President Lazarus Chakwera Wednesday rubbished claims by Leader of the Opposition in Parliament George Chaponda, who said the local economy continues to face challenges due to wasteful spending and excessive borrowing.
Chakwera was speaking in Parliament yesterday.
He appeared in the august House to answer questions from lawmakers.
In his response to Chaponda’s query, Chakwera urged the opposition leader to resist the temptation of making what he termed as half-baked diagnoses of the local economy.
“We would not have qualified for an Extended Credit Facility (ECF) programme with the International Monetary Fund (IMF) if our levels of borrowing were deemed excessive, more so because the restrictions on borrowing that our programme with the IMF requires are very robust.
“Similarly, we would not have had the likes of the World Bank and the European Union resuming the budget support programme they stopped in the past if the spending protocols required by the Public Finance Management Act were not being followed to the best of our ability under extremely challenging circumstances.
“So contrary to the public propaganda pushed by the opposition, over-expenditure within the 2024-25 budget is within the levels that were approved by this House early this year. In fact, if our spending was really outside the confines of the law and the best practices of fiscal discipline, the donor community would not even trust us with the millions of dollars they are investing for us to procure and distribute maize to fight the spate of hunger that El- Nino weather has spread in the 23 districts of our country,” Chakwera said.
The Malawi leader said what would have been fair for Chaponda to say was that despite his administration’s efforts to achieve fiscal sustainability, the national budget continues to face exogenous shocks such as El Nino weather conditions.
The President said such natural phenomena have had devastating impacts on this country’s harvest this year.
“That has created deviations to the expected outturns including economic growth and domestic revenue mobilisation.
“What would be fair to say is that compulsory expenditure such as interest payment on debt left by the Leader of the Opposition’s party [Democratic Progressive Party] and wage bill absorb much of the revenue collected from domestic resources, leaving no room for other important expenses.
“So, as the remaining resources are not enough for various government operations, including funding the Leader of Opposition’s attendance of this session of Parliament today, government has no choice but to borrow to cover those shortfalls. But we do not do so excessively because we have to remain within our spending cap and within the parameters of the IMF programme,” Chakwera said.
He told the House that Malawi’s ECF programme with the IMF remain ED on track, except for a few parameters which the authorities were working on.
Chakwera said Malawi has made considerable progress in its debt restructuring efforts with various lenders.
But speaking to reporters after the session, Chaponda said he was not impressed with Chakwera’s responses.
“He was rumbling around questions,” Chaponda said.
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