Malawians celebrate IMF, World Bank debt relief
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Thousands of Malawians, mainly supporters of President Bingu wa Mutharika`s ruling Democratic Progressive Party (DPP), Saturday poured onto the streets of major cities to celebrate the International Monetary Fund (IMF) and World Bank`s decision to cancel 90% of the country`s external debts. This was after Malawi reached the “completion point” of the Highly-Indebted Poor Countries (HIPC) initiative, including good governance and prudent fiscal discipline. Senior politicians and government ministers led the street celebrations following the IMF and the World Bank announcement Thursday cancelling 406 billion Malawi Kwacha (about US$2.9 billion debt, which the country owed international creditor nations and organisations. With the reprieve, Malawi still owes creditors some 400 million Malawi Kwacha. Saturday`s celebrations included music and speeches, with Trade and Private Sector Development Minister, Ken Lipenga, telling the gathering in Blantyre the debt relief meant Malawi would save at least 15 billion Kwacha (about US$110 million) spent on debt servicing annually. “The saved money will now be channelled to social services and education,” he said, adding that the debt relief was a reward for Mutharika administration`s fiscal discipline. “This debt was not accumulated last year; it dates back to as early as 1964,” said the minister. “But donors could not write-off the debt previously because of lack of serious economic management.” Lipenga, a senior minister in the administration of Mutharika`s predecessor ex-President Bakili Muluzi, said Malawi could not convince donors to cancel the debt previously because of endemic corruption and other issues of poor governance. “The donors wanted to see commitment to fiscal discipline and they are convinced with Dr. Mutharika`s management style,” he said. About 60% of Malawi`s population of 12 million live below the poverty line, surviving on under a dollar a day. |