Government has today issued a K21 billion bond, a debt instrument, to finance the construction of Malawi Defence Force, Malawi Police Service, Malawi Prisons Services and Department of Immigration staff houses.
A statement accompanying the prospectus says the rationale of the bond, issued at a coupon rate of 12.5 percent, will fund the first phase of the construction of 1 000 residential houses of the planned 10 000 houses.
Reads the statement in part: “The primary impact will be that security officers will live in modern housing close to their duty stations.
“Additionally, government will free up cash flows which otherwise would have gone to rental budgets, which then can be used to develop Malawi.”
Reserve Bank of Malawi (RBM) spokesperson Mbane Ngwira said yesterday that unlike the previous bonds which were meant for debt restructuring, this bond gives government an opportunity to raise funds for the residential buildings for security officers in a prudent manner.
In the 2019/20 National Budget statement Minister of Finance, Economic Planning and Development Joseph Mwanamvekha said government expects to construct 10 000 houses in a space of five years, out of which 4 000 will be for MDF, 4 000 for the Malawi Police Service, 1 000 for the Immigration Department and 1 000 for the Malawi Prison Services.