Malawi News

Malawi targets production and revenue generation in 2025/26 budget

Malawi targets production and revenue generation in 2025/26 budget

Government says the 2025–2026 national budget is designed to drive production and revenue generation as a means of promoting economic stability in the country.

Minister of Finance, Simplex Chithyola Banda, made the remarks during the ongoing 2025–2026 pre-budget consultation meetings. The consultations aim to provide a platform for key stakeholders to contribute to the budget’s formulation.

Speaking to MIJ Online, Banda stated that the preliminary fiscal plan focuses on promoting the domestic mobilization of resources.

Chithyola- we will mobilize resources domestically

“The government plans to implement the upcoming budget using revenue generated from taxes and other sources rather than borrowing,” Chithyola explained.

According to the minister, the budget aspires to enhance fiscal consolidation while positively supporting the financial sector.

Meanwhile, Dr. Bertha Bangara Chikadza, President of the Economics Association of Malawi, has emphasized the importance of drafting a realistic budget. She noted that the performance of the 2024–2025 national budget was mixed, with development projects heavily reliant on development partners, necessitating strengthened domestic resource mobilization.

“Grants underperformed by 61.7%. These funds were expected from foreign governments, meaning the nation relied heavily on donors, which jeopardized development due to non-committal donors,” Chikadza said.

She also highlighted the need to tax the informal sector to generate revenue, saying Malawi’s vast informal economy presents significant untapped potential.

“Currently, only a few companies pay taxes, yet Malawi has a large informal sector. While we’ve noted positive developments such as tax stamps, more can be done. It is also crucial to fully activate the Integrated Financial Management Information System (IFMIS) to track public expenditure and prevent resource misuse,” she added.

Chikadza- 2024/2025 budget was a mixed-bag

Similarly, Bertha Phiri, Executive Director of the Malawi Economic Justice Network, told MIJ Online that it is vital to align the budget with the goals of Malawi 2063.

“Aligning the budget requires prioritizing production sectors and engaging more with the private sector. Promoting agricultural diversification to support export-led growth is also critical,” Phiri said.

Phiri also stressed the need to ease fiscal pressure by addressing tax avoidance and evasion.

“We must ensure equitable income distribution by imposing higher taxes on high-income earners. This has not been implemented in the past three years, and we expect the 2025–2026 budget to address this,” Phiri explained.

Phiri- We must ensure equitable income distribution

The pre-budget consultations take place as Malawi continues its efforts to achieve the goals outlined in Malawi 2063. GDP growth for 2025 is projected at 4%, with the government focusing on growth-oriented policies to enhance economic stability.

The Ministry of Finance is expected to conclude the pre-budget consultations on Friday, January 17, in Blantyre.