Malawi’s President Lazarus Chakwera has suspended all international travel for himself and his government in a bid to save money, with immediate effect.
The measure follows a significant devaluation of the Malawian kwacha and the country’s securing of a loan from the International Monetary Fund (IMF) to bolster its struggling economy, BBC reported Thursday.
President Chakwera has also ordered all ministers currently abroad to return home promptly. Additionally, fuel allowances for senior government officials have been slashed by 50% as part of the austerity measures.
The policy runs in contrast with what the Nigerian government does amidst severe economic hardship and the worst cost of living crisis in decades.
President Bola Tinubu and has cabinet have continued foreign travels despite claiming the government met an “empty treasure.” Last week, the president approved a budget to buy a fleet of new SUVs for his office and the first lady’s office. The first lady’s office is not recognised by law.
Tinubu also approved a plan to buy a presidential yacht while millions of Nigeria struggle for high inflation that continues to push many into poverty. He has repeatedly urged citizens to bear the economic pains.
Malawi leads
Malawi’s economy has also been experiencing turbulent times, characterized by a severe shortage of petrol and diesel, along with high inflation. In a televised address, President Chakwera announced that the austerity measures would remain in place until the end of the financial year in March 2024.
Similar austerity measures were implemented during the COVID-19 pandemic, but their impact was limited due to lax enforcement. To alleviate the cost-of-living crisis, President Chakwera has instructed the finance minister to incorporate a reasonable wage increase for all civil servants into the upcoming budget review.
Furthermore, he has ordered a reduction in income tax for individuals in the forthcoming budget, aiming to provide relief to workers whose incomes have been eroded by inflation.
The IMF has approved a four-year credit facility worth $174 million, just days after Malawi’s central bank devalued the kwacha by 44%. Analysts suggest that the devaluation may have been a precondition for securing the IMF credit facility.
However, some express concerns that the currency devaluation could lead to price hikes and potentially worsen Malawians’ financial woes, as occurred a decade ago. Officials attribute the economic downturn to external factors, including a devastating cyclone earlier this year and the war in Ukraine.
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