Malawi outlines pro-poor and pro-growth measures

Written by  McDonald Chiwayula

Malawians can afford a smile as Government has outlined a number of measures described as pro-poor and pro-growth by Minister of Finance and Economic Planning, Joseph Mwanamvekha.

A total of 900,000 of these farmers to benefit under FISP A total of 900,000 of these farmers to benefit under FISP

Presenting the budget on Monday in Parliament, Mwanamvekha said Government has taken much consideration for the citizenry by allocating resources and introducing new measures that will cushion the populace from hardships.


The working class has some relief as the tax free bracket has been increased from K35, 000 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,” said the Minister in a statement. This means those earning K45,000 or less per month will not be deducted PAYE tax.


Mwanamvekha further disclosed that the Ministry of Labour has increased the minimum wage from the current K25,012 to K35,000, partly to protect the lowly paid workers and improve their welfare.


In a bid to bolster economic productivity of youths in the country and enhance the transport sector, Government has also removed customs duty on motor cycles of cylinder capacity of not more than 100cc commonly called Zobanduka or Kabaza.


To encourage growth of the home industry,  the Minister disclosed that Government has imposed surcharge on some goods that are locally produced such as vegetables, fruits, sugar, cooking oil and cement just to mention a few. In addition the measure will check a drain on forex and foster industrialization.


In the same vein of revitalization of the home industry, Government plans to bolster the energy sector with an injection of K40 billion allocated to EGENCO for power generation saying this will enhance productivity. Those living in deep rural areas who are not connected to ESCOM grid will also have better alternatives.


“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,” said Mwanamvekha during presentation of the budget.


In the new budget, peasant farmers will get a coupon valued at K15, 000 for acquisition of farm inputs under the Farm Input Subsidy Program (FISP). A total of 900,000 farmers are expected to benefit under the arrangement.


To ensure project activities of the Decent And Affordable Housing Subsidy Programme (DHASP) are sustained, Government has allocated K10 billion in the new budget for the programme. Government has also removed custom duty on flat iron sheets. This is main material for production of iron sheets and this entails that Malawians will be getting cheaper roofing materials.


The total budget has been pegged at K1.7 trillion representing 27.6 percent of the country’s gross domestic product (GDP).

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