Government of Malawi is unable to service its scheduled monthly payments of its service providers because it is facing financial constraints, senior official has told Nyasa Times.
Major contractors and suppliers have gone two months without payments from government raising a fear of escalating pressure on the service providers to pay their debts to other suppliers too.
"The prolonged elections tussle, unavailability of the budget means nothing can be spent on without the budget," said the official who opted for anonymity.
This has transcended to a spiral of broke companies that directly and indirectly deal with government.
Contractors are unable to pay their debts to service providers and service providers are unwilling to continue providing services.
This has caused a spiral of broke citizenry whose living somehow is linked to active business with government or its departments and agencies.
One businessman lamented that the levels of liquidity squeeze on the market is tighter.
Finance Minister Joseph Mwanamvekha presented a half trillion kwacha provisional budget in Parliament last month and was approved.
This budget allows the Ministries, Departments and Agencies of government to start spending and therefore oiling the wheels of the economy once again.
Malawi Government is the pinnacle of most business survival in the African most impoverished but resource endowed country.