Malawi’s worsening economic crisis took centre stage on Friday as Minister of Finance Joseph Mwanamvekha opened national budget consultations in Lilongwe, promising tough reforms — including a crackdown on ghost workers — as government prepares the 2026/27 National Budget. Speaking at the Bingu International Convention Centre (BICC), Mwanamvekha told cabinet ministers, senior officials and key stakeholders that the economy is under severe strain from a toxic mix of foreign exchange shortages, high inflation, climate shocks, fuel problems, and weak infrastructure. He admitted that these pressures have slowed growth, with Malawi’s economy now expected to grow by just 2.7 percent in 2025, down from an earlier forecast of 2.8 percent — a weak performance for a country facing rising poverty and unemployment.
While government projects growth of 3.8 percent in 2026 and 4.9 percent in 2027, Mwanamvekha said this will only happen if reforms and targeted investments under the National Economic Recovery Plan (NERP) are implemented properly. But for ordinary Malawians, the biggest pain is inflation. Prices remain painfully high because of food shortages, lack of foreign currency and fuel scarcity.
Inflation averaged 32.3 percent in 2024 and is still expected to be 28.5 percent in 2025, before easing to 20.7 percent in 2026 — still far above what households can afford. This means wages are being eaten up, businesses are struggling, and living costs continue to rise. Mwanamvekha also laid bare why government is struggling to spend on development.
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He said wages, interest on loans, pensions and gratuities now swallow over 90 percent of domestic revenue, leaving almost nothing for roads, hospitals, schools or economic projects. In simple terms, Malawi is using almost all the money it collects just to pay workers and service debt, not to grow the economy. This is why Mwanamvekha announced that the government will flush out ghost workers — people who are illegally on the payroll — as part of the 2026/27 budget reforms.
“We must clean up the wage bill,” he said, signalling that fraud and waste in government payrolls will no longer be tolerated. The Minister said the next budget will be guided by the Malawi 2063 Ten-Year Plan and the National Economic Recovery Plan, with money targeted at Agriculture, Tourism, Mining and Manufacturing — sectors expected to create jobs, exports and growth. Secretary to the Treasury Dr Cliff Chiunda reinforced government’s commitment to economic transformation, saying tough decisions are unavoidable if Malawi is to recover. But civil society warned that reforms must not hurt the poor.
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