Opposition Democratic Progressive Party (DPP) and United Democratic Front (UDF) Monday took turns in punching holes in the 2025-26 national budget, describing it as “unrealistic”.
But in an interview, Finance Minister Simplex Chithyola Banda hit back at the DPP, accusing the party of “messing up the economy” through over-borrowing, eroding donor confidence and presenting “fictitious reports to International Monetary Fund (IMF).
Presenting DPP’s reaction to the budget, Thyolo Central lawmaker Ben Malunga Phiri said the 2025-26 budget framework fell short of inspiring hope.
He added that it was unrealistic and hard to implement.
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He said at K8.05 trillion, the budget was “too exorbitant and too ambitious” because revenue generation, at K5.5 trillion, was low.
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“Fellow Malawians, you can see for yourself that this budget is a big lie. The budget has a deficit of K2.47 trillion. Where will the money to fill the deficit come from? Again, borrowing is the only answer.
“Malawians, you must be worried because MCP [Malawi Congress Party] is ready to put more debt burden on your shoulders and a yoke of debt around the necks of your children.
“Fellow Malawians, the 2025-26 budget is unrealistic due to its continued overreliance on donor support at a time global dynamics point to heavy deductions in foreign aid. The budget is counting on K1.14 trillion of donor grants. Recently, USaid [United States Agency for International Development] announced closure.
“Unfortunately, we are yet to be addressed on how the government intends to manage job loses due to the cut with about 5,000 Malawians affected, [they have not told us] how they intend to fund the services that were previously funded by USaid,” Phiri said.
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He added that the United Kingdom government, too, had announced that it would reduce budget spending, with international development or foreign aid experiencing cuts.
“Malawians, you must expect more economic trouble. What kind of government is this that has the guts to increase budget expenditures at a time when revenues are falling?
“Malawians, forget about Malawi 2063. The structure of the 2025-26 budget has little to offer in implementation of the Malawi 2063 vision,” he said.
On his part, UDF spokesperson on finance Ishmael Nkumba said the national budget had wrong assumptions on economic growth rates.
Nkumba added that the UDF was not convinced that economic transformation, characterised by a 3.2 percent growth rate, would be attainable.
“We are concerned about the prolonged imbalance of foreign exchange reserves due to the low capacity to export high value goods and services.
“While we appreciate the latest measures taken by the Minister of Trade and Industry Vitumbiko Mumba, through the Prohibition Order of 2025, to lower imports of products that can be produced locally, the UDF feels that local producers have neither been capacitated nor incentivised to meet the growing local demand for those foreign goods and services,” Nkumba said.
This, according to the UDF, may lead to the escalation of prices as competition from cheaper and wholesale imports will have been eliminated.
“We, however, implore the government to enhance foreign exchange control measures to safeguard the little forex that we have and to deal with unscrupulous businesses and individuals who are fuelling [activities on] the black market,” he said.
Commenting on the concerns, Chithyola Banda said the government was putting up long-lasting financial architecture that would not only help in stabilising the economy but also stimulate economic growth.
According to Chithyola Banda, the DPP is not an option for Malawi as it allegedly “invented institutionalised corruption and orchestrated anarchy in this country, where people with albinism were killed like chickens”.
“You can’t trust such people; people who used to abuse presidential powers,” Chithyola Banda said.
On her part, chairperson for the Budget and Finance Committee of Parliament Gladys Ganda said the committee was concerned with the significant jump in expenditure at a time revenue was set to rise marginally.
Ganda said the budget was poised to increase to K8.1 trillion from a 2024-25 revised estimate of K6.1 trillion, representing an increase of K2.0 trillion.
In contrast, Ganda said revenue was projected to only grow by K952.21 billion.
“This implies a widening fiscal gap, further exacerbating an already unsustainable debt burden.
“The committee, therefore, reiterates the urgent need for fiscal discipline, prioritisation of expenditure and enhanced revenue generation to ensure long-term sustainability,” Ganda said.
