Malawians have since 2004 been forced to service a total of K30 billion (US$94.4 million) in foreign debts for funds acquired to implement non-existent and stalled projects, which have not benefited citizens, Centre for Social Concern (CfSC) has revealed.
The projects in question include the construction of the Zomba-Jali-Phalombe-Chitakale Road which has seen a total of six loans amounting to US$58.26 million (almost K18.93 billion) approved by Parliament since 2004 and Phalombe District Hospital whose loan amounting to $7 million (K2.3 billion) was approved in 2010.
According to the CfSC report entitled The Paradox of Continuous Foreign Borrowing in a Rash of Stalled Debt Sponsored Projects the Zomba-Chitakale Road got its first loan of $21.06 million (K6.8bn) in 2004 from Kuwait, then another $7 million (K2.3bn) from the World Bank in 2005 before getting another $10 million (K3.25bn) from the same bank.
Yet in 2011 Parliament approved three loans for the same road amounting to US$19.2 million (almost K6.42bn) from Arab Bank for Economic Development in Africa (Badea), the Kuwait Fund for Arabic Development and Opec Fund for International Development.
In the just ended budget session, Parliament has again approved a further K3.4 billion with the project title now reading Zomba-Jali-Kamwendo-Phalombe-Chitakale Road thereby making the road once it is completed to cost taxpayers a total of K22.17 billion.
Minister of Finance spokesperson Nations Msowoya said although there have been challenges to some of the cited projects, almost all the projects are still in progress and none has been abandoned.
Said Msowoya: “In all these projects the government is dealing with foreign creditors and in this case more than three who have their own processes and procedures which have to be appreciated.