Nation Address by s2zEL9

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									               State of the Nation Address by Her Excellency Mrs. Joyce Banda,
                              President of the Republic of Malawi


May 18, 2012

INTRODUCTION

Mr. Speaker, Sir, I am delighted to preside over the opening of the 2012/2013 Budget Meeting and deliver a
statement on the state of the nation.

Mr. Speaker, Sir, before I proceed with my statement, allow me to express my sincere and heartfelt sadness over the
death of my former Head of State and Government, the Late Ngwazi Professor Bingu wa Mutharika. Once again, I
extend my sincere condolences to you, Mr. Speaker, Sir, Honourable Members, the bereaved family and the entire
nation. I invite all of you to celebrate his life and always remember his successes and positive contributions that he
made to this country. My administration intends to build on his achievements. (May I ask the Honourable House to
rise and observe 2 minutes of silence in honour of the Late President).

Mr. Speaker, Sir, The State of the Nation Address provides us with an opportunity to reflect on the journey we as
Malawians have taken; the journey to overcome poverty; the journey to overcome nepotism; the journey to overcome
oppression; yes, the journey to unlock our potential as Malawians to realise our destiny.




            President Banda delivering State of the Nation address. Photo: Fallys Ngalauka/Nyasa Times

Mr. Speaker, Sir, this journey has been painful to many of our citizens. Many of our country men and women have
lived in this country as destitute; as second class citizens; as aliens: not sharing the pride of being Malawian. This
has been either because one is a woman. This has been either because one comes from a “strange” tribe. This has
been either because age. This has been either because one is born with a disability. This could also be because one
was born into a poor family. These conditions have assigned many of our citizens to punishment where our society
has stopped caring for them.

Mr. Speaker, Sir, as a Malawian who is deeply conscious of the history and struggles of Malawians; as a Malawian
woman who knows the humiliation of Malawian women; as a Malawian who has championed the plight of rural poor,
the plight of urban poor, the plight of marginalized girls and boys; and as a Malawian human rights activist who has
championed for the advancement of the oppressed; and as a Malawian diplomat who has campaigned for the



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Malawian people; I can attest to the fact that the history of a Malawian is intimately intertwined with the history of
Africa and indeed the history of the world.

Mr. Speaker, Sir, Martin Luther King Jnr. once said “I have a dream”. Yes, I also have a dream. I see a Malawi where
her citizens enjoy their freedom, dignity and a sense of pride. Yes, I see Malawians maximise their capacity to realise
their social, political and economic empowerment. I see Government eradicate poverty of its people through
economic growth and wealth creation.

Yes, Mr. Speaker, Sir, I also have a dream. I see citizens getting jobs not because of where they come from; but
because they qualify for it. I see businesses winning tenders not because they have bribed; not because they
sponsor the ruling party but because they qualify to deliver. I see opposition leaders on Malawi Broadcasting
Corporation TV. I see opposition parties printing their uniforms from textile companies here in Malawi. I see freedom
upon our people.

Mr. Speaker, Sir, I also have a dream. I see children going to school and not spending time in their parent’s gardens
during school time. I see the girl child excelling in her education like her brother. Yes, I see our education system
delivering quality education. I see our health system delivering quality health care.

Yes, Mr. Speaker, Sir, I also have a dream. I see fuel in our filling stations. Yes, I see electricity all day long. Yes, I
see clean water delivered to our people. I see young children in rural areas playing on computers. I see industries
mushrooming across the country. Indeed, I also have a dream.

GENERAL BACKGROUND

Mr. Speaker, Sir, the nation is aware that our country has recently experienced social and economic challenges.
These include poor political and economic governance, shortage of fuel and foreign exchange; and unfavourable
investment climate, among others. These challenges have considerably reversed the gains that this country had
achieved during the previous administration. This notwithstanding, I am proud to say that this Administration has put
in place measures aimed at addressing these challenges decisively. I will report on these in the course of my
presentation. I will also spell out the vision of this administration which will be in tandem with the Malawi Growth and
Development Strategy II (MGDS II) which was approved by this Cabinet on 17th April, 2012.

Mr. Speaker, Sir, I would like to inform this august House that despite the challenges we faced during the 2011/2012
fiscal year, Government recorded some achievements in the socio-economic development of the country. Notable
among them are the Bingu wa Mutharika International Conference Centre, the President Hotel and the Presidential
Village here in Lilongwe. These facilities are ready and will assist us in hosting the forthcoming Summit of Heads of
State and Government of the African Union in July 2012.

Mr. Speaker Sir, I would like to underscore the fact that these are outstanding developments which will benefit all
Malawians. The facilities that have been built here in Lilongwe have changed the landscape of our Capital City and
will enhance our potential in conference tourism by making Malawi a preferred destination for conferences,
conventions and exhibitions.

Mr. Speaker, Sir, let me mention that our economy alone could not have afforded the hosting of AU Summit and
therefore Government sought support from sister countries to assist with the cost of hosting the AU Summit. We are
grateful to these countries for their support.

TRANSITION AND POLICY PRIORITIES

Mr Speaker, Sir, the Honourable House is aware that our development agenda is being realised through the
implementation of the Malawi Growth and Development Strategy (MGDS) that anchors our home-grown policies. I am,
therefore, pleased to report that Government recently approved the MGDS II. The MGDS II is the medium term

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national development framework for this country for a five-year period from 2011/2012 to 2015/2016. It is practically
designed to lift Malawi out of poverty to prosperity.

The MGDS II isolates and delineates nine priorities within priorities that guide our development agenda. These are:-

        Agriculture and Food Security;
        Transport Infrastructure;
        Energy, Industrial Development, Mining and Tourism;
        Education, Science and Technology;
        Public Health, Sanitation, Malaria and HIV and AIDS Management;
        Integrated Rural Development;
        Greenbelt Irrigation and Water Development;
        Child Development, Youth Development and Empowerment; and
        Climate Change, Natural Resources and Environmental Management.

In pursuit of these nine priorities and, indeed, in the implementation of the MGDS in general, we are able to measure
our development achievements against the eight Millenium Development Goals (MDGs) that the United Nations
designed for global development.

Mr. Speaker, Sir, let me start by saying that since I am finishing the second half of my predecessor’s term, may his
soul rest in peace, to a greater extent I will endeavour to complete his programmes. However, it is my view that there
is urgent need in our country to change the way we do things. This Administration will need to realign some of the
policies and programmes according to the Administration’s vision.

Mr. Speaker, Sir, in the meantime, this Administration seeks to do two things:

        To unlock the potential of the Malawian people to regain their freedom, dignity and sense of pride and
         thereby give Malawi the opportunity to realise her social, political and economic freedoms;
        To drive a people’s development agenda that enhances opportunities; reduces inequalities; and overcomes
         poverty through its political, social and economic programs.

Mr. Speaker, Sir, we will realise this by exemplifying the values of integrity, honesty, tolerance, selflessness and
stewardship within the leadership and the public at large whilst embracing three cornerstones of Unity, Equity and
Development.

In pursuit of this vision, the main policy thrust of this Administration is to create wealth through economic growth and
wealth creation as a means of achieving poverty eradication. Here we aim at creating wealth by transforming the
structure of the economy in order to achieve economic growth, accelerated job creation and the protection of the
vulnerable and the excluded within a decentralized and democratic environment.

SHORT TERM ECONOMIC RECOVERY PLAN

Mr. Speaker, Sir, our country is facing numerous problems today: foreign exchange shortage, tobacco industry crisis,
fuel shortages, energy crisis, bad governance and poor human rights record, unemployment and diplomatic crisis
among others. This Government believes that these issues need urgent attention. Therefore, we believe that we will
need one year for economic recovery.

Mr. Speaker, Sir, Government is working on a plan for the comprehensive recovery of the economy which will focus
on the short, medium and long term. In the immediate term (within three months), it is dealing with monetary, fiscal
and revenue policies including foreign exchange rate adjustment and expenditure control. Government will implement
measures to cushion the general population against the unintended socio-economic impacts of the exchange rate


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adjustment. The Budget Statement, to be presented by the Honourable Minister of Finance in this august House, will
furnish full details of the plan.

Hence, Mr. Speaker, Sir, this Government has taken a deliberate policy position on the following:

        Immediately restore the rule of law in this country where impunity will no longer be tolerated. In this regard,
         Government will repeal the oppressive laws that were passed in this august House as discussed below in
         this statement. Government is committed to resolving the issues that led to the suspension of donor aid.
        Immediately we have constituted a Commission of Enquiry into the death of Robert Chasowa a Polytechnic
         student who was mysteriously found dead; and will ensure that the enquiry into the July 20 demonstrations
         is brought to a conclusive end. I have also instituted investigations into Emmanuel Kafele, Edson Msiska
         and others who died in police custody.
        We have normalised our bilateral and multilateral relations with our development partners including restoring
         diplomatic relations with the United Kingdom and re-engaging the International Monetary Fund (IMF). The
         British Government has decided to immediately resume its support to our country.
        We have also normalised our bilateral relations with the Government of Mozambique. During my state visit
         to Mozambique we have signed two bilateral agreements.
        Government has re-opened dialogue for the reinstatement of the Millennium Challenge Compact (MCC)
         Account with the United States Government. The MCC office in Lilongwe is now open. The benefits of the
         MCC programme are enormous to our energy sector.
        I have written to political parties to nominate candidates to be considered for appointment as Malawi
         Electoral Commission (MEC) Commissioners. We are confident that MEC Commissioners will be appointed
         very soon to allow the Commission commence its work. Government will continue with inter-party dialogue
         to ensure political stability.
        We have opened up the Malawi Broadcasting Corporation to cover all Malawians including opposition
         parties and to act as a public broadcaster other than a mouth piece of a ruling party.
        We dissolved the National Initiative for Civic Education (NICE) and NGO Boards which were irregularly
         constituted, and Government has invited fresh nominations according to law.
        I have started a consultative process with Chiefs as development agents and custodians of our customs and
         culture by holding a one day consultative conference. In recognition of their critical role as development
         agents I have appointed 10 chiefs 60% of whom are women Chiefs to serve as Champions of the newly
         launched Presidential Initiative on Maternal Health and Safe Motherhood.

