Public debt management will be at the heart of the 2022 / 2023 national budget implementation, Finance Minister Sosten Gwengwe announced on Friday.
Presenting the 2022 / 2023 national budget pegged at K2.84 Trillion titled ‘accelerating Implementation towards wealth creation, job creation and food security’ in Lilongwe, Gwengwe said his ministry is currently reviewing domestic debt profiles with a view of restructuring debt towards longer maturity period – a move which will address the current debt sustainability concerns.
Minister of Finance Sosten Gwengwe MP delivering Budget 2022
“In addition to debt restructuring, government will in the 2022 / 2023 fiscal year continue to exercise fiscal discipline, avoid debt creating policies, and reduce granting of extra budgetary financing at Treasury,” explained Gwengwe.
“The Public Finance Management Act (2003) is also being reviewed to address gaps that have been observed in the current legal framework on issues of contracting public debt.”
The finance minister added that high level of external debt is also a matter of concern for government and that particular attention will be paid to make external debt sustainable.
He emphasized that government will maintain a policy of concessional borrowing, preferring grants and only under very exceptional circumstances contract non-concessional loans for high value investments.
“Government will engage its external creditors to restructure some of the loans. My Ministry will intensify efforts to refinance all expensive and near-maturing debt using cheaper debt to create fiscal space. This will enable Government to have resources for financing exports enhancing projects such as in the mining sector,” he said
On fiscal discipline, Gwengwe said the ministry of finance will ensure implementation of fiscal consolidation measures to enhance revenue collection and manage expenditures.
He said to enhance revenue collection; his ministry will continue rolling out the implementation of the just launched Domestic Revenue Mobilization Strategy (DRMS).
“This budget will embark on a painful but necessary journey to start flattening the net lending line and in the short to medium term put it on a sustainable downward trajectory,” he said.
