Malawi has held several successful talks on the restructuring of its debt, and the country's government hopes that the negotiations will help the state to "reach debt sustainability" and feels "optimistic" about further rounds of the talks, the country's central bank's statement said.
"The negotiations have been very positive, and the creditors have shown willingness to assist the country to reach debt sustainability. The Malawi Government remains optimistic that the discussions will conclude with acceptable terms for both the Government and the creditors," the statement read.
The state's central bank, the Reserve Bank of Malawi (RBM), contracted with different external creditors between 2012 and 2020. The largest part of the debt, US $800 million, is contracted with the African Export-Import Bank (Afreximbank). Of this amount, US $350 million was borrowed on behalf of the government.
In 2020, Malawi began paying off this debt, which, along with other forms of lending, led to "depletion of foreign exchange reserves has had an impact on the government's current service delivery," according to RBM.
As for other African countries overcoming the debt crisis, in June, Zambia managed to restructure US $6.3 billion of its debt with bilateral lenders under the Group of 20 nations' Common Framework. According to the agreement, the country is to pay 1% interest rates until 2037. Three other African countries - Chad, Ethiopia and Ghana - are candidates for debt treatment under the framework.