Mr. Speaker, Sir, since the passing on of the Late President Professor Bingu wa Mutharika, I have been receiving a
lot of requests to institute an investigation into the alleged “coup plot”. By public demand, Mr. Speaker, Sir, I have
decided to immediately set up a Commission of Enquiry to investigate the circumstances, intent and extent of the said
alleged “coup” and put the matter to rest as a nation.

I have also decided to appoint a Commission of Inquiry to enquire into the death of our former President Late Ngwazi
Professor Bingu Wa Mutharika. Among other issues, the Commission shall enquire into:

        Date of death;
        Cause of death;
        Medical attention available to the Late President at the time of his death; and
        The role and activities of various individuals during and in managing the transition.

I shall inform this nation the outcome of the inquiry and depending on the findings appropriate action will be taken and
important lessons shall be learnt.

Mr. Speaker, Sir, as the House will have heard, I have appointed a Cabinet Committee to investigate the Ministry of
Finance and the Malawi Revenue Authority (MRA) in what is commonly known as the MRA saga. Information



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reaching my office suggests that there have been cases of fraud, embezzlement and misprocurement in several
ministries, departments and statutory corporations.

I am, therefore, requiring all Principal Secretaries, Chief Executives and all public officers who are aware of instances
of fraud, embezzlement and misprocurement involving public funds in their institutions or that has come to their
knowledge, to bring those matters to my attention as soon as possible. If this information does reach my office by the
18th of June, 2012, and it is later discovered, there will be no sympathy for those involved.

Mr. Speaker, Sir, let me now turn to the economic recovery programme. Fifty years ago, Malawi stood on the
threshold of independence, a period which we hoped would prioritise the development of Malawi and Malawians.
Today we stand at a similar point in our history. However, to enjoy a more prosperous future, we have first to get our
house in order. The conditions will get rough before they get better, but we will face the challenges together as a
nation and will come out of it for a brighter future.

Mr. Speaker, Sir, Malawi’s economy today can best be characterised as that of a household that has been living
beyond its means, spending too much, borrowing to keep itself afloat and not earning enough. In our case, this
imbalance can be seen in terms of our sustained balance of payments crisis, where we import far more than we
export. It is also present in our fiscal deficit, where government has been spending more than its revenues.

Mr. Speaker, Sir, in both cases, we have traditionally relied on the donors to make up the difference. This is not only
unsustainable in economic terms but also makes us vulnerable to changes of view or of fortunes outside our control.
This explains why, Mr. Speaker, Sir, it has been critical to liberalise our currency and to restore our relations with the
international community.

NATIONAL AUSTERITY DRIVE

Mr. Speaker, Sir, equally, as a first priority we have to launch a national austerity drive. And since I believe that the
role of government is to listen and to lead; listening and leading we shall in this regard. We will cut back on
government expenditure through a number of on-going measures. For example, Government has set up a Cabinet
Committee to determine what to do with the presidential jet: whether to sale it or lease it out. Government Ministers,
officials as well as statutory corporation’s executives will cut back on excesses. Overseas travel shall be approved
only as a matter of national urgency. I have asked my advisors on how we can reduce the Presidential Motorcade to
sizeable necessity. The Minister of Finance will announce some of the measures in detail when he presents the
Budget.

Mr. Speaker, Sir, I am aware that there are serious challenges with our procurement system where some suppliers
connive with government officials to inflate prices, duplicate payments and deliberately fail to deliver goods and
services even when payment has been made. We will curb excesses in government procurement, and we will stamp
out corruption. We will redirect government efforts in monitoring and surveillance system to this sector. We will
strengthen governance and accountability institutions such as the Anti Corruption Bureau and the Auditor General.
The culture of officials “mending their roofs” at the expense of the public purse must be eliminated. Those who abuse
public funds must account for their actions.

GROWING THE ECONOMY

Mr. Speaker, Sir, we need to earn more as a nation to ensure that we can meet the legitimate aspirations of the
majority of Malawians. To achieve this, we must identify those things that should be a development guide for
Malawians over a generation regardless of which government is in power. These are what I would call our
“development tablets”-things that must be cast in stone:

Enabling environment for businesses: We have put an end to predatory tax audits, unfair and arbitrary appeals
procedures by the Malawi Revenue Authority (MRA). Government will review and simplify tax regime to make it more

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encouraging for business, investment and to support job creation. Procedures for licensing, work permits and visas
will be reviewed and simplified to encourage foreign investment and tourism. If we have to attract investors in those
industries which have a global choice of destinations, we have to be globally competitive in terms of our regulatory
and policy environment.

An aggressive electrification and energy programme: No country can effectively progress and develop without energy.
Further to our efforts in re-engaging the MCC Account where Malawi will restructure the energy sector, Government
has re-opened negotiations with the World Bank and the Mozambican Government on the interconnection to the
Mozambique Power Grid which would provide a mid-term solution to our power challenges. Government will also
encourage Independent Power Producers (IPP) to invest in various opportunities that the country has. In particular,
Government is exploring to engage a strategic investor to drive our energy sector.

Mr. Speaker, Sir, Government has identified a lasting solution to our fuel challenges. Negotiations with our strategic
partners are at an advanced stage. We will make announcement on this matter at an appropriate time.

Boost production: Mr. Speaker, Sir, Government is aware that the inadequate availability of foreign exchange caused
serious obstacles to doing business. The impact on business has been huge to the extent that there is an obvious
shrinkage in industrial output. Manufacturing companies have accumulated huge bills in foreign currency for
importation of raw materials. Many of these supplier accounts have been suspended or cancelled because of long
overdue bills. Government has decided to float the overvalued Kwacha to get it to its market value. Government
hopes that this policy will help stimulate foreign investment and relocate our foreign exchange to productive sectors.

Government will review agricultural product market and pricing policy to allow productivity grow while at the same
time stimulating wealth creation.

Increased exports: Mr. Speaker, Sir, starting this year, cash crop production will be intensified. Government has
identified rice, groundnuts, pigeon peas, sweet peas and sunflower as the key non-traditional crops that we will focus
on for the export market.

Government will develop export policy to guide the growth of our export base.

Reorganising Industry. Mr. Speaker, Sir, Government will reorganise our industry as a basis of growth and to allow
private sector to lead the growth. Government business in the market is too big and there is need to reduce
Government space in the industry by promoting private sector growth.

For example, the tobacco industry, like many other cash crops, is receiving increased attention by this Administration
as the sector is key to providing short term solution to the foreign exchange problem. Government had to balance
between motivating the current crop which is before the auctions and planning for the next season which has already
started. In this regard, Government is taking a holistic approach in restructuring the tobacco industry. This will
include:

        the introduction of the Integrated Production System (IPS)
        Reviewing the Tobacco Act as a matter of urgency;
        Restructuring the Auction Holdings Ltd;
        Government will establish a Fund to support Malawians to participate in the buying and exporting of tobacco;
        Government will further review policy regime and ensure policy coherence within the agriculture sector to
         align with programs on crop diversification and migration from Burley to Virginia tobacco; and
        Government will support local demand for manufacturing industry.

Of critical importance, Mr. Speaker, Sir, will be programs that increase yield per hectare and enhance linkages to the
market.



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Identify and promote drivers of growth: Mr. Speaker, Sir, this Administration has identified key sectors as drivers of
growth. These include agriculture, mining, infrastructure development, human capital development, industrialisation,
tourism and private sector development. Emphasis will be put on ensuring boosting agricultural productivity,
diversifying exports and private sector development; investing in and promoting other areas of economic potential,
including fisheries, livestock, timber, technology and innovation.

STATE OF THE ECONOMY

MACRO-ECONOMIC PERFORMANCE

Mr. Speaker, Sir, let me give you an informative picture of our macro-economic performance in the country. As we
are aware, our economy performed very well from 2005 up to 2010. During that period, the economy grew at an
average rate of 7.6 percent per annum. Despite the world economic downturn, the economy remained resilient.
However, in 2011, economic growth was subdued compared to 2010. Consequently, the growth rate slowed down to
4.3 percent in 2011 from 6.7 percent in 2010. This was 1.7 percent below the Malawi Growth and Development
Strategy (MGDS) threshold.

In 2011, the country achieved a lower economic growth rate due to a number of challenges. These included scarcity
of foreign exchange, fuel shortages and intermittent power supply which, among other issues, led to limited
importation of industrial raw materials, machinery and spare parts; distribution problems and interruptions in
production lines. Foreign exchange levels dwindled due to poor performance of tobacco sales on the auction floors
and drastic reduction in donor inflows. This resulted into reduced import cover, currently at less than a month. The
suspension of the Extended Credit Facility by the IMF due to our economy’s inability to perform as per agreed criteria
influenced the reduction in donor inflows.

Although we anticipated decreased tobacco production for 2011/2012 agricultural season following low tobacco
prices offered on the auction floors in 2011, a positive contribution will arise from the fact that a good number of
farmers opted to produce cotton and groundnuts as alternative cash crops. Economic growth rate is expected to
average at 4.9 percent in 2012. It is, however, anticipated that the economy will be on a path to growth recovery in
2013 when the various measures we have put in place are fully implemented.

Mr Speaker, Sir, current economic challenges in the country have brought about a general rise in price levels since
the last quarter of 2011. The erratic fuel supply and the rise in pump prices led to increase in transportation costs that
eventually pushed non-food prices up. For some time, parallel fuel prices and parallel foreign exchange market
premiums contributed to the high distribution costs to the extent that prices of most products in retail and wholesale
shops went up. In addition, the December 2011 maize price adjustment resulted in food price increases. In view of
this, the annual average inflation rate for 2011 stood at 7.6 percent compared to 7.4 percent in 2010. The low inflation
rate was a result of maize surpluses in the country following good weather conditions and successful implementation
of the Farm Input Subsidy Programme. At the onset of 2012, inflation was projected to rise to 15 percent due to the
challenges to which I have just referred.

