Thursday, July 18, 2024
EconomicsNews

EU BACKS MALAWI’S DEVALUATION WITH €60 MILLION AID TO CUSHION IMPLEMENTATION

LILONGWE – The European Union (EU), one of Malawi’s traditional partners in development and aid, has committed €60 million aid to help the Malawi Government cushion its citizens against the impact of the 44% devaluation alignment implemented last week.

The EU Ambassador to Malawi, Rune Skinnebach has expressed that Malawi has made a right decision to re-align the Kwacha and balance it to its reality, committing that the EU will complement the Government’s action plan designed to cushion the population and stimulate the economy’s growth.

The Government has, yesterday (Monday, 13th November 2023) unveiled a cocktail of its action plan designed to cushion the vulnerable citizens and forge a new path for protecting the Kwacha against illicit trade and practices that slide its value into the sinkhole.

Unveiling the Government’s action plan through a press briefing conducted at Umodzi Park in Malawi’s capital – Lilongwe, the newly-crowned Finance Minister, Simplex Chithyola Banda, highlighted that negotiations with development partners such as the International Monetary Fund (IMF), World Bank, the European Union and other agencies had already been done.

Within the cushioning strategy, the Government has increased cash transfer compartments, extending beyond the prevailing Social Cash Transfer which has also increased the disbursement amount with 57%, surpassing the devaluation’s 44% as well as increasing beneficiaries from 2 million to 3 million people representing a shift from 10% to 15% of the population respectively.

New cash transfer horizons for targeted vulnerable population include Cyclone Recovery Intervention (CRI) in which 184,920 households have been targeted to be receiving MK150,000 each for an estimated period of three months; Price Shock Urban Emergency Cash Transfer Program (PSUECTP) which will target 105,000 households in Malawi’s four city councils with each beneficiary receiving MK150, 000 covering a period of 3 months; wage rate increase for Climate Smart Public Works Programme (CSPWP) workforce as well as salary increase for civil servants among others.

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