The optimal use of resources to maximise health outcomes and attain Universal Health Coverage is very crucial especially in low and middle income countries (LMICs) where resources are limited. This requires improved efficiency in the distribution of resources across all health services and geographical areas so that all people benefit from the services provided. In this discussion paper, the Malawi’s experience in revising its resource allocation formula (RAF) to improve efficiency and equity in the resource allocation at the district level is discussed. Specifically, the article discusses all the steps undertaken by Ministry of Health in Malawi to date as well as the steps necessary looking forward to legally establish the newly developed RAF and to start implementing it. Further, practical and political considerations in ensuring the acceptability and implementation feasibility of a revised RAF are highlighted.