Mr Speaker, Sir, in 2012/2013 fiscal year, the economy is expected to perform better as a result of policy
interventions that Government has put in place in order to address the challenges in foreign exchange availability and
fuel supply. We held successful discussions with the World Bank and IMF on how to resolve the economic challenges
the country is currently facing. In this regard, we developed a package of measures which will comprehensively
address the challenges, especially the generation and management of foreign exchange and how to re-orient our
economy to become more export-oriented. Through this package of measures, we will achieve our goal of ensuring
that the volume of our foreign reserves is equivalent to at least 3 months of import requirement with an ultimate goal
of getting to six months of import cover in the medium term.

Mr. Speaker, Sir, on balance of payment, our goal in 2011/2012 fiscal year was to improve the current account
position. Emphasis was put on the pursuit of export-led growth with major investments in agriculture, manufacturing,


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mining and tourism sectors. However, the vision of turning the country from being a predominantly importing and
consuming economy to a predominantly producing and exporting economy was challenged by a faster growth of
imports compared to exports. This was worsened by lack of export diversification and overvaluation of our currency.

Mr. Speaker, Sir, the Zero Deficit Budget that Government implemented in the 2011/2012 fiscal year entailed meeting
all recurrent transactions from our own sources of revenue. However, domestic revenue collection performed dismally
leading to increased domestic borrowing. Consequently, expenditures were substantially constrained contributing to
the contraction of the general economy and a slowdown in infrastructure development projects and provision of social
services particularly in the health sector. As a consequence, by the end of 2011/2012 fiscal year, Government will
have incurred a deficit of MK59.7 billion principally financed by domestic borrowing from the Reserve Bank of Malawi.

In view of the challenges that were faced by implementing the Zero Deficit Budget, the fiscal policy for the 2012/2013
Budget is to do away with Zero Deficit Budget. Under this arrangement, Government will commit itself not to borrow
from the Reserve Bank to finance any over-expenditure of revenue shortfall. Government will also restore its
macroeconomic balance through a credible and liberal exchange rate regime.

AGRICULTURE AND FOOD SECURITY

Mr. Speaker, Sir, agriculture plays a vital role in the socio-economic development of the country. Government is
determined to eliminate hunger and to ensure that no child in Malawi goes to bed on an empty stomach, let alone
dies of starvation. In 2011/2012 fiscal year, Government continued to implement the Agriculture Sector Wide
Approach programme (ASWAp) through which all agricultural programmes are being delivered.

Under the Farm Input Subsidy Programme (FISP), a total of 140,000 tonnes of fertilizer, 7,000 tonnes of improved
maize seed and 2,800 tonnes of legume seed were distributed to 1.4 million resource-poor smallholder farmers
across the country.

In the 2012/2013 fiscal year, Government will implement the FISP for the eighth time at the same cost of K500 per
50kg bag of fertilizer and improved maize and legume seed. The number of beneficiaries will increase from 1.4 million
to 1.5 million. Government will, as a matter of priority and urgency, explore the possibility of expanding access to farm
inputs by introducing credit facilities for farm inputs to resource-poor farmers to complement FISP.

Government will streamline the implementation of the FISP to save on operational costs and will allow more private
sector participation. Government believes that this will help reduce corruption and waste.

In the 2011/2012 cropping season, the country is expected to produce 3.6 million tonnes of maize. This will translate
into a 7 percent reduction from the previous year’s production because of erratic rains which led to dry spells in some
parts of the country. Despite the reduction, the country will still register a maize surplus of 566,552 tonnes. With
regard to legumes, groundnuts production is estimated to increase by 18 percent from 325,000 tonnes in 2010/2011
to 385,000 tonnes while pulses are projected to increase by about 11 percent from 532,000 tonnes to 588,000 tonnes
in the 2011/2012 cropping season.

In response to the dry spells and floods that some areas experienced, Government distributed 46.5 tonnes of early
maturing maize seeds and 100 metric tonnes of sweet potato vines to the affected households. Furthermore, 629
tonnes of early maturing seeds and 2,332 tonnes of UREA fertilizer were distributed to farmers for irrigation.

Mr. Speaker, Sir, with respect to tobacco, the expected yield is 151 million kilograms which is 35 percent less than
last year’s production of 232 million kilograms. To address the issue of low prices offered at the Auction Floors which
mostly hurt poor Malawian farmers, Government will review the Tobacco Act as discussed above. We have also
engaged the tobacco buyers as partners in business and development of this country. The tobacco prices have now
improved on the auctions where tobacco is now fetching an average price of US$1.59 per kilogram compared to
US$0.81 per kilogram last year representing an improvement of 96%.

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As for cotton, Government made deliberate efforts to promote production in the 2011/2012 budget by allocating MK
1.6 billion. I am pleased to inform this august House that the estimated cotton production for 2011/2012 is 244,000
tonnes compared to only 52,000 tonnes which was produced in the 2010/2011 season. This translates into a 365
percent increase in production. Government also procured 3 ginneries, through a line of credit from the Government
of India that will be operated by ADMARC in Ngabu, Balaka and Karonga to improve the ginning capacity for value
addition. In 2012/2013 season the hectarage for cotton production is expected to increase from 236,269 to 250,000.

Mr. Speaker, Sir, during the 2011/2012 fiscal year 17 agricultural technologies were developed. Of the 17
technologies developed, 6 were for sweet potatoes varieties, 3 for Irish Potatoes varieties, 6 for bean varieties, and 2
rice varieties.

INDUSTRIAL DEVELOPMENT IN THE AGRICULTURE SECTOR

Mr. Speaker, Sir, Malawi does not have a fully developed industrial policy. As such, development policy and
programs in the agriculture sector are not aligned to industrial growth or critically tailored to foster industrial growth.
This Government will work on developing industrial policy.

Mr. Speaker, Sir, this Administration’s overall goal in the agricultural sector is to generate agricultural growth and
wealth creation through:

        advances in science and technology (mechanisation);
        commercialisation and promotion of regional markets;
        crop diversification;
        engagement of new crop of entrepreneurial leaders dedicated to our country’s agricultural improvement; and
        improving infrastructure while ensuring food security and sustainable use of natural resources.

This will require introducing policies and institutional changes necessary to promote agricultural innovation by
incorporating research, developing skills and capacity from academia, private industry, NGOs and government in
order to develop local knowledge and resources; harness technological innovation; encourage entrepreneurship;
increase agricultural output; create markets and improve infrastructure.

Mr. Speaker, Sir, Government wishes to manage the agriculture sector as a business by way of developing industries.
To realise this, Government seeks to reform land acquisition to ensure easier access and more efficient land
ownership and title processes. This will serve as a catalyst to assist the private sector to increase productivity and
achieve food security and diversified crop production for export.

Government will promote, help establish and support the growth of the following Industries in collaboration with
private sector:

        Cotton and Textile Industry with its upstream and downstream linkages
        Timber Industry with upstream and downstream linkages;
        Fishing Industry with its upstream and downstream linkages;
        Meat Industry (Animal Husbandry) with its upstream and downstream linkages;
        Chicken Farming Industry with its upstream and downstream linkages;
        Cooking Oil Industry with its upstream and downstream linkages;
        Fruit and Vegetable Market Hubs in Lilongwe, Blantyre and Mzuzu with linkages to rural farmers; urban and
         foreign export markets;
        Agricultural Engineering Industry (manufacturing and assembling of farm trucks, horse pipes, irrigation
         treadle pumps and motorised pumps);
        Paprika Industry with its upstream and downstream linkages;
        Cassava Industry with its linkages to pharmaceutical and other Industries;



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        Agricultural Commodities Exchange Market where we will develop commercial storage of cereals and
         commodities. Commodity exchanges could provide a holistic solution, including agricultural extension,
         support infrastructure for small farmers, quality warehousing, access to finance and market information.

Government will further encourage agro-processing for fruits like banana, tomato, mango, pineapple, papaya, citrus
and guava fruits in order to produce:

        Tomato paste, sauce and ketchup;
        Banana puree and soft drink;
        Fruit juices, fruit concentrates;
        Dried fruits and titbits;
        Canned fruits, jams, candy fruits.

Government will pay special attention to supporting bee farming and harvesting honey; and developing the Dairy
Industry including its upstream and downstream linkages like cheese, butter and yoghurt.

Mr. Speaker, Sir, Government will encourage technology and innovation adaptation by promoting and supporting
genetic modification in agriculture. Genetic modifications have many benefits:

        farmers will not be troubled to weed their gardens;
        farmers will not have to buy pesticides; and
        GM helps improve soil carbon and moisture content.

Genetically modified foods are pests resistant; they require fewer chemicals and are normally drought resistant.

Government will invite and engage strategic investors to drive these investment opportunities. Hence the need, Mr.
Speaker, Sir, to have close collaboration between the Ministry of Agriculture and that of Trade and Private Sector
Development. This Administration will mobilise, motivate and support the growth of strong private sector participation
as a strategy to realise these goals.

THE GREEN BELT INITIATIVE, IRRIGATION AND WATER DEVELOPMENT

Mr. Speaker, Sir, I now turn to the Green Belt initiative, irrigation and water development. As you are aware, the
country relies on rain-fed agriculture. In a bid to reduce overdependence on rain-fed agriculture, Government has put
in place measures to promote irrigation.

In the 2011/2012 fiscal year, under the Green Belt Initiative, Government procured 6,000 hectares from Press
Agriculture in Salima which is called Chikwawa Green Belt Irrigation Scheme. The design phase for this scheme is
completed while the construction phase for 530 hectares commenced and will be ready for irrigation farming by
September 2012. Procurement processes for the design and supervision consultancies for proposed Malombe and

Nthola-ilora-Ngosi irrigation schemes are underway. The designs for the initial 240 hectares of Chilengo site under
the Shire Valley Scheme are under review.

