Government’s continued heavy borrowing worries Capital Market analysts
The government’s growing appetite for foreign borrowing is continuing to attract condemnation from investment and financial analysts.
This week, Capital Hill got a nod from Parliament to borrow K20.5 billion to finance the rehabilitation of Benga-Nkhotakota-Dwangwa M5 road.
According to Finance Minister Sosten Gwengwe,in addition to having soft conditions, the loan from OPEC Fund remains very crucial.
However, capital market analysts are daring the government to make use of readily available local financial resources such as pension funds which are reportedly in excess of 1.8 trillion.
Speaking to Capital FM, Chief Operations Officer for the Malawi Stock Exchange (MSE) Kelline Kanyangala expresses concern, adding that the continued debts its weighing heavily on the local economy.
We do have significant resources as a country, for instance on a quarterly basis we have pension contributions of around K31 billion that are coming into the market and looking for investment”, Kanyangala said.
On his part another capital market analyst Noel Kadzakumanja bemoans the lack of utilization of the debt market, due to among other factors low awareness of such instruments.
Meanwhile the country will continue to pay for the recently nodded loan for the next 20 years.