Parliament yesterday started debating the proposed K10.9 trillion 2026/27 National Budget by highlighting ambitious revenue targets, rising public debt and chronic foreign exchange shortages as threats to successful implementation of the fiscal plan.
Presenting the Budget and Finance Committee of Parliament’s response, committee chairperson Sosten Gwengwe said the fiscal plan is being implemented amid three interconnected economic crises of persistent fiscal deficit, mounting public debt and foreign exchange scarcity.
“Malawi is currently navigating three interrelated macroeconomic crises,” he said.
Gwengwe, a former minister of Finance, noted that large deficits have historically been financed through borrowing, leaving little fiscal space for productive investment.
In its response, the committee also cautioned that the government’s revenue projection of K8.13 trillion, a 48.8 percent jump from the revised K5.46 trillion estimate for 2025/26, is “highly optimistic”.
Public debt remains another concern, with interest payments alone projected at K2.793 trillion, or 43 percent of domestic revenues, limiting funds for development programmes.
Despite the risks, the committee noted a projected primary surplus of K302 billion, saying that if sustained it could strengthen fiscal discipline and gradually free resources for development.
To improve fiscal sustainability, Gwengwe recommended broadening the tax base, boosting non-tax revenue through toll gates and departmental fees, accelerating debt restructuring and prioritising export-oriented production to address Malawi’s chronic trade imbalance and forex shortages.
Opposition voices echoed the concerns. with Malawi Congress Party spokesperson on the budget Peter Dimba warning that the government’s revenue and borrowing assumptions are uncertain.
He further called for reforms to agricultural subsidy programmes, stronger anti-corruption measures, and steps to improve fiscal discipline, arguing that misuse of public resources could derail the budget’s effectiveness.
Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha tabled the fiscal plan in Parliament on February 27 2026. Thereafter, Parliament went into a two-week break to allow legislators analyse the budget through clusters.
