The opposition United Democratic Front (UDF) on Monday took time to offer solutions to economic problems which Malawi is currently facing.
In a response to the 2025-2026 Financial Year Budget Statement, the party through its financial spokesperson Ismail Rizzq Mkumba said the party would love nothing more than seeing Malawians having money in their pockets, becoming rich and financially free, which he said can be achieved with the UDF.
“The UDF having the social responsibility to provide practical and sustainable suggestions to the government on matters affecting our nation, takes this opportunity to propose lasting solutions to navigate the harsh economic challenges.
“We have also taken note that National Budget has recurring wrong assumptions about the economic growth rates, year in year out. This has also been acknowledged by the minister in his budget statement,” he said
Mkumba, who is Blantyre Malabada Constituency legislator, said the estimated inflation rate of 24 percent from the current 32.3 percent is rather unrealistic given the current high food inflation rate and an uncontrollable pricing regime which has held hard working Malawians at ransom.
“The UDF is of the view that the Government ought to have focused on addressing the high food inflation through enhanced practical agricultural productivity – it is a matter of Demand and Supply. If maize grain was abundantly available, the food inflation rate would in response decrease,” he said
On high borrowing costs, he said the party noted that the policy rate has been maintained at 26 percent, which means that the cost of borrowing remains high.
“When the UDF was in government in 2020, the policy rate was not higher than 13.5 percent, borrowing was cheap and wealth was well distributed. We should remember that the levels of domestic debt remain high, suggesting that the Government has continued to borrow its own resources as well as crowding out the private sector, despite the UDF repeatedly warning the government against these two sins of economics.
“However, Madam Speaker, Blantyre Malabada Constituency through its Social Enterprise, Ndirande Trust PLC has benefitted by borrowing k63 million at the lending rate of 11 percent from MAIIC via the Mega Farm Project. Blantyre Malabada Constituency’s Mega Farm stands to earn approximately a net profit of k500 million from the sales of the ginger from our 8-hectare farm,” said Mkumba
He further said small and medium enterprises are hit hardest by high borrowing costs as they grapple with delayed settlement of their invoices and rely on short-term borrowing to sustain their businesses.
“The SMEs hold the key to a better Malawi as they employ the largest number of Malawians, have the potential to boost the export potential of our nation, thereby, implementing the government’s Import substitution Strategy. The challenges faced by SMEs in accessing affordable and on-time financing are rather systemic and require immediate deliberate policy to overcome them. Madam Speaker, we do not want to see a return of the tradition where for one to be assisted, one has to be a politician, or that one has to be connected to a well-connected politician in the Cabinet.
“Soaring Public Debt: Madam Speaker, we have noted that the level of public debt remains high and is expected to increase as the 2025-2026 budget has a deficit which will be financed by more borrowing. We acknowledge the efforts, and the agreements made to restructure debts. We are, however, worried that the debt restructuring is only a strategy for creating room for more borrowing – the government’s appetite for borrowing.
“We are worried even more now than we have been since the dawn of multiparty because the government continues to borrow for consumption rather than for development. We, therefore, urge the government to use the resulting fiscal relief to allocate more resources towards the high impact sectors which are crucial to addressing the foreign exchange reserves imbalances,” he said
Mkumba said the government needs to start promoting fractional ownership where the government will fund public limited companies and allow indigenous Malawians to purchase shares in these companies via the Public Private Partnership Commission, as this is where indigenous Malawians with brilliant start-up ideas meet with the experienced administration of the government.
On regulatory enforcement, he said the mining and tourism sectors which are key to transforming the economy require systematic investment and regulation to realize their full potential.
“We can no longer celebrate the development of mere policies and strategies as achievements when there is clear potential for these sectors to contribute to the national purse. The government must begin to invest actively in infrastructure to attract both local and international tourists.
“The UDF urges the Government to manage the available resources optimally to drive growth and tone down the optimism founded on unrealistic assumptions – because the budgets we have been making have not been realistic, and we have been implementing the wrong budgets, this is illegal. We believe we can achieve real economic transformation through risk-based and patriotic decision making,” he said
He added; ‘Madam Speaker, the UDF calls on Government to end the suffering of its citizens by taking bold steps to transform the economy. We recognize that the nation is in deep suffering and needs concerted efforts from all of us regardless of our political affiliations. We in the UDF understand the plight of our citizens, we will continue to offer support and suggestions because we put Malawi and its beautiful people first and.”
