Malawians should brace for ‘level one’ austerity measures-Minister Gwengwe tells youth conference
Minister of Finance and Economic Affairs, Sosten Gwengwe, has said the government may consider implementing what he describes as “level one” austerity measures in a desperate attempt to save money for provision of essential services.
Gwengwe disclosed the government may be forced to take this painful route due to the MK6.8 trillion public debt which, he said, is depriving the country resources to implement development plans.
The minister spoke Wednesday in Lilongwe during the opening of a national youth conference, dampening the mood of the participants, who are demanding solutions to the worsening economic situation in Malawi.
The two-day conference has been organized by Youth Decide Campaign—a consortium of youth led organizations which advanced a national youth manifesto ahead of 2019 and 2020 presidential elections.
Nearly 200 young people are attending the conference to interrogate the state of governance and youth development in Malawi in view of high cost of living, economic inequalities, worsening poverty and youth unemployment, among many other concerns.
Gwengwe said the “level one” austerity measures, which are still under discussion, would involve “things that are very disruptive and robust”.
“For instance, we would consider banning all travel, managing numbers in embassies and enforcing well coordinated recruitments because the public wage bill continues to swell. If all these are looked at and approved, government should be able to take that drastic route. So, do not moan when that happens. It is for the greater common good,” said Gwengwe.
The minister further said the government, which is already enforcing some austerity measures introduced some months ago, is working with the International Monitory Fund in seeking best ways of bringing Malawi out of the current debt and sorry economic situation.
“If there is any breakthrough, the nation will be communicated. If it is taking longer, because our situation has reached breaking point, some drastic plans will come in just to salvage the situation, although that is not a priority solution for the government,” he said.
Opposition Democratic Progressive Party Legislator Ralph Joama, who once served as Minister of Economic Planning and Development and Deputy Minister of Finance, backed Gwengwe, saying it is high time Malawi really started living within her means.
However, Joama, who was among a high-level panel of discussants on Wednesday, called upon the government to apply the “level one” austerity measures equally and cautiously, if approved.
“For instance, if government bans local travel completely and allow foreign travel to be done three times in a year without any limitations regarding the number of days travellers will spend out, that is hypocritical and selective.
Remember, senior public officers are the ones who mostly travel out of the country, taking with them huge amounts of foreign currency which benefits other countries. On the other hand, local travel promotes spending within, which boosts local businesses,” Joama said.
The participants also queried the government on the implementation of the youth manifesto, among many other campaign commitments.
In his response, Minister of Youth Development and Sports, Richard Chimwendo Banda, who was the guest of honour, said the participants raised real and pertinent issues, which the government “has already began addressing”.
“For instance, government has increased the number of people benefiting from students loans. Upkeep allowance for students has also been increased. Hostels to address students accommodation are also being constructed,” said Chimwendo Banda.
He added the National Economic Empowerment Fund has so far reached out to 22,000 young people with loans, who are now doing entrepreneurship and become self reliant.
Youth Decide Campaign Team Leader, Charles Kajoloweka, commended ministers Gwengwe and Chimwendo Banda and other key duty bearers for availing themselves at the conference.
“We are having an honest, constructive and objective engagement. We are thankful of their willingness to listen to alternative voices,” Kajoloweka said.
Other stakeholders invited to the conference include: development partners, academia, private sector, regional and international bodies that “are taking stock of the ground breaking gains, opportunities and challenges faced by young people in Malawi”.
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