Devaluation of the kwacha trickles down to higher education

The recent move by the Malawian government to devalue its currency has started to impact negatively on higher education, according to Japhet Nthala, the country representative of the Commonwealth Student Association.

Malawi’s Central Bank announced an adjustment in the exchange rate of the Malawian kwacha to the US dollar, devaluing the kwacha by about 30%.

The move set off an increase in the price of goods and services, including a general rise in public university fees.

Mid-year fee increments

Nthala told University World News, the devaluation of the kwacha is heavily affecting students. Said Nthala: “There has been a fee hike in almost all public colleges and universities, and this is happening in the middle of the academic year. We had a case at Mzuzu University where the administration announced a fee hike and students protested.

“The fee hike still stands and the administration has had the fee hike because of devaluation of the kwacha. As I speak, the College of Medicine [within the University of Malawi] and many other public colleges have hiked fees.”

Student loans fall short

Nthala said the Higher Education Students’ Loans and Grants Board (HESLG), the organisation tasked with giving student loans to fund their education, has not adjusted its loans to match the increase in fees.

“It [HESLG] has not increased its allocation, that’s the sad part. So it means if students are to have deficits in the school fees they owe, they [students] are responsible for paying the outstanding amount themselves.”

Nthala said not every student was a beneficiary of a government loan. He said those with no government assistance were deeply affected by the fee hike since they were paying the full amount from their own pockets.

General student upkeep now a nightmare

Rising prices following the devaluation of the kwacha also means the upkeep of students now costs more.

“The prices of things have risen, rentals and all basic needs are more costly. If the government doesn’t handle this well, we might have many cases of school dropouts, and this normally affects the less privileged,” he said.

According to Nthala, parents responsible for shouldering the education costs of their children were also struggling economically following the currency devaluation.

Exam fees increase

Nyasa Times recently reported that students pursuing business programmes at the Malawi University of Business and Applied Sciences (MUBAS) were up in arms about the administration’s decision to demand examination top-up fees.

The university management said it had to adjust examination fees due to the devaluation of the kwacha. Students at MUBAS, however, claim they paid exam fees before the exchange rate changes, hence they should not be affected by the currency devaluation.

Weighing in on the matter, Nthala said the devaluation of the currency means the cost of exam material and paying exam supervisors was no longer going to be the same and it had to cover these expenses.

However, he said that the extra cost for administering the exams should not all be covered by students through a fees top-up. According to him, the university management should also shoulder some of the cost since it was not the students’ fault that devaluation of the kwacha had increased exam administration costs.

A second devaluation of the kwacha

The recent shift in the kwacha’s exchange rate was the second time Malawi devalued its currency under the current administration of President Lazarus Chakwera, who assumed office in 2020. In May 2022, Malawi devalued its currency against the US dollar and it lost 25% of its value. Prior to that, Malawi had last devalued its currency in 2012.

Betchani Tchereni, an economics professor at MUBAS, welcomed the government’s devaluation move, saying it was necessary. Nyasa Times quoted him as saying the devaluation was important because “it reflects the true value of the Malawi kwacha on the ground” and would help the country’s “ailing economy”.