Malawi Seeking Debt Relief By China

By Joseph Dumbula

Malawi President Lazarus Chakwera is in China where he says he intends to lobby for debt restructuring for the Southern African nation.

Chakwera and other leaders from the continent are attending the 3rd China- Africa Economic and Trade Expo (Caete).

In his address before leaving Malawi capital Lilongwe, Chakwera said his call coincides with a recent one he made before Afreximbank in Ghana during the bank’s 30th anniversary to induce a relief for debt.

As of December 2021, Malawi owed China $239 million, a tag a wide range of stakeholders and critics have highly spoken against.

“We will take advantage of [the expo] in order for us not only to see what we can sell from Malawi in terms of trade and what economic activities the two nations can accomplish for our benefit. We also want to talk about the debt levels that we have, agreements that we had in the past and how we can continue in the future vis-a-vis the [International Monetary Fund] programme,” he said.

Earlier this year, there was a slight glimmer of hope when China signed a $5 million partial debt cancellation facility with the Malawi Government.

Malawi is running against time to have its K7.9 trillion unsustainable debt restructured ahead of its assessment with the IMF for a possible Extended Credit Facility (ECF) programme.

In the absence of the programme with the IMF, Malawi has witnessed an acute shortage of forex as partners are hesitant to support the country.

Currently, Malawi owes Afreximbank about $757 million in foreign debt and Trade and Development Bank about $145 million.

A 2023 Malawi government Annual Economic Report shows that the trade deficit improved from $2.07 billion in 2021 to $564.41 million in 2022, which translates to a 68 percent upgrade.