By Benadetta Chiwanda Mia:
Labour experts have indicated that Malawi’s labour sector endured significant setbacks in 2024 as high inflation, forex shortages and persistent fuel scarcity triggered widespread job losses.
In an interview on Tuesday, Employers Consultative Association of Malawi (Ecam) Executive Director George Khakhi said inflation hovering above 30 percent for most of the year severely eroded consumer purchasing power, forcing companies to implement layoffs and redundancies.
He picked on government’s inaction on operationalizing the Workers Compensation Fund, saying companies continue bearing heavy costs for work-related injuries and accidents.
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“Foreign exchange problems affected importation of raw materials and finished goods, reducing industrial productivity and leading to job losses. The persistent fuel shortages also significantly impacted business performance.
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“Government has not been forthcoming on operationalizing the Workers Compensation Fund leaving industry to pay out huge amounts of money for workplace incidents that should be covered by the fund,” Khakhi said.
Furthermore, Khakhi predicted continued challenges in 2025, particularly with inflation, as the country enters an election period that will precede a lean season.
“Without significant forex injection, fuel shortages will persist, further impacting productivity and employment. Government must fast-track labour law reviews to create a more employer-friendly environment,” he said.
Malawi Congress of Trade Union (MCTU) General Secretary Madalitso Njolomole said the workforce continues to reel from the effects of the 2023 currency devaluation, with subsequent fuel crises worsening worker welfare.
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Njolomole also called for replacement of the current K90, 000 minimum wage with a comprehensive living wage system, saying this would better protect workers’ purchasing power.
“While we commend employers who managed to raise salaries, these increments were immediately eroded by economic factors. To workers, the salary adjustments made little difference.
“Our appeal to government is to implement economic strategies that boost productivity. This will benefit employers, workers and ultimately all Malawians,” Njolomole said.
Institute of People Management Malawi President Frank Sabola emphasized the need for major investments in education and skills training to develop a more resilient workforce.
“Strengthening labour laws will protect workers’ rights, promote fair practices, and enhance industrial productivity. We need urgent action on this front,” Sabola said.
Meanwhile, economist Marvin Banda warned that mounting job losses in the formal sector are significantly reducing government tax revenues, which heavily depend on Pay As You Earn (PAYE).
He noted that while the informal sector dominates Malawi’s labour market, efforts to formalize unofficial markets often face resistance due to tax implications.
“PAYE contributes between 92 and 94 percent of total government revenues. When formal employment suffers, there’s an obvious decrease in resources available for crucial sectors, affecting people’s general welfare,” Banda said.
Labour export was one of the initiatives the government regarded highly to contribute to foreign exchange generation in the year.
In February the government, through the Minister of Finance Simplex Chithyola Banda, reported that it had generated about $475,000 from such initiatives especially from labour exports into Israel as at December 2023.
However, there was little to show from the same with Chithyola reporting to parliament during the recent mid-year budget review that following the signing of the Memorandum of Understanding (MoU) in April, 2024, the State of Israel issued the first job order in June 2024 requesting the Government of Malawi to recruit 500 out of the 3,000 agricultural workers stipulated in the MoU.
