Thursday, July 18, 2024
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Malawi Leader Chakwera Set to Negotiate Debt Repayment Plan at BRICS Plus Summit with India

Pres. Chakwera

From attending the SADC heads of state summit in Angola where he currently is, President Lazarus Chakwera of Malawi will travel directly to South Africa to attend the Brics plus summit scheduled to take place from August 22 to 24, 2023. The Brics group, composed of Brazil, Russia, India, China, and South Africa, is expected to address topics such as trade and investment facilitation, sustainable development, innovation, and reforms in global governance. During this summit, among other matters, Chakwera intends to engage in discussions with the Government of India to establish a plan for repaying a debt of approximately $136 million (equivalent to about K148.9 billion) that Malawi owes to India.

President Chakwera has openly stated that Malawi’s debt with India has reached an unsustainable level.

Said Chakwera: “I want to engage the Indian Government. We want to be able to move away from something that is hanging on our neck in order for us to really begin our developmental programme with earnest.”

In addition to its debt with India, Malawi has financial obligations to Afreximbank amounting to approximately $757 million (around K828.9 billion) in foreign debt. Furthermore, there is a debt of about $145 million (roughly K158.77 billion) owed to the Trade and Development Bank, alongside several outstanding payments.

China, primarily through its Exim Bank, is the most significant bilateral creditor for Malawi and ranks third among the external financial supporters. Their contribution comprises approximately $218 million (equivalent to about K238.7 billion), which constitutes 8.34 percent of the total foreign loans acquired by the Malawian government.

The World Bank, operating through the International Development Association, maintains its position as the largest creditor, representing nearly $1.3 billion, or 47.61 percent, of the overall external debt balance. Following closely, the African Development Bank, specifically through the African Development Fund, holds $420 million, equivalent to approximately 16.10 percent of Malawi’s foreign loans.

As of December 2022, Malawi’s total public debt reaches K7.9 trillion. Among this, K4.43 trillion is categorized as domestic debt, while K3.47 trillion is attributed to external debt.

 

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