Fiscal reforms top budget list
Participants to the first 2025/26 National Budget Consultations have asked government to enhance fiscal transparency, boost revenue collection and redirect resources towards sectors that drive economic growth and resilience.
In their submission in Lilongwe yesterday, stakeholders stressed the need to shift from welfare-focused allocations and prioritise investments in strategic sectors such as agriculture, tourism, mining and manufacturing.

The stakeholders said such a direction would stimulate job creation, increase exports and strengthen the country’s economic stability in the process.
In her contribution, Economics Association of Malawi (Ecama) president Bertha Bangara-Chikadza warned against the long-standing trend of reallocating funds from the development budget to cover shortfalls in recurrent expenditures. She said this practice hinders real economic growth.
She said: “The problem with trimming the development budgets is that it restricts real economic growth.
“Going forward, we should be more realistic with the resources we get from the development budget and manage them effectively.”
Bangara-Chikadza, who teaches economics at the University of Malawi, further called on the government to prioritise fiscal consolidation by adopting integrated financial management systems and broadening the tax base.
She said that such measures would ensure that resources are available for key economic activities that can catalyse growth.
Taking her turn, Malawi Economic Justice Network (Mejn) executive director Bertha Phiri echoed Bangara-Chikadza’s sentiments.
She noted that the Malawi Government loses substantial revenue through tax holidays extended to some investors.
Said Phiri: “The government should be transparent on how it awards tax holidays and tax breaks to businesses.
“As much as we need to attract investment, we shouldn’t forego the tax revenues because they are an important resource in the budget.”
Both Ecama and Mejn underscored that improving the national resource envelope would enable investments in productive sectors critical to achieving economic resilience and sustainable growth.
The recommendations come in the wake of austerity measures in the 2024/25 National Budget, which saw cuts to allocations in the tourism, mining, energy, and construction sectors.
The cuts, part of broader efforts to address Malawi’s low economic performance, drew criticism from analysts who argued that such measures undermine the country’s growth potential.
But despite the cuts, the Ministry of Agriculture’s allocation increased by 15.6 percent or K75.1 billion, rising from K480.37 billion to K555.53 billion.
However, out of the K75.1 billion increase, about K72.39 billion, representing 96.3 percent of the increase, is earmarked for recurrent expenditures, leaving critical initiatives such as mechanisation of mega farms and anchor farms with an K86 billion funding shortfall.
In his presentation, Innocent Pangapanga Phiri, head of the Centre for Agricultural Research and Development (Card) at the Lilongwe University of Agriculture and Natural Resources (Luanar), expressed concern over the government’s focus on the Affordable Inputs Programme (AIP).
He argued that the programme, which consumes more than half of the agricultural budget, is unsustainable and limits the sector’s development.
Said Pangapanga Phiri: “We need to shift to investments in mechanised mega farms, high-value crops and agro-processing industries. Structured markets and export-oriented agriculture are also critical to unlocking the sector’s potential and addressing rural poverty.”
During the consultation meeting which Minister of Finance and Economic Affairs Simplex Chithyola Banda opened, stakeholders also emphasised the importance of aligning fiscal policies with long-term development goals, notably Malawi 2063 and its first 10-year implementation plan (MIP-1).
They said this is pivotal in steering the country towards sustainable economic growth and resilience.
In an interview later, Chithyola-Banda pledged reforms to address gaps in the forthcoming budget.
He said: “We have been working on innovative strategies to raise funds and plug the gaps in the budget.
“We have been exploring carbon markets, and we can generate resources from that to fund activities in critical sectors.”
Pre-budget consultations provide a platform for the Ministry of Finance to solicit input from stakeholders for possible consideration in the national budget.
The minister is expected to present the 2025/26 National Budget during the 51st Session of Parliament set to open on February 14 2025.