Thursday, July 18, 2024

Pres. Chakwera Implements Stringent Austerity Measures for Malawi’s Economic Recovery


Malawi President Lazarus Chakwera yesterday proved once more why Malawians made the right choice in June 2023 when they ushered him  into power by making tough decision that will help fix the problems associated with the 44% devaluation.

“I am here to serve Malawians, and to do so, I am prepared to do things that are painful as long as they are the right things. The most painful thing by far has been the recent devaluation of our currency to correct the false value of the kwacha based on nothing and rebuild true value in the kwacha based on production of exports. I know that this decision has caused a lot of pain, and I know that all of us now have to make big adjustments in spending so that we can prioritize those areas that are most productive and stay the course until our economy becomes productive and profitable again,” said President Chakwera in a late night address to the nation monitored which Shire Times monitored.

The President then mustered the courage to deliver the painful but necessary economic measures for the benefit of Malawians in the long run.

“In making those painful adjustments, I myself have to lead by example. This is why effective immediately, all my international trips between now and the end of the fiscal year, beginning with my trip to COP28 at the end of this month, are cancelled. By extension, I am putting a freeze on all public-funded international trips for all public officers at all levels, including those in parastatals, until the end of the financial year in March. In fact, all Cabinet members currently abroad on public-funded trips must return to Malawi with immediate effect. Any travel deemed absolutely necessary by anyone during that period must be submitted to my office for my personal authorization.

“Secondly, I order that all fuel entitlements for Cabinet Ministers, Principle Secretaries, Directors and all Members of Senior Management of Public Institutions should be cut in half with immediate effect. Thirdly, until further notice, I order the Secretary to the President and Cabinet to circulate to all public institutions a criteria for local trainings and local travel that will be acceptable, as well as a cap on how much of their budgets can be spent on allowances for such trainings and trips. By doing this, I am effectively ending the practice of draining public coffers to spend on allowances for useless activities.”

“Fourthly, I have directed the Minister of Finance and Economic Affairs to include provisions in the upcoming midyear budget review for cushioning Small to Medium Enterprises so that we can protect the jobs that they create. Fifthly, I have ordered the Minister of Finance to also include in that mid-year budget review provisions for a reasonable wage increase for civil servants. In the meantime, I have also directed him to review the Pay As You Earn income tax and incorporate a reduced percentage in the new budget he presents to Parliament in a few months so that workers whose incomes have lost value in the devaluation are helped with a lower tax burden.



Editor In-Chief
the authorEditor In-Chief