“The president is now in charge of all portfolios until further notice,” said a statement signed by office of the president and cabinet secretary Bright Msaka on the announcement late Friday.
No reason was given for the sacking of the cabinet, which Mutharika appointed in 2009, soon after his re-election.
Mutharika is under fire over chronic fuel and foreign exchange shortages and is also accused of infringing democratic freedoms in the impoverished southern African country.
Demands for a smaller cabinet were included in a petition handed to authorities by activists on July 20 when deadly riots erupted after police moved to put down demonstrations criticising Mutharika’s governance.
The country is also targeting a “zero-deficit budget” unveiled this year in which recurrent expenses like government salaries are set to be paid out of local resources.
Worsening donor ties and a spat with former colonial power Britain, triggered twin expulsions of envoys, followed by London’s cutting of direct aid last month over concerns over economic management and governance.
The International Monetary Fund (IMF) in June said its programme with Malawi was off-track as the government had failed to review a US$79,4 million credit facility meant to cushion the chronic foreign exchange shortages.
Since the riots, the central bank has devalued the local kwacha currency, which the government had resisted despite the IMF arguing it was over-valued.
Government representatives and civil society leaders have also held United Nations mediated talks and agreed this week that an opposition vigil should be allowed to go ahead within four weeks.
Vigils set for this week were called off after Mutharika loyalists obtained a court injunction. —AFP