LILONGWE — Malawi’s Leader of Opposition, Hon. Simplex Chithyola Banda, on Monday tore into the government’s Mid-Term Budget Review, branding it a “budget of punishment, panic and false promises” that will push struggling citizens deeper into hardship.
Speaking in Parliament, Chithyola Banda accused Finance Minister Joseph Mwanamveka of presenting a fiscal plan that “hurts the poor and suffocates the economy,” pointing to tax hikes, new levies and stalled hiring as signs of a government “out of ideas but quick to squeeze citizens.”
VAT, Transfer Levy Under Fire
At the center of his criticism is the hike in VAT from 16.5% to 17.5%, which he said will inflate prices on essentials already battered by nearly 30% inflation. He warned the move will hit rural families hardest, saying many can “barely afford salt” as it is.
He also blasted the new 0.05% levy on bank and mobile money transfers, saying it punishes cash-strapped families, small traders and first-time bank users, pushing people back into informal, cash-based systems.
More Taxes, Less Spending Power
The opposition chief described the removal of tax-free thresholds on betting winnings as “petty,” arguing many young people rely on small lottery payouts. He said new surcharges on rentals, insurance and cement imports will only add pressure on businesses and households. According to him, the tax measures will “shrink buying power, slow business, worsen inflation and weaken the Kwacha.”
Freeze on Jobs, Surge in Borrowing
Chithyola Banda faulted the government’s freeze on recruitment and promotions—introduced after an 18% wage bill overrun—saying it will aggravate shortages of teachers and medical staff while keeping thousands of graduates jobless.
He also flagged a K512.6 billion rise in expenditure despite falling revenue, along with soaring interest payments and domestic borrowing that is expected to nearly double. Cutting development spending by K89.9 billion, he said, reveals a government “crowding out the private sector in broad daylight.”
“Sweet Words, No Money”
The opposition leader accused the administration of making grand social promises without funding to match—citing an expanded FISP programme with no forex for fertilizer, and free primary and secondary education without money for teachers, classrooms or materials.
He attributed a 43% drop in donor grants to “poor systems, weak coordination and unpredictable forex allocation.”
Political Blame Game, Bloated Cabinet
Chithyola Banda said the Finance Minister’s repeated jabs at the previous administration are a distraction from present economic failures. He dismissed the government’s austerity talk as “fake,” pointing to what he called an oversized cabinet and growing list of advisers.
He labeled the MK5 billion constituency development fund—set for 2026—and the pledge of free secondary education as “populist, post-dated promises” detached from a reality of a K3.1 trillion deficit and severe forex shortages.
Opposition Demands Reversal
Chithyola Banda outlined the opposition’s demands: reverse the VAT hike, scrap the transfer levy, present a credible forex and economic recovery plan, and subject monetary policy to parliamentary oversight. “We cannot support a budget that taxes the poor to cover up government failures,” he declared.
A Message to Voters
Closing his statement, Chithyola Banda said the budget “takes with both hands and gives nothing back,” urging Malawians to look ahead to the 2030 elections. He vowed that the opposition will continue pushing for fair taxation, job creation, improved services and a production-driven economy.
