The Ministry of Finance plans to borrow K454.6 billion from the local financial market through Treasury Bills and Treasury Notes in the next three months.
Reserve Bank of Malawi, which is the agent of government on the financial market, has issued the current quarter’s calendar for debt instruments issuance.
This amount consists of K247 billion Treasury Notes and K207.6 billion Treasury Bills that will be issued across the three months between July and September to finance the current budget.
Treasury notes are debt instruments with maturity period from 2 to 10 years with interest payments every six months while Treasury Bills are short term debt instruments with a maximum maturity period of 364 days.
Meanwhile, Public Debt is estimated at over K6 trillion which the World Bank recently described as unsustainable, creating fiscal pressure as this fiscal year’s interest payments are estimated at K524 billion.
The IMF is also pressing for tangible measures to contain the recent rapid debt upsurge as the issue is among the key considerations before agreeing to the much needed Extended Credit Facility that is expected to unlock some aid flow.
However, the current national budget has a deficit of K884 billion, partly financed by K654 billion domestic borrow
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