Malawi President Lazarus Chakwera has suspended his foreign trips and those of government officials as part of austerity measures to cushion the impact of the recent 44 per cent devaluation of local currency on the country's economy.
In his televised address to the nation on Wednesday night, Chakwera ordered a cut by half on fuel allowances allocated to top government officials, including cabinet ministers.
The Reserve Bank of Malawi this month announced the devaluation of local currency to align it with the US dollar on the black market. The move resulted in instant price increases for almost all commodities, including fuel and electricity, which increased by over 40 per cent.
“I know that this decision has caused a lot of pain,” Chakwera said, “and I know that all of us now have to make big adjustments in spending so that we can prioritize those areas that are most productive.”
Chakwera said that he would be the first to make those adjustments, and that all of his international trips through the end of the fiscal year were canceled. Chakwera also said he was freezing all public-funded international trips for public officers at all levels, including those in parastatals, or state-owned enterprises, until the end of the financial year in March.
“In fact, all cabinet members currently abroad on public-funded trips must return to Malawi with immediate effect,” he said.
Analyst Victor Chipofya told local radio that Chakwera could have announced measures that would help generate more foreign exchange for the country rather than those that failed in the past.
“The country needs to build industries that would be able to export commodities to be able to have foreign currency,” he said. “Nothing like that came out from the president.”
Another political analyst, George Phiri, said Chakwera's address failed to outline how the government will address challenges facing people in rural areas, where over 80 per cent of Malawians live.
“The impact of devaluation has affected everyone across the board, whether he is the president or he is an ordinary Malawian in the rural and is not considered for the beneficiary of the [farm input] subsidy,” Phiri said. “What happened with those?”
However, the Malawi Human Rights Defenders Coalition said in a statement that if well implemented, the measures that Chakwera introduced would likely address the impact of devaluation on the country’s economy.