Debt Stifles Implementation of MW 2063
A country Climate and Development Report by the World Bank says Malawi’s rising debt could stifle efforts to implement the national development blueprint - Malawi 2063 - especially in financing climate-change-related actions.
The report released on Wednesday says the government cannot finance the actions to full capacity hence suggesting it identifies other financing sources to help in the investments and measures that do not increase its public debt.
The report raises concern that Malawi is on the verge of failure to fulfil the Malawi 2063 due to its huge debt which is affecting its investment on climate issues.
According to the report, if Malawi stays on the current low-growth development path, climate change could reduce the Gross Domestic Product by 3 to 9 percent in 2030 and 6 to 20 percent in 2040.
It highlights that Malawi needs a wide collection of investments, policy reforms, and other interventions to build resilience.
Economist Dr Betchani Tchereni says with the recent cyclones that hit the country, there is a need to shift priorities and start using debt finances in programmes that respond to climate change and improve the country’s economy.
“Whenever we generate some foreign currency, it means it is going towards foreign debt. So, for people to get appliances that might be used for cooking and other things, it becomes very difficult and that way the fight against climate change may become very difficult,” he says
“Even if we get any financing sources now, it is about what people are experiencing. So, people need jobs, that means industrialization. So let us get debts that are going to be adding value to our commodities.”
On his part, environmentalist Dr Wilfred Kadewa says there is a need for the country to start investing in climate-change-related actions, warning failure to do so could also affect agricultural productivity thereby negatively impacting the implementation of the Malawi 2063.
“We need to invest in things that will help us produce goods locally. In Agriculture, it is the same thing. If we do not have the money, we will not match towards Malawi 2063 and will not be able to fight climate change.
Currently Malawi has a combined external and internal debt of K8 trillion ($7.7bn).