New report faults austerity measures


A new report commissioned by Action Aid Malawi (AAM), in partnership with Feminist Macro-Economic Alliance, Civil Society Education Coalition (CSEC), and Malawi Health Equity Network (MEHN) has said austerity measures agreed between Malawi Government and cooperating partners to restrict the growth of the wage bill are hurting critical areas of the economy.

The report, The Public Versus Austerity: Why Public Sector Wage Bill Constraints Must End, has revealed that, as part of containing the growth of the wage bill, the government has adopted three strategies namely salary freezes, recruitment freezes and frozen or delayed promotions.

It says the Public Sector Wage Bill restraints were adopted by the government in 2005 under the Poverty Reduction and Growth Facility (PRGF) of the International Monetary Fund (IMF) and continued under the Extended Credit Facility (ECF).


It says the agreement between the IMF and the government has been to maintain a Public Sector Wage Bill (PSWB) that should be below 25 percent of the annual national budget and/or not more than eight percent of the GDP.

The report further notes that recruitment freezes have also deprived employment opportunities to prospective teachers and health workers, in particular women, who dominate the nursing and primary school teaching professions.

It says, in both the education and health sectors, serving front-line workers have attempted to force the government to hire individuals who had just graduated from medical and teaching colleges, by holding industrial actions which, in their own right, have had detrimental impacts on service delivery in the short term.


“However, the government responsiveness has been painfully slow and this has been attributed to wage bill considerations in line with its agreement with the IMF,” the report says.

AAM Acting Country Director Rodney Mwaisimba said the need to overhaul the framework for economic management in Malawi is urgent.

“In short, they have sought to reduce the role of the State in the social and economic lives of the Malawian society,” Mwaisimba said.

Speaker of Parliament Catherine Gotani Hara said it was sad to note how austerity cuts in Malawi have blocked the recruitment of public workers including nurses, teachers, agriculture extension workers, and other essential public sector workers.

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