Minister of Finance Joseph Mwanamvekha will tomorrow take to the big stage in the National Assembly to present the 2025/26 Mid-Year Budget Review Statement that essentially gives a picture of how the government has managed finances.
It promises to be a solid reality check considering that a different administration from the one that developed the financial plan will lead the review.
What is clear is that the K8.05 trillion 2025/26 National Budget is almost off-track with indicators pointing to missed targets, especially on the revenue front, a key enabler of making the budget a reality. In the fiscal plan that rolled out on April 1 2025, domestic revenues were projected at K4.44 trillion to be supplemented by grants from cooperating partners estimated at K1.14 trillion against total expenditure of K8.05 trillion.
Reserve Bank of Malawi data show that between April and September, Treasury collected about K2.65 trillion against over K4 trillion expenditure, meaning that the country incurred a K1.36 trillion deficit in just six months. For the record, the annual deficit was estimated at K2.47 trillion to be financed by borrowing.
On the other hand, inflation rate climbed to 29.1 percent in October and growth projections slipped to 2.4 percent, thereby dampening the macroeconomic assumptions on which the 2025/26 National Budget was underpinned. Initially, the economy was projected to rebound to 3.4 percent of gross domestic product (GDP) with inflation expected to moderate from 32.3 percent in 2024 to 24 percent in 2025.
While it has become a trend for Ministers of Finance to table supplementary budgets during the Mid-Year Budget Review that have tended to dismantle the initial fiscal plan gone off-track, this time around Mwanamvekha has no choice but to re-do it. Primarily, the dismantling will be informed by the fact that the current financial plan was designed to facilitate the agenda of the previous administration, as such, the new team would want to advance its own development plans.
If commentaries from economists and other stakeholders are anything to go by, radical restructuring of the budget will be inevitable if stability, confidence and certainty are to be restored in the economy that is surviving on a life support machine.
Following their victory in the September 16 General Election, President Peter Mutharika and team inherited an economy riddled with rising cost of living, high inflation and interest rates as well as foreign exchange and fuel scarcities. Fact. It is an economy reeling under a public debt of over K16 trillion or equivalent to 86.4 percent of GDP comprising external debt stock of $4.27 billion (about K7.4 trillion) and $5 billion (about K8.79 trillion) domestic debt, according to Ministry of Finance data.
I will repeat what I said in my previous write-up that breathing life into a dead economy demands strong leadership having the right people in the right places, not amateurs.
Malawians are going through hell economically. Former president Lazarus Chakwera and his team promised to take them to Canaan, the Biblical Promised Land flowing with milk and honey, but in five years the journey could not start purportedly because they were paving the way, as it were.
Now, all eyes are on Mwanamvekha, the new man in-charge of the economy. It is worth mentioning that Mwanamvekha inspires hope due to his experience both in the private and public sectors.
That said, however, what will be key is how he will rework the financial plan, ensuring fiscal discipline and reform of foreign exchange markets to avert a deeper balance-of-payments crisis. Two weeks ago, the Office of the President and Cabinet announced austerity measures, but such measures will only be meaningful if they are implemented to the letter and not mere rhetoric.
Tomorrow’s Mid-Year Budget Review Statement will mark an important milestone in the new administration’s tenure as it will provide a reality check and give clear direction on where the country is heading to.
During the State Opening Address to the 52nd Session of Parliament on October 31 2025, the President made the intent of his administration known to all when he said: “Mr. Speaker, Sir, if we get the economy right, we get everything else right. It is a growing economy that will create more jobs for the youth and women. But for all this to happen, good governance and rule of law will be very key. I will not tolerate any corruption…”
Indeed, the economy is everything and when people entrusted with leadership demonstrate good knowledge of the economy and how they hope to navigate through, it inspires some level of confidence and hope.
For now, let us wait and see if Mwanamvekha has that magic wand to ease the pain. Over to you, sir!
