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MALAWI 2025/26
Health
Budget Brief
Protecting Essential Health
Gains Despite Fiscal Pressures
2
MALAWI
Sustain progress in maternal, newborn, and child
health: Under-5 mortality rate (U5MR) has declined from
64 per 1,000 live births in 2016 to 48 in 2024, neona-
tal mortality rate (NMR) from 27 per 1,000 live births to
24, and maternal mortality (MMR) from 439 to 225 per
100,000 live births. Yet, these remain double to triple the
Sustainable Development Goal (SDG) 3 targets (25 for
U5MR, 12 for NMR, and 70 for MMR by 2030).
RECOMMENDATION
The Ministry of Health (MoH), in collaboration with
Partners, is encouraged to prioritize cost-eective,
high-impact interventions (antenatal care, skilled birth
attendance, immunisation, nutrition, and adolescent
health) to accelerate progress in maternal, newborn and
child health in the ve years to 2030.
Key Messages and
Recommendations
HOW TO ACHIEVE THIS
Scale up evidence-based interventions
already embedded in the Essential Health
Benets Package (EHP), allocate sucient
domestic resources for frontline services, and
ensure donor support is increasingly aligned with
high-burden conditions. Using the Reproductive,
Maternal, Newborn, Child, Adolescent Health and
Nutrition (RMCAH+N) Scorecard, District Health
Oces (DHOs) are encouraged to integrate
Maternal, Newborn and Child Health (MNCH)
targets into annual implementation plans and
ensure that results are monitored through the
District Health Information Software 2 (DHIS2).
1 Protect Essential Health Gains
Despite Fiscal Pressures
HEALTH BUDGET BRIEF 2025/26
US Government (USG) funding to the health sector
is projected to decline sharply, posing major risks
to HIV/AIDS, malaria, TB, and maternal–child health
programmes. Initial estimates indicate a total reduction
of approximately US$62 million between 2024 and 2025,
with USAID losing about 42 per cent (US$61.5 million) of
its allocation, PEPFAR/CDC registered a marginal 1 per
cent (US$1 million) cut as overall USG funding to the
health sector declined by 66 per cent as of 1st July 2025.
This is occurring at a time when rising debt servic-
ing costs now absorb 27 per cent of the total gov-
ernment budget for 2025/26, constraining overall
scal space. The health sector’s share of the national
budget has only marginally increased from 9.1 per cent
in 2024/25 to 9.5 per cent in 2025/26.
RECOMMENDATION
The MoH is encouraged to nalise and implement
the system-wide sustainability plan under develop-
ment, anchored in the National Health Financing
Strategy (HFS). Building on recent progress in resum-
ing critical services post-USG withdrawal, the MoH is
encouraged to:
Ensure at least 70 per cent of donor-dependent pro-
gramme costs (HIV/AIDS, malaria, TB, MNCH) are
covered through more ecient domestic resource
allocation by 2030,
Align all development partner nancing to the Third
Health Sector Strategic Plan (HSSP III) priorities by
2027 and
Increase domestic resource mobilisation by expanding
private sector investment, introducing fee-for-service
wings in all central hospitals by 2026, and initiating
phased roll-out of social health insurance (SHI) by
2027.
2 Mitigate the Impact of
Declining Donor Support
Increasing domestic resource mobilisation is key to ensuring
sustainability of health interventions amidst reducing ODA.
HOW TO ACHIEVE THIS
The MoH is encouraged to strengthen inte-
gration across service delivery, information
systems, and supply chains, while scaling SHI
pilots and expanding earmarked health reve-
nues. Blended nancing mechanisms could be
explored, and regular resource-mapping with
development partners conducted to align sup-
port and reduce duplication. Budget prioritisation
frameworks led by the Ministry of Finance ought
to direct funds towards core health services.
In 2024/25, district drug budgets were reduced by 27
per cent during the mid-year budget review (MYBR),
leading to widespread stockouts, while the budget
for Queen Elizabeth Central Hospital (QECH) was
slashed by 64 per cent, undermining service deliv-
ery. Delays in fund disbursements further constrained
timely execution, and misalignment between MoH and
Central Medical Stores (CMST) quantication processes
complicated procurement and supply planning.
RECOMMENDATION
The Ministry of Finance is encouraged to pro-
tect health allocations from in-year cuts, ensure
timely and full disbursement, and enforce budget
credibility thresholds (±5 per cent variance between
approved and executed). The MoH and National Local
Government Finance Committee (NLGFC) are encour-
aged to strengthen district-level procurement planning,
cashow forecasting, and coordination with CMST to align
quantication and supply planning.
