In an effort to address the economic challenges faced by Malawi, President Lazarus Chakwera has taken decisive steps to cut costs.
Effective immediately, he has suspended all international travel for himself and his government, citing the need to save money following a significant devaluation of the currency.
This move comes as Malawi secures a loan from the International Monetary Fund (IMF) to bolster its struggling economy.
President Chakwera has not only halted foreign travel but has also instructed ministers currently abroad to return home.
Additionally, fuel allowances for senior government officials have been reduced by 50%.
The economic difficulties in Malawi are evident in the acute shortage of petrol and diesel, coupled with high inflation.
During a televised address, President Chakwera emphasized that these measures will remain in place until the end of the financial year in March 2024
Similar austerity measures were previously introduced during the Covid-19 pandemic, but their impact was limited due to lax enforcement.
To alleviate the cost-of-living crisis, the president has directed the finance minister to allocate funds for a reasonable wage increase for all civil servants in the next budget review.
Furthermore, there are plans to lower income tax on individuals in the upcoming budget to support workers whose incomes have diminished in value.
The recent devaluation of the currency by 44%, announced shortly after Malawi secured a $174 million (£140 million) credit facility from the IMF, has raised concerns among analysts. Some speculate that the devaluation was a prerequisite for obtaining the IMF credit.
Critics fear that the currency devaluation may lead to higher prices, exacerbating the financial difficulties faced by Malawians, reminiscent of challenges experienced a decade ago.
Officials attribute the economic downturn to external factors such as a devastating cyclone earlier in the year and the ongoing war in Ukraine.
The situation highlights the urgent need for measures to stabilize Malawi’s economy and mitigate the impact on its citizens.
