Expanding the Health Budget through Sector Collaboration in Malawi
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A multi-stakeholder dialogue process for domestic resource mobilisation that helped Malawi substantially increase the health budget despite debt stress, aid volatility, inflation and currency shocks.
Malawi's health financing reform emerged from a severe fiscal squeeze. For years the country spent only about USD 9.9 per person on health, roughly 90% below the WHO reference level of USD 86, while donors financed 54.5% of total health expenditure. More than 70% of donor funding flowed off budget through NGOs and implementing partners rather than through the central treasury, and Ministry of Health resource-mapping identified at least 166 financing sources and 265 implementing partners, creating duplication and limiting visibility over total spending. Malawi's response was an integrated, sequenced multi-stakeholder approach. It began with a locally led Landscape Scoping Review that produced credible evidence and defined the reform agenda. Civil society engagement came early and focused on building parliamentary understanding of health financing. That groundwork made it possible to hold a unified national dialogue in October 2022, facilitated with support from SADC and the African Union, bringing together ministries, parliament, the private sector, media and partners. The outcomes were translated into action through a Technical Assistance Plan aligned to budget cycles and through monthly Treasury–Ministry of Health working groups. Parliament shifted from passive observer to active champion, issuing formal commitments that helped lead to the Health Financing Act of 2023, which established frameworks for national health insurance, sin taxes and public-private partnerships. A National Health Financing Strategy and Health Sector Strategic Plan III followed in January 2023.
Policy Recommendations
Start with evidence. In Malawi, the Landscape Scoping Review legitimised the reform agenda and reduced the perception that the process was being driven from outside. Countries replicating this model should invest in credible evidence before convening high-level dialogue.
Use civil society as a bridge, not only as an advocate. By helping parliamentary committees understand health budgets and reform options early, civil society organisations turned lawmakers from possible critics into informed co-owners of the process.
Ministerial engagement matters. Technical working groups alone rarely create fiscal space — direct engagement among the ministers of Finance, Health and Local Government was critical, and making those commitments public raised the political cost of inaction.
Treat the Technical Assistance Plan as the bridge from dialogue to delivery. Linking legislative drafting to realistic timelines and to the Medium-Term Expenditure Framework moved the process beyond a communiqué and into actual implementation.
Institutionalised Treasury–Ministry of Health coordination made the difference. The budget gains held because collaboration became routine and survived a change in administration.
Dialogue still has limits. Even strong multi-stakeholder mobilisation cannot offset sovereign debt burdens that consume more than half of domestic revenue, so domestic resource mobilisation needs to be paired with debt-relief and debt-restructuring advocacy where the AU and regional bodies may have a unique role.
Key Numbers
Growth in the nominal domestic health allocation
USD spent per person on health before the reform
Of total health expenditure financed by donors
SADC and EAC countries that replicated the model
Malawi
Key Findings
Total health expenditure grew 9.9-fold in Kwacha terms, from MK 518 billion in 2019/20 to MK 5,120 billion in 2025/26, while the government's nominal domestic allocation grew 6.7-fold from MK 114 billion to MK 768 billion.
Kwacha devaluation from about 750 to about 1,750 MWK/USD reduces that 6.7-fold nominal growth to only 2.9-fold in real purchasing power, so the Ministry of Health buys fewer imported medicines today than in 2019.
The Health Financing Act of 2023 established frameworks for national health insurance, sin taxes and public-private partnerships, and the model has since been replicated in 11 SADC and EAC countries.
The January 2025 US foreign-aid freeze suspended an estimated USD 178 million in annual PEPFAR allocations and halved the US share, a loss of MK 638 billion, while the Global Fund simultaneously reduced GC7 allocation envelopes.
Malawi still mobilised additional domestic financing during the 2024–2025 disruption — including a mid-year allocation of MK 17.1 billion for pharmaceutical shortages and a 2% motor vehicle insurance levy ring-fenced for health — while other countries declared health-financing emergencies.