MPONELA, Malawi—Malawi’s public debt has reached a staggering 90.9 percent of its Gross Domestic Product (GDP), a figure totaling K23.9 trillion as of March 2026. Perhaps more alarming for the average citizen is the “opportunity cost” of this burden: debt servicing is now devouring 25 percent of total annual government expenditure, writes Winston Mwale.
This means that for every four Kwacha the government spends, one Kwacha is immediately diverted to pay back creditors rather than funding hospitals, schools, or infrastructure.
The data was unveiled by Henry Machemba, National Coordinator of the NGO Coalition on Child Rights (NGO CCR), during a comprehensive presentation on the 2025 Malawi Debt Transparency and Accountability Study Report.
Conducted under the Open Budget Survey (OBS) mechanism, the assessment paints a picture of a nation at a crossroads, struggling with a deepening fiscal crisis while civil society organizations (CSOs) scramble to establish a unified National Debt and Tax Platform to demand accountability.
The presentation was the centerpiece of a two-day orientation and position paper development meeting convened by the Malawi Economic Justice Network (MEJN).
The sheer scale of the K23.9 trillion debt reveals a shift in the country’s financial dependency.
According to Machemba’s presentation, which cited the Ministry of Finance’s 2026-2027 Budget Policy Statement and 2025 IMF data, the debt is heavily weighted toward domestic sources.
Domestic debt now accounts for 65 percent of the GDP, while external debt stands at 35 percent of the GDP.
This heavy reliance on domestic borrowing—often at higher interest rates than international concessional loans—has direct implications for the 25 percent of the budget currently lost to debt payments.
For the NGO CCR, this is not just an economic issue but a human rights one.
When 25 percent of the national budget is sequestered for debt, the remaining funds for social services—upon which Malawi’s children rely—are severely depleted.
Machemba’s assessment meticulously reviewed the legal frameworks intended to regulate how Malawi borrows and manages money.
These include the Republican Constitution (Sections 12 and 180) and the Public Finance Management (PFM) Amendment Act 2022.
Specifically, Part VIII and Part IX of the PFM Act (sections 70-90) provide the legal basis for public borrowing, guarantees, and the creation of a debt retirement fund.
This is further supported by the Malawi Public Finance Management (Debt and Aid Management) Regulations 2023 (PFMR), which aims to clarify the operational framework for managing State-Owned Enterprises (SOEs) debt and increasing transparency.
However, the “Debt Accountability Module” highlighted significant “missing aspects” and lack of clarity in these laws.
For instance, while the laws provide requirements for publishing debt strategies, there is no clear timeline for submitting the debt strategy and annual borrowing plan to the legislature.
The assessment cited the Open Government Partnership (OGP) Action Plan 2025-2028, which revealed that borrowing plans often reach Parliament too late for any meaningful scrutiny.
This results in a dangerous precedent: parliamentarians are essentially “making laws and approving loans without fully understanding their impact”.
Furthermore, the legal framework remains silent on critical crisis management provisions, such as procedures for handling sovereign defaults or formal debt restructuring.
It also lacks clear policies on confidentiality clauses in debt contracts, which can be abused to hide the true terms of a loan from the public eye.
One of the most striking revelations in Machemba’s report was the accessibility—or lack thereof—of key financial documents.
The 2022-2026 Medium-Term Debt Management Strategy (MTDS) was rolled out in December 2022.
Yet, the assessment found it is not publicly available on the Ministry of Finance website, forcing stakeholders to look to external international databases to find it.
While the MTDS does cover fiscal rules, debt ceilings, and targets for fiscal deficits, it fails to explain how borrowing aligns with national budget priorities or sectoral allocations.
It also omits projections for how foreign and domestic borrowing will align with broader fiscal goals.
The transparency issues extend to the Annual Borrowing Plan (ABP).
The plan for the 2023/24 fiscal year was not published by the December 2024 cutoff date. In fact, it only saw the light of day in January 2026, far too late to be useful for proactive public oversight.
Similarly, the publication of annual debt management reports remains sluggish.
The report for the 2019-2020 fiscal year was only published in February 2025, while the 2023-2024 report was published in January 2026.
This chronic delay prevents citizens and CSOs from holding the government accountable for how funds were used in real-time.
The role of the National Assembly is central to debt accountability, but the assessment suggests that the legislature is often bypassed.
While the Constitution and PFM Act require parliamentary approval for loans, this often applies only to external debt.
The report notes a major loophole: Parliamentary approval is not required for debt market instruments, which are vital for financing government operations. Instead, Parliament “indirectly” approves domestic borrowing when it passes the national budget deficit.
This means there is minimal follow-up and disclosure on how domestic borrowing is actually utilized.
Even when Parliament is involved, its capacity is questioned.
The Budget and Finance Committee has expressed concerns about being excluded from key borrowing decisions. Currently, multiple oversight bodies like the National Assembly, the National Audit Office (NAO), and CSOs exist, but they lack the coordination and enforcement mechanisms needed to check executive power.
Machemba’s report also highlighted the precarious status of the Parliamentary Budget Office (PBO).
While the PBO conducts budget and debt analysis, it exists as an “administrative arrangement” and is not yet backed by legislation, leaving it without a clear budget line to support its operations as an Independent Fiscal Institution.
Furthermore, the National Audit Office (NAO) has yet to step up to the plate.
The assessment found no published evidence of annual audit reports specifically on public debt management by the NAO.
Such audits are supposed to ensure that borrowing complies with national laws and international standards while evaluating the efficiency and sustainability of the debt portfolio.
While the government does engage in pre-budget consultations and provides some information through social media, the assessment found these efforts to be insufficient for meaningful debt accountability.
There is currently no evidence that the legislature holds public hearings specifically to allow the public to provide input on borrowing proposals or loan agreements during the budget formulation stage.
While citizens are sometimes involved in monitoring debt-funded projects—such as under the World Bank-supported GESD program—there is no evidence that the executive uses participation mechanisms during the actual implementation of the broader budget.
To address these gaps, the OGP is driving commitments for better debt data dissemination, and there are calls for community-level campaigns to translate complex financial data into “plain language” for the general public.
The meeting in Mponela concluded with a clear set of recommendations to pull Malawi back from the brink of a total debt crisis.
Henry Machemba and the NGO CCR highlighted several urgent reforms:
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Timely Disclosure: The government must publish the Debt Management Strategy and Annual Borrowing Plan on time.
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Legislative Strengthening: Review the 2023 PFMR to include clear debt limits and safeguards against abuse, and provide the Parliamentary Budget Office with full legal backing.
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Audit and Oversight: The National Audit Office must begin conducting and publishing regular audits of debt management.
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Proactive Review: Parliament must establish mechanisms for the proactive review of debt plans and implementation reports, rather than acting as a rubber stamp.
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Multistakeholder Action: Establish a formal Debt Management Working Group that includes CSOs and other independent stakeholders to ensure transparency.
As the meeting wrapped up, the message was clear: with 90.9 percent of GDP in debt and a quarter of the budget vanishing into interest payments, Malawi can no longer afford the luxury of opacity.
The creation of the National Debt and Tax Platform marks a new chapter in civil society’s efforts to ensure that the K23.9 trillion burden does not break the back of the nation’s future.
For Machemba and the NGO CCR, the mission continues. “Transparency,” the report suggests, “reduces the risk of corruption and promotes informed public discourse… facilitating constructive discussions about debt sustainability and its role in national development”.
The figures presented in Mponela are a wake-up call. Whether the government and the legislature will heed it remains to be seen.