President Lazarus Chakwera delivered his speech at the 77th General Assembly of the United Nations (UN) where he called on the world’s major lenders to cancel the debts of poor countries.
In his speech, Chakwera said that least developed countries are struggling with unsustainable levels of debt and there is a need to address this problem.
The leader of Malawi argued that unsustainable debt is a new form of slavery and just as leaders of past generations worked together to end old forms of slavery, current leaders must also join forces to end new forms of slavery.
He noted that the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, recently urged major lenders to show leadership in relieving debts that plague poor countries.
“Even loans made and received in good faith have become unsustainable in the recent and current climate of unforeseen external shocks.
“I therefore join her in reiterating this call. And I commend China for leading by example in delivering on the pledge it made last year to cancel interest-free loans owed by 17 African countries,” Chakwera said.
He added that as the President of a country which should receive debt relief, he does not consider Malawi as a country entitled to debt relief and he is fully committed to being held responsible for the responsible use of the money saved through debt relief.
“We too must prove ourselves worthy of such a system by using it to protect our citizens from increased financial volatility, trade costs, and human suffering caused by debt and other factors,” he said. Chakwera.
The call comes amid revelations that Malawi’s public debt has risen from K5.65 trillion in June last year to K6.38 trillion in March 2022, meaning the administration of Lazarus Chakwera borrowed an average of K81 billion per month for nine months.
Finance Minister Sosten Gwengwe said on Wednesday the borrowing rate was unsustainable.
“It’s a cycle that needs to be broken,” Gwengwe said.
Currently, Malawi, which is facing currency and fuel crises, is struggling to secure an IMF program due to unsustainable debt levels.
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