Tough times trigger strikes

The devaluation of the kwacha by 49 percent in May and the general hard economic environment have sparked a spate of strikes in companies and institutions.

Malawi Congress of Trade Unions (MCTU) has defended the industrial actions, saying they are justified under the prevailing economic conditions, but Employers Consultative Association of Malawi (Ecam) argues that employees should be reasonable in their demands.

Strikes rock Malawi

An analysis by The Daily Times shows that most of the strikes began after July 1, when the current national budget was adopted, which means between May and June people were looking forward to July to see if government and other companies would put in place economic measures that would cushion them from the negative effects of the devaluation.

In May, Mzuzu University failed to reopen because its budgetary allocation fell short after the devaluation, a development that resulted in protests by the

In the same month, local United Nations staff pressed their employers to hike pay according to the US dollar, saying their salaries are pegged in dollars but after the devaluation they did not get the demanded 49 percent increment.

On June 27, staff at Petroda left their duty station to press their employers to increase their salaries to meet the increase in cost of living.

According to information gathered from the staff, on average an internal truck driver earns K8, 000 monthly salary, K1, 000 house allowance and a K700 night allowance which are far below the cost of living.

Then Malawi College of Heath Sciences' Zomba Campus students protested an increment of their allocation allowance from K1,000 to K1,200, arguing that with their current allowance they would: "not be able to trigger into the fray with lavish things at the market owing to the devaluation of the Kwacha."

Last month, medical staff at Neno District Hospital boycotted work over disagreements on allowances before the Ministry of Health intervened and ordered them back to work.

Malawi Institute of Journalism (MIJ) radio station staff also took the radio off air in July to press management to, among other things, raise their pay by 45 percent in line with the 49 percent devaluation.

Last weeks, staff at Blantyre Water Board (BWB) kept the city dry for a day when they closed water supply to coerce their employers to hike pay by 40 percent instead of the 10 percent the company had offered them.

On July 25, workers at the Electricity Supply Corporation (Escom) threatened a national black out as they went on strike, demanding a pay rise in the region of 35 and 40 percent to cushion them from the effects of devaluation.

On Monday staff at Malawi Postal Corporation (MPC) went on strike in protest against a five percent increment and demanded a 21 percent increment.

MCTU backs strikes

Robert Mkwezalamba, Secretary General Malawi Congress of Trade Union (MCTU)—a body that champions the rights of workers, argued on Tuesday that the strikes are justifiable given that cost of living has shot up yet most companies are reluctant to duly raise pay.

"Absolutely justified they may just vary on specific areas such as: Did they follow procedures for the strike? Was the proposal realistic in the spirit of building strong companies or they were forced due to employers resistance to dialogue? But given current cost of living, any call for salary increase is justifiable!

"We strongly condemn and regret the actions by the government through the Controller of Statutory Corporations whose office has led to the numerous strikes in parastatals. In some of the parastatals, the workers and management had settled for 36, 46, 40 and even 25 percent [increments] and management agreed to these increases only for his office to give advice to the government that approved 5 percent across the board only meaning the employers are bound to implement," Mkwezalamba said.

Mkwezalamba asked employers to provide better alternatives to their employees through dialogue so that the latter can be assured that they will get improved privileges when company finances improve other than taking a hard line of retrenching people.

Companies want to sustain businesses— Ecam

However, Employers Consultative Association of Malawi(ECAM) president Buxton Kayuni said companies are smarting from the hard economic policies from the previous regime. As such they have been hit double by the devaluation and as such they cannot just raise salaries without looking at how they will sustain their businesses.

"The devaluation has not spared anyone, companies and employees have been affected. In fact companies now have to pay more for their inputs compared to the pre-devaluation period. Remember that employers are also coming from a period of bad business and this is now a time to recover," he said.

He said most employers are tempted to reduce the number of staff, but have decided to maintain them and give them considerable increments in line with inflation other than devaluation which may result in companies closing businesses.

"Companies are weighing options of retrenchments as a cost reduction strategy or "keep all and give a reasonable increment"? A reasonable employee would go for the latter. Hence, most companies are ideally averting the adverse condition of retrenchments.

"[Employers] firstly have to ensure that employment is maintained and generated. Then to address pay in line with the inflation rate and later when there has been substantial recovery in the economy to adjust salaries above the cost of living and not just in line with it. The process is gradual and delicate," Kayuni said.

Situation temporary— Economics Association

Economics Association of Malawi (Ecama) Executive Director Nelson Mkandawire said even though the effects of devaluation are huge at the moment the situation is temporary.

He said companies should at least be able to give something to their employees at the rate of inflation.

"As of now the inflation rate is averaging around 18.3 percent. This rate may not go down so soon. Companies need to take this into account when deciding to increase salaries of their employees not the devaluation rate of 49 percent that will be suicidal," Mkandawire said.

The government initially devalued the local currency by 10 percent in August last year before the May 49 percent devaluation. However, the government increased civil servants' salaries by 21 percent.

The government devalued and floated the kwacha to pave the way for the resuscitation of an International Monetary Fund programme which was suspended under the Bingu administration.

Meanwhile, National Statistics Office says the rate of inflation as of July is 20.1 percent.