4
MALAWI
3 Enhance Health Budget
Performance – i.e.,
Credibility and Execution
Despite a 40 per cent increase in the district drugs
budget (MK34.1 billion), over 70 per cent of facilities
are likely to report recurrent stockouts. The devolved
drug budget (10 per cent) has remained at at MK2.5
billion in 2025/26, eectively falling to 8 per cent of the
total drugs budget.
RECOMMENDATION
Gradually increase the devolved drugs budget to at
least 15 per cent within the medium-term expend-
iture framework (MTEF) to strengthen district
responsiveness. Meanwhile, the MoH, in collaboration
with MoF, is encouraged to scale up the implementation
of Direct Facility Financing (DFF), ensuring adequate train-
ing for health centre management committees (HCMCs)
to improve procurement and accountability.
4 Expand Access to Medicines
and Supplies
HOW TO ACHIEVE THIS
Conduct quarterly budget execution reviews
between MoF, MoH, NLGFC and Local
Councils; publish variance and disbursement
reports; and ring-fence district health budgets
for essential recurrent expenditures (ORT); and
capacitate Local Councils to reduce mid-year dis-
ruptions and improve accountability.
HOW TO ACHIEVE THIS
Amend the MTEF ceiling guidance to pro-
gressively allocate a higher share to dis-
tricts, while expanding DFF to all districts by
2027/28. Conduct regular Logistics Management
Information System (LMIS) based stock mon-
itoring, paired with community scorecards, to
improve accountability in drug distribution and
use.
Despite a 40% budget increase, 7 in 10 health facilities
are still projected to face recurrent drug stockouts.
5
HEALTH BUDGET BRIEF 2025/26
The budget for the expanded programme on immu-
nisation (EPI) more than doubled in 2025/26 (from
MK1.5 billion to MK3.2 billion), with vaccine pro-
curement increasing by 1.5 times while the repro-
ductive health budget grew tenfold (MK71 million
to MK901 million).
RECOMMENDATION
Sustain and protect allocations for immunisation
and reproductive health, while also ensuring timely
release of funds to protect hard-won child survival
gains.
HOW TO ACHIEVE THIS
Strengthen procurement planning for vac-
cines and reproductive health commodities
and cash ow management to ensure timely
orders and payment. MoH is also encouraged
to coordinate with Gavi, the Vaccine Alliance, and
UNFPA to maintain co-nancing commitments.
5 Sustain Momentum
on Immunisation and
Reproductive Health
Central hospital budgets rose by 83 per cent in
2025/26 (from MK35 billion to MK65 billion), yet
allocations remain below needs. Meanwhile, over-
crowding persists at district hospitals despite a 28.5 per
cent increase in rehabilitation funding (MK14 billion to
MK18 billion).
RECOMMENDATION
The Ministry of Finance is encouraged to ensure full
and timely disbursement of central hospital budg-
ets to cover operations. The MoF could work with MoH
to support hospitals to adopt reforms to ensure quality
and sustainability of services while protecting equity,
especially for primary health care services. Meanwhile,
the MoF is encouraged to sustain the increase in
the district budget for infrastructure rehabilitation
to address overcrowding across health facilities.
6 Strengthen Central and
District Hospital Capacity
HOW TO ACHIEVE THIS
Implement hospital performance contracts
tied to timely disbursement, expand PPPs
for diagnostics and non-core services, and
prioritise rehabilitation of high-congestion
wards. Continue to improve hospital governance
and accountability. Link infrastructure investment
to service delivery benchmarks to ensure quality
gains.
An 83% increase in central
hospital budgets is commendable,
but does not close the funding
gap. Central hospital allocations
still fall short of what’s needed to
deliver quality care.
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MALAWI
Malawi has one of the lowest stang densities in
the region: 5.54 (0.54 doctors and 5 nurses per 1,000
people), compared to the World Health Organisation
(WHO) African Region threshold of 10.9 skilled health
workers (excluding community healthcare workers) per
1,000 population to realise at least 70 per cent of the
Universal Health Coverage (UHC) targets. This stang
shortage places immense pressure on existing sta, lead-
ing to delayed patient care, reduced service quality, and
limited access—particularly in rural areas.
RECOMMENDATION
The MoH is encouraged to prioritise recruitment,
retention, and equitable distribution of health
workers, aligned with population needs, while lev-
eraging development partners support to expand
training and supervision capacity.
7 Address Human Resources
for Health Gaps
HOW TO ACHIEVE THIS
Expand the Health Service Commission’s
recruitment drives annually, guided by evi-
dence on need and distribution.
Introduce hardship and retention allowances
for underserved areas; and partner with train-
ing institutions to scale up midwives, nurses,
and clinical ocers and other identied cadres
with critical gaps.
