Malawi

The African Sovereign Debt Justice Network, (AfSDJN), is a coalition of citizens, scholars, civil society actors and church groups committed to exposing the adverse impact of unsustainable levels of African sovereign debt on the lives of ordinary citizens. Convened by Afronomicslaw.org with the support of Open Society for Southern Africa, (OSISA), the AfSDJN's activities are tailored around addressing the threats that sovereign debt poses for economic development, social cohesion and human rights in Africa. It advocates for debt cancellation, rescheduling and restructuring as well as increasing the accountability and responsibility of lenders and African governments about how sovereign debt is procured, spent and repaid. Focusing in particular on Kenya, Zambia, Zimbabwe, Mozambique, Nigeria and Senegal, the AfSDJN will also amplify African voices and decolonize narratives on African sovereign debt . Its activities include producing research outputs to enhance the network’s advocacy interventions. It also seeks to create awareness on and elevate the priority given to sovereign debt and other economic justice issues on the African continent and beyond throughout 2021.

Malawi is facing a period of heightened fiscal and economic uncertainty, with rising debt pressures coinciding with a politically significant moment following the return of President Lazarus Mutharika. On the 4th of October 2025, President Mutharika was sworn in as Malawi’s 7th President, taking over from ex-President Lazarus Chakwera. This debt update examines Malawi’s current political and economic landscape, and the fiscal and debt sustainability challenges President Mutharika has inherited. Further, the update highlights perspectives from the IMF and analysts, as well as the evolving role of China in Malawi’s borrowing framework. Drawing solely from recent reporting and analysis, the update highlights both the opportunities and risks that the country faces as it navigates this complex macroeconomic environment.

This study analyzes trends in public debt and austerity in Africa, focusing on the period immediately preceding the COVID-19 pandemic (2018–19) to date (2023/2024). More specifically, it centers on countries at high risk of defaulting on their debt, those that have defaulted on their debt repayments during the pandemic and post-pandemic period, and those currently undertaking debt restructuring. The study further analyzes fiscal policy measures adopted by indebted countries, focusing on their impact on social spending and the well-being of populations in Africa. The selected countries for this study are Zambia, Ghana, Malawi, and Kenya.

Against the background of the highlighted liquidity injections, the Malawian government needs to be wary of the funds that are being continuously extended to them in the name of “foreign direct investments”. While it is anticipated that these financial facilities “will greatly enhance our foreign exchange reserves position and provide the macroeconomic stability needed for economic and business growth”, the AfSDJN cautions against liquidity injections that are accompanied by conditionalities that have not been made public. It is imperative that these conditionalities be explicitly defined, and that the terms and conditions be made accessible to the public.