Malawi Civil Servants' Pay Rises, Minimum Wage Up - Tax Imports of Veggies, Sugar and Cement

9 September 2019

Pegged at K1.7 trillion, Minister of Finance, Economic Planning and Development Joseph Mwanamvekha on Monday September 9 2019 presented the first budget of the second-term of President Peter Mutharika administration up from K1.4 trillion from last year, seeking to sustain economic stability while bolstering growth rate.

alights from his vehicle to deliver the budget statement.-Photo by Lisa Kadango, Mana

Mwanamveka announced salary increases for junior civil servants by some 10 to15 % and raised minimum wage from K962/day (about K25,000/month) to K1, 346/per (about K35,000/month).

The country;s purse keeper said the wage bill is projected to be at K443.4billion, which is 7.1 percent of gross domestic programme and representing a 12.6 percent increase from last fiscal year's approved figure K393.6 billion.

"Lower grades in the civil service are expected to get relatively high salary increments than the high ranking grades," said Mwanamveka.

On income tax, govt has increased PAYE tax-free bracket from K35 000 to K45000 "to protect the low paid workers." He said this takes into account the cost of living.

Mwanamvekha also said government will continue with the Youth Internship Programme designed to recruit youths aged between 18 and 30, to be placed in various ministries, departments and local councils.

He committed K4.5 billion for the Youth Internship Programme targeting at 2 000 young people to be recruited this year.

Mwanamvekha also said government has introduced tax to all imported vegetables, fruits, cement and sugar, to encourage and promote local products. He said a full list of those imports to face tax will be gazetted.

The Finance minister said the importation tax on motorcycles dubbed 'Zobanduka' has been reduced "to ease transportation in rural areas."

Government has also introduced a Carbon tax on vehicles to reduce greenhouse gas emissions.

As Malawi's economy is largely reliant on agriculture with sales of tobacco, tea and sugarcane; in terms of allocation, Mwanamvekha said K 167 billion has been given to the Agriculture sector up from K150 billion in the 2018/2019 financial year.

The Farm Input Subsidy Programme (Fisp) in the 2019/20 growing season--a crucial food security programme for rural farmers--has been allocated K35.5 billion, which will reach out to 900 000 beneficiaries for both fertiliser and seeds from the 2018/19 revised figure of a cut from K41.5 billion last year which targeted one million beneficiaries.

The Decent and Affordable Rural Housing Project--the President's signature project--and another social spending initiative, has been allocated K10 billion, which is the same amount from the 2018/19 fiscal year with some 8 000 houses expected to be constructed and rehabilitated.

He said out of K10.0 billion, K600 million has been earmarked for the construction of houses for person with albinism.

Mwanamvekha, appointed in May by President Peter Mutharika after he narrowly retained power, said the government was battling to curb the budget deficit and a rising government debt stock, which he said stood at 62% of GDP in December 2018.

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