Malawi President cancels foreign trips as austerity measures take effect
Malawi President Dr Lazarus Chakwera has cancelled all his remaining external travel this fiscal year (ending 31 March 2024) as well as those of cabinet ministers and senior government officials as part of strict austerity measures.
Chakwera made the announcement on Wednesday at Kamuzu Palace in Lilongwe when he announced that Malawi has finally qualified for IMF’s extended credit facility (ECF), immediately unlocking US$700 million direct budgetary support which donors stopped providing to the country 10 years ago due to cashgate and mismanagement of the facility.
He has since ordered all cabinet ministers outside the country on government funded trips to return home immediately.
He also ordered that fuel allocation to cabinet ministers and senior government officials be cut by half with immediate effect.
President Lazarus Chakwera said the pain will continue for few months while the government is fixing the “dislocated bones” of the economy back into place.
He said he understands the pain that Malawians are feeling, but it is meant to put the economy back on track.
He said the approval of the extended credit facility (ECF) will unlock foreign direct investment to extend productivity.
Chakwera cited injection from World Bank among many investors and multilateral institutions that have already committed their support to the country.
He further said the ECF signals to foreign private investors that Malawi is on track in managing it’s economy.
Economics Association of Malawi president Betchani Tchereni has hailed the government for securing the ECF with the International Monetary Fund (IMF).
He has however urged government to be prudent with the way it uses the resources that come with the programme.
Tchereni, an economics lecturer at the Malawi University of Business and Applied Sciences, said the $174 million ECF package will provide some relief against the protracted balance of payment problems that have rocked the country in recent years.
Malawi’s import cover has consistently been below the recommended threshold, with gross official reserves–the amount of forex under the direct control of the central bank–falling as low as 0.7 months of import cover in some months.
Human Rights Defenders Coalition (HRDC) has commended President Lazarus Chakwera for announcing what they call “action oriented measures”.
In a statement HRDC says “this is the leadership Malawians have been looking for.”
“The proposed cushion measures are comprehensive and what is key, however, is the implementation of the proposed measures. We know sometimes that it is easier said than done,” says the statement.
But the Centre for Social Accountability and Transparency (Csat) has challenged President Lazarus Chakwera to lead by example in adhering to austerity measures he has just announced.
Csat executive director Willy Kambwandira argues that there have been times previously when such measures were not followed.
He said: “Implementation of the austerity measures should start with his office, otherwise we will not be surprised to learn government ministries, departments and agencies are not implementing them.
“We believe the President could do more on the austerity measures including cutting on his budget, fighting corruption, and promoting transparency and accountability.”
