Malawi Congress of Trade Unions (MCTU) has proposed a 44 percent minimum revision of salaries for workers to cushion them against effects of the devaluation of the kwacha.
MCTU has also asked government to increase, with 44 percent, the national minimum wage of K100 000, which the union recently proposed.
In a statement issued yesterday, the union has also asked government to reduce taxes on basic goods and services, including imports in order to cushion workers against the tough times ahead.
“MCTU, therefore, calls upon government and employers to immediately act on this issue; otherwise, workers will not have any choice but to declare a dispute,” reads the statement jointly signed by MCTU president Charles Kumchenga and the organisation’s secretary general Madalitso Njolomole.
On Wednesday, the Reserve Bank of Malawi (RBM) devalued the kwacha by 44 percent, a development that saw the exchange rate being adjusted from K1 180.29 to K1700.00 against the United States dollar in authorised dealer banks.
The union said it was greatly concerned with the 44 percent devaluation which has already caused public panic as the cost of living has already started doubling.
Currently, the inflation rate stands at around 28.6 percent, which is already high for an average Malawian worker to afford basic needs.
“MCTU is also greatly concerned that in the absence of immediate government intervention, the devaluation might also lead to retrenchments and eventually many companies will close down hence further destabilising the economy,” reads the statement.
The union further said it was unfortunate that majority of businesses in the country depend on importing materials for production; hence the 44 percent devaluation has implications that go beyond the cost of living.
In May this year, MCTU held a Tripartite Labour Advisory Council Meeting in Lilongwe where, among other issues, recommended to government to revise the minimum wage from the current K50 000 to K100 000, representing a 100 percent increase to cushion workers against the prevailing economic hardship.
But the union has expressed concern that since then government has not shown any commitment towards the implementation of the recommendation.
“This is an insult to workers in Malawi who work hard for their families and our nation Malawi,” reads the statement.
In an interview, Secretary for Labour Wezi Kayira said Minister of Finance and Economic Affairs Simplex Chithyola-Banda will on Monday outline measures that have been put in place to cushion the citizenry against effects of the devaluation.
“So, let us wait and hear what the minister will say. Secondly, we have agreed with MCTU to meet on the same day and agree on the way forward,” said Kayira.
However, Employers’ Consultative Association of Malawi (Ecam) executive director George Khaki, in his reaction to the development, said generally it would not be sustainable for businesses to raise wages at the same rate of inflation, especially when inflation is rising rapidly.
“One of the factors we consider in revising wages is the cost of living. Devaluation doesn’t reflect the cost of living though it contributes to the same. Therefore, using devaluation alone for this purpose may not be the right approach,” said Khaki.