Seven months after President Peter Mutharika rejected a salary increment for himself, Vice-President and Cabinet ministers; government has raised the presidency’s perks by 61 percent.
Government has also made members of Parliament (MPs) happy with a similar increase in daily subsistence allowances (DSAs).
Civil servants too have not been left out of the per diem party that Capital Hill is dishing out even as public services suffocate under a funding squeeze that has left public hospitals, for example, with no choice but to cut poor patients out of certain services such as free meals or transferring them to referral hospitals in ambulances.
According to one of the 2015/16 budget documents under Vote 010—from where perks for the President, Vice-President, former presidents and their ex-deputies are drawn—government has allocated K54 million in this fiscal year against a revised estimate of K33.6 million in the 2014/15 budget.
That is an increase of K20.4 million in absolute terms.
However, when this year’s allocation is compared against the 2014/15 approved estimates of K43.4 million, the jump stands at K10.6 million or 24.4 percent, which might be the amount not appropriated due to Mutharika’s salary freeze last year.
In an interview on Thursday, Minister of Finance, Economic Planning and Development Goodall Gondwe
However, Gondwe was adamant that neither the President nor ministers have started receiving the new salaries.
Said Gondwe: “Yes, it [the increment] is in the budget, but the President is not receiving the new salary. We put it in because it is what he is entitled to. The same applies to the ministers. If the President or the ministers decide to start picking it, then they can”.
When pressed to explain why the adjustments were made given Mutharika’s public rejection of the new salary in December 2014 citing poor economic and public finance conditions, Gondwe said the matter was technical and would explain later if necessary.
“I have lined up several meetings. I’m busy at the moment. I can make an argument on the matter when the time is right because what you are asking is not facts, but you want an argument on the merits of the move. Just get the facts; the President and the ministers are not getting the new salary,” he said.
In December 2014, government effected a salary increment backdated to October 1 2014 for the President, Vice-President Saulos Chilima, members of the Cabinet and the leader of opposition.
Mutharika, however, rescinded the decision, insisting he would only accept a salary increase once the economy improved.
But the economy has not improved.
While Malawi’s headline inflation was pegged at 24.2 percent at the time of Mutharika’s decision and has since stood at 19.5 percent as at May 2015, it has in fact started rising again from 18.8 percent in April this year as food prices climb thanks to a 30 percent drop in crop output.
This is a signal that shortage of food—which controls 50 percent of the inflation when computing consumer price index (CPI)—could wipe out these inflation gains as the 2.8 million food insecure people scramble for the little that is there.
What’s more—interest rates have hovered around 40 percent for years, slackening business activities in the process and leading to economic slow-down.
In 2014 when Mutharika rejected the perks hike, the economy is estimated to have grown by six percent, while this year when the new increase has been effected, independent analysts expect economic output to range between 3.6 percent and 5.5 percent5.
Besides, Capital Hill—in the absence of direct budgetary support and a shrinking revenue base on the back of a depressed economy—is failing to solve its fiscal equation, leading to government struggles to pay civil servants as well as fund its ministries, departments and agencies. At the time of his ‘no’ decision, Mutharika was earning K1.5 million a month while his deputy’s salary was at K1 million.
If the 60 percent increment is implemented, the President will be tucking away a tax-free K2.4 million while his vice will net K1.6 million monthly, translating into an annual pay of K28.8 million and K19.2 million respectively.
Asked to confirm whether the President would start receiving the new salary, State House press secretary Gerald Viola referred Weekend Nation to State House Chief of Staff Peter Mukhitho, who declined to comment on the matter.
Viola again refused to comment when Weekend Nation went back to him, insisting Chief Secretary George Mkondiwa was the right official to provide the information.
“Find out from the Chief Secretary who has ready answers. I am a State House employee and I cannot discuss the salary of my employer in the media. As a matter of fact, I am actually not supposed to know the salary of my employer. The Chief Secretary is readily available to discuss such matters with you,” said Viola.
In a telephone interview on Friday, Mkondiwa told Weekend Nation that the position of the President has not changed.
“The President, the Vice-President and the ministers are not going to get an increase. As for the figures in the budget documents, ask Treasury,” said Mkondiwa.
Besides the presidency’s salaries, Weekend Nation can also reveal that there have been increments in DSAs for members of Parliament (MPs) and civil servants.
Sources have revealed that DSAs for MPs have been adjusted from K40 000 to K65 000, representing a 62.5 percent hike.
But acting Clerk of Parliament Roosevelt Gondwe said this week implementation of the new allowances will depend on government having the money.
Parliamentary sources explained that the DSA raise was responding to the prevailing accommodation rates in Lilongwe, which have gone up, making it hard for MPs to find appropriate accommodation each time they attend plenary and committee meetings in Lilongwe.
There are 19 parliamentary committees, each with an average membership of 20, which meet twice per quarter and each meeting lasts six days.
At the rate of K65 000, each meeting would cost about K7.8 million while a plenary meeting, which lasts 28 days on average, would translate to about K309 million per sitting.
Meanwhile, government has, with effect from July 1 2015, also adjusted DSAs for civil servants across the board, following on the increase in salaries for workers from grade l downwards.
According to a memo Weekend Nation has seen, DSAs for grade A have been revised from K25 000 per day to K40 000; B and C from K22 000 to K35 000; D from K21 000 to K30 000; E and F from K17 000 to K25 000; G, H and I from K15 000 to K20 000; J and K from K8 000 to K15 000; and L and below from K6 000 to K10 000.
According to the memo, government has revised the rates in response to the prevailing costs of accommodation and food across Malawi.
But the move to raise perks for the presidency as well as DSAs for MPs and civil servants has riled the Catholic Commission for Justice and Peace (CCJP) national coordinator Chris Chisoni, who has accused government of insensitivity to taxpayers’ plight.
Chisoni wondered how government would meet such demands given that the budget has a huge deficit.