Malawi’s quest to align its national budget with the Malawi 2063 (MW2063) is facing significant hurdles, with a United Nations analysis revealing glaring discrepancies between the fiscal plan and the MW2063 First 10-Year Implementation Plan (MIP-1).
This misalignment raises concerns about the country’s ability to meet its developmental targets, particularly those outlined in MIP-1, which focuses on critical areas such as commercialised agriculture, manufacturing and industrialisation.
Published UN data show that the top three spending priorities to achieve MIP-1 objectives as modelled by the National Planning Commission (NPC) are economic infrastructure at 35 percent, agricultural productivity and commercialisation at 18 percent and human capital development at 11 percent.
Yet, the 2025/26 National Budget allocated the highest share to effective governance systems and institutions at 45 percent against the MIP-1 recommendation of eight percent followed by human capital development at 30 percent against the recommended 11 percent and agricultural productivity and commercialisation at nine percent against the recommended 17.6 percent.
On the other hand, enhanced public sector performance has been allocated 5.7 percent against the recommended 0.7 percent, economic infrastructure has been allocated 5.6 percent against the recommended 34.8 percent while urbanisation has been allocated 2.4 percent against the recommended 5.8 percent.
Industrialisation has also fallen short of the recommended 10.5 percent with an allocation of 1.2 percent, private sector dynamism has an allocation of a meagre 0.1 percent against the recommended 10.8 percent.
Only environmental sustainability with an allocation of 0.4 percent against the recommended 0.2 percent and mindset change with an allocation of 0.1 percent as per recommendation; have had their allocations aligned with MIP-1.
Unicef has since urged government to improve the link between budget and government policies by allocating resources consistent with the priorities in MIP-1
“Going forward, while deliberate efforts are needed to align budget frameworks to the MIP-1 as the 2025/26 allocations reveal significant misalignment, the NPC is encouraged to consider rethinking its MIP-1 spending targets,” reads the Unicef 2025/26 National Budget brief.
In March this year, NPC said it was conducting a mid-term review of MW2063 First 10-Year Implementation Plan to assess its progress.
NPC said MIP-1, which was launched in 2020, is designed to be reviewed every five years to ensure that short and medium-term targets are followed through.
However, in the Annual Progress Report of the Malawi 2063 First 10-Year Implementation Plan, NPC reported 43 percent progress.
Funding constraints had delayed some major projects, including expanding area under the Greenbelt Initiative, establishing a Mining Regulatory Authority, supporting establishment of large private mining companies largely promoted under PPPs and facilitate increase in cement production.
NPC director General Frederick Changaya said in an interview that in the face of funding constraints, it will prioritise modern and low financing models to advance the MW2063, the country’s long-term development plan.
He conceded that Malawi has significant headwinds due to funding constraints and shocks.
He said: “There are modern financing models unlike the most expensive and demanding traditional government debt.
“I think of a public private partnerships with smart structuring with blended financing models using concessional funds to de-risk private sector participation in critical infrastructure,” he said.
In the 2025/26 financial year, Ministry of Finance and Economic Affairs indicated that MIP-1 will continue to be the guiding policy in resource allocation and programme implementation to transform the country into a self-reliant industrialised upper middle-income economy by 2063.
The 2025/26 Ministry of Finance Financial Statement indicates that key pillars; namely ,agricultural productivity and commercialisation got K738.9 billion, urbanisation received K190.6 billion while industrialisation got K93.8 billion.
However, of the K8.05 trillion national budget, recurrent expenses are estimated at K6 trillion or 75 percent of total spending while development expenditure is allocated K2.01 trillion to drive infrastructure development and economic growth.
Former minister of Finance and Economic Affairs Simplex Chithyola Banda said the fiscal plan reaffirms the government’s commitment to production-led growth, fiscal consolidation and enhanced revenue mobilisation to address economic challenges”.
MW2063 was launched in January 2021 and the plan is anchored on the three pillars of agricultural productivity and commercialisation, industrialisation and urbanisation.
