By: Lloyd M’bwana
The main opposition Malawi Congress Party (MCP)’s Member of Parliament (MP) for Dedza East constituency has questioned government’s wisdom behind too much borrowing funds from local and international financial bodies saying if not careful the future generation will feel the pitch of repaying the loans.
Linguzi made the observation in Parliament on Tuesday, November 17 when contributing to the general debate on the approved International Development Association (IDA) funded Southern Africa Trade and Transport Facility Programme loan bill which has a 40 year-year repayment period on 0.75 percent per year with a 10 year grace period.
The bill aims to borrow US$40 million (MK16 billion) for the rehabilitation of the M1 Road stretches between Karonga and Songwe (40 kilometers), Bwengu and Chiweta (60 km) and Lilongwe and Kasungu (150 km).
Apart from rehabilitating the sections of the roads, the funds will also be used to buy roads safety equipment for the Malawi Police Service (MPS). The equipment including breathalyzers and conducting of baseline survey on the use of seatbelts on the roads of Malawi.
Legislator Linguzi who is also a Chairperson for Parliamentary Committee on Health said though Malawi itches for development in various sectors relying on borrowed money was not ideal as the burden of repaying the loans will be on the future generation to come.
“The spirit of over borrowing for any development isn’t health at all. Future generation to come will cry for us when repaying the loans. Therefore, borrowing should be based on real infrastructure development which will remain standing after us.
“As such, this money should respond to infrastructure including maintenance roads to public hospitals and equipment rather than on software which has no impact to people’s lives hence calling the Minister of Finance to include Ministry of health in the steering committee for the implementation of the project”, urges Linguzi.
In responding, Minister of Finance, Economic Planning and Development, Goodall Gondwe trashed the allegation of the country’s over borrowing saying Malawi’s current threshold of General Domestic Products (GDP) values is at 80 percent which shows that the nation was still doing well on borrowing.
“The actual borrowing GDP value sealing is 150 percent. Currently, Malawi is at 80 percent far much from the sealing. This means that the nation is within the limit and that we are using our resources prudently though some hiccups. Thus, government will make sure that any funds borrowed are used for infrastructure development which might stand for the future generation usage”, assures Gondwe.
Goodall Gondwe is an economist who has served in the cabinet of Malawi as Minister of Finance since 2014. Previously he was Minister of Finance from 2004 to 2009, Minister of Local Government from 2009 to 2010, and Minister of Natural Resources, Energy and Environment Affairs from 2011 to 2012.
Gondwe was director of the Africa Division of the International Monetary Fund before returning to Malawi to work as a politician. In the period leading up to his election as Member of Parliament, he served as the Chief Economic Advisor to President Bakili Muluzi