Economists urge spending cuts

Malawian economists and social protection advocates have urged government to cut non-essential expenditure and strengthen domestic revenue collection to finance social protection programmes amid rising living costs and uncertainty over development partner funding.

The recommendations follow findings by the International Monetary Fund (IMF) that targeted cash transfers are more cost-effective than broad-based subsidies in cushioning vulnerable households against cost-of-living shocks.

They al so come as government prepares for the 2026/27 mid-year budget review amid mounting fiscal pressures.

In its October 2026 World Economic Outlook analytical chapter, the IMF argues that targeted cash transfers offer a more efficient way of protecting vulnerable households from rising prices.

“Targeted and temporary transfers are the most effective way of protecting the most vulnerable from a spike in the cost of basic necessities,” the report states.

The IMF estimates that providing comparabl e protection through measures that suppress prices could require between three and 22 times more fiscal resources.

Mbukwa: Safeguard cash

transfers | Nation

Local analysts, however, say implementing targeted support requires government to reprioritise expenditure and secure predictable funding rather than resort to additional borrowing.

Mzuzu University economics lecturer Christopher Mbukwa said government should

safeguard cash transfers and school feeding programmes while cutting non-essential spending.

“We can improve fiscal space by resolutely implementing expenditure controls and cutting spending in non-essentials such as some travel allowances, unnecessary ceremonies, et cetera,” he said.

Mbukwa said fiscal sustainability also depended on stronger revenue collection, spending discipline and better management of donor-financed

programmes.

“A big allocation will not mean much if beneficiaries receive it months late,” he said.

He urged Treasury to establish predictable funding schedules and use savings and additional revenue to meet outstanding obligations instead of accumulating more debt.

Budget pressures

The recommendations come against the backdrop of a K10.98 trillion national budget, which allocates K2.79 trillion to public debt interest and K1.51 trillion to goods and services.

According to the 2026/27 Citizens’ Budget, government’s direct contribution to the Social Cash Transfer Programme stands at K7 billion, up from K4.41 billion in the previous financial year’s revised estimates.

Presenting the budget in March, Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha said the increased allocation was

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