Govt unveils cushioning measures after currency devaluation

Government has announced measures for cushioning the most vulnerable Malawians from the economic shock following devaluation of the Malawi Kwacha.

Announcing the measures in Lilongwe, Minister of Finance and Economic Affairs Simplex Chithyola Banda said the measures are aimed at cushioning the vulnerable sections of the population against the adverse and unintended effects of this re-alignment, while also ensuring that the past policies and acts of negligence that got Malawi into the current mess never happen again.

He said: “In fact, the pain we are all feeling from this currency realignment should teach us to denounce our habits of allowing Governments to effect bad economic policies that kill our productivity and promote endless consumption.

“Allowing Governments to deceive us into feeling like all is well when there is a cancer killing our economy, and demonizing any Government that comes to tell us the truth and make the painful corrections necessary for our economy to heal long term.”

The finance minister also disclosed that government will re-introduce the Price Shock Urban Emergency Cash Transfer Programme which will target 105 000 households in Zomba, Blantyre, Mzuzu and Lilongwe city councils where beneficiaries will receive once off transfer of MK150 000 covering a three-month period.

He added that government will continue with the implementation of Cyclone Recovery Intervention in Blantyre Rural, Thyolo, Phalombe, Chiradzulu, Mulanje, Nsanje, Chikwawa, Balaka, and Zomba Rural targeting 184,920 households where beneficiary households receive MK150 000 to support with consumption needs and cushion the affected households against the effects of the alignment.

Chithyola Banda also said authorities will intensify what he called crackdown on all illegal foreign exchange trade in markets across the country and in boarder.

“With immediate effect, the Fiscal Police, with support from the Financial Intelligence Agency (FIA) and National Intelligence Service including Malawi Defense Force (MDF), will intensify crackdown on all illegal foreign exchange trade in all markets across the country and in boarder areas.

“The public is, therefore, warned to resist and report all suspicious incidents of buying or selling of foreign exchange from unregistered vendors,” he said.

Meanwhile, the Reserve Bank of Malawi has, with immediate effect, restricted all Authorised Foreign Exchange Dealers to sell foreign exchange in cash over the counter in any foreign currency to the equivalent of US$2 000 per traveller.

According to the Central Bank, any amount beyond this limit must be placed on an electronic bank card in line with the existing Regulations.

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