Malawi’s President Lazarus Chakwera has taken swift action to address the country’s economic
challenges, suspending all international travel for himself and the government to save money.
This decision comes in the wake of a significant currency devaluation as Malawi secures a loan from the
International Monetary Fund (IMF) to revitalize its struggling economy. President Chakwera has also
directed ministers abroad to return home and cut fuel allowances for senior government officials by
50%. The Malawian economy has faced turbulent times, marked by a severe shortage of petrol and diesel,
coupled with high inflation. President Chakwera announced these measures in a televised address,
emphasizing their enforcement until the end of the financial year in March 2024.
In an effort to alleviate the cost-of-living crisis, President Chakwera has tasked the finance minister with
providing a reasonable wage increase for all civil servants in the next budget review. Additionally, he has
ordered a reduction in income tax on individuals in the upcoming budget to support workers grappling
with lost income value. The IMF recently approved a four-year credit facility of $174 million, simultaneous with Malawi’s central bank devaluing the kwacha by 44%, raising concerns about potential price hikes and worsening financial woes for the population.
Analysts speculate that the devaluation may have been a prerequisite for securing the IMF credit facility.
Despite external factors such as a devastating cyclone and the conflict in Ukraine being cited for the
economic downturn, officials are working to address the challenges and stabilize Malawi’s economy.