A Review Of Malawi’s Domestic Debt Strategy And It’s Implications For Fiscal, Monetary And Financial Sector Development Needs

By Mercy Kumbatira
June 2008
Preamble
The failure by domestic debt managers to formulate an appropriate borrowing strategy has a number of problems which include bunching of payments, which cause cash flow difficulties, a maturity profile which is short term and monetisation of debt. Once policy makers have assessed the government’s fiscal sustainability, debt managers need to formulate a credible borrowing strategy. For this to happen, they need to make an accurate assessment of both the borrowing requirements for government and for monetary policy and also the likely take-up of government securities by the market. This is also only possible when there is close coordination between the main institutions that are involved in economic policy.