BLANTYRE-(MaraviPost)-The Ministry of Local Government and Rural Development has dismissed claims that local councils are facing a funding “drought”, insisting that government has money for the Constituency Development Fund (CDF) but is now releasing it under stricter 2026 guidelines meant to curb waste and abandoned projects.
This comes after a story published this week reported that councils had received only 9% of the MK1.25 trillion allocated in the 2026/27 National Budget five months into the financial year, with development funding at just 4%.
However, Minister of Local Government and Rural Development Ben Phiri told Parliament on August 7 that the low disbursement rate does not mean government is broke.
“Yes, we are facing turbulences. However, it does not mean to say that projects are not running. I think it is unfair to say that the government has completely no money,” Phiri said.
According to the Minister, the current funding pattern reflects a deliberate shift in how CDF and other development funds are managed.
Under the new 2026 CDF Guidelines, funds are no longer released automatically or as lump sums.
Instead, money is released project by project only after technical designs, Bills of Quantities, procurement and approvals are completed.
As a result, what has been described as “delays” are in fact mandatory administrative and technical processes.
Phiri explained that once contractors are awarded, they receive a 20% mobilisation fee, and subsequent payments are made upon production of certificates.
“You can be rest assured that there will not be delays in payments upon production of certificates, everything will flow,” he added.
Furthermore, the data cited in the report tells only part of the story.
While development funding stands at 4%, Other Recurrent Transactions which cover health, education, drugs, agriculture and disaster management have already received 56% of their allocation, translating to K61.2 billion.
This means essential services in councils have continued to run.
In addition, the 2026/27 budget marks the biggest CDF allocation in Malawi’s history.
Each constituency is now handling K5 billion, and CDF has also absorbed the District Development Fund, LIDF and Hospital Rehabilitation funds.
Because of this, government argues that bigger money must come with bigger accountability.
Indeed, the new approach moves away from the old system where funds were disbursed quickly but often led to stalled or substandard projects.
The focus now is on quality over speed.
Planning must come first to ensure that every project is properly costed, technically sound, and aligned with community priorities before any payment is made.
At the same time, government maintains that the macro economy can support the commitments.
Inflation has eased, fuel is consistently available, and government has returned to the IMF from a position of discipline.
Therefore, suggestions that Treasury has no resources for councils are unfounded.
Critics including the Catholic Commission for Justice and Peace and the Centre for Social Transparency and Accountability have warned that late disbursements cause cost overruns.
However, the Ministry contends that releasing money without readiness is what created the problems of unfinished projects in previous years.
For this reason, the Ministry has also directed councils to strengthen implementation teams and hold public accountability meetings to ensure value for money at district level.
Officials say the 9% cumulative figure should not be read as bankruptcy but as reform.
The money is available, but it will only move when projects are ready.
Should year two of the Mutharika administration maintain this discipline, government expects to see fewer abandoned projects and better infrastructure delivered to communities.
Last Month, Local Government Minister Phiri launched dashboard to monitor development projects that are tapping resources from CDF’s MK5 billion across the country.
