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Towards Recovery and Sustainable SocioEconomic Development


On the occasion of the

Friday, 20th May, 2016























Mr. Speaker, Sir, I am pleased to deliver this morning the State of the Nation
Address to this august House, and to officially open the 2016/2017 Budget
Before I proceed, allow me, Mr. Speaker, Sir, to convey my deepest condolences
to the entire Honourable House and the bereaved family on the sudden death
of Honourable Billy Kanjira Banda who, until his death, was a Member of
Parliament for Mchinji West Constituency. May his soul rest in eternal peace.
Mr. Speaker, Sir, let me proceed by outlining the gains we have made so far as a
nation and then outline some of the plans for the 2016/2017 financial year.
Mr. Speaker, Sir, the title of my Address today is: Towards Recovery and
Sustainable Socio-economic Development.
This country knows well that we have faced challenges for the past two years.
But we cannot keep bemoaning our challenges. The question is: how are we
redefining ourselves as a nation and emerging out of the challenges.
I am pleased to report that the economy is slowly stabilizing. We took tough
measures to contain our situation, and it was not easy. The resumption of the
Extended Credit Facility with International Monetary Fund (IMF) is testimony
that our austerity measures and fiscal discipline are bearing fruits.
More than ever, we are optimistic that Malawi can do better. We now believe we
can gradually wean ourselves from donor dependency. We have illustrated that
with our own resources well managed, we can make Malawi a country where
our potentials and dreams are realized.


Mr. Speaker, Sir, let me speak on macro-economic environment and reforms.
Our 2015/2016 performance has been influenced by shocks caused by
pressures from the rising food prices, exacerbated by low production of maize
in the 2015 growing season due to floods, dry spells and early cessation of rain
in most parts of the country.
I want us to note that the economy grew by only 3.1 percent in 2015 despite an
earlier projection of 5.4 percent growth rate. The rate of inflation remained high
at 21.8 percent in 2015 as compared to the projected rate of 16.4 percent.
Domestic debt stock increased to K526.4 billion in 2015 as compared to K487.0
billion at the end of 2014. However, domestic debt as a ratio of GDP dropped
from 15.6 percent in 2014 to 8.9 percent in 2015.
Mr. Speaker, Sir, while recognizing that the macroeconomic developments in
the 2015/2016 financial year were mainly due to the effects of climate change,
Government fought hard to achieve macroeconomic stability by implementing
tight fiscal and monetary policies. Government has now regained firm fiscal
management by exercising strict control on spending and enhancing domestic
resource mobilization.
On expenditure control measures, Government has made it mandatory for all
Ministries, Departments and Agencies to submit financial transaction reports,
which include revenue, expenditure, commitment and payroll returns and bank
reconciliation reports as a condition for accessing subsequent funding. Now

Treasury can analyse expenditure lines with closer scrutiny. We can compare
expenditures in the Integrated Financial Management Information System
(IFMIS) with those reflected at the Reserve Bank of Malawi. We can now detect
any irregularities quickly.
Mr. Speaker, Sir, while Government is committed to reduce donor dependency,
domestic resource mobilization performance was below the set targets. From an
approved Mk 666.6billion in June 2015, this was revised to MK 654 billion
during the midterm budget review. Mr. Speaker Sir, in order to enhance
domestic resource mobilization, Government is committed to implementing a
broad based tax reform starting from the 2016/2017 fiscal year with a view to
aligning our tax system with the nations development goals, thus making it
more efficient, effective, simple, transparent and predictable.
Further, I would like to report that Government remains committed to
implementing the Zero Net Domestic Borrowing policy in the medium term. The
annual target of domestic debt repayment will remain at 1.5 percent of GDP.
On how we manage external debt, Government will ensure that foreign loans
are obtained primarily to finance development projects that are thoroughly
appraised and are of strategic importance to the country. In fact, the projects
must be justified to be of high rate of return.
Mr. Speaker, Sir, we will continue with public debt management reforms to
improve and align our public debt laws, procedures and processes to
international best practice. We need to make our legal framework on public
debt management more comprehensive and robust. This entails reviewing
relevant provisions in the Public Finance Management Act (2003).

