Finance Minister Joseph Mwanamvekha has unveiled a K10.978 trillion 2026/27 National Budget designed to cushion vulnerable households while laying a foundation for economic recovery and growth.
The budget, representing 34 percent of Malawi’s Gross Domestic Product (GDP), places strong emphasis on social protection, agriculture, electricity access and public services — sectors that directly impact low-income families.
In a major boost to vulnerable communities, government has increased funding to the Social Cash Transfer Programme to K7 billion — a 58.6 percent rise.
The programme will also be expanded to additional districts, meaning more ultra-poor households will receive direct financial support to meet basic needs such as food, school materials and healthcare.
An additional K2 billion has been allocated to the Disability Trust Fund, while further funding has been directed to the National Children’s Commission to enhance child welfare services.
To reduce hunger and stabilise food prices, the agriculture sector has received K931.1 billion. Of this amount:
K111.4 billion has been set aside for the fertiliser subsidy programme, K60 billion will go toward maize purchases, K40 billion will support irrigation development.
These investments aim to increase food production, reduce dependence on erratic rainfall and protect poor households from recurring food shortages.
Electricity Access for Rural Homes
Through the Malawi Rural Electrification Programme (MAREP) and the Malawi Electricity Access Project (MEAP), over 186,000 households have already been connected to electricity nationwide. Expanded energy access is expected to improve small-scale businesses, education outcomes and household living conditions in rural communities.
Government is also at an advanced stage of negotiations to finance the Mpatamanga Hydropower Project to increase power generation capacity.
While a general recruitment freeze has been announced to control expenditure, government has prioritised hiring in critical sectors such as education and health. Wages and salaries are projected to rise to K1.923 trillion from K1.631 trillion, partly due to new recruitment and salary adjustments in these sectors — improving service delivery for ordinary citizens.
Additionally, K296 billion has been allocated for pensions and gratuities to ensure retirees receive payments on time.
Minister Mwanamvekha also indicated that the policy rate is expected to drop to 18 percent from 26 percent in the 2026/27 fiscal year.
Lower borrowing costs could ease financial pressure on small businesses and farmers, helping stimulate local economic activity.
With projected economic growth of 4.1 percent and plans to reduce the fiscal deficit from 11 percent to 9 percent, government says the budget balances fiscal discipline with targeted support aimed at improving the lives of Malawi’s most vulnerable citizens.