At the same time, Development Partners are
encouraged to support supervision systems
and continuing professional development
(CPD).
7
HEALTH BUDGET BRIEF 2025/26
On average, 80 per cent of recurrent on-budget
health spending is domestically nanced, while 85
per cent of development spending is donor-funded,
exposing capital investments to ODA volatility.
RECOMMENDATION
Institutionalise domestic co-nancing of develop-
ment projects to cushion against aid withdrawals
while exploring innovative nancing (e.g., sin taxes,
earmarked levies, blended nancing) to fund priority
programmes, service delivery and capital investment
sustainably.
8 Reorient Health Financing Towards
Long-Term Sustainability
HOW TO ACHIEVE THIS
Establish a co-nancing framework requiring
all major donor-nanced projects to include
a domestic contribution, phased in over
the MTEF. Introduce new health levies and
expand earmarked revenue streams, while
strengthening public nance management
(PFM) systems to ensure transparency in
their use.
ADVOCACY ASKS
1. Safeguard health allocations and ensure full
and timely disbursement to central and dis-
trict levels, which is essential for boosting budget
credibility through strict adherence to approved ORT
allocations, and avoiding mid-year reductions.
2. Expand DFF coverage to all districts and
strengthen capacity building for facility-level budget
planning, execution, and reporting.
3. Increase the devolved drug budget to 15 per
cent, aligning it with medium-term needs and stock
management practices.
4. Sustain high-priority programme allocations
(EPI, HIV/AIDS, reproductive health) amidst ODA
reductions.
5. Increase domestic revenue mobilisation via
innovative nancing such as social health insurance,
public private partnerships (PPPs), and eciency
reforms.
6. Strengthen human resources through recruit-
ment, retention incentives, and equitable deployment
to meet population needs.
85% of development spending is
donor-funded. Time to build a
sustainable domestic financing
alternative is now.
8
MALAWI
The analysis builds on previous health budget briefs and
is informed by Government Budget Documents from
2021/22 to 2025/26, such as the programme-based
budget (PBB), nancial statements, detailed budget esti-
mates, and ceilings for Local Councils from the NLGFC.
This budget brief presents a summary analysis of health spending trends in
Malawi’s 2025/26 budget and oers recommendations on improving health
nancing. The information presented in this brief is especially pertinent for
government entities, donors, civil society organisations (CSOs), and other
stakeholders positioned to drive change towards enhancing Malawi’s national
health sector’s comprehensiveness, eciency, sustainability, and exibility.
The analysis provided in this brief was based on the budg-
etary allocations to three main entities, namely:
1 Ministry of Health (MoH) (Vote 310)
2
Transfers to Local Councils for the health sector
and drugs under the National Local Government
Finance Committee (NLGFC) (Vote 121) and
3 Subvented Health Organisations (SHOs) (Vote
275) – Medical Council of Malawi, Kachere
Rehabilitation Centre, National AIDS Commission
(NAC), Nurses & Midwife Council of Malawi, Malawi
Red Cross Society.
Introduction
9
HEALTH BUDGET BRIEF 2025/26
Additionally, the maternal mortality ratio has
declined from 439 per 100,000 live births in 2016
to 225 in 2024. Fertility rates have declined but remain
quite high, above the recommended thresholds, with
adolescent fertility falling to 114 in 2024 from 135
4
births
per 1,000 women aged between 15 and 19 years in 2018.
Malawi has sustainably reduced childhood mortal-
ity rates between 2016 and 2024. For instance, the
under-5 mortality rates (U5MR) reduced from 64 per
1,000 livebirths to 48, infant mortality from 42 per
1,000 livebirths to 35 and neonatal mortality rate
from 27 per 1,000 livebirths to 24
3
(Figure 1). This
progress is attributed to strides in antenatal and delivery
care, immunisation, distribution of insecticidal nets and
eective treatment of common infections.
Overview of the Health Sector
Source: Demographic and Health Survey, 2024;
Malawi | World Bank Gender Data Portal
2000 2010 2016 2024
INFANT
2004
0
50
100
150
200
2000 2004 2010 2016 2024
0
50
100
150
200
24
42
27 31 27
NEONATAL
2000 2010 2016 2024
MATERNAL
2004
0
100
200
300
400
500
600
FIGURE 1
Trends in Mortality Rates in Malawi, 2000-2024
2000 2004 2010 2016 2024
Mortality Rates (per 1,000 live births)
Mortality Rates (per 1,000 live births)
Mortality Rates (per 1,000 live births)
Mortality Rates (per 100,000 live births)
0
50
100
150
200
48
189
133
112
64
UNDER-5
506
304
517
439
225
35
104
76 66
42
2030 SDG TARGET
2030 SDG TARGET 2030 SDG TARGET
10
MALAWI
tion, inadequate resources to nance recruitment, and
ineective supervision. It is vital to ensure that adequate
health workers are available in the right quantities, types,
mix and in the right places and aligned with population
needs to deliver adequate health services eectively. In
comparison to other countries within the region, Malawi
has the lowest doctor density
5
and a nurse density
6
ratio
of 0.54 and 5.07, respectively. These gures are below
the WHO African Region threshold of 10.9 skilled health
workers (excluding community healthcare workers) to
achieve at least 70 per cent of the UHC targets (Table
1) - a clear indication of understang in the sector.
