The Malawi Economic Justice Network (MEJN) has warned that the country is at a critical economic juncture and risks a major economic setback unless the government strictly adheres to expenditure control measures.

According to MEJN Executive Director Bertha Phiri, the government must enforce previously outlined austerity strategies, such as limiting business-class air travel for senior officials, fully utilizing the Integrated Financial Management Information System (IFMIS), and prioritizing domestic resource mobilization.

Phiri emphasized that with the current economic challenges, exacerbated by the withdrawal of aid from the United States and the suspension of the International Monetary Fund’s (IMF) Extended Credit Facility (ECF), the government cannot afford laxity in spending.

“The country is already in a tight spot, with general elections approaching, there is pressure for political appeasement, but that must not come at the cost of fiscal discipline. Malawi must live within its means to avoid ballooning deficits,” Phiri said.

Speaking to Zodiak, Principal Secretary in the Ministry of Finance Betchani Tcheleni, reiterated the government’s commitment to restoring economic stability, highlighting ongoing efforts to follow fiscal control measures and to boost revenue collection.

“We are focusing on production and enhancing the supply side of the economy. If we can secure alternative sources of funding, it will help ease the strain,” Tcheleni said.

The recent termination of the IMF ECF programme was attributed to the government’s inability to meet tough conditions such as reducing the civil service wage bill and phasing out farm input subsidies, an indication of continued fiscal challenges.

Meanwhile, the Reserve Bank of Malawi has revised the country’s economic growth forecast for 2025 to 4.0%, slightly below the World Bank’s 4.2% projection.

(Written By: Winnie Luwembe-ZBS)