Malawi Parliament passed a bill on Monday that will allow the government to borrow K3 billion (at least US$10 million) from the Arab Bank for Economic Development in Africa to fund some of its projects in the Green Belt Initiative.
The loan is meant to fund for the second phase of the small farmer‚Äôs irrigation project in the Green Belt Initiative.
The loan authorisation Bill seeks to resuscitate irrigation schemes in the Lake Malawi region, which were abandoned after the Malawi congress party regime went out of power in 1994.
The bill, mwhich appeared as number 28 of 2012 was the first to be passed after the House resumed its new meeting which is scheduled to last for three weeks.
According to Leader of the House there are a total of 24 Bills to be brought into the House during the period.
Presenting the Bill Minister of Finance Ken Lipenga said the money is aimed at funding the second phase of the Small, Farms Irrigation Project along Lake Malawi and will benefit two districts Nkhatabay and Mangochi targeting more than 4,000 households in these districts.
‚ÄúThe goal in the whole project is to put about one million hectares of land under irrigation with the aim of improving agricultural production, promoting food security and improve nutrition, and also creating employment,‚ÄĚ said Lipenga.
During contribution towards the Bill one of the MPs MCP‚Äôs Vitus Dzoole-Mwale asked Minister of Finance to bring figures of how much the country has borrowed so far expressing concerns that borrowing without checks and balances may lead the country into another debt that would be problematic to coming generations.
‚ÄúI think we are borrowing too much,‚ÄĚ said Dzoole-Mwale.
He also expressed concerns that for a long time government has been borrowing money but without tangible results to the intended beneficiaries because the money is at times diverted to other uses.
‚ÄúOur farmers are still using hoes. These hoes at times can break people‚Äôs backs, we want to see our farmers transforming to mechanised farming using tractors,‚ÄĚ said Dzoole-Mwale an MP for Lilongwe Msozi south.
Lipenga said the borrowed amount is expected to be repaid in a period of 30 years with a 10 year grace period at an interest rate of one percent annually.
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