Mr. Speaker, Sir, during the 2011/2012 fiscal year, over 2,000 hectares of land was developed for irrigation for both
commercial and smallholder farmers. This brings the total of land under irrigation in the country to 92,326 hectares.
Smallholder beneficiaries increased from 356,728 in the 2010/2011 fiscal year to 365, 844 in 2011/2012 fiscal year.

Mr. Speaker, Sir, under water resource management and development, I am pleased to report that preparatory
activities for the implementation of the Songwe River Basin Programme and Shire River Basin Management



                                                          10
Programme were completed. In the 2012/2013 fiscal year, Government will implement the Shire River Basin
Management programme and also rehabilitate the Kamuzu Barrage.

In the 2011/2012 fiscal year, Government drilled 270 boreholes countrywide of which 60 boreholes were drilled in
Mwanza and Neno districts with financial support from the Government of Japan while 110 boreholes were drilled in
Mwanza, Mangochi, Mchinji, Mzimba and Salima with support from UNICEF.

In the 2012/2013 fiscal year, Government plans to construct 700 boreholes countrywide of which 600 will be
supported by the People’s Republic of China. Additional 300 boreholes will be rehabilitated in Mchinji district with
funding from JICA.

During the 2011/2012 fiscal year, Mr. Speaker, Sir, Government made over 24,000 new piped water connections and
rehabilitated over 26,000 dysfunctional water connections throughout the country.

Mr. Speaker, Sir, in the 2012/2013 fiscal year, Government, with additional funding of U$120 million from the World
Bank, will continue to implement the National Water Development Programme which will include installation of new
connections and rehabilitation of old ones in the cities of Blantyre, Lilongwe, Mzuzu and other parts of the country.
Complementary funds will be provided by the European Union.

EDUCATION, SCIENCE AND TECHNOLOGY

Mr. Speaker, Sir, I would now like to focus on education, science and technology. As you are aware, education,
science and technology are catalysts for socio-economic development of our country. In this regard, I am pleased to
report that during the year under review, Government made good progress in this priority area. With regard to basic
education, Government:-

        constructed 352 classrooms, 86 teacher houses and 36 administration blocks;
        established 240 Complementary Basic Education Centres; and
        trained 600 facilitators and 50 supervisors.

Mr. Speaker, Sir, with respect to secondary education, Government completed construction of girls hostels at
Kasakula, Nachitheme, Chiwale and Chamakala, while girls hostels for 14 other secondary schools are under
construction. Furthermore, Government provided 6,668 bursaries to conventional and community day secondary
students and continued to provide bursaries to 188 students at Kamuzu Academy.

With regard to teacher education, preparatory works for the construction of three teacher training colleges are almost
completed. In addition, 10,360 primary school student teachers were enrolled.

Mr. Speaker, Sir, turning to university education, I am pleased to inform you that a number of developments have
taken place. Bunda College of Agriculture was delinked from the University of Malawi in August 2011. Consequently,
Bunda College became part of the newly established Lilongwe University of Agriculture and Natural Resources which
will be launched soon. A law to establish the new University was passed by this House. In addition, a K3.2 billion
construction project for new administration and teaching facilities at Bunda College will also commence soon as part
of developments at the new University.

The construction of the Malawi University of Science and Technology (MUST) in Thyolo is underway. A programme
to provide support facilities such as staff houses, access roads, water and sanitation will begin shortly so that these
facilities are available by the time the university is completed. Similarly, curriculum development for the new university
is in progress and academic programmes have already been developed. The new University will become the hub of
academic excellence in science and technology in this part of the continent.




                                                           11
While Government is implementing a programme to establish new public universities in the country, the University of
Malawi and Mzuzu University have increased their intake of first year students. The student population at the two
public universities went up from 3,417 in 2010 to 4,463 in 2011.

Mr. Speaker, Sir, Government plans to abolish quota system in selecting students into public universities.
Government will set up a committee to review and advise on how to increase intake into the public universities.
Government will engage private universities in a Public Private Partnership arrangement as one way of increasing
university intake.

Mr. Speaker, Sir, in the 2012/2013 fiscal year, Government plans to:-

        provide bursaries to 12,000 needy students at secondary school level and 340 needy students at Kamuzu
         Academy;
        provide cash transfers to 600 needy students at secondary school level;
        construct 2,000 classrooms, 1,000 teachers houses and 30 resource rooms for children with special needs;
        rehabilitate 5 conventional secondary schools;
        commence construction of Phalombe, Rumphi, Mchinji and Chikhwawa Teachers Training Colleges; and
        recruit additional 10,360 student teachers.

Mr. Speaker, Sir, Government will expand access to technical-vocational training; raise the standard of education on
offer, and ensure that it meets the needs of the market; ensure the availability of commercial, agricultural and
industrial specialisations involving a necessary partnership with the private sector and other interested actors.

TRANSPORT INFRASTRUCTURE

Mr. Speaker, Sir, I now turn over to transport infrastructure. Transport infrastructure is one of the critical catalysts of
development as it facilitates access to economic and social services in any country. Government recognizes the need
for a well coordinated transport system. As such, it has identified critical projects in road, rail, marine and aviation
sub-sectors.

Road Transport

Mr. Speaker Sir, road transport continues to be the dominant mode of transport in the country accounting for 70
percent of all domestic traffic and 95 percent of all external trade. It is for this reason that Government has continued
to invest in the road transport infrastructure through the Road Sector Programme.

During the 2011/2012 fiscal year, Government:-

        upgraded about 50km of gravel road into bitumen standard against a target of 50km;
        carried out routine maintenance of about 4,000 km of paved roads and approximately 11,500 km of unpaved
         roads against targets of 3,600 km and 6,000 km respectively; and
        rehabilitated 124 km of paved roads against a target of 231 km.

With regard to Karonga–Chitipa road, I wish to inform this august House that construction is expected to be
completed at the end of 2012. The delay in completing the road is largely attributed to foreign exchange and fuel
shortages which affected the supply of raw materials among other things.

In the forthcoming financial year, Government will continue to implement the Road Sector Programme. Government
will promote new technologies in road maintenance works to cut on maintenance recurrent budget on unpaved roads.
Technology exists which can reduce the cost of road maintenance considerably.




                                                            12
Rail Transport

Mr. Speaker, Sir, Government intensified efforts to develop the railway transport system in the country in order to
reduce the burden on road transport as well as cut down on transportation costs. During the year under review,
Government replaced vandalized culverts on the Lilongwe-Salima railway line and constructed and repaired box
culverts.

In December, 2011, Government signed a concession agreement with VALE Logistics, a Brazilian company which is
mining coal in Moatize, Mozambique and plans to transport the coal through Malawi. The company will construct a
railway line from Chapananga passing through Mwanza and Neno to join the existing railway line at Nkaya. In
addition, the company will rehabilitate and upgrade the existing railway line from Liwonde to Nkaya. This project will
provide a cheaper alternative to road transport and facilitate an annual freight of 5.1 million metric tons of exports and
imports. During construction, over 3,000 Malawians will get employment. Government will give priority to Nacala
Corridor.

Nsanje World Inland Port and Shire-Zambezi Waterway Project

Mr. Speaker, Sir, with regard to the Nsanje World Inland Port and Shire Zambezi Waterway Project, you will recall
that the African Development Bank provided resources amounting to about 3 million Euros for a feasibility study. I am
pleased to inform the august House that all the modalities for the implementation of the study have now been
finalised with our partner states of Zambia and Mozambique. My administration will fully engage the partner states at
every step of this project to ensure that all of us are part of the process. COMESA and SADC Secretariats are
coordinating this work. It is expected that the study will start during the second half of 2012/2013 financial year.

Meanwhile, preparatory work in Nsanje is continuing. Surveys and beaconing of the updated perimeter boundary for
the proposed Nsanje City have been completed.

Air Transport

Mr. Speaker, Sir, Government realizes the need for efficiency and effectiveness in the air transport sector and to that
effect, we will carry out a number of reforms in the sector.

In the 2011/2012 fiscal year, Government completed the rehabilitation of the runway at Kamuzu International Airport
as well as the rehabilitation of the terminal building. Expansion and renovation of the VVIP wing of Kamuzu
International Airport are at an advanced stage. Government continued to rehabilitate Chileka Airport terminal building.
Government also acquired and replaced airport navigation equipment and carried out automation of airport
administration systems. We will continue to carry out reforms in the air transportation with a view to improving the
performance of air transport.

Mr. Speaker, Sir, Government is working on determining the future of Air Malawi. Government recognises the
importance of having an efficient and effective local airline to enhance the country’s tourism sector.

Mr. Speaker, Sir, Government believes that the private sector has a major role in the provision of services in road, air,
rail and water transport. For this reason, we are developing a policy that will require all foreign contractors to team up
with local contractors on major projects that will be undertaken. This will ensure that we are building the capacity of
local contractors to competently undertake huge construction projects.

CLIMATE CHANGE, NATURAL RESOURCES AND ENVIRONMENTAL MANAGEMENT

Mr Speaker Sir, I now turn to climate change, natural resources and environmental management. Natural resources
form a principal source of social wellbeing and economic development in Malawi. However, these resources are
under constant stress from unprecedented human, industrial and other developmental activities. This has led to

                                                           13
increased climate variations such as prolonged dry spells, droughts, intense rainfall, floods and temperature
variability. These, in turn, have negatively affected the performance of the economy.

Mr Speaker, Sir, in order to minimize these impacts, Government implemented a number of activities. With regard to
climate change and meteorological services, Government installed 63 Rainfall Logging systems and 25 Automatic
Weather Stations to simplify weather data collection especially in remote areas of the country. Government is also
implementing Quality Management System for aviation weather services in order to promote constant compliance
with international standards.