Mr. Speaker, Sir, this year, we expect to improve the macroeconomic indicators
for our economy as a result of these measures.
Let me also report that the economy is expected to register a real GDP growth
rate of 5.1 percent in 2016, and 7.0 percent in 2017. The annual average rate
of inflation is expected to fall from 21 percent in 2015 to 19.8 percent in 2016,
with further improvements in 2017 and beyond.


Mr. Speaker, Sir, in the 2016/2017 financial year, Government will roll out
Program Based Budgeting (PBB) reforms. These have already been piloted in
selected Ministries. All Ministries, Departments and Agencies will now prepare
their budgets in line with the PBB framework.
Mr. Speaker, Sir, the PBB approach will complement Governments initiative
on institutional performance assessment. Let us note that PBB framework
provides an effective linkage between resources utilized and results achieved.


Mr. Speaker, Sir, in order to improve the stability of the financial sector,
Government implemented a number of initiatives in the 2015/2016 financial
year. We focused on strengthening the regulatory environment and improving
the financial infrastructure for the sector. I am pleased to report that the

following Bills have been developed for tabling in this house in order to
strengthen the regulatory environment:

The Credit Reference Bureau (Amendment) Bill, 2015;

The Payment Systems Bill, 2016;

The Financial Services Amendment Bill, 2016l;

The Banking Amendment Bill, 2016;

The Malawi Deposit Insurance Corporation Bill; and

The Anti-Money Laundering Bill, 2016.

Our aim is to make the regulatory framework tough and conducive.

Mr. Speaker, Sir, I have some good news on infrastructure for the financial
sector. The National Switch was implemented in the 2015/2016 financial year.
Government also commenced work on installation of Micro Finance Institution
Transaction Processing Hub. Once installed, the hub will serve as a common
Management Information System for Micro Finance Institutions.


Mr. Speaker, Sir, we all recall that MGDS II ends June this year. As a result,
Government has conducted a comprehensive review of the implementation of
the MGDS II. We now have drawn lessons to inform the formulation of its

Mr. Speaker, Sir, we also recall that we promised to establish the National
Planning Commission. We have made progress and we are now at the stage of
developing a proper legal framework for the establishment of the Commission.
This will ensure continuity of development programmes.


Mr. Speaker, Sir, agriculture remains one of the key priorities for Government
because of its significance to our economy. Government will, therefore,
continue to place highest priority on the sector to ensure both national and
household food security as well as support agro industries.
Overview of the 2015/16 Season
Mr. Speaker, Sir, the 2015/16 growing season has been badly affected by
adverse weather conditions caused by the El Nino phenomenon. This has
negatively affected crop production including maize the staple food. Maize
production has declined by 12.4% in the 2015/16 growing season. Thus, maize
production declined from about 2.8 million metric tons in 2014/15 growing
season to about 2.4 million metric tons in 2015/16. The country will, therefore,
experience a deficit over another deficit registered in the previous season.
Over three million Malawians are expected to be food insecure.
Mr. Speaker, Sir, this august house must note we have already declared Malawi
a State of Disaster and appealed for humanitarian relief assistance.

Mr. Speaker, Sir, let me put it on record that Government distributed in the
past year relief maize to about 2.8 million food insecure people in 25 districts.
This maize was drawn from the Strategic Grain Reserve. We used Government
resources and funds from the World Bank through the Malawi Floods
Emergency Recovery Project. Through ADMARC, a total of 110,000 metric tons
of maize was procured from Zambia and locally and sold to the general public
at a subsidized price. And as the Government pronounced, no single person
died from hunger.
Mr. Speaker, Sir, in addition, a consortium of International Non-Governmental
Organizations also contributed towards the relief program in form of cash
transfers that benefited about 430,000 Malawians.

Vulnerable households in

all the 28 districts were also provided with sweet potato vines and cassava
cuttings to mitigate food shortage.
Mr. Speaker, Sir, besides mitigating the food shortages;

We implemented the Farm Input Subsidy Programme benefiting 1.5

million resource poor farmers. This year farmers contribution was
increased from MK1, 500 to MK9, 000.

