Government Monday announced a cocktail of eight key measures to cushion Malawians from the 44 percent devaluation of the Kwacha announced on Wednesday last week.
Briefing reporters in Lilongwe, Finance Minister Simplex Chithyola Banda said government has already negotiated with development partners such as the World Bank and Multi-Donor Trust Fund for adjustments to social cash transfer programmes to cushion the poor against the effects of the devaluation.
Among other things, Chithyola Banda said government would immediately engage public trade unions to review salaries in the public sector and determine how civil servants can be properly cushioned against the alignment.
The minister said authorities would continue with the implementation of Tropical Cyclone Freddy recovery interventions in the Southern Region targeting 184,920 households, who will receive K150,000 each.
The money is supposed to support targeted people’s consumption needs and cushion the affected households against the effects of the devaluation.
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Chithyola Banda said government would also re-introduce the Price Shock Urban Emergency Cash Transfer Programme which will target 105,000 households in Zomba, Blantyre, Mzuzu and Lilongwe city councils.
He said beneficiaries would receive a once-off transfer of K150,000 covering three months.
“[The government has also] increased Social Cash Transfer Beneficiary Coverage from the current 10 percent to 15 percent of the population, from two million to three million people.
“Pursuant to Section 54 of the Employment Act…, the government has embarked on consultations with relevant stakeholders to revise the minimum wage. The government will also embark on a similar exercise with respect to public servants,” Chithyola Banda said.
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He added that with support from development partners, Malawi commenced the recruitment of 2,741 healthcare workers to be completed by July 31 2024.
Furthermore, Chithyola Banda said government is discussing the issue of skilled labour export with foreign governments.
“Over 5,000 skilled professionals are expected to be recruited under this programme.
“The country is also expected to significantly benefit, in terms of foreign currency remittances/ foreign currency diversification, under this initiative,” the minister said.
European Union (EU) Ambassador to Malawi Rune Skinnebach has since hailed Malawi for taking “corrective measures”.
According to Skinnebach, the devaluation may be painful for many Malawians and the government in the short to medium term.
“I think it’s the right decision. I think it’s a great decision. It’s a decision that we, at the EU, support. And we will do anything possible to support in its implementation,” the envoy said.
He said the EU stands to help cushion Malawians from the effects of the devaluation by front loading “probably around 60 million Euros”.
Skinnebach expressed hope that Malawi would be granted the Extended Credit Facility programme by the International Monetary Fund when the fund’s board meets in Washington DC Wednesday.
Meanwhile, Centre for Social Accountability and Transparency Executive Director Willy Kambwandira has said it was unfortunate that Chithyola Banda missed an opportunity to answer questions from Malawians through the media.
“He has failed to live up to the expectations of Malawians as regards to what measures government has put in place, both in the short and long term, to cushion Malawians from the impacts of devaluation.
“Again, his presentation lacked clarity on many aspects. It is unfortunate that he refused to take questions. That tells us that government has no sense of direction on how they intend to deal with the impacts of the devaluation,” Kambwandira said.
