Government directs state-owned enterprises on strict expenditure control measures

President Peter Mutharika

* No procurement of new vehicles; suspension of recruitments; to hold physical meetings within their office premises while encouraged to hold virtual conferences, workshops and interviews

* To control the drain of foreign exchange reserves, external travel will be reduced and only to be approved by the President through the Chief Secretary

* Fuel entitlement for public officers including Ministers, their deputies and senior government officials shall be reduced by 30% with immediate effect

By Duncan Mlanjira

The Government has ordered some strict austerity measures for all state -owned enterprises (SOEs) with immediate effect up to the end of 2025/2026 financial year.

The expenditure control measures issued by Chief Secretary to Office of President & Cabinet, Justin Saidi, include a moratorium on procurement of new vehicles and high assets until on special cases, where controlling officers will have to seek approval from the OPC — with exemptions to apply under agreed work plans and programmes.

Recruitments have been suspended, including non-established posts until further notice but on a case-to-case basis, where the recruitments in essential and ctitical government services shall be considered.

“Promotions of officers from Grade F and below will require prior authority from Treasury and department human resources management and development (DHRMD) to verify availability of funds,” says the circular — emphasising that “promotions made without this approval will be rendered invalid”.

All controlling officers have been directed to personally verify and approve all payroll submissions made to the DHRMD.

Another crucial austerity measure includes meeting for all Ministries, Departments and Agencies (MDAs) that physical ones should be held within their office premises while encouraged to hold virtual conferences, workshops, interviews, shortlisting exercise, procurement negotiations and any other activities to save resources on travel.

To control the drain of foreign exchange reserves, external travel will be reduced and only to be approved by the President through the Chief Secretary, who shall determine and approve the number and composition of travel delegates for any government prioritised trip.

“In case where the travel is donor funded, there shall be no government expenditure in form of any too-up allowances towards such travel.

The circular further says “according to the Public Finance Management Act (2022), it is illegal to commit government where there are no resources. Accordingly, all MDAs will be required to procure goods and services based on the quarterly allotments provided by Treasury.

“Suppliers will be required to supply their goods or services only when they have received an IFMIS generated local purchase order (LPO). All goods and services supplied without the system-generated LPO will not be paid by government.

Extra budgetary requests will not be allowed and shall not be entertained by Treasury except on special cases and will be restricted to approved budget provision.

Fuel entitlement for public officers including Ministers, their deputies and senior government officials has been reviewed and reduced by 30% with immediate effect.

All mining licences and contracts will be reviewed and it has been emphasised that any mining contracts that have been idle for more than five years shall be revoked.

The number of embassies shall be reduced and that each shall have not more than five members of, including the Ambassador or High Commissioner.

“Controlling officers, heads of department and chief executives of parastatals and SOEs shall be responsible for ensuring strict adherence to the expenditure control measures,” stresses the Secretary to the OPC.

Just yesterday, South Africa’s Don Consultancy Group (DCG) Chief Economist, Chifipa Mhango, applauded President Peter Mutharika “for the decisive and disciplined manner in which he is constituting his new administration and introducing reforms to improve efficiency and fiscal prudence in government operations”.

In a press statement from Johannesburg, Mhango described the President’s directives on official travel and administrative restructuring as “a bold step towards restoring fiscal discipline and strengthening accountability in public service”.

“President Mutharika’s leadership is sending a powerful signal that government business must be guided by discipline, efficiency, and respect for public resources,” said Mhango.

“His decision to regulate and rationalise official travel demonstrates a deep understanding of the need to safeguard the national budget and ensure that every kwacha spent delivers measurable value to Malawians.”

Mhango, who is DCG’s director of economic research & strategy, noted that “Malawi has, for years, struggled with inefficiencies and excessive public spending linked to unnecessary official trips and overlapping administrative structures”.