With respect to environmental management, Government continued to monitor and inspect all development activities
to ensure compliance with Environmental Management Act. In 2011/2012, a total of 30 projects were inspected in the
mining, agriculture, water, health and industrial sectors. Of these, 14 projects failed to comply with environmental
standards and Government issued an order for them to either comply or face closure. Government will strengthen its
monitoring on industries on their environmental compliance.

Mr Speaker, Sir, as regards forestry, Government continued to manage 90,000 hectares of forest plantations to
ensure sustained supply of industrial timber. A total of about 2,000 hectares were replanted in the period under
review. Furthermore, Government continued to provide adequate management of an estimated 1 million hectares of
natural forest reserves to protect water catchment areas. Government also facilitated the planting of 54 million
seedlings on customary land during the last National Forestry Season under the theme: “Conserve Trees and Forests
to Moderate Climate Change”.

In addition, Government wants to reorganise and improve operations at Chikangawa Timber Plantation.

INTEGRATED RURAL DEVELOPMENT

Mr. Speaker, Sir, moving to integrated rural development, I wish to inform this honourable House that Government is
determined to improve the livelihoods of rural people in the country through the implementation of the Integrated
Rural Development Strategy. One of the approaches of the strategy is the implementation of Rural Growth Centres
Programme.

I am pleased to report that during the 2011/2012 fiscal year, Government embarked on construction works of rural
growth centres at Chapananga in Chikhwawa and Mkanda in Mchinji. Meanwhile, construction of Bvumbwe, Limbuli
and Nkhamenya markets is underway and will be completed in the course of 2012/2013 fiscal year.

Mr. Speaker, Sir, the agricultural policies and programme interventions that this Government is proposing, addressing
pressing poverty and food security needs, will need to take a longer-term view of the kinds of science-based
interventions that are needed to launch the agricultural sector on a structurally industrial path. This will mean building
agricultural growth clusters that would drive national economic growth and create jobs in the rural areas.

The agricultural growth clusters, which are critical to the development of rural economy, will have to provide additional
tools for improving the welfare of poor farmers, many of whom are women. The critical role that women play in
agriculture cannot be underestimated. Hence the program will provide equal educational opportunity as a starting
point for building a new economic order for the country. Developing rural economies and transforming them into
engines of economic growth will contribute to sustainable growth, redistribution of wealth to all citizens, create
employment that will enhance incomes of rural communities and mitigate the negative consequences of rural-urban
migration

PUBLIC HEALTH, SANITATION, MALARIA AND HIV AND AIDS MANAGEMENT

Mr. Speaker, Sir, I wish to draw your attention to public health, sanitation, malaria and HIV and AIDS management.


                                                           14
Public Health

A healthy nation is essential for the development of a country. As such, Government continues to put a lot of effort in
improving the health sector. In 2011/2012 fiscal year, a Health Sector Strategic Plan for 2011-2016 was developed
and is now being implemented. Strategic focus areas include: human resource development and retention;
strengthening supply chain management for essential drugs and medical supplies; and construction, rehabilitation
and maintenance of health infrastructure.

Other notable achievements in the health sector were:

         construction of 57 Basic Emergency Obstetric Care Units;
         implementation of an incentive package to improve the morale, productivity and retention of critical health
          workers; and
         procurement and distribution of medicines in form of kits with assistance from development partners. A
          monthly average of 1,200 kits is delivered to the health centres and the exercise, which started in January
          2012, will end in June 2013.

Mr. Speaker, Sir, in 2012/2013 fiscal year, Government plans to:-

         construct 11 health centres and 140 staff houses in difficult-to-reach areas popularly known as Umoyo
          houses;
         rehabilitate Kasungu and Chitipa hospitals and 23 laboratories throughout the country; and
         establish a Public Health Institute to strengthen governance and stewardship of the health sector.

Sanitation

Mr. Speaker, Sir, with regard to sanitation, it is Government’s objective that all people in this country own and have
access to improved sanitation facilities, and practise safe hygiene. To achieve this, Government is implementing
sanitation programmes and activities in pilot districts of Rumphi, Nkhotakota, Ntchisi, Balaka, Phalombe and
Chikhwawa.

Malaria

Mr. Speaker, Sir, let me now focus on malaria. Malaria is the leading cause of morbidity and mortality, particularly in
children under five years of age and pregnant women. It is the commonest cause of outpatient visits at health
facilities, hospitalization and death. Malaria also has a serious socioeconomic impact on families and the nation
through school and work absenteeism and high levels of expenditure on malaria treatment.

In 2011/2012 fiscal year, Government:-

         developed third generation National Malaria Strategic Plan;
         made the policy on the distribution of insecticide treated mosquito nets (ITNs) universal (the distribution was
          previously restricted to under fives and pregnant women);
         distributed over 1 million insecticide treated mosquito nets countrywide;
         introduced Malaria Rapid Diagnostic Tests for strengthening malaria diagnosis; and
         undertook Indoor Residual House Spraying in Nkhotakota district protecting about 300,000 people against
          malaria.

In 2012/2013 fiscal year, Government will distribute over 5 million Insecticide Treated Mosquito Nets. In addition,
Government, with assistance from the Government of Cuba, will introduce a way of controlling mosquito larvae using
pesticides called Larviciding.


                                                           15
Nutrition, HIV and AIDS Management

Mr. Speaker, Sir, Malawi is one of the few countries in the world that has made tremendous progress in addressing
nutrition disorders, HIV and AIDS.

Government is determined to eliminate all forms of malnutrition and ensure that no child in Malawi dies of malnutrition.
According to the recent Demographic and Health Survey (2010), I am pleased to report that the nutritional status of
children has improved, for instance stunting, which is chronic malnutrition, wasting and underweight have reduced by
7 percent, 4 percent and 8 percent respectively within 5 years. Malawi is one of the few countries in the world to
make such achievements.

Mr. Speaker, Sir, there is tremendous progress in combating micronutrient deficiencies; for instance about 97 percent
of Malawians have attained the globally acceptable level of consuming adequately iodized salt. Furthermore, from
2004 to 2009, Vitamin A deficiency in under-five children declined from 60 percent to 44 percent and anaemia from
80 percent to 52 percent.

Mr. Speaker, Sir, Government is determined to prevent further spread of HIV, promote access to treatment for people
living with HIV and AIDS, mitigate the health, economic and psychosocial impact of HIV and AIDS on individuals,
families and communities.

According to the Malawi Demographic and Health Survey (2010) adult HIV prevalence declined from 12 percent to
10.6 percent and AIDS-related mortality as a percentage of the overall deaths has declined from 11 percent to 3
percent over a period of five years.

Mr. Speaker, Sir, during 2012/2013 fiscal year, Government will intensify the HIV and AIDS service delivery and
ensure that ways are explored on how Malawi can approach the long term financing for HIV and AIDS. Government
is also determined to look into the legal environment of HIV/AIDS in order to reduce stigma and discrimination.

Maternal Health and Safe Motherhood

Mr. Speaker, Sir, Government will put special focus on issues of Maternal Health and Safe Motherhood in order to
protect and ensure a healthy life for child bearing mothers and mothers in general. In this regard, I have launched a
Presidential Initiative on Maternal Health and Safe Motherhood. To this effect, I have appointed a Committee of
Traditional Authorities, of which 60% are women chiefs, drawn from across the country, who will champion the
Maternal Health and Safe Motherhood movement in this country. Under the initiative, Government will construct
holding shelters for expectant women, among other facilities, with the support of well wishers including the Bill and
Melinda Gates Foundation.

CHILD DEVELOPMENT, YOUTH DEVELOPMENT AND EMPOWERMENT

Mr. Speaker, Sir, now, I would like to speak on child development, youth development and empowerment.

Child Development

Mr. Speaker, Sir, children deserve the best care from the earliest age to give them a head start in life. With that in
mind, Government continued to implement programmes aimed at developing our children to prepare them to become
productive citizens of this country. Among the initiatives being implemented is the Early Childhood Development
(ECD) Program. During the 2011/2012 fiscal year, Government:-

        opened 240 new ECD centres;
        rehabilitated and upgraded 3 ECD centres;


                                                          16
        trained 15,000 ECD caregivers; and
        oriented 23 district ECD teams on parenting education.

To address incidents of child abuse, Government oriented 28 District Social Welfare Officers and magistrates on the
Child Protection and Justice Act 2010. We are currently in the process of reviewing the Adoption Act.

In the 2011/2012 fiscal year, over 15,200 orphans and other vulnerable children (OVCs) were supported with
bursaries across the country. Furthermore, over 2,400 older OVCs were trained in vocational skills in order to prepare
them for independent and productive life.

Mr. Speaker, Sir, the cash transfer programme continued to benefit over 100,000 beneficiaries in 27,925 ultra-poor
and labour-constrained households. Of the beneficiaries, 64 percent were children. The programme is currently
operating in 7 districts.

In the coming financial year, Government plans to open new ECD centres and train more caregivers in basic ECD
across the country.

Youth Development and Empowerment

Mr Speaker, Sir, youth development and empowerment is essential for socio-economic growth and development of
this country. For this reason, Government will continue to invest in our youth.

During the 2011/2012 fiscal year, Government:-

        under the Youth Enterprise Development fund, disbursed K630 million to 967 youth groups and 298
         individuals;
        trained over 250 youths in vocational and entrepreneurial skills;
        provided start-up tools in various Vocational and Technical Development Centres including Katuli in
         Mangochi, Mpherembe in Mzimba, Mikolongwe in Chiradzulu, Bangula in Chikhwawa and Livingstonia
         Technical College in Rumphi; and

Mr. Speaker, Sir, with regard to sports; Government has reversed the decision to transfer the construction of the new
stadium from Lilongwe to Blantyre. The stadium will be built in Lilongwe. Meanwhile Government will upgrade
facilities at Kamuzu Stadium in Blantyre.

In the 2012/2013 fiscal year, Government will continue to offer entrepreneurial and livelihood skills to the youth and
strengthening sports infrastructure development in the country.