Indicator
Malawi Zambia Zimbabwe Mozambique
Density of
Doctors 0.54 3.24 1.27 1.75
Density of
Nurses 5.07 29.36 30.17 9.34
Source: World Health Organization Data, 2022
Accelerated eorts are needed if Malawi is to
achieve SDG 3 targets, as only ve years remain
until 2030. For instance, despite progress, U5MR (48)
and neonatal mortality rate (24) are respectively
twice the SDG 3.2 targets of at least 25 and 12 deaths
per 1,000 live births by 2030. Strikingly, the maternal
mortality rate (225) is 3.2 times the SDG 3.1 target of
at least 70 deaths per 100,000 live births. Regarding
HSSP III targets, the U5 mortality rate has reached the
target of 48, but infant and neonatal mortality rates still
exceed the targets of 34 and 22, respectively. Moving
forward, doubling down on comprehensive strategies
and targeted interventions to improve maternal and child
health outcomes is more urgent than ever, especially
given the signicant reduction in ocial development
assistance (ODA), which previously funded much of the
health interventions. This should be complemented by
eorts to sustain public investments and diversify nanc-
ing sources, particularly from domestic sources.
Furthermore, progress toward the SDGs is con-
strained by the persistently high disease burden and
shortage of adequately trained health personnel.
The health sector has been struggling with sta reten-
TABLE 1
Human Resources for Health Statistics7
Source: Third Health Sector Strategic Plan III (2023-2030)
Burden of Disease, 2019
FIGURE 2
0 3 6 9 12
15
Diabetes and Chronic
Kidney Disease
Digestive
Nutritional
Deficiencies
Neoplasms
Enteric Infections
NTDs and Malaria
Respiratory
Infections and TB
HIV/AIDS and STIs
Maternal and
Neonatal
Cardiovascular
Diseases
Percentage of Mortality
13.8
12.9
11.8
7.8
7.1
5.7
4.9
3.8
3.1
2.2
11
HEALTH BUDGET BRIEF 2025/26
infections and tuberculosis (11.8 per cent), Malaria (7.8
per cent) and enteric infections (7.1 per cent), continue
to contribute substantially to the mortality levels in the
country. Importantly, HIV/AIDS and malaria interven-
tions are heavily nanced by donors, such that the recent
reduction in ODA is likely to derail progress made in
improving health outcomes over the years.
Additionally, the double prevalence of communi-
cable and non-communicable diseases is exerting
a huge burden on the country’s healthcare system
(Figure 2). Of great concern, despite ongoing eorts,
HIV/AIDS remains one of the leading causes of death
in Malawi in 2019, responsible for 12.9 per cent of mor-
tality with maternal and neonatal leading at 13.8 per
cent. Other communicable disease such as respiratory
Size of Health Sector Spending
The health sector budget has increased from MK550
billion in 2024/25 to MK768 billion in 2025/26 (Figure
3). This marks a nominal and real increase of 40 per cent
and 10 per cent, respectively. The nominal increase is
primarily driven by a 97 per cent increase in the budget
for other recurrent transactions (ORT) under the MoH
– mainly under the medical supplies budget line, which
has been increased by 158 per cent from MK22 billion to
MK58 billion – and a 69 per cent increase in wages and
salaries budget at the district level.
Akin to 2024/25, the health sector has received the
second largest allocation of 9.5 per cent of the total
Government budget in 2025/26, after education
(16.6 per cent) and ahead of agriculture (8.6 per
cent) and other social and economic sectors (Figure
4). Debt servicing costs – whose allocations have swelled
from 24 per cent of the total budget in 2024/25 to 27 per
cent in 2025/26 – have remained the largest expenditure
item in the budget for ve consecutive scal years, con-
straining allocations to health and other sectors.
