ILO paints gloomy outlook on Malawi’s real incomes

The International Labour Organisation (ILO) says in the absence of adequate policy responses, real incomes for workers and their families will continue to be eroded.

ILO country office director for Zambia, Malawi and Mozambique, Wellington Chibebe, said this in a statement accompanying the ILO August 2023 Newslater.

He said this is expected to increase inequality, reduce people’s purchasing power, thereby reducing demand and putting businesses under strain.

Said Chibebe: “Significantly higher prices and an expected sharp downward trend in the economic recovery are fuelling a cost of living crisis and exacerbating existing employment challenges.

“Indeed, this cost of living crisis comes on top of significant losses in the total wage bill for workers and their families.”

Chibebe observed that after two years of pandemic, increasing interest rates and depreciating currencies, many countries, and particularly the lower-income ones, have limited fiscal space left to cushion the impact of these blows on their people, fuelling further social unrest.

Meanwhile, published Centre for Social Concern (CfCS) data shows that the average cost of living in urban areas for a family of six went up by 25.64 percent from K307 368 in September 2022 to K386 192 in August 2023.

This is despite the minimum wage of K50 000, with the low wage earners having to struggle to afford basic commodities amidst mounting pressure on prices, as evidenced by the sustained rise in inflation rate, the rate of increase in prices of goods and services over a given period, over the past 12 months, largely due to a rise.

CfSC project officer Kondwani Hara said in an interview said that high inflation rate, currently at 27.8 percent as of September 2023, coupled with low industrial production will result in the continuous rise of the cost of living.

He challenged government to act with speed to implement short-term measures aimed at safeguarding Malawians from such economic uncertainties.

Said Hara: “The government should increase agricultural productivity.

“Malawi relies heavily on agriculture. So, improving agricultural productivity can help lower food prices.”

Minister of Information and Digitisation Moses Kunkuyu, who is also the official government spokesperson, said government is working on improving the food situation and increasing exports through the rollout of mega farms.