UTM Criticizes Mid-Year Budget as Misaligned and Extravagant it

The United Transformation Movement (UTM) has expressed strong criticism of the 2024/2025 Mid-Year Budget, describing its priorities as “upside down.” The Party argues that the Budget allocates more resources to non-essential consumption rather than critical economic growth and development areas.

According to UTM, President Lazarus Chakwera’s austerity measures, announced on November 27, 2024, are notably absent from the Budget. Instead, expenditures for State Residences have increased from K24 billion to K34 billion, and the Office of the President and Cabinet (OPC) Budget has risen from K34 billion to K39 billion.

Lack of Support for Growth Sectors

UTM criticized the stagnant or reduced funding for key growth sectors such as Mining, Manufacturing, Agro-processing, and Tourism. It labeled the increase in international travels and purchases linked to the President and his associates as examples of extravagance.

In its response to the Mid-Year Budget statement delivered on December 4, 2024, by the Minister of Finance, UTM also pointed out the Budget’s failure to address the status of the Extended Credit Facility (ECF), which was approved on November 15, 2023.

Rising Costs and Economic Hardships

The Party highlighted the severe economic challenges facing Malawians, including rising fertilizer costs, fuel and foreign exchange shortages, and unpaid pensions for retired public servants. UTM also criticized the government for its inability to address these pressing issues, noting that Malawi’s GDP growth remains at a dismal 1.8 percent.

UTM observed that under the current administration, Malawi has experienced the worst-ever four-year stretch of economic stagnation, with 75% of Malawians living in poverty, 91% unemployed, and many households struggling to meet basic needs.

Inflation and Public Debt

The Party expressed concern over Malawi’s inflation rate, which stands at 33.8%—significantly higher than global and regional averages of 5.8% and 18.1%, respectively. This inflation has rendered basic necessities such as food, fuel, and fertilizers unaffordable for many households, deepening economic hardships.

UTM also criticized the alarming increase in public debt, with K950 billion borrowed in the first half of the fiscal year and an additional K450 billion planned for the second half. The Party noted that these borrowings, primarily allocated to recurrent expenditure, have pushed total public debt to an unsustainable K15 trillion, posing long-term risks to the nation’s economic stability.

Call for Responsible Financial Management

Describing the Budget as a product of “gross financial mismanagement,” UTM warned that the current fiscal path would burden future administrations and generations. The Party concluded that the Budget offers no hope or solutions to the challenges facing Malawi, calling for a more responsible and growth-oriented approach to financial management.