Local councils deprived of K63bn

Financial records for the 2025/26 fiscal year show that local government authorities (LGAs) received K130.7 billion against the expected K193 billion budget, leaving a deficit of about K63 billion.

The Nation’s analysis of the LGAs budget further shows that the development budget suffered the most as it received K71.312 billion cumulatively out of K112.418 billion. On the other hand, the other recurrent transactions (ORT) budget received K63.707 billion; out of K80.828 billion for the financial year ended March 31 2026.

National Local Governance Finance Committee (NLGF) stated that the disbursements were based on the budget as revised during mid-year review and acknowledged the delays.

On its part, Malawi Local Government Association (Malga) maintained that not all resources were provided. 

Funds allocated for ORT are forfeited once the financial year ends while those in the development budget are sometimes provided in the next fiscal year. However, authorities in LGAs have said such funding has been scarce in recent years.

In an interview, Malga executive director Hadrod Mkandawire said just like in other quarters, some development programmes, particularly those that are infrastructure-intensive, continued to experience significant funding constraints.

He said: “It is further observed that key development sectors such as Borehole Development, Infrastructure Development Fund (IDF), Roads Rehabilitation and Hospital Rehabilitation either received minimal or no disbursements during the fourth quarter.

“These persistent cash-flow constraints are likely to delay the completion of ongoing projects and affect service delivery readiness across districts, cities, municipalities and the town councils, particularly as the financial year comes to a close.”

Reacting to the situation, Centre for Social Transparency and Accountability executive director Willy Kambwandira described the funding trends as serious failure of fiscal governance and a direct setback to the country’s decentralisation agenda.

But NLGFC executive director Kondwani Santhe argued that Capital Hill transferred all the money, based on revised figures.

He said: “Government transferred 100 percent of both ORT and development funds for the 2025-2026 Financial Year. Use revised mid-year budget for analysis and not March [2026] approved budget.”

In the 2026/27 fiscal year, total transfers to LGAs are projected at K2.088.9 trillion, including K1.145 trillion for CDF; K849.4 billion for personal emoluments; and K94.5 billion for ORT.

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