ENERGY, INDUSTRIAL DEVELOPMENT, MINING AND TOURISM

Mr. Speaker, Sir, I now wish to turn to energy, industrial development, mining and tourism. Government will give
these areas overriding priority in order to accelerate the recovery of the economy.

Energy Development

Mr. Speaker, Sir, Government attaches great importance to energy as an engine for economic growth. In this vein,
during the 2011/2012 fiscal year, Government continued with the implementation of the Malawi Rural Electrification
Programme (MAREP) and the Energy Efficient Lighting Programme which aims at reducing the morning and evening
peak demand for electricity.




                                                          17
Under the MAREP, 30 trading centres against a target of 54 were electrified across the country. The remaining 24
trading centres are expected to be completed soon.

With regard to the Energy Efficient Lighting Programme, which is being implemented with support from our
development partners, over 1 million energy saver bulbs are being distributed for free to households, small business
enterprises and Government buildings and the remaining seven hundred are being sold at a subsidized price in a few
selected retail outlets.

Mr. Speaker, Sir, as the august House is aware, the country experienced fuel shortages and inadequate power
supply during the year under review. For this reason, Government has put in place short to long term measures to
address these challenges as discussed above.

Mr. Speaker, Sir, in order to address inadequate power supply, Government will, in the short term, install Kapichira
Phase 2 power generation plant which is expected to add 64MW of electricity by August, 2013. In the long term,
Government will develop hydro electric power plants on a number of rivers such as Bua, Dwambazi, South Rukuru,
Songwe and Shire to increase generation capacity. Government has also put aside financial resources for the
quantification of coal for thermal power generation. In general, our policy direction is to construct additional power
generation plants and engage Independent Power Producers (IPP) who should invest in power generation as
discussed above.

Mining Development

Mr. Speaker, Sir, I am pleased to report that the mining sector, which until 2009 contributed less than 1 percent to the
GDP, is generating significant economic benefits for Malawi. Currently, the sector is contributing 10 percent to the
GDP largely due to uranium mining at Kayelekera. Mineral exports now account for 20 percent of the total export
value.

We are expecting these economic benefits to increase with the coming of a number of mining companies. In 2013,
Globe Metals and Mining will start mining niobium, uranium and tantalum at Kanyika in Mzimba District. The company
is currently finalizing Bankable Feasibility Studies and Environmental Impact Assessment.

I would also like to report that a number of foreign companies are actively engaged in the exploration for different
minerals particularly rare earth metals, uranium, gold, titanium-bearing heavy mineral sands, oil and gas. With regard
to artisanal and small-scale mining, Government will formalise and regulate the subsector as it plays an important
role in poverty reduction and socio-economic development.

Mr. Speaker, Sir, inadequate and outdated geological information and insufficient institutional and human capacity
are slowing down investment in the sector. In order to address these challenges, Government will:-

        undertake an airborne geophysical survey to upgrade the current geophysical and geological database;
        rehabilitate and equip laboratories with modern equipment and technologies;
        train existing staff in geological and mining disciplines; and
        introduce specialized geological and mining courses in local tertiary institutions to ensure that the mining
         companies employ more professional local Malawians.

Manufacturing

Mr. Speaker, Sir, manufacturing continued to provide promising prospects despite the challenges the country faced
during the period under review. Nevertheless, Government facilitated several projects in the following areas: cigarette
manufacturing, wood processing, sugar production and processing, agro-processing, pharmaceutical production,
leather production, trading and oil production.


                                                           18
These projects have an investment portfolio of over US$680 million and will generate 13,840 direct jobs and spill-over
economic effects. Once operational, the projects will assist in generating foreign exchange through exports and
benefit the country through import substitution and technology transfer. Sugar production companies will also
generate power that will feed into the ESCOM grid.

Tourism

Mr. Speaker, Sir, with regard to tourism, Government considers this area as having high potential for boosting
national revenue, job creation and foreign exchange.

Mr. Speaker, Sir, in the 2012/2013 fiscal year, Government plans to overhaul and reorganise the tourism sector in
order to respond to current international market trends. This will include redefining our airline, redesigning our Lake
Malawi as a tourism destination for both lower and high income tourists, engaging a strategic investor to drive the
tourism industry and thereby raise the profile of tourism in Malawi.

Malawi suffers from poor quality and presence of hotel services, over pricing of tourist’s products, and lack of
acclaimed local tourist agents. Most of the tourists’ agents are foreign based and they collect fees and other
payments in foreign currencies; and revenue is retained in foreign accounts depriving Malawi of foreign currency.

Mr. Speaker, Sir, in order to develop our tourism, Government will:

         Establish a Film and Music Industry;
         Promote the development of a local Animation Industry in Malawi, where we want to see Malawian university
          lecturers teaching other countries on African history and culture to the Diaspora, beam signal right from here
          in Malawi;
         Develop a world class hotel on the Lake with water sport; golf course; marina village; health clinic; villas;
          casino; conference centre; and a cultural village;
         Establish a Tourist Route from Southern Region to Northern Region or vice-versa, for example, Majete to
          Mulanje to Blantyre to Zomba/Liwonde to Mangochi to Lilongwe to Kasungu/Salima to Nkhata-
          Bay/Mzuzu/Likoma to Nyika Plateau;
         Revamp the airline and encourage cheap and regular flights in and out of Malawi; and to tourist destinations
          with small aircrafts of 5-10 people;
         Introduce a Cruise Ship on Lake Malawi;
         Link Malawi to regional tourist markets: Kenya; Egypt; Nigeria and South Africa.

Mr. Speaker, Sir, I am pleased to announce that a National Dialogue on the Economy has been organised towards
end of June 2012. One of the major themes of the conference is reinstating the traditional drivers of growth which
includes tourism. Government wants to redefine Malawi as a tourist destination country. One of the expected outputs
of the conference is a comprehensive action plan to develop tourism in Malawi.

OTHER DEVELOPMENT PRIORITIES

PUBLIC SECTOR REFORMS

Mr. Speaker, Sir, I now turn to public sector reforms. Government continues to implement reforms in the public sector
with the objective of strengthening and improving efficiency and effectiveness in the public service. The reforms are
being undertaken in response to a high demand for quality public goods and services by the general public.

In the 2011/2012 fiscal year, the reforms focused, among other things, on the Medium Term Pay Policy, capacity
building, health service delivery, parastatal management, Central Government procurement system, pension scheme,
and the development of service charters, strategic plans and a Human Resource Development Policy.


                                                           19
In the 2012/2013 fiscal year, Government will continue implementing these reforms. Government will conduct quick
impact reform programmes focusing on performance analysis of selected services including the Road Traffic
management, Malawi Revenue Authority, Land Registry management, Water Boards management and urban
sanitation services.

Government will also continue with Parastatal Sector Reforms focusing on preparation and enactment of relevant
Bills for the parastatals that were earmarked for merging, dissolving or restructuring. These include merging of the
Health Regulatory Parastatals namely Medical Council of Malawi, Nurses Council of Malawi, and the Pharmacies and
Poison Board and the integration of the Malawi College of Health Sciences and the Malawi College of Accountancy
into the University of Malawi. In a bid to improve performance management at local government level, Government
will roll out Performance Management System to all the Districts.

Mr. Speaker, Sir, I am confident that through these reforms, the public service will be able to retain and attract
qualified and professional personnel, perform efficiently, effectively and improve the quality of goods and service
offered by the public service.

TRADE AND PRIVATE SECTOR DEVELOPMENT

Mr. Speaker, Sir, I now turn to trade and private sector development. Government takes a keen interest in ensuring
growth of the sector in order for the country to realise tremendous financial and economic returns needed for
development.

In the year under review, tobacco remained the major export commodity accounting for 30 percent of export followed
by uranium accounting for 12 percent. Major export destinations were Canada, South Africa, United Kingdom and
Egypt. However, China and India are expected to be among our major export destinations in the near future.

Mr. Speaker, Sir, Government is promoting a private sector driven growth and therefore Government plans to initiate
a number of reforms in the sector. The focus will be on empowering small and medium enterprises, establishing
linkages between industry and small businesses, promoting access to capital and reforming the financial sector.

With regard to trade facilitation, Government implemented several measures aimed at improving efficiency at our
border posts when conducting international trade. It implemented integrated border management, acquired non-
intrusive inspection equipment such as scanners and x-rays in order to boost Government revenue collection; and
developed a one-stop shop for trade documentation, customs clearing, and payment of taxes and duties.

In 2012/2013 fiscal year, Government will continue to proactively undertake business missions to attract foreign direct
investment and markets for our commodities; continue to negotiate for new preferential market arrangements to
strengthen our presence on the global markets; establish a business incubator programme through which youths and
women will be trained in various business skills and technologies; and commence the implementation of
competitiveness and job creation support programme worth US$16 million to develop value chains in products in
which we have potential.

Mr. Speaker, Sir, Government will pay greater attention to the development of the Small and Medium Enterprises
(SMEs). Generally, the SMEs, which includes the informal economy, covers large segment of the economy that is not
monitored nor regulated by specific statutes, and whose activities are not factored in the national accounts. In terms
of size, the subsistence agriculture in the rural areas is larger than the SMEs in the urban and semi urban areas. The
economic activities in the informal economy in Malawi have the following characteristics: easy entry, heavy reliance
on indigenous resources, family ownership of the enterprise, hence susceptible to child labour, small scale operation,
missing linkages to the formal economy, and high costs of production, high competitive demand for its goods and
services, tacit skills acquired outside the formal school system, little room for transition of entrepreneurs and workers
into the formal economy.



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This Government, Mr. Speaker, Sir, will develop the SMEs through a decentralised programme where focus will be
on the following:

        Establish a Small Industry Support Fund (SISF), and expand its activities so that it will more effectively
         support micro, small and medium-sized enterprises;
        Link the fund to Business Incubators and Local Industry Promotion Centres to reduce failure rate of small
         businesses;
        Decentralise the operations of the Fund to allow easy access by rural communities;
        Review and reorganise the mandates of MEDI, SEDOM and DEMATT and where necessary amalgamate
         them to align with the Industrialisation Policy and Programme.

