The Reserve Bank of Malawi (RBM) has announced that the government plans to borrow K628 billion from the domestic market in the second quarter of the fiscal year. This amount represents 52 percent of the total K1.19 trillion that the government intends to borrow for the entire 2023-24 financial year. The borrowing will be done through Treasury bills and Treasury notes from local banks, firms, and individuals. Treasury bills have short-term maturities, with interest paid at maturity, while Treasury notes have a mid-range maturity period, with interest paid every six months. The RBM has released a domestic debt calendar for the period from July to September 2023.
According to Finance Minister Sosten Gwengwe’s presentation of the 2023-24 national budget to Parliament, the overall fiscal balance is estimated to have a deficit of K1.32 trillion, which is 8.7 percent of gross domestic product (GDP). This represents a slight improvement from the previous year’s 8.8 percent. The budget deficit will be financed through foreign borrowing amounting to K288.78 billion and domestic borrowing amounting to K1.19 trillion.
However, the Budget and Finance Committee of Parliament, chaired by Gladys Ganda, has cautioned against overspending and emphasized the need for the government to adhere to the approved budget. Ganda highlighted the importance of fiscal prudence to avoid excessive borrowing and urged all government ministries, departments, and agencies to exercise financial discipline.
In other words, the Reserve Bank of Malawi has announced that the government plans to borrow K628 billion from the domestic market in the second quarter of the fiscal year. This borrowing represents 52 percent of the total amount planned for the entire financial year. The funds will be borrowed through Treasury bills and Treasury notes from local institutions and individuals. The government’s overall fiscal balance is estimated to have a deficit of K1.32 trillion, which will be financed through foreign and domestic borrowing. The Budget and Finance Committee of Parliament has urged the government to adhere to the approved budget and exercise financial discipline to avoid excessive borrowing.