Minister of Finance Felix Mlusu has defended government`s continued borrowing despite the country accumulating much debt for the past years.
According to Mlusu, although total deficit for the 2020/2021 fiscal year has been revised upwards from K755.1 billion to K810.7 billion the country has no choice but to continue borrowing.
The issue of borrowing cannot go out completely, we have to borrow because we walked into government and we found a K4.1 trillion debt in there.
And for us to be able to service this debt, we have to find resources to do that at the same time we also have to run the developments that we want to do,” made it clear Mlusu.
The Finance Minister added that for the past six months, government has only borrowed K304 billion against the planned K365 billion.
“We had planned to borrow K365 billion for the first 6 months to run various activities including projects but we borrowed less, we borrowed K304 billion.
Obviously we have a lot of services, programmes and operations to run, we just have to make sure that we should be spending money on those projects that are relevant to the development of the country,” suggested the Finance Minister.
According to Mlusu, during the first six months of the fiscal year, Government expenditures were over and above the target of K974.6 billion by 2.5%.
He added that among other factors, this is on account of the unforeseen expenditures towards Covid-19 pandemic management and re-administration of the Malawi School Certificate of Education (MSCE) examinations.