PUBLIC LECTURE: PUBLIC DEBT SUSTAINABILITY

Malawi like many other sub-Saharan Africa (SSA) countries has a high prevalence of public debt despite qualifying for debt relief in 2006 under the Highly Indebted Poor Countries (HIPC) initiative by the World Bank and the International Monetary Fund (IMF). Prior to the HIPC debt relief in 2006, Malawi’s debt to GDP rose to 130%. Since 2006 the debt has risen again from 30% (2006) to 59% (2021) against a SADC convergence target of 60%.

Fourteen years post HIPC debt relief, Malawi, at the 2020 United Nations General Assembly requested additional debt relief considering the macroeconomic shocks experienced due to the COVID-19 pandemic. As Malawi’s TPD continues to rise, so too does the risk of fiscal space and debt sustainability.

The lecture aims at assessing Malawi’s debt and fiscal sustainability risk and proposes that Malawi improves its productive industrialisation, and manufacturing capabilities as one of the main strategies to improve revenue its revenue base and sustain its debt.