Minimum wage hiked to k90 000

Malawi Govern-ment has approved new minimum wage rates for general workers which show an 80 percent increase from K50 000 to K90 000 per month, The Nation has established.

In a communication we have seen, but is yet to be published in the Malawi Government Gazette, the approval means the general minimum wage has gone up from K1 923.08 per day or K50 000 monthly to K3 461.54 per day or K90 000 per month.

However, for domestic workers, the minimum wage is now pegged at K2 000 per day or K52 000 per month from K1 461.54 per day or K38 000 per month, an increase of 38 percent.

At this rate, the general minimum wage hike is K20 000 less than what Malawi Congress of Trade Unions (MCTU) proposed and K3 000 less than what Employers’ Consultative Association of Malawi (Ecam) suggested.

When contacted yesterday, Ministry of Labour Principal Secretary Wezi Kayira could not be drawn into confirming the rates, saying “these things are confidential and not yet gazetted”.

He said: “The short of it is that the ministry is processing the gazetting of the new rates of minimum wage and once this process is done, the public and all the stakeholders will be informed.

“We should wait for the government gazette to come out for everyone to see and know the new rates.”

Section 54 of the Employment Act mandates the Minister of Labour to fix the minimum wages of any group of wage earners after prior consultations with representatives of workers and employers concerned.

A source privy to the developments confided that the proposal to introduce the new sector covering wholesale and retail shop workers did not receive the support of both Ecam and MCTU.

In arriving at the 38 percent pay hike for domestic workers, the source said it was noted that most employers of domestic workers may not afford a wage increase of beyond 38 percent.

Ecam executive director George Khaki said he was not better placed to disclose the revised rates, saying it was the duty of the Ministry of Labour.

He, however, said since the minimum wage is set to rise by a huge percentage, the expectation of the employer is that this could lead to increased costs of production and further strain job creation efforts.

Said Khaki: “Already, employers are dealing with other structural issues like shortage of foreign exchange which we feel will not be resolved soon, El Nino and shortages of agricultural inputs like fertiliser.”

Both MCTU president Charles Kumchenga and his secretary general Madalisto Njolomole were yet to respond to our query as we went to press by 8pm.

But in May last year, MCTU held a Tripartite Labour Advisory Council Meeting in Lilongwe where, among other issues, it recommended to the government a revision in the minimum wage from the current K50 000 to K100 000, representing a 100 percent increase to cushion workers against the prevailing economic hardships.

However, before the minimum wage hike proposal was reviewed, the Reserve Bank of Malawi (RBM) effected a 44 percent kwacha devaluation last November, a development that saw the exchange rate adjusted from K1 180.29 to K1700 against the United States dollar in authorised dealer banks amid rising inflation.

Soon after the devaluation, MCTU proposed a 44 percent minimum revision of salaries for workers to cushion them against effects of the kwacha devaluation.

In a statement, the union also asked government to reduce taxes on basic goods and services, including imports in order to cushion workers against the tough times ahead.

But RBM Governor Wilson Banda cautioned against salary increment demands due to the devaluation, stating that pay hikes above 10 percent could worsen inflation, trigger job losses and pile up pressure on the national budget.

Meanwhile, government has since raised civil servants’ salaries by an average of 15 percent after workers protested an earlier offer of 10 percent hike.

 The increment is with effect from November 1 2023, but will start to reflect in January salaries with arrears.