A FAIR DEAL FOR MALAWIAN WORKERS: BUILDING A STRONG
AND REWARDED WORKFORCE
12.1 Overview
Before agriculture, tourism, mining, industry, energy, trade, and logistics can fully
thrive, Malawi must prioritize its workforce. A well-skilled, fairly remunerated, and
supported labor force is the bedrock of economic transformation.
Challenges facing the labor sector include:
- Uncreative and uncaring leadership: failing to recognize one of the root causes of
corruption, principles of fairness and develop a dynamic, motivated and inclusive
labor market. - Low Wages: Many Malawians earn less than a living wage, perpetuating poverty
and low productivity. - Inadequate Worker Protections: Limited enforcement of labor laws leaves workers
vulnerable to exploitation and unsafe conditions. - Skills Gap: A mismatch between workforce skills and industry demands hampers
economic growth. - Gender Inequality: Women earn less than men for the same work, and maternity
protections are insufficient - Informal Work: A significant portion of the workforce operates in the informal
sector without protections or benefits. - Weak Labor Data Systems: A lack of real-time employment data impedes
evidence-based policymaking.
Aligned with MW2063’s pillars of Human Capital Development and Inclusive
Wealth Creation, and supported by enablers such as Governance, Private Sector
Dynamism, and Technology Adoption, UTM’s vision for labor reform is to create a
strong, protected, and rewarded workforce that drives national progress.
12.2 UTM Pledges: Labour Reforms
Target Milestone: By 2035, UTM aims to ensure that 95% of Malawians earn a living
wage, with formal employment covering at least 70% of the workforce. Additionally,
UTM targets creating 6 million new jobs across formal and informal sectors,
significantly reducing gender wage disparities, and ensuring that all workers have
access to health insurance and social security. Our ultimate goal is to ensure
that every Malawian citizen can retire with dignity, supported by a robust pension
system after years of dedicated work.
Enhanced Pension Fund Management: UTM commits to establishing a separate
Private Sector Pension Corporation incorporated with Public Pension Investment
Corporation into Public Private Pension Investment Corp (PPPIC) to ensure efficient
management of private sector pension contributions. This corporation will: - Offer transparency and
accountability in fund management,
ensuring returns are optimized for
contributors. - Provide innovative pension products
tailored to both formal and informal
sector workers. - Mandate regular compliance checks
to ensure all employers are making
required contributions. - Partner with financial institutions to
create micro-pension schemes for
informal workers, expanding pension
coverage nationwide. - Invest a portion of the funds into
safe, high-yield national projects like
infrastructure and renewable energy,
ensuring sustainable growth of the
pension pool while contributing to
economic development. - These measures will ensure that pensions serve as a secure safety net for workers
- while contributing to national prosperity.
12.2.1 Raising the Minimum Wage
Alignment with MW2063: Advances Inclusive Wealth Creation by ensuring fair
wages for workers.
UTM Pledges:
- Living Wage Commitment: Raise the minimum wage to MK150,000 per month for
non-domestic labour and MK100,000 for Domestic Labour, upon taking office, with
periodic reviews to ensure it is indexed to inflation and reflects the cost of living. - As industries grow, require tax-benefit companies to share savings with
employees, ensuring a minimum $100 monthly wage by 2027. - Regional Adjustments: Account for differences in urban and rural living costs to
implement fair minimum wage policies. - Compliance Enforcement: Establish a robust monitoring and enforcement system
to ensure employers adhere to the new minimum wage, with strict penalties for
violations.
12.2.2 Reducing PAYE and Tax Reforms
Alignment with MW2063: Supports Economic Resilience by increasing disposable
income and stimulating consumer spending.
UTM Pledges: - Lower PAYE Rates: Implement
and reduce Pay-As-YouEarn (PAYE) taxes to 10%
for all employees, allowing
workers to keep more of their
earnings. - Economic Multiplier
Effect: This policy will
boost consumer spending,
stimulate economic growth,
and increase tax revenue
through heightened
economic activity
12.2.3 Worker Protections and Safety Nets
Alignment with MW2063: Advances Governance by creating a secure and wellregulated labor environment.
