LILONGWE (Mabvuto Banda, Reuters) – Malawi will cut the benefits enjoyed by cabinet ministers and top civil servants as the government works to rein in spending due to a foreign aid freeze and weak tax revenue, the finance minister said on Saturday.
International donors, led by Malawi’s former colonial ruler, Britain, halted direct aid to the southern African nation in 2013 over the so-called “cashgate” scandal in which senior government officials siphoned millions of dollars from state coffers.
“Cabinet has decided that the Treasury and the Office of the President and Cabinet should review the various perks, including travel, vehicle and fuel entitlements for minister and senior public servants that should be scaled down,” Finance Minister Goodall Gondwe told Reuters.
He spoke a day after outlining plans to trim the 2015/16 national budget to 906 billion kwacha ($1.23 billion) from 929 billion kwacha previously because of the failure to meet revenue targets in the first half of the year.
Like many of its neighbours, Malawi is also grappling with a steep devaluation of its kwacha currency that has been fueled by the aid suspension and declining export earnings from the key tobacco crop.
British High Commissioner to Malawi Michael Nevin told Reuters the proposed budget cut was “a bold move” aimed at improving the economic prospects of the country, which previously relied on aid for 40 percent of its budget.