Fiscal discipline not optional, it’s a lifeline

Parliament on Tuesday this week passed the K11 trillion 2026/27 National Budget, allowing Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha to raise money and spend the same on behalf of the Malawi Government in the new financial year starting on April 1 2026. The passing of the national budget is a great moment for every Minister of Finance and his or her team. This is the reason Mwanamvekha should be forgiven if he takes a break to relax while sipping his favourite beverage.

Back to events in Parliament, what struck me most when the House went into the Committee of Supply—a stage where legislators scrutinise allocations to various government ministries, departments and agencies (MDAs) vote by vote—was the minister’s boldness towards ensuring that the budget does not get bloated amid lobbying by parliamentary cluster committees for additional allocations worth K2.3 trillion. It was a tough call for the minister to balance between being a populist and cutting the cloth according to his size as the proposal would have pushed the fiscal deficit beyond K5.1 trillion or about 16 percent of gross domestic product (GDP). When tabling the budget in Parliament on February 27 2026, Mwanamvekha said the fiscal plan was themed ‘Driving economic recovery and sustainable growth through impactful reforms and fiscal consolidation’, describing the fiscal plan as “people-centred, pro-poor, developmental and transformative” agenda to drive Malawi’s economic recovery with focus on four key sectors of agriculture, tourism, mining and manufacturing.

Now that the national budget is passed and ready to roll out come April 1, my passionate prayer is for the minister to maintain the boldness and discipline demonstrated during debate when implementing the financial plan. Here, what quickly comes to mind is the issue of over-expenditure by “the usual suspects”, budget votes that have seemingly become untouchables, as it were. Prudent management of public finances is critical to the success of budget implementation.

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Cut the cloth according to your size or spend within means and manage the expenses by cutting down or eliminating unnecessary spending or luxuries. It is a fact that Malawi is financially struggling. Total public debt has reached unsustainable levels at K23.9 trillion or 90.9 percent of GDP as of December 2025.

Mwanamvekha forecasted GDP to grow from 2.7 percent in 2025 to 3.8 percent in 2026 and further 4.9 percent in 2027 with the budget itself anchored on a 4.1 percent real GDP growth rate. While promising, the growth rate still falls short of the consistent minimum of six percent required to achieve aspirations in Malawi 2063 (MW2063), the country’s long-term development strategy that seeks to create “an inclusively wealthy and self-reliant industrialised upper-middle-income country by the year 2063, so that we can fund our development needs primarily by ourselves” driven by three key pillars of agricultural productivity and commercialisation, industrialisation and urbanisation. In its Malawi Public Finance Review titled ‘Restoring Stability, Rebuilding Trust’, published in December last year, the World Bank acknowledged that public finances in the country are under severe strain marked by persistent fiscal and current account deficits, a highly vulnerable debt profile and a declining external support that makes the cost of policy inaction increasingly untenable.

The bank notes that the rising fiscal risks are worsened by global uncertainty recurrent climate-induced shocks, dwindling aid flows and election-related overspending which underscore the urgent need for action on reforms. Moving forward, Malawi can ill afford a further deterioration in public finance management because doing so will erode all gains and efforts towards macroeconomic stability and delve deep into debt distress and low or negative economic growth. If that happens, it will be contrary to the objectives Mwanamvekha outlined when he presented the budget in Parliament.

Through national budgets or expenditure plans, governments around the world implement their development plans to foster economic prosperity as well as eradicate or reduce poverty. Thus, a national budget represents a contract between a government on one hand and the citizens or the people on the other. In one of his addresses tackling budgeting issues, the 44th United States President, Barack Obama, summed it up better when he said: “A budget is more than just a series of numbers on a page. It is an embodiment of our values.” This is how our duty-bearers should look at the national budgets from the perspective that it is a contract setting out the values and aspirations of government to improve the welfare of the people.

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