President Lazarus Chakwera has unveiled a tranche of austerity measures which include freezing all international travel and cutting by 50 percent top public officers’ fuel entitlements to counter the economic slump.
The President made the declarations in a national address last night, a week after the Reserve Bank of Malawi (RBM) effected a 44 percent kwacha devaluation that has sent shock waves to the economy with consumers bearing the brunt as prices of goods and services skyrocketed.
Chakwera, who has faced criticism over his frequent foreign travel, said he will lead by example by curtailing all his travel plans, including the one to the 28th United Nations Conference of Parties on climate change and environment (CoP28) in Dubai in the United Arab Emirates later this month.
He said: “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.”
The President also ordered all Cabinet members currently abroad on public-funded trips to return home with immediate effect, adding that “any travel deemed absolutely necessary by anyone during that period must be submitted to my office for my personal authorisation”.
On fuel, he said: “I order that all fuel entitlements for Cabinet ministers, principal secretaries, directors and all members of senior management of Public Institutions should be cut in half with immediate effect.”
Meanwhile, the President also said he has ordered the Minister of Finance and Economic Affairs Simplex Chithyola Banda to include provisions in the upcoming Mid-Term Budget Review for cushioning small and medium enterprises (SMEs) so that “we can protect the jobs that they create”.
Said Chakwera: “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 [Paye] income tax and incorporate a reduced percentage in the new budget he presents to Parliament in a few months.”
Reacting to the measures, economic commentator Christopher Mbukwa said the austerity measures have “somehow touched on areas that I personally have been very concerned with, such as lack of fiscal discipline”.
In a written response, the Mzuzu University lecturer observed, however, that there have been instances of missed opportunities by the President to lead by example.
“I feel some trips that he undertook to were needless. Putting an embargo on foreign trips on himself and others is a huge statement on fostering fiscal discipline,” said Mbukwa.
On his part, Leader of Opposition in Parliament Kondwani Nankhumwa described the austerity measures as laughable.
He said: “He says he has stopped his trips between now and March 30 next year. He knows that there is almost no international meeting between December and February.
“Why can’t he say he has cancelled all international trips between now and 2025? Surprisingly, he hasn’t said anything about his local trips.”
The measures come on the back of an International Monetary Fund executive board approval of the Extended Credit Facility for Malawi to help stabilise its economy.