The recent 40 percent wage increase imposed on small and medium enterprises (SMEs) has sparked concern among business leaders and economic analysts, who warn of mounting pressure on already fragile operations. President of the Union of SMEs, James Chiutsi, said the wage increase has further squeezed profit margins, threatening the survival of many businesses. The lack of consultation prior to the wage hike has further fuelled frustrations. Economic policy expert Veli Nyirongo warned that the wage hike, if not carefully managed, could deepen Malawi’s economic woes. A sudden wage hike could push them into financial distress or force layoffs,” he said.