Ministry of Finance, Economic Planning and Decentralisation has ordered a review of public contracts signed between September 1 2023 and September 1 2025 and suspended any payments for the same until completion of assessments.
Secretary to the Treasury Cliff Chiunda, in a memo to controlling officers and heads of department in government ministries, departments and agencies (MDAs) dated May 29 2026, said the suspension affects all contracts, agreements, guarantees, consents and employment-related contracts signed during the prescribed period.
He asked the MDAs to provide original contract sums and addendum, justification necessitating upward adjustment and evidence that the due approval process was followed during the procurement process.
“Funding will not be provided for the works and services related to these contracts until the review process is completed,” said Chiunda.
The MDAs face a June 20 2026 deadline to provide the requested information to the National Audit Office and the Office of the Attorney General.
The move comes against a background of the public service head count that the Department of Human Resource Management and Development launched last November barely a month after President Peter Mutharika and Democratic Progressive Party (DPP) returned to power following their victory in the September 16 2025 General Election.
Reacting to the review of contracts, economists told The Nation yesterday that the move is necessary to safeguard public resources.
Public finance management expert Dalitso Kubalasa, speaking in an interview, said most of the fiscal shocks Malawi faces, including the sudden accumulation of arrears and court-ordered payments usually stem from a contract ‘quietly’ signed with a guarantee or a consent clause.
He said: “When these agreements are reviewed properly, we are not just checking for legal mistakes, but rather protecting the money meant for hospitals, for roads, for schools, for inclusive development.
“That is what sound public finance management truly means, in safeguarding the public’s money from quiet, legally-binding commitments that were never properly scrutinised.”
In a separate interview, Scotland-based Malawian economist Velli Nyirongo said the review can help government identify contracts that expose the State to unnecessary financial risks, excessive costs or unfavourable terms.
He said that in many countries, poorly negotiated contracts, weak legal provisions and inadequate oversight have resulted in significant financial losses, costly disputes and unplanned liabilities.
Nyirongo said the involvement of both the Auditor General and the Attorney General is important because the contracts in question will be subjected to both legal requirements and delivery of value for money that aligns with national interests.
Corporate governance expert Jimmy Lipunga said the exercise will enable Treasury to assess the magnitude of contingent liabilities pertaining to contracts and guarantees executed to which government is ultimately a party.
“This may be in the context of computing the national debt. Under the Public Finance Management Act, it is the responsibility of the ministry to track the level of national debt and to programme the payments,” he said in a written response yesterday.
Meanwhile, private practice lawyer Benedicto Kondowe has said the government can review all contracts and, where justified, vary, suspend or terminate them.
However, he cautioned against breach of contract where legally awarded contracts get nullified or varied.
“The key consideration is that any decision must follow due process and be supported by evidence to avoid exposing the State to legal liability,” said Kondowe.
Malawi Government launched a head count in December following a surge in the wage bill from K479.6 billion in the 2021-22 financial year to a projected K1.6 trillion by 2025-26, consuming 25 percent of recurrent expenditure and 38 percent of all domestic tax revenue, according to Minister of Information and Communications Technology Shadric Namalomba.
Chief Secretary to the Government Justin Saidi is on record as having said that the staff audit seeks to reconcile Human Resource Management Information System (HRMIS) establishments with the physical verification of every public worker.
The Comprehensive Personnel Audit of All Public Servants Drawing Remuneration from Public Funds was scheduled to run from December 9 2025 to February 6 2026.
However, payroll audits are not new in the Malawi public service with the most recent one conducted in 2020. In October and November 2015, government also embarked on a similar exercise to delete ghost workers through a headcount and payroll audits.
