Malawi to spend K1.7 trillion in 2019/20 FY, civil servants get 10 % pay hike

Written by  MBC Online


A total of K1.7 trillion will be spent by Malawi in the 2019/20 financial year which has been developed under the theme “Inclusive Growth and Economic Empowerment: The Future We Want”.

FM Mwanamvekha arrives at Parliament to deliver his maiden budget speech. FM Mwanamvekha arrives at Parliament to deliver his maiden budget speech.

The budget was presented by Finance Minister Joseph Mwanamvekha on Monday in parliament, his first since being hired by President Professor Arthur Peter Mutharika, taking over from veteran Goodall Gondwe.


Mwanamvekha said the Financial Year 2019/20 budget seeks to deliver inclusive growth, infrastructure development and economic empowerment for the vast majority of our people, including the Youth, Women and the Physically Challenged.

"It further aims to ride on the macroeconomic stability achieved during the past two fiscal years and build a resilient economy capable of withstanding unforeseen shocks," he added.

Here are some highlights of the budget:

Civil servants pay rise

. Wages and salaries increase for civil servants of between 10 to 15 percentage depending on grade for civil servants. This will increase the wage bill to K443.4 billion.

Tax free bracket to K45,000

.Government has increased the Pay As You Earn (PAYE) tax free bracket to MK45,000 from MK35,000 per month in order to take into account the cost of living and increase disposable personal income.

.Minimum wage at K35,000 per month

In addition, Ministry of Labour in consultation with relevant stakeholders such as Employers and Employees associations has increased the Minimum Wage from the current K962 per day, translating to K25,012 per month to K1,346.15 per day which translates to K35,000 per month. This is to partly protect the lowly paid workers and improve their welfare. Government will be reviewing the Minimum
Wage from time to time to take into account developments in the purchasing power of the Kwacha.

.Removal of VAT on solar materials

.In order to promote usage of clean energy and compliment hydropower in the country, Government has removed VAT on solar panels, solar batteries, solar accumulators, solar inverters, solar chargers, solar lumps, solar bulbs and energy efficient bulbs, liquefied petroleum gas and gas cylinders, and wood cook stoves. This is expected to empower Malawians to purchase these clean energy products at affordable prices.

.K1.6 billion for Nyasa Bullets and Wanderers stadiums.

. K200 million for state of the art indoor netball complex.

 Major assumptions

.Major assumptions anchoring this budget. include:

a. An estimated growth of 5.0 percent in 2019 and 7.0 percent in

b. Average inflation rate of 8.0 percent during the fiscal year;

c. A stable exchange rate of about K750/US dollar;

d. A Policy rate of 13.5 percent;

e. Upward review of user fees and charges.

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