Source: Government Budget and Financial Documents (2021/22-24/25)
FIGURE 3
Trends in Health Sector
Budgets
2021/22 2022/23 2023/24 2024/25 2025/26
Nominal Real
MK Billions
0
100
200
300
400
500
600
700
800
223
200
279 323 354
200 243
368
550
768
Source: Government Budget and Financial Documents (2021/22 – 2025/26)
FIGURE 4
Trends in Health Sector Budgets
Compared to Other Social
Sectors
2021/22 2022/23 2023/24 2024/25 2025/26
SOCIAL PROTECTION
EDUCATION
TOTAL SOCIAL SECTOR
WASH
Health
Public Debt Charges
% of TGE
0
5
10
15
20
25
30
35
9.1 8.5
21
9.7
21
9.2
24
9.5
27
15
12
MALAWI
There is a notable change in the composition of the
health sector budget by implementing agency. The
share of the centralized health budget, through the
MoH, has decreased from 64 to 57 per cent as the
decentralized health budget has increased from 35
to 42 per cent (Figure 6). The increase in the decentral-
ized share reects rising wages and salaries for primary
healthcare sta – as evidenced by a 69 per cent increase
in the devolved personnel emoluments (PE) budget. The
share allocated through subvented health organisations
has remained constant at 1 per cent.
The programme composition of the MoH budget
remains the same with 42 per cent of resources allo-
cated towards health service delivery (MK165 bil-
lion) (Figure 7), seconded by infrastructure and medical
equipment (MK123 billion) and management and support
services (MK101 billion). Of interest is the increase in the
allocation towards health research by 1,784 per cent from
Despite the increase, investments in health fall
short of costed needs and regional and interna-
tional benchmarks. In per capita terms, for example,
the 2025/26 health budget translates to US$21, below
the HSSP III target of US$78.7 and the WHO minimum
recommended investment for low-income countries
(LICs) of US$86. If o-budget resources are considered,
the per capita health budget reaches US$40, still below
the WHO minimum recommendation. As a share of the
total budget, allocations are consistently below the Abuja
target for African States to allocate at least 15 per cent
to the health sector. Similarly, at 3 per cent of GDP, allo-
cations are below the minimum recommended invest-
ment of 5 per cent by the Southern African Development
Community (SADC). Limited scal space, amid rising
debt servicing costs, remains a key constraint to ade-
quately nancing the health sector. Going forward, the
Government is encouraged to sustain health spending
towards the U$86 per capita investments and Abuja tar-
gets.
Source: Government Budget and Financial Documents
(2021/22 – 2025/26)
FIGURE 5
Trends in Health Sector Spending as a
Share of Total Budget and of GDP
2021/22 2022/23 2023/24 2024/25 2025/26
% of Total Govt. Budget % of GDP Abuja Target (15% of TGE)
Percentage (%)
0
3
6
9
12
15
9.7
1.9
8.5
2.1
8.5
2.4
9.1
2.9
9.5
3.0
15
Funding Gap
Composition of Health Sector
Spending
Source: Approved Financial Statements, 2021/22 - 2025/26
Trends in the Composition of Health Sector
Budgets by Implementing Agency
MoH Local Councils SHOs
FIGURE 6
Percentage (%)
0
20
40
60
80
100
2021/22 2022/23 2023/24 2024/25 2025/26
40
58
48
50
46
52
35
64
42
57
2 2 2 1 1
13
HEALTH BUDGET BRIEF 2025/26
AIDS programme is to partially cushion the withdrawal of
USAID funding. Signicant adjustments have also been
made towards reproductive health and the expanded
programme for immunisation (EPI) budget under MoH –
which have been increased by 1,169 per cent and 87 per
cent, respectively. It is commendable to see Government
putting in eorts to lessen the impacts of aid withdraw-
als towards critical interventions like immunisation and
reproductive health.
MK289 million to MK5.4 billion in the 2025/26 budget.
The signicant increase reects the Ministry’s increased
focus on health research – one of the nine priorities in the
HSSP III – to promote high-quality evidence generation
to inform health care delivery.
The allocation towards HIV/AIDS increased sub-
stantially by 2,440 per cent from MK178 million in
2024/25 to MK4.5 billion in 2025/26 (Figure 8). This
increase in government contribution towards the HIV/
Signalling a new
strategic priority, the
allocation for health
research has surged
by an incredible
1,784% in the 2025/26
budget.
Source: 2025/26 Approved Programme-Based Budget Document
Composition of MoH Allocations
by Programme
FIGURE 7
MK Billions
0
50
100
150
200
Health
Research
Digital
Health
Medical Products
and Tech
Management and
Support Services
Infrastructure and
Medical Equipment
Health Service
Delivery
0.3 5.4 2.9 0.3 5.0 0.1
49.9
101.1 105.0
123.3
182.6
165.9
2025/262024/25
14
MALAWI
ments towards services that target the reduction of
maternal and childhood mortality rates in Malawi.
