Budget watchers cautiously optimistic

Presenting the 2026/27 National Budget in Parliament yesterday, Minister of Finance, Economic Development and Decentralisation Joseph Mwanamveka outlined spending priorities centred on economic stabilisation, agriculture, tourism, mining and manufacturing. Malawi Economic Justice Network (Mejn) executive director Bertha Phiri described the budget as “well blended” and “developmental,” citing the allocation of 30.9 percent of the national cake to development—one of the highest in history. “We commend government because the Consolidated Development Fund will be decentralised to councils for operationalisation of communities.

Citizens will be part and parcel of development planning,” said Phiri. She also welcomed tax measures removing import duties on equipment for technical colleges and praised the introduction of a national exchange market to stabilise prices and e-procurement measures to curb illicit financial flows. Bankers Association of Malawi president Phillip Madinga commended the reduction of capital gains tax on shares from 30 percent to 13 percent, saying it demonstrates government listens to private sector concerns.

“You have a minister who went out consulting the public and the private sector. One outcry was capital gains tax on shares. He announced today they have scrapped the 30 percent and introduced 13 percent.

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This is good news for everybody who has shares on the market,” Madinga said. Economics Association of Malawi (Ecama) president Bertha Bangara-Chikadza welcomed the increase in value added tax (VAT) thresholds from K25 million, describing the previous threshold as “cumbersome” and burdensome. She also praised expenditure control measures and efforts to close revenue leakages through digitisation and Malawi Revenue Authority (MRA) reforms.

On his part, Malawi Local Government Association (Malga) executive director Hadrod Mkandawire congratulated Mwanamveka for presenting a “progressive, ambitious and bold” budget, expressing excitement over allocations to councils. He noted that K1.145 trillion has been allocated to local authorities under the reformed Constituency Development Fund, representing 33.7 percent of the national development budget. “This is unprecedented and gives a good picture in terms of government matching policy aspirations with action,” said Mkandawire.

“We just hope disbursements will also be good because the trend has been that the actual disbursement against approved estimates has been a big mismatch.” However, Mkandawire pointed to gaps in recurrent funding, citing the health sector as an example. “Only K50 billion has been allocated to district council health operations, representing just 4.9 percent of the total K1.02 trillion allocation to the health sector. This is a big mismatch in terms of functions and resources, yet most health services are anchored at the local level,” he said. He also expressed disappointment that government overlooked Malga’s request for import duty exemptions for ward councillors to purchase one vehicle every five years.

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