We implemented the Legume Production and Marketing Programme. We

are diversifying to more crops like soya beans, pigeon peas and
groundnuts seed. This is one area where the future of our forex lies.

We inaugurated a third Cotton Ginnery for ADMARC in Balaka;

We supported cotton growers with about 670 metric tons of certified

cotton seed on cash as well as a loan basis;


We launched the US$2.4 billion Irrigation Master Plan and Investment

Framework to guide the expansion of the irrigation sub-sector by
116,000 hectares.

Some of the major projects under this framework

include Shire Valley Irrigation, Bwanje Scheme expansion, Songwe River

and Greenbelt Initiative Schemes;

We completed construction of seven solar pump irrigation schemes

covering an area of about 780 hectares under the Agriculture
Infrastructure Support Project, and 150 hectares

under the Climate

Adaptation for Rural Livelihoods and Agriculture Project in Karonga,

Neno, Chikhwawa and Nsanje;

We completed maintenance of old government irrigation schemes in

Karonga, Nkhotakota and Machinga and


400 hectares was

developed for gravity fed irrigation in Blantyre, Thyolo and Phalombe


We procured over 4000 treadle pumps through the Malawi Flood

Emergency Recovery Project funded by the World Bank and also
undertook surveys and designs of the 30 damaged irrigation schemes;

We implemented the Karonga and Malombe Rice Production and value

addition project. This will irrigate 1,500 hectares for the production of
rice to be processed, graded, branded and packaged for both local and
export markets.

Mr. Speaker, Sir, to address food shortages in the 2016/2017 financial year,
Government has provided ADMARC with financial resources to procure maize

soon after harvest to ensure that markets are fully stocked with commercial
Government has also invited interested private sector investors to undertake
commercial irrigation farming in order to boost maize production beginning
this year.

The programme will also involve medium-scale farmers and

smallholder farmers to either utilize their existing irrigation facilities or rent

unutilized irrigable land. Government will guarantee to buy the maize produced
through the National Food Reserve Agency. We will also prioritize the
development of dams and boreholes to reduce dependence on rain-fed
agriculture. I have also directed that FISP should undergo further reforms to
ensure that the programme is efficiently and effectively implemented. In the
end, FISP must be run like in the private sector.
Mr. Speaker, Sir,

in addition, Government will revamp extension farmer

linkages by deploying more Field Assistants across the country and improving
on their mobility through the procurement of

motorcycles and vehicles

including mobile vans.

Tobacco Production and Marketing
Mr. Speaker, Sir, we are all aware that the tobacco industry has been facing a
number of challenges. These include over-production, high rejection rates and
low prices.

We are therefore taking appropriate measures which include

reviewing the Tobacco Act in order to address the structural challenges.

Mr. Speaker, Sir, Government will this year adopt the National Agriculture
Policy, the National Irrigation Policy, National Fisheries and Aquaculture Policy,


and the National Seed Policy and Bill. We need appropriate agricultural policies
to guide the sector.
Greenbelt Initiative
Government continues to prioritize investment in the Greenbelt Initiative in
order to increase productivity of selected high value crops. I am, therefore,
pleased to report that construction of the irrigation infrastructure and the
sugarcane factory in Salima were completed. Sugarcane nursery development
is underway and planting on the 439 hectares will commence later this year.
Under the GBI, Government has an ongoing Land Management Contract with
Malawi Mangoes limited where land has been provided to Malawi Mangoes for
the production of bananas and mangoes.
Mining Development
Mr. Speaker, Sir, Malawis unique mineral potential continues to attract
interest from both local and foreign investors. We are now focusing on creating
an appropriate investment environment by reviewing of mining legislation and
establishment of mining cadaster, among other things. I am pleased to report
that Government finally launched the countrywide airborne geophysical data in
August, 2015.
Mr. Speaker, Sir, Government will continue to collect, assess and disseminate
geo-scientific data related to geology and mineral resources of Malawi.


can now access the data for use in mineral exploration, infrastructure
development and general research.