Including provisions for Local Councils, the EPI
budget increased by 112 per cent from MK1.5 bil-
lion in 2024/25 to MK3.2 billion in 2025/26 (Figure
9). Commendably, the Treasury increased the budget
for the procurement of vaccines under MoH by 150 per
cent from MK1 billion to MK2.5 billion. The allocation for
vaccine management by Local Councils was increased by
7 per cent from MK344 million to MK368 million. Amidst
reducing ODA, the Government is therefore encouraged
to sustain this positive trend to ensure continued access
to life-saving vaccines for children.
The reproductive health budget has increased by
1,169 per cent from MK71 million to MK901 million,
while the budget for the procurement of family
planning commodities has increased by 33 per
cent from MK640 million to MK854 million (Figure
8). Compared to previous years, this represents a sig-
nicant shift, with the budget for reproductive health
now exceeding that for the procurement of family plan-
ning commodities. This is a commendable move by the
Ministry of Health, as this means additional resources will
be channelled towards maternal and neonatal health and
adolescent health interventions that were not adequately
prioritised in the previous nancial year. Sustaining these
allocations is important and will help ensure improve
-
Source: Ministry of Health, 2021/22 – 2025/26
2021/22 2022/23 2023/24 2024/25 2025/26
Trends in the EPI Budget
FIGURE 9
MK, Millions
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Operational Expenses Vaccines - Local CouncilsVaccine
138 138
750 1,000 1,400 1,000
2,500
297
368
218
344
Source: Ministry of Health, 2024/25 – 2025/26
Allocations to Selected Health Interventions
under MoH in 2025/26, in MK millions
2025/262024/25
FIGURE 8
MK, Millions
0
1,000
2,000
3,000
4,000
5,000
Community
Health
Reproductive
Health
HIV
ART
Co-Financing
Procurement of
family planning
commodities
EPI
+2,240%
+1,169%
0%
+294% +33%
+87%
4,522
1,000
1,494
2,797
901
71
178
254
640
854
60
60
To cushion against aid withdrawals, the domestic
budget for HIV/AIDS has increased by 2,440%,
with reproductive health funding also rising by 1,169%.
15
HEALTH BUDGET BRIEF 2025/26
cent and 37 per cent, respectively. While Lilongwe
Central Hospital’s allocation was increased by 24 per cent
from MK14.7 billion to MK18.2 billion. The increase in
allocations for central hospitals is mainly to cover public
utilities, medical supplies and routine maintenance of
assets. However, despite these increases, allocations
remain below nancing requirements, amidst rising
service delivery needs.
Zomba Central Hospital has since introduced
reforms to improve self-nancing and hospital per-
formance through its own revenue generation. This
initiative involves implementing various resource genera-
tion strategies, like “fee-for-service” wings, SHI schemes,
Public-Private Partnerships (PPPs), and Auxiliary Services,
among other approaches. While these initiatives are cru-
cial, hospitals must balance revenue generation and the
delivery of primary healthcare services while keeping in
mind that most of their clientele are vulnerable.
The total allocation to central hospitals was sub-
stantially increased by 83 per cent from MK35.4
billion in 2024/25 to MK64.7 billion in 2025/26 (Figure
10). The Queen Elizabeth Central Hospital (QECH) regis-
tered the highest increase, at 337 per cent, from MK5.1
billion to MK22.3 billion. The ORT allocation for QECH
was revised downwards in the 2024/25 budget by 64
per cent, from MK14.2 billion to MK5.1 billion, which
has contributed to the signicant increase compared
to the 2025/26 allocation of MK22.3 billion. This raises
concerns regarding budget credibility, as the 2024/25
initial expenditure estimates show a variation of 64 per
cent, exceeding the ±5 per cent recommended budget
credibility threshold, between the approved and revised
ORT budget for QECH. MoH is therefore encouraged to
strengthen budget credibility by working to maintain
budgets within the recommended threshold.
The operational expenses of Mzuzu Central Hospital
and Zomba Central Hospital increased by 73 per
Source: 2025/26 Approved Detailed Budget Document (Volume II)
Zomba Central
Hospital
Mzuzu Central
Hospital
Queen Elizabeth
Central Hospital
Lilongwe Central
Hospital
Trends in ORT Allocations to Central Hospitals
FIGURE 10
MK, Billions
0
5
10
15
20
25
2024/25 2025/262023/24
5
8
11
68
13
11
5
22
11
15
18
Central hospital budgets rose by 83%, led by a 337%
increase for Queen Elizabeth Central Hospital.
