Immediate past former Finance minister Simplex Chithyola Banda yesterday blamed the Democratic Progressive Party (DPP)-led government for not cleaning up fast enough the economic mess he helped create and left behind.
His return to criticise the current state comes even as Malawi’s economy is recording progress towards stabilisation since September 2025 in key macroeconomic indicators although the cost of living still remains too painful for the majority of the population.
Chithyola Banda: DPP administration of failing to address key national challenges
Wearing the hat of Leader of Opposition in Parliament, Chithyola Banda in a statement dated June 16 2026 accused the DPP administration of failing to address key national challenges, including economic difficulties such as high cost of living and punitive taxes facing Malawians.
In a typical case of the pot calling the kettle black, Chithyola Banda, who served as minister of Finance and Economic Affairs before the Malawi Congress Party (MCP) lost to DPP in the September 16 2025 General Election, also decried the undermining of the Office of the Vice-President, saying its holders have constitutional obligations that must be respected, regardless of how they were treated by previous administrations.
He said: “The cost of living continues to rise while incomes remain stagnant. Foreign exchange shortages continue to affect businesses. High fuel costs continue to drive up the prices of goods and services. Meanwhile, Malawians continue to hear reports of wasteful expenditure, questionable priorities and allegations of corruption. People are asking a simple question: if government has money for luxury projects, why does it not have enough money for hospitals, schools, agriculture and economic recovery?”
But numbers show that the Peter Mutharika administration is in fact reversing some of the major negative performances that occurred under the Lazarus Chakwera administration, including those presided over by Chithola Banda as finance chief.
The Nation review of key indicators show, for example, that inflation has eased as maize prices collapsed, fiscal deficits have narrowed, foreign exchange reserves have improved and interest rates have started falling. However, households and businesses are still grappling with higher fuel and transport costs.
National Statistical Office (NSO) data indicate that headline inflation has fallen from 28.7 percent in September 2025 when the MCP regime was voted out to 24.3 percent in April 2026. The decline was largely driven by food inflation, which dropped from 33 percent to 19.1 percent during the period.
The easing of food prices, particularly cereals such as maize and rice, helped to offset rising costs elsewhere in the economy. However, non-food inflation increased from 21.7 percent to 33.2 percent, reflecting higher transport, fuel and utility costs.
Further, monetary conditions also eased. The central bank reduced the policy rate from 26 percent to 24 percent in March 2026, while commercial lending benchmarks and Treasury bill yields also declined.
According to Reserve Bank of Malawi (RBM) data, foreign exchange reserves have increased from $511.8 million, an equivalent of two months import cover in September 2025 to $571.6 million or 2.3 months of import cover as of March 2026. However, the level is still below the recommended three-month minimum.
Public finances also improved with an analysis of RBM data showing that the cumulative fiscal deficit narrowed from K1.356 trillion between April and September 2025 to K782.1 billion between October 2025 and March 2026.
As a share of expenditure, the deficit declined from 33.9 percent to 20.4 percent. Relative to GDP, it fell from about 5.2 percent to three percent.
The improvement suggests government reduced the gap between spending and revenue collection. However, debt servicing remained a major burden. Interest payments increased from K977.9 billion in the first six-month period to K1.28 trillion in the second.
Taken together, the figures suggest that Malawi’s economy became more sustainable between September 2025 and mid-2026. Inflation moderated, reserves strengthened, deficits narrowed and borrowing costs eased.
The Chakwera administration also presided over one of the fastest expansion of public debt, ballooning it by more than 500 percent within five years, which has left government spending roughly half of domestic revenue just on interest payments and debt servicing.
Malawi’s public debt increased from K3.64 trillion in 2020 to about K22.4 trillion by early 2025. Over the same period, the debt burden rose from about 48 percent of GDP to nearly 90 percent of GDP, with little multiplier effects to show for it.
On the other hand, the fuel story partly explains this divergence.
Between November 2023 and September 2025, petrol prices remained fixed at K2 530 per litre despite two devaluations of the kwacha implemented by the MCP administration that reduced the value of the kwacha by more than 70 percent and increased import costs. During the period, global fuel prices and in-bond landed cost (IBLC) had consistently surged outside the trigger band of plus or minus five percent.
While the artificial fuel prices policy may have protected consumers from immediate price increases, it also created market distortions as fuel was being sold below landing cost, forcing government and suppliers to absorb losses that stood around K1 trillion by the time MCP was exiting government.
The eventual correction pushed petrol prices to K3 499 per litre in October 2025, K4 965 per litre in January 2026 and K6 209 per litre by May 2026.
In an interview yesterday on whether he was not being hypocritical when he presided over the collapsing economy until last September, Chithyola Banda said the new administration should focus on current solutions rather than looking back.
“You can’t defend the indefensible, you cannot blame an ex-husband of your wife as a reason for your failure to take care of her,” he said.
Meanwhile, Scotland-based Malawian economist Velli Nyirongo has since said issues such as high public debt, foreign exchange shortages and fuel import constraints are typically deep structural macroeconomic problems that accumulate over many years.
In a separate interview, government and public policy expert George Chaima said the DPP inherited from the MCP government most of the challenges highlighted in Chithyola Banda’s statement.
“I do not know when they [MCP] became angels that they should become the light to Malawians,” he said.
Minister of Information and Communications Technology Shadric Namalomba, in an interview last evening, asked Chithyola Banda to keep quiet, saying: “MCP should be the last to throw stones at this government. As a nation, we are still grappling with the economic mess left behind by their tenure characterised by theft and poor economic governance.”
On the sentiments about the government sidelining First Vice-President Jane Ansah and Second Vice-President Enoch Chihana, he said the MCP administration ill-treated vice-president Saulos Chilima who died in a military plane crash alongside eight others on June 10 2024.
