Councils’ development budget suffers most

An analysis of the Local Government Authorities (LGAs) budget for the 2025/26 fiscal year shows that councils have received only 63 percent of the expected funding for the first three quarters (April to December 2025). Out of the anticipated K148.324 billion, councils received K93.931 billion. The development budget has been the hardest hit.

Councils received only K49.19 billion, representing 43 percent of the expected K86.461 billion. In contrast, the recurrent budget performed better, receiving K44.741 billion, or 72 percent, out of the projected K61.862 billion. This means the central government still owes councils K54.392 billion in total allocations—K17.121 billion for recurrent expenses and K37.271 billion for development projects.

The Malawi Local Government Association (Malga) has expressed concern over the situation. For the third quarter alone, Malga’s analysis shows that LGAs received only K11.478 billion of the K25.957 billion allocated for development, leaving a gap of K14.479 billion, or 56 percent. The recurrent budget for the same period was funded at 69 percent, with councils receiving K13.014 billion out of K18.966 billion.

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Overall, councils received K24.5 billion—55 percent of the K44.923 billion expected for the quarter. According to Malga, roads rehabilitation accounted for the largest share of unfunded resources during the third quarter at K6.9 billion, representing 41 percent of the unfunded amount. The education sector also suffered as councils did not receive K2.38 billion meant for School Improvement Grants (SIGs).

In addition, K4.5 billion allocated for hospital rehabilitation was not disbursed. The association also noted that councils did not receive funds for several development initiatives, including the Infrastructure Development Fund (IDF) and borehole development. However, the health and district development sectors received full funding.

Malga observed that the funding gaps came at a critical time when Malawi had begun implementing the Free Primary and Secondary Education policy. Increased enrolment requires investments in school infrastructure and timely release of School Improvement Grants to support operations. The review period also coincided with a time when projects such as borehole installations should have been completed or protected before heavy rains.

However, government failed to release K579 million earmarked for borehole development. Other productive sectors—including irrigation, environment, fisheries and forestry—also missed out on K379 million in funding. Malga has urged government to prioritise development financing, warning that the lack of funding could negatively affect water access, infrastructure development and health facility improvements at the local level.

Malga executive director Hardrod Mkandawire said councils are also struggling to increase locally generated revenue due to the difficult macroeconomic environment. Many businesses are not performing well, making it harder for councils to collect revenue despite having local revenue strategic plans. He said the situation increases the obligation on central government to provide adequate funding for councils to carry out their functions.

If the trend continues, Mkandawire warned, it could undermine fiscal decentralisation. Centre for Social Transparency and Accountability executive director Willy Kambwandira also described the funding gaps as worrying, saying they weaken decentralisation and deepen public mistrust in local governance. He called for predictable, transparent and timely disbursement of funds, stronger parliamentary oversight and improved financial accountability by councils. Meanwhile, during the presentation of the 2026/27 National Budget, Finance Minister, Economic Planning and Decentralisation Joseph Mwanamvekha said government plans to accelerate fiscal decentralisation through increased funding to councils, including through the reformed Constituency Development Fund.

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