Malawi Tourism Council (MTC) has expressed concern over the omission of tourism support in the K2.2 trillion 2020/21 National Budget to facilitate quick recovery from the impact of the Covid-19 pandemic.
Over the past months, officials from MTC, an umbrella body for tourist operators, have been engaging government on how best to bail out the sector, which is on its knees due to the global pandemic.
Players in the sector are advocating for the suspension of pay as you earn (Paye), temporary waiver on fixed utility bills such as electricity, suspension of interest on bank loans against a revised interest rate, suspension of withholding tax payments, postponing payment of licences and permits on food and beverages, among others.
In a statement, MTC board chairperson Johns Malili wondered why the budget was silent on the support for the tourism industry, which is one of the hardest hit by the pandemic and has lost more than 35 000 jobs since March this year.
He said: “More than ever, the industry, which makes substantial contribution to the economy, needs a swift government intervention while realising that full recovery for the industry is projected for a couple of years or longer.”
Ministry of Tourism, Wildlife and Culture Principal Secretary Isaac Katopola recently admitted that MTC officially requested government through Ministry of Finance and Reserve Bank of Malawi for a possible bailout package.
He admitted that the big request was to either make a once-off payment or pay part of the salaries of compliant tourism operators for at least three months to cushion possible closures of companies and massive retrenchments.
Said Katopola: “Government has to, among other issues, identify where to get the financial resources.
“Another request was on possible cuts on utility charges that are calculated based on maximum demand, this is still being considered.”
Katopola conceded that the Covid-19 business challenges and possible solutions are like uncharted waters that may take time to deal with.
Ministry of Finance spokesperson Williams Banda earlier said given the revenue challenges, it was hard to offer bailout packages to the private sector, including tourism industry.
Early July, the MTC preliminary study revealed that the economy lost about K40.5 billion in the tourism industry between April and June due to Covid-19.
It also found that the sector needs about K7.3 billion bailout package monthly for staff bills such as wages, pension and tax to avoid massive dismissal of employees.
As early as March, government revealed that over 35 000 jobs had been lost in the tourism industry due to the adverse impact of the pandemic that has restricted travel and conferences, among others.
In his State of the Nation Address in Parliament last month, President Lazarus Chakwera said Malawi is endowed with beautiful game reserves and magnificent lakes, among others, which should not be kept hidden from the world.
He said: “Rather, we should invite people from far and wide to experience what Malawi has to offer.
“This is because the generation of business and jobs on a large scale will require mass tourism.”
Tourism contributes about seven percent to the country’s gross domestic product and accounts for six percent of the country’s total employment.
Malawi Growth and Development Strategy III identifies tourism as the third priority area coming after agriculture and education.