BLANTYRE (Reuters) – Malawi is on course to getting its $1.2 billion external debt with different lenders restructured to “sustainable levels”, its central bank said in a statement on Sunday.
The bulk of the debt – $800 million – is contracted with Afriximbank, and repayments started in 2020, it said.
The Reserve Bank of Malawi said in its statement that the negotiations have been very positive and creditors were willing to help the country reach debt sustainability.
“The Malawi Government remains optimistic that the discussions will conclude with acceptable terms for both the Government and the creditors,” the statement said.
Servicing of the debt and other forms of loan has been constrained by the lack of foreign currency, which has affected the government’s operations, the bank said.
“(The) debt service payments, which fell due after June 2020, have depleted foreign exchange reserves and are affecting current service delivery by the Government.”
Landlocked Malawi, a net importer, is experiencing severe shortages of key imports such as fuel, medicines and fertilizers due to foreign currency shortages. This has resulted in long queues of motorists at fuel stations and robberies there.
(Reporting by Frank Phiri; Editing by Carien du Plessis and Frances Kerry)