INFORMATION AND COMMUNICATION TECHNOLOGY

Mr. Speaker, Sir, the global community has become an information society thriving on generation, sharing and
utilisation of up-to-date knowledge in all spheres of life. Countries the world over are able to make remarkable
developmental strides due to their capability to harness information through modern media. For this reason,
Government continues to place strong emphasis on the deployment and use of information and communication
technology (ICT) as a key catalyst for the economic development of the country to facilitate informed and results-
oriented decision-making.

Malawi needs a strong Telecommunications, Information and Technology (TIT) platform in order to launch its
industrial programme. The TIT Platform should be able to integrate security, banking and insurance, taxation, Deeds
Office, immigration, courts, traffic licensing, business registration, National Register, education and health sectors in
order to realise integrated planning and monitoring. The TIT programme will take a long term view to support
initiatives to change the structure of the economy. Government will take deliberate effort to build telecommunications
infrastructure in the rural areas to support rural development initiatives and broaden the formal economy.

To fast track the achievement of our national development goals, Government is enhancing e-government service in
order to coordinate and manage national and public sector ICT development and utilization aimed at improving public
service delivery.

Mr. Speaker, Sir, as regards improvement of ICT services in rural communities and other areas lacking ICT facilities,
during 2011/2012 fiscal year, Government established 7 community telecentres in Ntcheu, Mwanza, Neno, Mangochi,
Mulanje, Phalombe and Nsanje under the Infrastructure Services Project, bringing to 51 the number of telecentres in
the country.

Government, in collaboration with the Government of the Republic of Tanzania, will continue to implement Regional
Communications Infrastructure Project. Once completed, the project will connect Malawi to the rest of the world
through a fibre network cable in Dar es Salaam, Tanzania. This will complement the other fibre cable network
connecting this country to the world through Mozambique.

Mr. Speaker, Sir, with regard to postal services, I wish to report that the Malawi Post Corporation is providing
diversified services by turning post offices into one-stop shops. It signed agreements with the Malawi National Lottery
and Airtel Malawi to bring their services closer to the people throughout the country.

Mr. Speaker, Sir, Government will specifically focus on the following:

        Restructure the Telecommunications Industry by establishing a public limited company that can drive
         infrastructure development in rural areas; and pioneer technological advancement and invite a strategic
         private sector partner for technology, skills transfer and private capital;
        Priority will be given to the establishment of the optic fibre across the country;



                                                           21
        Give free bandwidth access to universities, colleges and research centres to enable them digitize their
         records, access and disseminate data easily. In exchange, universities and colleges will be expected to
         digitize all their collections and make them available online;
        Ensure the provision of postal services to rural areas by restructuring the postal services to become drivers
         of internet access and information management centres;
        Re-negotiate existing telecommunications agreements to introduce more competition and accelerate access
         to telephones, Internet and information technology in general throughout the country;
        Open up issuance of radio, TV and Wi-max licences to increase competition which may lead to reduced
         prices.

Mr. Speaker, Sir, this Government has prioritised ICT as a catalyst for advancement. To this effect, Government will
promote the following:

        Expand access to computers and cell phones and the internet for the rural population; expand knowledge of
         computers and cell phones through educational systems;
        Install computer and cell phone centres in rural areas; install computer and cell phone laboratories in
         secondary and technical schools and universities;
        Technology incubators will be introduced to academic centres to link them to problems of real industry;
        Establish Computer and Cell Phone Assembling Plant that can progress to higher level manufacturing by
         entering into Joint Venture with one of the major computer and or cell phone manufacturing companies;
        Motivate for the establishment of Venture Capital by linking those with capital to those with ideas;
        Build Engineering Capacity in computers, cell phones, printers, TVs, faxes, fridges through Science Fairs
         like the ones taking place at Kamuzu Academy, and encouragement of Cottage Industries for Assembling
         and Service Plants;
        Establish Toy Factories to stimulate technological advancement.

WOMEN IN DEVELOPMENT

Mr. Speaker, Sir, Government values the role that women play in the socio-economic development of this nation. In
this respect, we have continued to advocate for increased representation of women in decision-making positions in all
sectors of the economy. As a result, representation of women in decision-making positions in the public sector has
increased from 19.2 percent in 2007 to 24 percent in 2012.

Government is committed to uplifting the economic welfare of women by, among other things, engaging them in
various income generation activities. In the 2011/2012 financial year, Government trained 177 women entrepreneurs
from 17 districts across the country in business management at Magomero Community Development Centre.
Furthermore, Government with support from the community savings and investment programme trained 9,959
women countrywide in business management and financial literacy.

In the coming fiscal year, Government will scale up women economic empowerment activities by facilitating transition
of women business groups into cooperatives to make them commercially viable; and intensifying efforts of linking the
groups to industries, viable markets and financing services. Mr. Speaker, Sir, very soon, I will be launching the
Presidential Initiative on poverty and hunger reduction which will among other things mobilise women to form
cooperatives to grow cash crops.

DISABILITY AND THE ELDERLY

Mr. Speaker, Sir, turning to people with disabilities and older persons, Government continued to implement several
initiatives aimed at uplifting their livelihoods.

During the 2011/2012 fiscal year, Government:



                                                         22
        increased the number of districts where Community Based Rehabilitation Project is being implemented from
         16 to 21;
        provided assistive devices to 1,230 persons with disabilities in different parts of the country;
        provided start-up capital to 130 older persons engaged in various small-scale agro-businesses such as
         piggery and goat rearing across the country; and
        assisted over 2,000 older persons with food, blankets and warm clothing.

In the 2012/2013 financial year, Government will develop a National Information Management System to ensure
effective management of disability data in the country; and enact the Disability Bill. Government will continue to
provide start-up capital to older persons who have the requisite skills to engage in small-scale businesses. We plan to
provide low-cost housing to poor and vulnerable older persons and improve access to social services by older
persons.

LANDS, HOUSING AND URBAN DEVELOPMENT

Mr. Speaker, Sir, turning to Lands, Housing and Urban Development, Government made steady progress in this area.
During the period under review, Government:-

        conducted boundary reaffirmation exercise between Malawi and Zambia and Malawi and Mozambique
         covering distances of 273km and 104km respectively;
        constructed boundary pillars along the two borders;
        serviced and allocated over 2,000 plots to urban developers for residential and commercial purposes in
         Blantyre, Lilongwe and Mzuzu;
        processed 500 lease application, and 2,700 property registrations; and
        digitized all manual records of the land and deeds registries.

NATIONAL SECURITY AND DEFENCE

Mr. Speaker, Sir, with regard to national security and defence, Government continues to ensure that peace and calm,
law and order prevail in the country. However, the country does not have a national security policy to guide and
regulate our security programmes and activities. Government will therefore initiate the development of National
Security Policy.

Mr. Speaker, Sir, in the 2011/2012 fiscal year, there has been numerous complaints raised by private sector
concerning crime and theft. I appeal to the Malawi Police Service to ensure that the country enjoys peace and
security.

In the 2012/2013 fiscal year, Government plans to continue with the construction and rehabilitation of houses for
members of the security departments and will ensure that officers are provided with modern houses. In addition,
Government will also ensure that the sector has adequate human resource, modern technologies and good offices.

Further, Government will continue with the project on the computerization of its border posts in order to promote
safety and security through controlling and monitoring of persons entering and leaving Malawi.

With regard to Defence, in the 2011/2012 fiscal year, Government contributed a full battalion to a UN peace keeping
mission in Ivory Coast and continued to deploy staff officers and military observers in the United Nations Missions in
the Darfur, the Southern Sudan and the Democratic Republic of the Congo; and has completed the rehabilitation of
the Malawi Armed Forces College Hospital in Salima.

Government will reorient military programmes to include infrastructure development (roads, dams and irrigation
channels) and expand military colleges to include training in engineering and technology development.


                                                          23
In the 2012/2013 fiscal year, Government will continue to engage our neighbouring countries on issues of defence;
deploy soldiers, staff officers and military observers in the United Nations peace-keeping missions in Ivory Coast, the
Darfur, the Southern Sudan and the Democratic Republic of the Congo; and develop infrastructure in all the barracks
and other units in order to improve the welfare and living conditions of armed forces.

Mr. Speaker, Sir, with regard to prison services, during the year under review, Government constructed additional
cellblocks at Chitipa, Dedza and Mwanza Prisons. Government will continue to expand irrigation farming in all major
prisons to make them food self-sufficient and plans to diversify the farming to include livestock and poultry production
to improve prisoners’ diet.

Government will review the status of suspects who have been on remand for five years without appearing before
court. Government will also intensify community service for the convicts.

HUMAN RIGHTS, RULE OF LAW AND ACCESS TO JUSTICE

Mr. Speaker, Sir, Government is committed to the promotion and protection of human rights, democracy, the rule of
law and access to justice as provided for in our Constitution.

With respect to the rule of law, during the 2011/2012 fiscal year, the country experienced a deterioration of human
rights, rule of law and governance. Due to poor political and economic governance donors withdraw and or
suspended aid to Malawi and the investment climate worsened. Court orders were not complied with and many
repressive laws were passed in this august House. Despite these challenges, Mr. Speaker, Sir, Government
continued to review certain laws, including:

        the Domestic Act, the;
        Public Health Act;
        the Chiefs Act;
        the Sheriff’s Act;
        the Patents Act and the Local Courts Act; and
        finalized the review of two laws relating to adoption of children and fire arms.

