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Consider better budget financing strategies – UDF

Mkumba: Domestic Debt has become uncontrollable

By Lovemore Khomo

The United Democratic Front – UDF on Monday urged government to relook at its financing strategies and enhance the non-tax revenue generating units that can reduce the reliance on borrowing to finance the National Budget.

UDF Finance Spokesperson in Parliament, Ismail Rizzq Mkumba made the remars when responding to the Budget Statement presented on 23th February, 2024 by Finance Minister Simplex Chithyola Banda.

Mkumba advised government to regulate and prioritize the mining and tourism sectors to help the country realise more revenue.

“The recovery that is being propagated in the budget is artificial at best because the country intends to borrow some more and most of it is for consumption. The total Public Debt is expected to hit over K13.1 trillion or 85% of the GDP with no clear plans to manage the recurring budget deficits.” explained Mkumba.

The UDF Finance Spokesperson expressed concern that projected interest payment for the 2024/2025 Financial Year of K1.5 trillion will be unbearable and prolonged burden to majority poor Malawians.

“Domestic Debt has become uncontrollable, the government’s appetite for it is insatiable. Domestic Debt has jumped from K5.8 trillion in March 2023 to K6.1 trillion in the planning fiscal year.” He said.

The Blantyre Malabada MP expressed worry that the trend will in the long run, cause adverse effects on the economy and will worsen the standard of living for Malawians, especially those in the Small, Medium Enterprises.

He further noted that several activities outlined in the budget may not have an immediate impact on productivity, job creation and import substitution. Also, warned that the focus on construction projects with uncertain completion timelines may not address the urgent needs of the economy.

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