President Professor Arthur Peter Mutharika has announced that his government will take bold steps to address Malawi’s economic crisis, prioritizing people-centered development and decentralization.
In his State of the Nation Address (SONA) delivered at the National Assembly in Lilongwe on Friday, Mutharika highlighted the country’s severe economic crisis and announced measures to restore macroeconomic stability and stimulate growth.
“The measures to be implemented aim to stabilize prices, improve food security, and stimulate economic growth,” he said.
However, challenges persist, including low foreign exchange reserves and high inflation, he acknowledged. This, Mutharika emphasized the need for collaboration among stakeholders to ensure the success of the initiatives his government is undertaking to revive the economy.
Key Economic Recovery Measures
Mutharika highlighted the procurement of maize from Zambia to address the hunger crisis, stabilizing prices and making food more accessible to citizens.
The government also procured affordable fertilizer and made it available to farmers, supporting agricultural production and food security. Further, the government restocked fuel supplies, ending the fuel crisis and resuscitating the private sector.
Macroeconomic Environment
On macroeconomic environment, Mutharika announced that his administration is endeavoring to reduce inflation from 28.7% in September 2025 to less than 21% in 2026, the economic growth projected at 2.7% in 2025 to 3.8% in 2026 and 4.9% in 2027.
Mutharika also sees a shift in foreign exchange reserves: below desired three months import cover, with measures underway to support forex generation.
To tame government expenditure, the Democratic Progressive Party (DPP) administration has reduced fuel entitlements for Cabinet Ministers and government officials, and restricting their local and foreign travel.
On decentralization and local development, Mutharika reiterated the increase in Constituency Development Fund (CDF) from MK 220 million to MK 5 billion per constituency per year, shifted management responsibility to controlling officers in local authorities and the development of CDF Guidelines and investing in national CDF digital dashboard for transparency and accountability.
He also announced that his government will construct 2-storey market buildings in Blantyre, Lilongwe, and Mzuzu, financed by the International Fund for Agricultural Development (IFAD).