Funding, capacity strain local councils—treasury

Ministry of Finance, Economic Planning and Decentralisation has conceded that local councils lack adequate financial and administrative capacity to implement devolved development programmes, raising concerns about their ability to deliver essential public services.

The ministry’s director responsible for poverty reduction and social protection Kate Langwe said councils remain heavily dependent on central government funding despite assuming greater responsibilities under decentralisation reforms.

Blantyre, one of the country’s four city councils. | Nation

Speaking during a panel discussion at the Economics Association of Malawi (Ecama) 2026 Annual Economic Conference in Mangochi on Friday, she said inadequate financing, staff shortages and incomplete devolution are undermining implementation.

“What I can say is that the councils are equipped, but not well equipped to deliver these reforms,” she said.

Langwe observed that most councils have the potential to generate additional revenue locally, but lack the capacity to exploit available opportunities.

She said the transfer of responsibilities has not been adequately matched with financial resources, personnel and decision-making authority.

Her assessment reflects wider concerns about the financing of local government services.

In May this year, The Nation quoted Malawi Local Government Association (Malga) executive director Hadrod Zeu Mkandawire as having complained that local authorities had gone two months without funding for Other Recurrent Transactions and Constituency Development Fund, a development that paralysed service delivery.

He said that the delayed disbursement has operational implications that have affected payment of public utilities, including fuel for hospitals, water and electricity bills.

A United Nations (UN) Common Country Analysis published in 2025, citing a Unicef costing study, estimated 78 percent financing gap for devolved social sector and agricultural functions.

The assessment indicated that district councils received only about a fifth to a quarter of the funding required to fulfil their service delivery obligations, with about 80 percent of their budgets financed through central government transfers.

UN Children’s Fund public financial management specialist and technical lead Chisomo Tsonga, speaking at the same conference, said resource allocation should reflect differences in poverty, vulnerability and development needs across districts.

“Government may need to focus on introducing equity in terms of how resources are allocated, using data, looking at poverty disparities and vulnerabilities,” she said.

Tsonga also highlighted weaknesses in budget execution, saying allocations for development projects in education and health are not always matched by actual expenditure.

She called for improved cash management and timely disbursement of resources to strengthen implementation.

The concerns were also reflected in a United Nations Development Programme presentation at the conference, which questioned whether Malawi’s public institutions have sufficient financing, capacity and accountability mechanisms to translate development policies into measurable results.

The presentation emphasised the need to improve the utilisation of available resources rather than concentrating solely on mobilising additional financing.

But Langwe said government has identified weaknesses in financial management and coordination between central government, district councils and development partners as obstacles to effective decentralisation.

She warned that fragmented financing and duplication of activities can undermine development outcomes, particularly where resources were already limited.

However, Langwe maintained that further reforms are necessary to ensure that financial resources matched the responsibilities assigned to councils.

The two-day lakeshore conference was held under the theme ‘From policy to practice: Making reforms work’.

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