UTM Pledges:
- Unemployment Insurance: Introduce an unemployment insurance program that
provides financial support to workers who lose their jobs through no fault of their
own. - Universal Health Insurance: Expand the national health insurance scheme to
include all workers, ensuring access to affordable healthcare. - Workplace Safety: Implement stringent safety standards and inspections,
especially in high-risk sectors like mining and construction. - Mandatory Employment Contracts – Require written contracts for all workers,
including domestic employees, to prevent exploitation and ensure formal
employment data records. - Mandatory Contracts: Require written contracts for all employees to protect
against exploitation. - Salary Breakdown: Mandate deductions for PAYE (10%), health insurance (5%),
pensions (5%), and unemployment insurance (3%) to formalize pension and other
social contributions and ensure transparency. - Enhanced Pension Scheme: Integrate existing pension systems into a Public
Private Pension Insurance Corporation (PPPIC) to centralize and grow pension
funds. Introduce policies that mandate contributions from informal sector workers
through cooperatives and microfinance institutions to expand pension coverage.
12.2.4 Skills Development and Training
Alignment with MW2063: Advances Human Capital Development by equipping
workers with relevant skills for emerging industries.
UTM Pledges: - National Skills Program: Develop a comprehensive program to train workers in
digital literacy, advanced manufacturing, renewable energy, and other emerging
fields. - Regional Training Centers: Establish free or subsidized training centers within
technical colleges, across the country to upskill workers and prepare them for
new career opportunities. - Apprenticeships: Collaborate with industries to create apprenticeship programs
that combine practical training with theoretical learning.
12.2.5 Supporting Women and Vulnerable Workers
Alignment with MW2063: Promotes Inclusive Wealth Creation by addressing
inequality and empowering marginalized groups.
UTM Pledges:
- Equal Pay: Mandate equal pay for equal work to close the gender wage gap.
- Maternity Leave: Extend paid maternity leave to three months, ensuring job
security for working mothers. - Formalizing Informal Work: Develop policies to extend labor protections to
informal workers, including domestic workers and gardeners.
12.2.6 Strengthening Labor Rights and Enforcement
Alignment with MW2063: Advances Governance by ensuring fair and efficient labor
regulations.
UTM Pledges: - Updated Labor Laws: Revise outdated labor laws to address modern challenges,
including protections against unfair dismissal and workplace harassment. - Labor Courts: Establish specialized labor courts to resolve disputes efficiently and
fairly. - Whistleblower Protections: Implement laws to protect employees who report
labor violations, ensuring they are not retaliated against.
12.2.7 Infrastructure for Employment Growth
Alignment with MW2063: Supports Economic Resilience by creating jobs through
strategic investments.
UTM Pledges: - Job-Creating Projects: Invest in infrastructure projects such as road construction,
housing, and renewable energy to create thousands of new jobs.
12.2.8 National Work Data Collection System
Alignment with MW2063: Supports Governance by enabling evidence-based
policymaking.
UTM Pledges: - Employment Tracking & Integrated Database: Establish a National Labour Data
System linked to the Social Security Unique Identity Number (SSUIN)/National
ID to monitor employment trends in real-time. This centralized database will
support evidence-based policymaking, ensuring accurate labor market insights
and informed decision-making. - Data Management and Reporting: Publish monthly or quarterly employment
reports to maintain accurate records and keep the public informed of
employment trends. - Transparency: Publish monthly or quarterly employment reports to inform the
public of employment figures.
12.3 Estimated Investment and Funding Mechanisms
Estimated Investment: $1 billion over the next decade to fund wage reforms,
training programs, and social security systems.
Funding Sources:
- National Budget Allocation: Commit 3% of the national budget to labor and
employment programs. - Public-Private Partnerships (PPPs): Partner with the private sector to co-fund
training centers, apprenticeship programs, and job-creating infrastructure
projects. - International Grants and Loans: Leverage funding from global labor and
workforce development initiatives. - Tax Incentives: Offer incentives to businesses that create formal jobs and invest
in worker training programs. - Pension Fund Contributions: Through the Public Private Pension Investment
Corporation (PPPIC), utilize employee contributions to fund social safety nets
and job-creating programs, ensuring resources are allocated to unemployment
insurance, health coverage, pensions, and other critical labor initiatives.
Conclusion
Aligned with MW2063’s pillars and enablers, UTM’s labor reforms will ensure every Malawian worker receives fair wages, opportunities for growth, and the protections they deserve. Moreover, we are committed to creating a system where every Malawian citizen can retire with dignity, supported by a robust pension and social security system after years of dedicated work.Our vision is clear: a Malawi where hard work pays off, where workers are empowered to thrive, and where labor becomes the driving force behind national progress. Together, we will build a nation that values and rewards the contributions of its people.