Malawi’s deepening public debt crisis is said to be compounded by weak accountability and oversight systems, raising concerns about the country’s ability to manage rising borrowing, according to a new survey.
Conducted by The International Budget Partnership, a global partnership of budget analysts, community organisers and advocates, the survey observed that this is despite Malawi having legal and policy frameworks for debt management.
The Open Budget Survey 2025 Debt Accountability Module found that Malawi’s public debt governance falls “significantly” short of the transparency, oversight and participation standards required to hold the government accountable for its borrowing decisions.
Reads the survey report: “Malawi does not have an independent fiscal institution for public debt management.
“The Parliamentary Budget Office exists as an administrative arrangement, but is not backed by legislation and has no dedicated budget line.”
The survey said that as a result, no independent analysis of debt sustainability, debt management strategy or annual borrowing is published during the budget formulation and approval phases.”
International Budget Partnership argues that the absence of an independent fiscal institution means that the only fiscal analysis available to Parliament and the public is that produced by the executive itself, with no independent counterweight to scrutinise its assumptions or conclusions.
Public finance specialist Dalitso Kubalasa said that while fiscal discipline should be intentional and backed by firm rules to prevent expenditure overruns and growing debt, Malawi also needs to adopt a more realistic exchange rate framework and stronger social protection measures to cushion vulnerable households during reforms.
“Government must always have an inclusive pre-negotiated consensus on a reform compact with domestic stakeholders,” he said.
Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha, in an interview yesterday, conceded that high debt burden is one of the fiscal challenges the economy has faced in past years.
He said that through the five-year National Economic Recovery Plan (Nerp), government will address the debt crisis.
“We have indicated what needs to be done and how we will achieve that,” said Mwanamvekha.
The survey also found that Parliament did not examine the Medium-Term Debt Management Strategy or the annual borrowing plan during the last fiscal year while the National Audit Office lacks legal authority to conduct public debt audits, removing what it describes as an essential layer of independent scrutiny.
Public debt had reached K23.9 trillion, equivalent to 90.9 percent of gross domestic product (GDP) by December 2025 while debt interest payments are projected at K2.793 trillion, about 25 percent of total government expenditure in the 2026/27 fiscal year that ends on March 31 2027.
On the other hand, government plans to finance a K2.852 trillion budget deficit, representing 6.8 percent of GDP, through additional domestic and external borrowing, a move that risks worsening pressure on public finances.
The trajectory, according to The International Budget Partnership has direct consequences as resources that could finance health, education and social protection are increasingly absorbed by debt servicing, with disproportionate impact on low-income and vulnerable populations.
