Mzuzu — Government has been asked to avoid providing debt to financial institutions which do not provide proper expenditure guidelines for their loans to avoid misuse of the funds and counterfeit development projects.
Veteran journalist Ephraim Munthali made the call Thursday in Mzuzu during a two-day training for journalists on financial reporting organised by Reserve Bank of Malawi (RBM).
Munthali, who is also the Managing Editor for Nation Publications Limited, was commenting on a presentation made by RBM Governor Dr. Dalitso Kabambe on a general overview of government's debt.
"If government has to produce value for each debt collected, there is need for engaging institutions which will also provide expenditure guidelines so that whichever agency or ministry is implementing the project with such funds becomes accountable.
"We have seen this happening with institutions like World Bank and International monetary Fund; otherwise, the country will continue to pay for debts which have no value for the development of the country," Munthali said.
Kabambe concurred with Munthali saying it is important for every loan to be looked into objectively and evaluated to determine if it is a priority for government or not.
"Usually, this is one of the things that we advise government because sometimes repayment rate for loans may not be in tandem with the signed agreement.
Pre-loan or pre-project evaluation will help government to get only loans whose value will be of importance to the nation and if the project is not, government is at liberty to reject the loan," he said.
Earlier, Kabambe encouraged journalists to be factual in reporting financial issues as they have direct impact on the masses.
"A good journalist is knowledgeable and reports facts as they are because whatever you report, will help government, investors and business persons among others to make better decisions.
Let me take this opportunity to clarify that Malawi recorded the highest debt record between the year of 1994-1996 when it registered over 180 percent of Gross Domestic product (GDP) and it remains the highest as of now," Kabambe said.