Friday, July 19, 2024

Finance Minister Unveils President Chakwera’s Plan to Safeguard Vulnerable Malawians Amid 44% Currency Devaluation

Simplex Chithyola, Malawi

In response to the Reserve Bank of Malawi’s recent 44% devaluation of the local currency aimed at addressing supply-demand imbalances in the forex market, the Minister of Finance Simplex Chithyola Banda asserted on Monday that the government would not remain passive. Instead, they pledged to take proactive measures to shield vulnerable populations from the adverse effects of this currency devaluation.

Speaking on Monday, Chithyola-Banda told the nation that President Lazarus McCarthy Chakwera instructed him and his team “to put into effect his (Chakwera’s) Action Plan for the recovery, development, and protection of the economy in the aftermath of the currency realignment, as well as measures for cushioning the most vulnerable Malawians from the economic shock this devaluation has caused.”

According to the Minister, the Chakwera-led administration has already negotiated with development partners such as the World Bank and Multi Donor Trust Fund for adjustments to Social Cash Transfer Programs in order to cushion the poor against the effects of the alignment. To this effect, Chithola said government has undertaken to “continue with the implementation of Cyclone Recovery intervention in Blantyre Rural, Thyolo, Phalombe.

Chiradzulu, Mulanje, Nsanje, Chikwawa, Balaka, and Zomba Rural targeting 184,920 households where beneficiary households receive MK150,000 to support with consumption needs and cushion the affected households against the effects of the alignment.”

Chithyola also said that government will “Re-introduce the Price Shock Urban Emergency Cash Transfer Program which will target 105,000 households in Zomba, Blantyre, Mzuzu and Lilongwe city councils. Beneficiaries will receive a once off transfer of MK150, 000 covering a period of 3 months.”

The Minister also said that government will increase Social Cash Transfer Benefit Levels by 57 percent which is more than the exchange rate alignment amount. This, he said, will be done with immediate effect. There will also be  an increased Social Cash Transfer Beneficiary Coverage from the current 10 percent to 15 percent of the population, that is  from 2 million to 3 million people.

Chithyola also said that Pursuant to section 54 of the Employment Act (Cap. 55:01 of the Laws of Malawi), Government has embarked on consultations with relevant stakeholders to revise the minimum wage promising that government will also embark on a similar exercise with respect to public servants.

Furthermore, the Minister said government with support from development partners has commenced the recruitment of 2741 health workers, such as nurses, doctors, etc. The recruitment process is expected to be completed by 31st July 2024.

The Minister also revealed that government is discussing with foreign governments on skilled labour export where over 5000 skilled professionals are expected to be recruited under this program. According to Chithyola, it is expected that the country  will significantly benefit in terms of foreign currency remittances/foreign currency diversification under this initiative.

The Minister was not yet done. He also announced that government will increase the Wage Rate for the Climate Smart Public Works Programme (CSPWP) and further to the same that the Public Works Wage Rate will be adjusted upward. He revealed that currently, beneficiaries receive MK1,200 for 4 hours working day for 12 days a month.

Furthermore, CSPWP Beneficiary Work Period will be extended by having no breaks between cycles for six months in a year. The Minister, among many more measures they have put in place said government will immediately engage all Civil Service Trade Unions to review salaries in the public sector and determine how Civil servants can be properly cushioned against the alignment







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