President Lazarus Chakwera of Malawi has imposed a comprehensive set of austerity measures, including a suspension on all international travel for himself and government officials in a move to address Malawi’s economic challenges.
This decision comes on the heels of a significant devaluation of the Malawian kwacha and securing a vital loan from the International Monetary Fund.
According to BBC, the President’s directive mandates the immediate return of all ministers abroad, effective immediately.
Additionally, fuel allowances for senior government officials have been slashed by half, a measure aimed at reducing government expenditure.
Malawi’s economy has been grappling with severe difficulties, including acute petrol and diesel shortages, coupled with rampant inflation. In a televised address, President Chakwera emphasized that the austerity measures will remain in place until the end of the financial year in March 2024.
Similar austerity measures were introduced during the COVID-19 pandemic but produced limited results due to lax enforcement.
To alleviate the burden of the cost-of-living crisis, the President has instructed the Finance Minister to allocate funds for a reasonable wage increase for all civil servants in the upcoming budget review.
To further ease the financial strain on workers, the President has ordered a reduction in income tax rates for individuals in the forthcoming budget. This move aims to provide relief to those whose incomes have been eroded by rising inflation.
The IMF approved a four-year credit facility worth $174 million (£140 million) just days after Malawi’s central bank devalued the kwacha by a staggering 44%
