Malawi bans foreign travel for government officials after securing IMF deal
Analysts suggest the devaluation may have been a condition for securing the IMF credit facility.
Malawi’s President Lazarus Chakwera has suspended with immediate effect all international travel for himself and his government in a bid to save money.
The measure follows a huge devaluation of the currency as Malawi secures a loan from the International Monetary Fund (IMF) to boost its ailing economy.
Malawi’s economy has been undergoing turbulent times, characterised by an acute shortage of petrol and diesel, as well as high inflation.
In a televised address, Mr Chakwera said the measures would remain in place until the end of the financial year in March 2024.
Some similar austerity measures were announced during the Covid-19 pandemic but had limited impact as they were not strictly enforced.
As part of moves to ease the cost-of-living crisis, the president has asked the finance minister to make provisions for a reasonable wage increase for all civil servants in the next budget review.
He has also ordered a lowering of income tax on individuals in the upcoming budget, to help workers whose incomes have lost value.
The IMF has approved a four-year credit facility worth US$174 million, just days after Malawi’s central bank announced the devaluation of the kwacha by 44%.
Analysts suggest the devaluation may have been a condition for securing the IMF credit facility.
Some fear the currency devaluation will only raise prices and potentially worsen Malawians financial woes, as happened a decade ago.
Officials have blamed the economic downturn on external factors, such as a devastating cyclone earlier this year and the war in Ukraine.
Source: BBC
