Malawi’s external debt doubles in 10 years

Malawi’s external debt has quietly crossed the US$4 billion mark, more than doubling in just 10 years and raising fresh questions about the country’s growing dependence on foreign borrowing.

The debt has reached US$4.048 billion (about K7.09 trillion) as government negotiates with the International Monetary Fund (IMF) for a fresh Extended Credit Facility (ECF) programme to support the struggling economy.

According to the World Bank’s 2026 International Debt Report, Malawi’s external debt stock increased by 8.1 percent in 2025, from US$3.744 billion in 2024 to US$4.048 billion.

The report further shows that the country’s external debt has more than doubled over the past decade, rising from US$1.723 billion in 2015.

Public and publicly guaranteed debt accounted for US$3.972 billion, representing approximately 98 percent of Malawi’s total external debt.

Multilateral institutions held the largest share, with claims amounting to US$3.599 billion, representing 90.6 percent of public and publicly guaranteed external debt.

The World Bank’s International Development Association (IDA) was the largest individual creditor, accounting for US$1.895 billion, followed by other multilateral lenders at US$1.234 billion and the African Development Bank at US$470 million.

Bilateral creditors accounted for US$373 million, including US$219 million owed to China and US$80 million to India.

The report also shows that Malawi received no new external debt commitments from private creditors in 2025. Meanwhile, new commitments from official creditors had an average maturity of 23 years, a four-year grace period and an average interest rate of 1.1 percent.

At global level, the World Bank says external debt among low- and middle-income countries increased by 5.5 percent to US$9.4 trillion in 2025, marking the fastest growth since 2021.

The institution warned that although access to international financing had improved, borrowing had become more expensive for poorer countries, with total debt-service payments reaching US$1.4 trillion in 2025.

World Bank Group Chief Statistician and Director of Development Data, Haishan Fu, called for responsible debt management to ensure countries maintain debt sustainability.