BY ALICK PONJE
Malawi’s debt profile, currently at K2.9 trillion, is likely to hit K3 trillion in the next financial year as Parliament Tuesday authorised government to obtain two more loans amounting to K113 billion from China for internet development.
The loans—$99 million (approximately K72 billion) from Industrial and Commercial Bank of China and $56.98 million (approximately K41 billion) from Exim Bank of China—received less scrutiny from Members of Parliament (MPs), a departure from previous experiences.
With massive absenteeism prevalent during the day’s sitting, only a few MPs, notably Dedza East representative Juliana Lunguzi, expressed concern over excessive borrowing which they argued is saddling future generations with unsustainable loans.
Lunguzi charged that the government seems to be obtaining the loans without proper planning apparently because the loan bills had only started appearing on the Order Paper, the official agenda for the National Assembly for each sitting day, last week.
She said: “Does this government really have plans? We borrowed millions of dollars for tractors, shellers and a sugar factory only to realise later that we made mistakes. Are we borrowing for the intended purposes or something else?”
But Minister of Finance, Economic Planning and Development, Goodall Gondwe, defended the two loans, saying Malawi is lagging behind in terms of information and communications technology (ICT) and that now is the right time to develop the sector.
He maintained that the country cannot stop borrowing because it does not have resources for different projects.
“ICT is now globally recognised as an important sector in development and we all agree that Malawi’s ICT infrastructure is not developed. The only way we can develop the sector is through such borrowing as we are doing today,” Gondwe said.
Responding to concerns that the loans have conditions that contractors will be from China, Gondwe said China and India are the remaining donors that require that contractors for projects that they fund should be from their countries.
Malawi Congress Party spokesperson on finance, Alexander Kusamba Dzonzi, and his People’s Party counterpart, James Munthali, while supporting the loan bills, called on government to prudently use the money.
As of yesterday, the Order Paper had two more money bills, namely Industrial and Commercial Bank of China (Blantyre City Bypass Road Project) and the Industrial and Commercial Bank of China (Chileka International Airport).
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