16
MALAWI
As part of deepening decentralisation and improv-
ing facility nancing in line with the National
Decentralisation Policy II, the MoH is rolling out
the Direct Facility Financing (DFF) mechanism to
13 districts, following a successful pilot in Rumphi.
The objective of the DFF is to improve direct funding to
targeted health facilities, strengthen their operational
capacity and service delivery. With support from UNICEF,
the DFF is currently being rolled out in 3 districts – Ntchisi,
Rumphi and Mzimba – while Partners in Health (PIH)
and other development partners are supporting the
scale-up to 12 additional districts.8 To ensure successful
implementation, health centre management committees
(HCMCs) in the respective districts have been trained
and oriented on the DFF Guidelines. The MoH, in col-
laboration with NLGFC and Development Partners, is
therefore encouraged to continue supporting council
ocials with adequate training to eectively strengthen
budget planning and execution.
Government remains committed to the decentrali-
sation agenda, as evidenced by the steady increase
in allocation for healthcare services under Local
Councils. The 2025/26 allocation has increased by 57 per
cent from MK191.3 billion in 2024/25 to MK299.8 billion
(Figure 11). The largest proportional increase is towards
salaries and wages for healthcare workers, a reection
of the Government’s commitment towards increasing
the number of healthcare personnel in the sector. Other
notable allocations include MK34.1 billion for the pro-
curement of drugs, MK4 billion for blood, MK379 million
for vaccines, and MK18 billion for the rehabilitation of
District Hospitals.
Despite the substantial increase in the drug budget,
by 40 per cent, over 70 per cent of health facilities
in Malawi are currently facing frequent drug short-
ages. While the 10 per cent devolved drug budget has
allowed districts to temporarily outsource drugs, this
relief typically lasts no more than three months. The
allocation for the devolved drugs budget has remained
unchanged at MK2.5 billion and has now reduced from
the ideal 10 per cent to 8 per cent of the centrally man-
aged district drug budget (MK32 billion in 2025/26). To
better support districts during extended shortages of
medicines and medical supplies, it is crucial to gradually
increase the proportion of the devolved drugs budget
to at least 15 per cent in the medium-term expenditure
framework (MTEF).
The allocation towards rehabilitation of district
hospitals and health facilities has increased by
28.5 per cent from MK14 billion to MK18 billion,
now covering all 28 districts. The gradual increase in
this budget line is crucial to address existing infrastruc-
tural challenges, which have resulted in overcrowding
in most district hospitals. The government is therefore
commended for showing its commitment to improving
hospital infrastructure to support the provision of essen-
tial health services at the local level.
Fiscal Decentralisation and Primary
Healthcare Spending
Source: 2025/26 Approved Financial Statement
2021/22 2022/23 2023/24 2024/25 2025/26
Trends in Devolved Health Budgets
FIGURE 11
Thousands
0
50
100
150
200
250
300
Drugs - 10% devolved
ORT - General PE Rehab of District Hospitals
Drugs - Centrally Managed (NLGFC)
57
8
88
10
14
12
14
19
18
23
12 17 29 22 32
17
HEALTH BUDGET BRIEF 2025/26
Financial Accountability (PEFA) framework for a budget
to be deemed credible. The 2024/25 drugs budget for
District Hospitals was revised downwards by 27 per cent
from MK30.96 billion to MK22.47 billion, reecting exist-
ing procurement challenges aecting the supply of drugs
and medical equipment. NLGFC is therefore encouraged
to address the existing bottlenecks and ensure that the
provision of drugs is managed eciently, considering the
existing drug shortages in medical facilities.
The performance of the health budget signicantly
improved in 2024/25 compared to 2023/24 (Table
2). Total expenditure by the MoH and Subvented Health
Organisations was generally in line with approved esti-
mates. Spending by Local Councils was 12 per cent below
the approved estimates, due to revisions to the drugs
budget under NLGFC during mid-year budget review
(MYBR). The variance is beyond the recommended
+/-5 per cent according to the Public Expenditure and
Health Budget Credibility
and Execution
TABLE 2
Trends in Health Expenditure Performance
Category 2023/24 2024/25
Approved Revised % Variance Approved Revised % Variance
MoH 167,519 191,445 14% 345,131 345,596 0.1%
PE 64,848 76,809 18% 91,559 92,057 0.5%
ORT 43,510 48,774 12% 56,183 56,183 0.0%
DI 54,561 54,561 0% 190,637 190,637 0.0%
DII 4,600 11,300 146% 6,753 6,719 -0.5%
Local Councils 39,118 49,118 26% 69,666 61,176 -12%
SHOs 5,681 5,918 4% 6,185 6,185 0.0%
Source: Approved Financial Statement 2024/25 – 2025/26
18
MALAWI
donors and NGOs inuencing health spending decisions.