In the 2012/2013 fiscal year, we will continue with the law reform programme and finalize review of the laws that I
have just referred to. Some laws which were duly passed by this august House and were referred back to the Malawi
Law Commission will be repealed, as a matter of urgency, and these include:

        section 46 of the Penal Code (Cap7:01);
        the provisions regarding indecent practices and unnatural acts contained in sections 137A and 153 – 156 of
         the Penal Code;
        the Civil Procedure (Suits by or Against the Government and Public Officers) (Amendment Act, 2011);
        the local Courts Act, 2011; and
        Section 35 of the Police Act, 2010.

Mr. Speaker, Sir, my Government will bring to Parliament a bill for debate and decision on whether the independence
national flag could be reinstated to replace the current one. This decision was reached upon observing that the
process to change to the present flag did not involve adequate national consultation and participation by Malawians.
In the opinion of the Cabinet, there was no compelling reason for changing the independence flag. The Minister of
Justice will present the bill to this august House during this meeting of Parliament.

The Constitution (Amendment) Bill, 2012, which seeks to provide for the holding of Tripartite Elections and is already
before this House, will also be considered soon.




                                                           24
In the 2012/2013 fiscal year, Government will start conducting civic education in readiness for the 2014 tripartite
elections and build capacity of Civil Society Organisations to enable them adequately deliver governance and human
rights programmes.

Government will strengthen institutions that enforce and promote human rights, accountability in governance issues
and access to justice like the Office of the Ombudsman, Malawi Human Rights Commission, the Law Commission
and the Malawi Electoral Commission.

Mr. Speaker, Sir, in the coming fiscal year, Government will remain committed to the fight against corruption. We will
concentrate on areas of corruption prevention, public education, investigations and prosecution in our quest to
achieve a corrupt-free society.

LABOUR RELATIONS

Mr. Speaker, Sir, the role of labour in economic growth and development cannot be overemphasized. Government
therefore, is committed to promoting a high quality and productive workforce.

During the 2011/2012 fiscal year, Government enacted the Labour Relations (Amendment) Bill 2012 which will
ensure that labour disputes are quickly resolved. Government processed 3,000 compensation cases related to
injuries and death of workers in the course of their employment and paid out K147 million to injured workers and
dependants of deceased workers. Meanwhile, the slowdown in economic activity, in certain cases, resulted in laying
off of staff.

Mr. Speaker, Sir, as earlier said, the primary focus of this Administration’s policies is wealth and job creation.
However, this country does not have credible employment and unemployment data to help with planning. We do not
have comprehensive statistics on unemployment levels. Government will commission National Unemployment
Survey in collaboration with National Statistics Office and the International Labour Organisation (ILO).

In the 2012/2013 financial year, Government will continue to facilitate maintenance of harmonious Labour Relations
in workplaces, provision of decent salaries and wages and improvement in working conditions.

DISASTER MANAGEMENT

Mr. Speaker, Sir, turning to disaster management, Government continued to provide relief interventions and
implemented disaster preparedness programmes to assist disaster-impacted communities. During the 2011/2012
fiscal year, the country experienced an increased number of disasters including floods, hailstorms and dry spells
because of climate change. These caused damage to property, road infrastructure and crops in 25 districts and
18,000 households were affected. In response to these disasters, Government, with support from individuals, local
companies and development partners, provided relief items in the form of food and non-food items to the affected
households.

Mr. Speaker, Sir, in the 2012/2013 financial year, Government is developing an Integrated Flood Risk Management
Plan for the Shire Basin. This will address the flood hazard situation in a harmonious and integrated manner.

INTERNATIONAL RELATIONS

Mr. Speaker, Sir, I now turn to international relations. Let me inform this august House that the consolidation of our
multilateral and bilateral relations is of utmost importance in the pursuit of our foreign policy.

Mr. Speaker, Sir, I wish to inform this august House that our diplomatic relations with the United Kingdom have been
normalized since this administration came into power in April, 2012 as highlighted above. Following this development,


                                                           25
the Prime Minister of Great Britain approved to send a High Commissioner on the understanding Malawi will abide by
the international protocols that guide diplomatic relations between two sovereign nations. Similarly, I have appointed
a High Commissioner for Malawi to the United Kingdom. The British Government has assured us of their support as
we embark on the restoration and rebuilding of our economy.

In the 2011/2012 fiscal year, Government established formal diplomatic relations with the Republic of Estonia, the
Republic of Slovenia, the Republic of Malta, the Republic of Bosnia and Herzegovina, the Republic of Fiji, the
Republic of South Sudan, the Republic of Armenia, the Republic of Mongolia, the Peoples Republic of Bangladesh,
the Republic of Georgia, and the Republic of Montenegro.

Our Mission in Kuwait City is now fully operational and has already started cementing our relations with the Middle
East countries. In addition, several foreign nationals have been appointed Honorary Consuls for the Republic of
Malawi in countries such as the United States of America, Germany, Turkey, Belgium, Ukraine, Poland, Italy, Spain,
Nigeria and Austria to assist the Government in its developmental efforts. Here at home, the Government of the
Republic of India officially established a resident diplomatic mission in Lilongwe while the Federal Republic of Nigeria
will establish its mission soon. We are also establishing a Joint Permanent Commission of Cooperation with the
Republic of Liberia.

Mr. Speaker, Sir, Government will upgrade our diplomatic missions to be able to identify relevant emerging
technologies and markets for our industrialization programme. We will establish a Diaspora Department in the
Ministry of Foreign Affairs to harness the efforts of Malawian Diaspora to meaningfully participate in the economic
development of the country.

CONCLUSION

Mr. Speaker, Sir, at the beginning I said ‘I also have a dream”.

From their experience of the impact of globalization and interdependence, the developed countries have begun to
realize that the problem of poverty in a developing country will not remain forever in that developing country, but
sooner or later it will find a way of transferring itself into developed world.

Learning a lesson from the protracted recession of the late 1970s and 1980s, and the recent global financial crisis,
the developed countries have also realized that to stimulate the global economy, they must cultivate vast new
markets in the developing world.

The countries of the developing world, including Africa, have also been formulating a fundamental change in
approach and orientation to their endeavors to solve global economic problems. They have come to realize that
reciting a litany of grievances, denunciations and using confrontational language is counterproductive in dealing with
the developed countries. They have now resolved to adopt a completely rational approach and resume dialogue with
the north on the basis of partnership of equals.

The developing countries have realized that their lack of unity has not served the cause of development and are now
more determined to present a united front to their counterparts in the North, with whom they would like to re-open the
dialogue.

Accordingly, the AU proceeded to craft the concepts and modalities that would provide the basis and the framework
of its new initiatives. It launched a vigorous advocacy for its views and initiatives, and attended to important
housekeeping tasks such as the establishment of effective organizational mechanisms, guidelines and procedures. It
also decided to restore the issue of economic cooperation to the top of its agenda without neglecting the political
aspect of its mission.




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A South African textbook on International Relations says: “At the end of World War 2 …through the Marshall Plan for
Western Europe, the United States channeled $12 billion into Europe … The US also accepted protectionist
measures introduced in Western Europe, such as the Schuman Plan of 1950 …”

The same approach of financial aid and concessions on protectionist policies was utilized to enable Japan quickly to
reconstruct its economy. (Power, Wealth and Global Order, eds Philip Nel and Patrick J. McGowan: UCT Press, 1999.
P 40).

The Federal Republic of Germany poured considerable resources into former German Democratic Republic to speed
up the process according to which East Germany would catch up with West Germany in terms of economic
development.

These examples show us that what happened in Western Europe after the Second World War and in Germany after
the fall of Berlin Wall can be emulated in dealing with similar situations in Africa.

These examples also demonstrate that where there is a will, there is a way.

Of necessity are issues of inflows of capital especially in areas of manufactured goods and modern economic sectors.
This calls for need to address the issue of the transfer of technology as an essential part of achieving Malawi’s
development.

Malawi will develop centers of excellence: in business; in health; in education; in agri-processing and tourism: which
should rally development agenda with specific driver projects in the sub sectors. Here, the focus is around energy,
mining, infrastructure, water resources, tourism, and finance and insurance, roads and rail projects as articulated
above.

Internally, Mr. Speaker, Sir, Malawi needs strong political leadership based on the spirit of Umunthu that will
deliberately promote a highly skilled public service that is backed up by effective systems which will be able to
provide steady national direction for sustained development.

The Political leadership should work to promote corporate governance and create conditions conducive for
investment and trade as discussed above. Issues of fight against corruption, rule of law and observance of both
political and economic governance are critical to promoting private investment and the growth of an effective and
vibrant private sector.

Mr. Speaker, Sir, we Malawian leaders should aim at establishing open, competitive and dynamic economic
structures that will mobilize individual initiative and dynamic private enterprise. To achieve this, we the Malawian
Leaders should draft an organizing national philosophy to rally consensus within and across political parties, civil
society, business, organized labour, strategic private investors and development partners in order to radically
turnaround our economy. We Malawian leaders should be determined and ready to deliver a development and
modernization project to serve the people of Malawi.

Mr. Speaker, Sir, it is my hope that the private sector leadership from Malawi and the world; the development
partners here present and far away; the civil society here present and far away; the investors here present and far
away; this day provides a platform where strategic relationships like those of Marshall Plan; like those of West
Germany could find space in the economic emancipation of Malawi.

Yes, Mr. Speaker, Sir, I also have a dream. I call upon all Malawians of all walks of life: rich and poor, urban and rural,
educated and not educated, employed and unemployed, boys and girls, sick and healthy, small business and big
business; friends and enemies, vendors and financiers, lomwes, tumbukas, chewas, senas, ngonis, yaos, all of you,
come, come and join me in the efforts to lead and develop this country. Let us unlock our skills. Let us unlock our


                                                           27
spirits. Let us unlock our ability to be free and free we shall be indeed. I cannot do this alone. Only if we work together,
can we succeed. God is on our side, we need to be on His side.

Mr. Speaker, Sir, it is now my singular honour to declare the 2012/2013 Budget Meeting of Parliament officially
opened.

May God bless you all and May God bless Mother Malawi.




Thank you, Mr. Speaker, Sir.




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