Malawi Local Government Association (Malga) says councils received a paltry four percent against 96 percent for central government from net revenues in the budget during the fourth quarter of the 2024-25 financial year.
In light of the funding imbalance, Malga said in its report titled ‘The long wait for meaningful fiscal devolution continues’ that the situation reflected a vote of no confidence in the central government’s commitment to fully empower councils in line with the policy and law.
The analysis further noted that despite being low, the allocation was not disbursed in full with K15 billion yet to be released by close of the financial year on March 31 2025.
Reads in part the report prepared by Malga with support from Action Aid Malawi: “The LGAs [local government authorities] were expected to receive K141 billion cumulatively by the fourth quarter of this [2024-25] financial year. Instead, the LGAs received K126.2 billion with a negative variance of K15.03 billion,”
Speaking in an interview yesterday, Malga executive director Hadrod Mkandawire said the central government could be in breach of the law which compels Treasury to transfer five percent of the net national revenue to local councils as stipulated in Section 150 of the Constitution.
He said the issue is on the agenda at Malga’s annual general meeting scheduled for next month.
“Obviously it’s a constitutional matter. The forthcoming Annual General Assembly of the Local Authorities will deliberate on this matter, and come up with a position,” said Mkandawire.
Treasury was yet to respond to our questionnaire as we went to print yesterday.
But the Malga analysis further shows that the spending ratios in Malawi between central government and the LGAs is lower than the sub-Saharan Africa prescribed average, with the Kenyan Constitution prescribing 15 percent of national resources to sub-national governments while in Zambia it is at 7.5 percent and 10 percent for Rwanda.
According to the report, almost all sectors, notably education, health, agriculture, environment and gender got 50 percent or less of the funding, yet funding linked to members of Parliament, such as the Constituency Development Fund and the Borehole Fund had 100 percent disbursement.
Further, the analysis states that in February and March 2025, councils had a funding drought, with K6.4 billion for the period yet to be accessed by March 31 2025.
Out of this amount, K624 million or about 10 percent was meant for the purchase of drugs which has put hospitals under pressure, according to the report.
“All district hospitals depend on National Government transfers for their operations. In the past two months, it has been very difficult to provide public health services including ambulatory services, patient feeding, cleaning services and even medical services,” adds the report.
The report further highlights that from January to March there was no funding to the agriculture sector yet this was the peak of providing extension services to farmers.
Malga has recommended that LGAs should step up their efforts in generating their own source revenues which have less conditions as regards utilisation and autonomy.
