Key Business Points
- The Malawian government should consider developing a comprehensive minimum wage structure that takes into account sectoral and economic variations.
- A fair minimum wage should consider factors such as location, profitability, and company size to avoid increasing unemployment.
- A sectoral minimum wage system is being gradually implemented, with minimum wages designated for specific sectors such as domestic workers, truck drivers, and shop attendants.
The Malawian labour market is proposing a comprehensive minimum wage structure that resonates with the sectoral and economic environment of employers. This comes two weeks after the Minister of Labour increased the minimum wage by 40 percent. Grant Thornton Malawi chief executive officer Hastings Bofomo Nyirenda has suggested that minimum wage should be by sectors, taking into account economic variations and location. He proposes that more profitable sectors, such as oil and gas, financial services, and manufacturing, should have higher minimum wages.
Nyirenda’s proposal has been described as progressive by the Employers Consultative Association of Malawi executive director George Khaki, who says that a comprehensive approach is needed to provide a clear framework. The Centre for Social Concern (CfSC) economic governance officer Agnes Nyirongo warns that if policymakers fail to act decisively, the nation risks great inequality, labour unrest, and a deepening cycle of poverty.
The Ministry of Labour is gradually implementing a sectoral minimum wage system, with minimum wages designated for specific sectors. Principal Secretary Chikondano Musa says that the ministry is consolidating stakeholder feedback and commissioning further studies. A recent survey by CfSC showed that pressure on the cost of living has eased, increasing by 2.6 percent to K503 876 for a family of six in March due to a maize price drop. True economic justice will only come when wages reflect the real cost of living, Nyirongo says, emphasizing the need for a fair and transparent wage policy. As the Malawian government continues to implement a sectoral minimum wage system, businesses and investors can expect changes in the labour market that will impact productivity and economic growth.
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