In an interesting turn of events, the Employers Consultative Association of Malawi (Ecam) has asked Finance Minister Simplex Chithyola Banda to consider increasing the minimum wage.

Traditionally, it is the workers who push for such demands, with employers negotiating for a lower percentage.

In its contribution to the 2025-26 national budget, Ecam says the economy has, over the past year, experienced persistently high inflation, which exceeded 30 percent.

By November 2024, this had decreased to 27 percent, with food inflation at 33.7 percent.

The employers’ body adds that the effect of this has been to significantly erode employees’ incomes, thus affecting their economic well-being and, by extension, economic development.

“Ecam, however, is of a view that raising the minimum wage by at least 30 percent (slightly above inflation) subject to an agreement on the same in the Tripartite Labour Advisory Council…

“This will not only cushion the effects of inflation on disposable incomes but also increase aggregate demand for goods and services which has gone down.

“In the same vein, Ecam requests government to consider raising the tax-free band to K200,000 to enable workers to have more disposable income for their sustenance and that of their families,” the employers say.

Currently, the tax-free band on income tax stands at K150,000.

In an interview, Ecam Executive Director George Khaki claimed that, as responsible employers, they also consider the welfare of workers.

“We are very aware of the fact that disposable incomes for workers have been negatively affected by inflation. A wage increase will ensure that their disposable incomes are maintained, thus ensuring productivity,” Khaki said.

Malawi Congress of Trade Unions (MCTU) Secretary General Madalitso Njolomole said that the workers’ body is in total agreement with the minimum wage hike proposal by Ecam, as well as the proposal to raise the tax-free threshold.

“Actually, we have a bilateral operating agreement with Ecam and this was discussed in one of our meetings. Therefore, MCTU is in agreement with Ecam’s proposal,” Njolomole said.

The employers’ body has also asked Chithyola Banda to operationalise the Workers’ Compensation Fund.

The Workers’ Compensation Fund is provided for in the Workers Compensation Act, which was promulgated in 2000. It is one of the few mandatory social safety nets provided for in the workplace.

According to Ecam, the government, in 2023, established a board for the fund but did not provide the necessary funding for the fund to become operational.

“Currently, compensation for work-related injuries is paid for by individual employers and not the fund, as envisaged in the Workers’ Compensation Act,” Ecam says.

The employers further state that the current