Opposition political parties in Parliament and the Budget and Finance Committee of Parliament have warned that unrealistic economic projections, rising debt and inefficient resource allocation could undermine the implementation of the 2025/26 National Budget.
Democratic Progressive Party (DPP) and the United Democratic Front (UDF) spokespersons on budget on Monday reacted to the proposed K8 trillion fiscal plan which Minister of Finance and Economic Affairs Simplex Chithyola-Banda presented on February 28 2025.
In his submission, DPP representative Ben Phiri, who is also Thyolo Central legislator, described the budget as “full of fiction and drama”, arguing that it failed to address pressing economic challenges and the promises made by the government.
“The growth in expenditure significantly outpaces revenue growth,” said Phiri.
An analysis by the Budget and Finance Committee of Parliament shows that revenues have increased by K2 trillion, rising from K6.1 trillion in the 2024/25 revised budget to K8.1 trillion in the 2025/26 proposed budget.
However, revenues are projected to grow modestly from K952.1 billion. The discrepancy will result in a fiscal deficit of K2.1 trillion, which Phiri warned could restrict government investment in essential services such as health, education and governance.
On his part, UDF spokesperson on the budget Ismael Nkumba observed that rising deficits, rising debt and increasing interest payments could constrain private sector growth.
He said: “Small and medium enterprises hold the key to a better Malawi as they employ the largest number of Malawians.
“They also have the potential to boost exports, thereby supporting the government’s import substitution strategy.”
Since the Tonse Alliance-led administration assumed power in 2020, government debt has surged from K4.76 trillion, representing 54 percent of the rebased gross domestic product (GDP), to K16.19 trillion, which is 86.4 percent of the GDP.
Budget and Finance Committee chairperson Gladys Ganda urged the government to strengthen revenue mobilisation, enforce fiscal discipline, improve debt management, reduce domestic borrowing and enhance budget transparency.
“The committee urges the government to curb excessive expenditures and prioritise investments in revenue generation,” she said.
In response, Chithyola-Banda acknowledged the sharp increase in debt over the past four years, but attributed it to external factors such as maturing past debt and exchange rate fluctuations.
“When the opposition start talking about debt, they should also talk about the debt we inherited from previous governments and how it is affecting us now,” he said.
The current fiscal year ends on March 31 2025.
