Lilongwe – Malawi’s President, Lazarus Chakwera, has taken immediate action to save money by suspending all international travel for himself and his government.
The decision comes as Malawi’s currency experiences a significant devaluation and the country secures a loan from the International Monetary Fund (IMF) to revive its struggling economy.
President Chakwera has also instructed all ministers currently abroad to return home.
To further reduce expenses, fuel allowances for senior government officials have been reduced by 50%. Malawi’s economy has been facing challenging times, marked by a severe shortage of petrol and diesel, as well as high inflation.
In a televised speech, Mr. Chakwera stated that the measures would remain in effect until the end of the financial year in March 2024.
Similar austerity measures were announced during the Covid-19 pandemic, but they had limited impact as they were not strictly enforced.
To alleviate the cost-of-living crisis, the president has requested the finance minister to allocate funds for a reasonable wage increase for all civil servants in the next budget review.
Additionally, he has instructed a reduction in income tax for individuals in the upcoming budget to assist workers whose incomes have decreased in value.
The IMF has recently approved a credit facility worth $174m (£140m) for Malawi. This comes shortly after the country’s central bank announced a 44% devaluation of the kwacha.
Analysts believe that the devaluation may have been a requirement for obtaining the IMF credit facility.
However, there are concerns that this devaluation will lead to higher prices and exacerbate the financial difficulties faced by the people of Malawi, as was the case ten years ago.
Officials have attributed the economic downturn to external factors, including a destructive cyclone earlier this year and the conflict in Ukraine.
