By Burnett Munthali
Dr. Dalitso Kabambe, a leading Malawian economist, has recently criticized Malawi’s heavy reliance on borrowing, asserting that this practice has stunted the country’s economic progress. In a frank assessment, Kabambe argues that the nation’s dependency on external debt and donor funds has created significant barriers to economic development and stability.
Kabambe contends that Malawi’s frequent borrowing has had detrimental effects on the country’s economy. He points out that many major projects fail because of the overwhelming debt burden. “Most big projects in the country fail because of debts that the country has been taking, which are a hindrance towards economic liberation,” Kabambe remarked. He believes that this reliance on debt has prevented the country from achieving sustainable economic growth and self-sufficiency.
The economist advocates for a shift in mindset, urging Malawi to focus on leveraging domestic resources for development rather than depending on external financial assistance. “There is a need to change the mindset and develop based on what is in the country rather than relying on donors and debtors to bail the country out,” Kabambe said. He stresses the importance of harnessing local resources and capabilities to drive economic progress.
Kabambe has recommended significant changes in Malawi’s monetary and fiscal policies to address the issues caused by excessive borrowing. He warns that without these reforms, the Malawian kwacha will remain vulnerable to devaluations and inflation. According to Kabambe, failure to implement these changes will continue to undermine economic stability and growth.
He also highlights concerns about the impact of current economic policies on personal savings. “Those of you that have money in the bank, that money is being eroded by 36 percent and being rewarded by 26 percent, and yet savings are important in growing the economy,” Kabambe noted. This erosion of savings, he argues, undermines the financial security of individuals and the overall economic health of the nation.
Kabambe’s critique underscores the urgent need for Malawi to reevaluate its economic strategies and borrowing practices. By focusing on domestic resource utilization and implementing necessary reforms in monetary and fiscal policies, the country could potentially reduce its debt dependency and foster a more robust and resilient economy. His insights serve as a call to action for policymakers and stakeholders to prioritize sustainable development and economic self-reliance.