In addition, this threatens the sustainability of health
programmes that are mainly nanced by donors.
The recent reductions in ODA to the health sector,
coupled with rising debt servicing costs, pose a
signicant challenge in nancing critical health
programmes such as HIV/AIDS, malaria, tuber-
culosis, nutrition and maternal and child health
(Figure 13). For instance, initial estimates show that
USAID support to the health sector has reduced by 66
per cent from US$145 million in 2024 to US$49 million in
2025
10
. Support from USAID primarily nanced HIV/AIDS
services, followed by basic health, maternal and child
health, and family planning. The withdrawal of USAID
support and the signalled decline of support by various
other health donors are likely to cripple the delivery of
HIV/AIDS services and other essential health services in
the country. The funding withdrawals will therefore put
vulnerable groups such as young women and children
at even greater risk, threatening to reverse gains and
deepen inequalities, driving infection and AIDS related
deaths.
When on-budget nancing alone is considered, an
average of 80 per cent of the health sector budget
has been nanced through domestic resources over
the past ve years (Figure 12). Government resources
primarily nance operational expenses such as ORT and
PE, while development projects are largely nanced
through donor resources (DI). On average, 85 per cent
of the sector’s development budget is foreign nanced.
This nancing arrangement, especially for development
projects, makes the sector’s development plans highly
vulnerable to ongoing reductions in ODA. This calls for
the MoH to accelerate leveraging the National Health
Financing Strategy (HFS) to innovatively diversify health
nancing, anchored on domestic resource mobilisation
and private sector initiatives, to help sustain health out-
comes and achieve universal coverage in the long term.
Taking into consideration the inclusion of o-
budget support to the sector, nancing is signif-
icantly donor dependent, with an average of 54.5
percent of total health expenditures funded by
donors
9
. This therefore reects limited government dis-
cretion in making direct health expenditure decisions with
Health Sector Financing
Source: 2025/26 Approved Financial Statement
2021/22 2022/23 2023/24 2024/25 2025/26
On-Budget Health
Financing by Source
FIGURE 12
Percentage (%)
0
20
40
60
80
100
Domestic Foreign
83
17
90
10
85
15
65
35
76
24
Source: U.S. Foreign Assistance by Country,
https://foreignassistance.gov/cd/malawi
Trends in Health Sector
Funding from USAID
FIGURE 13
Basic Health
Maternal & Child Health,
Family Planning
HIV/AIDS
2017 2019 2020 2021 2022 2023 2024 20252018
0
20
40
60
80
100
USD Millions
58
29
94
5
0.8
19
HEALTH BUDGET BRIEF 2025/26
Citations
1 ForeignAssistance.gov - Data.
2 The State of the Health Workforce in the WHO
African Region, 2021.
3 2024 Malawi Demographic and Health Survey
(MDHS).
4 https://data.who.int/indicators/i/24C65FE/27D371A.
5 Number of physicians (per 1,000 population)
including generalists, specialist medical practitioners
and medical doctors not further dened.
6 Number of nursing and midwifery personnel (per
10,000 population).
7 https://data.who.int/countries/454#:~:tex-
t=Health%20data%20overview%20for%20
Malawi%2C%20containing%20the%20latest,pop-
ulation%2C%20life%20expectancy%20and%20mor-
tality%20data%20from%20WHO.
8 Blantyre, Nsanje, Machinga, Chitipa, Nkhotakota,
Lilongwe, Chikwawa, Dedza, Kasungu, Neno, Balaka
and Salima.
9 National Health Accounts, 2022.
10 ForeignAssistance.gov - Data; data extracted on 1st
July 2025.
20
MALAWI
Acknowledgements
This budget brief was written by Chisomo Alice Tsonga and
Tapiwa Kelvin Mutambirwa under the technical guidance
of Mathew Tasker and leadership from Penelope Campbell
(DrPH). The brief was reviewed and benetted from technical
inputs from Kettie Sambani, Joe Collins Opio and Divine
Mamboneh Shu (all from UNICEF Malawi). Additional reviews
and technical inputs were provided by Dr. Solome Nampewo
(WHO), Abigail Chari (PhD) and Francis Zhuwao from MoH.
The Brief was produced with nancial support from the
European Union and the Government of Ireland as part of the
Social Protection for Gender Empowerment and Resilience
(SP-GEAR) or Amai Titukuke.
FOR MORE INFORMATION, CONTACT
unicef.org/malawi
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Saumya Anand
Chief of Health
UNICEF Malawi, Lilongwe
sanand@unicef.org
Mathew Tasker
Chief of Social Policy
UNICEF Malawi, Lilongwe
mtasker@unicef.org
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