Closing the Gaps: Catalyzing Business Growth through Innovative Education and Health Financing Solutions in Malawi

Key Business Points

• Increased social spending is crucial for Malawi’s long-term economic growth, as underinvestment in education and health is eroding human capital and weakening productivity.
• Targeted subsidies could help generate additional resources for social spending, by ensuring that high-earning individuals contribute their fair share, as proposed by Minister Mwanamvekha, which can be achieved through zipangizo zotengera (means-tested subsidies).
• Domestic financing for essential health services is necessary to reduce reliance on donor support and achieve sustainable development, which is essential for ukongwe (economic growth) and chitukuko (development) in Malawi.

Civil society organisations have urged the government to scale up social spending in the 2026/27 National Budget, citing persistent underinvestment in education and health as a major threat to malawi’s economic growth. During pre-budget consultations, Link for Education Governance in Malawi and the Malawi Health Equity Network highlighted deep financing gaps in these sectors, which are compromising learning outcomes, future earnings, and health service delivery. The groups warned that continued underinvestment will worsen inequality, reduce labour productivity, and lock the economy into low-growth cycles, ultimately affecting biashara (business) and uchumi (economy) in Malawi.

The education sector is particularly affected, with capital expenditure remaining critically low, and inadequate funding for examinations, infrastructure, and curriculum rollout. This is compromising the integrity of the education system and the employability of graduates, making it challenging for them to secure njira za kazi (job opportunities) in Malawi. The Malawi Health Equity Network executive director, George Jobe, noted that funding constraints are already translating into service disruptions, rising accident-related injuries, and limited capacity to respond to climate-related health shocks, which can have a negative impact on afya (health) and uchumi (economy) in Malawi.

Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha acknowledged the funding pressures, but argued that blanket subsidies in education and health are limiting the government’s ability to expand social spending. He proposed introducing zipangizo zotengera (means-tested subsidies) to ensure that high-earning individuals contribute their fair share, which can help generate additional resources for social spending and promote uchumi wa kuwala (inclusive economy) in Malawi. This approach could help protect vulnerable groups and promote maendeleo (development) in Malawi.

The concerns come against the backdrop of Malawi repeatedly missing its international commitments, including the Abuja Declaration target of allocating 15 percent of national expenditure to health and the Dakar Declaration benchmark of 20 percent for education. Civil society groups warned that continued failure to meet these thresholds will have severe consequences for the economy and biashara (business) in Malawi. As the government prepares the 2026/27 National Budget, it is essential to prioritize social spending and explore innovative solutions to address the financing gaps in education and health, which can help promote ukongwe (economic growth) and chitukuko (development) in Malawi.

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