital market, which is close to the K1 trillion being sought.
“The market is capable [of raising the funds] based on the statistics we have. The money won’t be raised at one go but it will be raised in tranches over a period of time, tied to the project implementation schedule,” Kamanga said.
Speaking when he presented the 2021/22 National Budget, Mlusu said the government had registered progress on preparations to issue a 15- year development bond for some strategic and flagship projects.
Mlusu said the Ministry of Economic Planning and Development and Public Sector Reforms, in conjunction with the Ministry of Finance, completed the selection of 15 projects that would be financed through the issuance of a local development bond.
“The long-term development bond will be structured in such a way that it incentivises Malawians in the diaspora to participate in the development of this country through infrastructure project financing,” Mlusu said.
