Government dismisses overborrowing concerns

Minister of Finance Felix Mlusu has dismissed fears that government has overborrowed from the Reserve Bank thereby increasing fears of high public debt.

The response by the finance minister follows a query by Mzimba North lawmaker Yeremiah Chihana who raised concerns in Parliament that Treasury has exceeded the required 20% borrowing.

But speaking to Yoneco FM Online, Mlusu said government`s intention is to ensure that public debt is at sustainable levels and that by the end of June Treasury will not borrow from the Central Bank.

“At this point in time, we do not know the exact figure, in fact we are required by the end of June that we should have any borrowing, and I would like to assure the nation and the media that we have not borrowed the 20% that he is talking about.

“When you look at our figures as at the end of June 2021 you will find that there is going to be zero balance in terms of what is called ways and means from the Reserve Bank,” he said.

A number of stakeholders have cautioned government on the high and rising public debt which they say remain a major concern.

But in response, Mlusu said to counter this, government will implement a number of fiscal consolidation initiatives, including but not limited to enhancement of external resource mobilization; domestic revenue mobilisation; public expenditure efficiency and prioritization.

In an addition, the finance minister said government has engaged external creditors for debt relief as part of efforts to mitigate the economic impact of Covid-19 pandemic on the domestic economy.

The country`s public debt interest is projected at K299.7 billion or 2.9% of the rebased Gross Domestic Product (GDP).

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