Malawi Government Announces Strict Expenditure Control Measures
In a decisive move to tighten fiscal discipline and curb excessive public spending, the Government of Malawi has announced a comprehensive set of Expenditure Control Measures to be implemented immediately and remain in effect until the end of the 2025/2026 financial year.
The announcement, contained in a circular Ref. No. C5/5/001 dated 6th November 2025, was issued by Dr. Justin Adack K. Saidi, the Chief Secretary to the Government under the Office of the President and Cabinet (OPC). The directive has been circulated to all Controlling Officers, Heads of Department, and Chief Executive Officers of Parastatals and State-Owned Enterprises (SOEs).
Key Measures Introduced
According to the circular, the government has ordered an immediate moratorium on the procurement of motor vehicles and high-value assets, except in special cases where prior approval is granted by the Office of the President and Cabinet. The move is aimed at curbing unnecessary government expenditure on luxury and non-essential items.
Recruitment and promotions within the civil service have also been frozen, with only essential positions in critical sectors being considered on a case-by-case basis. Promotions for officers from Grade F and below will now require authorization from both the Treasury and the Department of Human Resource Management and Development (DHRMD) to ensure fiscal capacity.
On payroll management, the circular emphasizes personal accountability by Controlling Officers, requiring them to personally verify and approve all payroll submissions to avoid cases of ghost workers and fraudulent payments.
In a cost-cutting measure targeting meetings and travel, Ministries, Departments and Agencies (MDAs) have been instructed to hold physical meetings within their office premises or opt for virtual platforms such as video conferences. Government has also imposed strict restrictions on external travel, citing the need to preserve scarce foreign exchange reserves. All foreign travel must now receive prior approval from the Chief Secretary for presidential clearance, while delegation sizes will be strictly controlled.
Furthermore, the circular stipulates that donor-funded travel will no longer attract government “top-up” allowances, a practice that has previously burdened public finances.
Procurement and Fiscal Compliance
The Chief Secretary reminded MDAs that under the Public Finance Management Act (2022), it is illegal to commit government funds where no resources have been allocated. Henceforth, all procurement must be aligned with quarterly Treasury allotments and backed by IFMIS-generated Local Purchase Orders (LPOs). Any goods or services procured outside this system will not be recognized or paid by government.
Additionally, extra-budgetary requests have been outlawed except under special circumstances, reinforcing the administration’s resolve to adhere strictly to approved budgetary limits.
Fuel and Foreign Mission Reforms
In another significant austerity measure, fuel entitlements for all public officers — including Cabinet Ministers, Deputy Ministers, and senior officials — have been slashed by 30 percent with immediate effect.
The circular also announced an impending restructuring of Malawi’s diplomatic missions, with the number of embassies and staff to be reduced. Each embassy will now be limited to a maximum of five officials, including the Ambassador or High Commissioner.
Mining Sector Review
The Government has also ordered a comprehensive review of all mining licenses and contracts, warning that any mining license that has remained idle for more than five years will be revoked. This move signals renewed efforts to ensure that Malawi benefits meaningfully from its natural resources.
Accountability and Enforcement
Dr. Saidi stressed that Controlling Officers, Heads of Departments, and CEOs of SOEs will be held personally accountable for compliance with these measures.
Any breach of the directive, especially unauthorized promotions, procurements, or expenditures, will render the actions invalid and may attract disciplinary action. “These measures are meant to safeguard public resources and ensure that every kwacha is spent prudently and transparently,” Dr. Saidi wrote, urging all institutions to bring the circular’s contents to the attention of every officer.
Analysis: Austerity in an Era of Fiscal Pressure
The latest expenditure control measures reflect growing fiscal pressures facing the Malawian government amid sluggish revenue collection, rising debt servicing costs, and dwindling foreign reserves.
Economic analysts view the move as a necessary austerity intervention, though its success will depend heavily on strict enforcement, political will, and transparency in the approval processes.
Dr. Ellen Nyasulu, a Lilongwe-based economist, noted that “the government’s approach mirrors fiscal consolidation strategies adopted by several African nations facing budget deficits.”
However, she cautioned that if not managed carefully, the measures could affect service delivery, particularly in health, education, and infrastructure sectors.
Observers have also praised the decision to review mining contracts, describing it as a step toward enhancing accountability in the extractive sector, where Malawi has historically lost potential revenue due to poor oversight and dormant licenses.
As the austerity period begins, all eyes will be on how the government balances expenditure restraint with the need to maintain essential public services and economic growth.
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