Finer details of the Reformed Constituency Development Fund (RCDF) show that the fund is now worth K1.45 trillion and embracing all development funds for Local Government Authorities (LGAs), a departure from the previous system.
The affected windows are the District Development Fund (DDF), Water Resources Fund, Infrastructure Development Fund (IDF) and Hospital Rehabilitation Funds.
On the other hand, city roads have survived and separately received K7.728 billion allocated through the National Local Government Finance Committee (NLGFC) budget.
But while the K1.45 trillion for RCDF is higher than the K106.649 billion previously allocated for all the above development funding windows, including CDF in the 2025/26 fiscal year ending on March 31, Parliament and pundits have expressed worry over the level of Central Government Transfers (CGTs) to LGAs.
In the 2026/27 Draft Financial Statement, total transfers to LGAs are projected at K2.088 trillion, including K1.145 trillion for RCDF, K849.4 billion for personal emoluments and K94.5 billion for Other Recurrent Transactions (ORT).
Reads the statement: “The transfers have increased largely due to fiscal devolution through CDF which aims at increasing development activities across the country.
“In light of this, financing of projects for local councils has increased from an approved estimate of K106.6 billion in the 2025/26 financial year to K1.145 trillion in the 2026/27 financial year, representing an increase of 973.6 percent.”
The statement said the transfers exclude estimates for medical drugs of K56.6 billion for district hospitals and K14.9 billion for Programme for Results for Primary Schools which have been allocated under the NLGFC.
How will this work?
In an interview last week, NLGFC financial analyst Duncan Macheso said councils will be free to choose which projects to be prioritised.
He said: “Councils are being asked to prepare what are known as annual investment plans, which includes the aspirations of the citizens in the locality.
“That list is supposed to be a comprehensive one which covers all sectors. So the secretariat will choose and recommend to the council.
“The full council will deliberate and either approve or cause changes to be made. Part of the money is supposed to cover District Wide Projects, which means each constituency will be contributing to those projects.”
Based on the 2026/27 Draft Financial Statement, from the K1.145 trillion, at least K279.705 billion or 24.4 percent will be sourced from donor partners and will cover construction and rehabilitation of projects.
The remaining K865.295 or 75.57 percent from government resources, is divided into 47.57 percent for construction and rehabilitation of projects, 10 percent for district wide projects and five percent each for project management costs and rehabilitation of infrastructure damaged by disasters.
The other allocations are three percent for education bursaries, two percent each for women empowerment and youth empowerment as well as one percent for sports and creative arts.
Stakeholders, supportive, but cautious
Malawi Local Government Association (Malga) executive director Hardrod Zeru Mkandawire in a separate interview said they expect the funding scheme to be administered and implemented within the architecture and framework of the local development system.
He said: “Our only prayer is that this reformed CDF should not be a guise to centralise local level development projects where key decisions are undertaken by the centre.
“So long as the central actors do not interfere in the key decision making on projects’ identification, resource allocation and priority of projects, then we are good to go.”
Parliamentary Committee on Local Authorities and Rural Development chairperson Edward Chileka Banda said having one basket under RCDF will help reduce logistical workload and ease oversight in the form of supervision and monitoring.
He said: “We are hoping that the CDF guidelines being developed will take into account the vital development interventions that failed under the consolidated funding baskets.
“In specific terms, we anticipate that the revised CDF guidelines will have specific funding windows or allocations for key sectors including water development, education, agriculture, health and many others.”
Banda said the CDF increase from K220 million to K5 billion per constituency poses risks, including capacity challenges prevalent in the local councils amid delays in funding and low absorption rates, but indicated that his committee is engaging relevant authorities on the same.
But accountability expert Willy Kambwandira noted that while the one basket approach may be framed as geared to improve efficiency, it has the potential to create a fertile ground for politicisation of development priorities and uneven resource distribution.
“Without robust safeguards, clear allocation criteria and ring fencing for critical sectors, it risks reversing gains in fiscal discipline and sets a dangerous precedent where development financing becomes subordinated to political expediency not public interest,” he said.
In his State of the Nation Address delivered in Parliament in Lilongwe on February 13 2026, President Peter Mutharika said the RCDF will be performance-based.
Mutharika’s now governing Democratic Progressive Party (DPP), in its September 16 2025 General Election campaign manifesto, promised to expand the CDF’s scope to cover areas such as construction of early childhood centres, primary and secondary schools, health centres, road grading and irrigation schemes.
The party also said the CDF will be used for construction of police units, markets, water and sanitation facilities, skills development centres and provision of bursaries and vocational training.
