Minister of Finance Simplex Chinthyola Banda yesterday told Parliament that in the revised budget for 2023/24, the allocation for civil servants’ wages and salaries has been increased by MK80 billion, rising from the initially approved MK900 billion to MK980 billion. According to Chithyola, this adjustment is intended to mitigate the impact of the recent 44 percent devaluation of the local currency, as highlighted by Banda. The move aligns with President Lazarus McCarthy Chakwera’s commitment to raising civil servants’ pay as part of broader measures to address economic challenges.
During the presentation, Chinthyola Banda also noted that President Chakwera’s austerity measures, including the suspension of foreign trips and reduction of benefits for government officials, are anticipated to save approximately MK4.2 billion in the final quarter of the budget year. These savings will be redirected to productive sectors like the mega farms program, a key campaign promise of the Chakwera administration.
Furthermore, the Finance Minister revealed that the approval of the Extended Credit Facility (ECF) by the International Monetary Fund (IMF) for Malawi is expected to unlock over $240 million (almost MK404 billion). The ECF, valued at around $174 million, is poised to enhance the country’s Balance of Payments (BoP).
Chinthyola Banda’s budget statement to Parliament reflects optimism and hope, emphasizing various government initiatives to cushion the impact of the recent currency devaluation. Additionally, he anticipates increased economic inflows with the implementation of the new IMF program.
These resources mark a significant development for the Chakwera administration, representing the first disbursement since the 2013 cashgate scandal. Notably, Malawi is set to receive $80 million in direct budget support from the World Bank, recognized as the country’s largest multilateral creditor. Additionally, the African Development Bank (AfDB) is expected to provide $30 million, and the European Union (EU) is set to contribute 60 million euros to support the nation’s economic endeavors.