Natural Resources and Environment Management

Mr. Speaker, Sir, we have taken some measures to safeguard the countrys
environment and natural resources. Government has initiated the process of
placing Viphya Plantation and Thuma and Dzalanyama Forest Reserves under
private sector management. We have also developed a National Charcoal
Strategy in order to promote sustainable production of charcoal and
alternative sources of energy for domestic use.
In the 2016/2017 fiscal year, Government will strengthen the legal policy and
regulatory framework for the effective management of its natural resources and
environment. We will enact the Environment Management Bill (2016) and also
adopt the National Climate Change Management Policy. Further, we will
approve the revised National Forestry Policy and also enact the Environment
Management Bill (2016).
Industry, Trade and Private Sector Development
Mr. Speaker, Sir, Government continues to implement the National Export
Strategy in order to build the economys productive base. In the ending
financial year, Government implemented a number of policy, administrative,
regulatory and institutional reforms to enhance Malawis attractiveness as a
destination for private investment. In this regard:

Government launched the Malawi Business Registration System

which allows for online registration of businesses and companies;


Government developed a collateral registry at the Department of

Registrar General to improve business registration and ensure
investors access to capital from the Banks;

Government operationalized the Companies Act (2015) through the

passing of the Insolvency Bill;

Government commenced the establishment of the Malawi Trade Portal

to facilitate the Ease of Doing Business in the country; and

Government formulated and approved the National Trade Policy and

the National Industrial Policy

Mr. Speaker, Sir, these reforms will improve Malawis competitiveness in Doing
Business with the world. The reforms will also attract private investment,
which is necessary for economic growth, job creation and poverty reduction.
Mr. Speaker, Sir, Government also facilitated bilateral discussions with
potential investors through the first ever Malawi Investment Forum. This forum
attracted a lot of high profile foreign investors. Government also conducted
bilateral meetings with the Chinese Government on priority projects for Malawi.
I am pleased to report that the discussions with potential investors have
already started bearing fruits. As I speak, we have already granted investment
certificates worth $124 million.
Furthermore, Mr. Speaker, Sir, the Chinese Government approved the
immediate implementation of three priority projects. These are the Chileka
International Airport Project, the 300 Megawatt Kammwamba Coal Fired Power
Plant project and the E-Government (National Identity) Project. The Chinese
Government also agreed to bring investors to support value addition in a

number of products particularly those featured in the National Export Strategy

such as oil seed products; sugarcane products; cotton, textile and apparel;
hides and skins, among others. This is part of the seven major projects
approved by the Chinese Government.
I would also like to report that Government continued to facilitate the
accreditation of the Malawi Bureau of Standards in support of industrial
development. Government is committed to the construction of the State of Art
Laboratory in Blantyre, whose ground breaking ceremony took place in
February, 2016.
Mr. Speaker, Sir, during the 2016/2017 financial year, Government will
continue implementing reforms in order to enhance Malawis attractiveness as
an investment destination. The reforms will now include reviewing the
Regulations to establish Export Processing Zones, which will in turn facilitate
the promotion of industrialization.

Labour and Employment

Mr. Speaker Sir, labour plays a vital role in the socio-economic development of
the country. Government, therefore, is committed to promoting a high quality,
skilled and productive workforce.
In order to improve quality in our technical colleges, Government is
constructing ICT and Business Centres, classrooms and workshops at
Lilongwe, Nasawa, Salima and Soche Technical Colleges.


Mr. Speaker, Sir, Government is aware that Malawi has available skilled labour
that can foster development of our country. In order to provide job
opportunities to the available labour force, Government will review the current
Temporary Employment Permit procedures. We will tighten the issuance of
Temporary Employment Permits to ensure that only special skills which are not
available in the country are considered.
Mr. Speaker, Sir, in order to bridge the information gap between employers and
the labour force, Government is currently developing a Labour Market
Information System which will increase access to and availability of labour
market information in the country. The system will also help Government to
modernize public employment services.
In this financial year, Mr. Speaker, Sir, Government continued to conduct
labour inspection in workplaces to ensure that workplaces complied with
regulatory framework on occupational health and safety standards. We
inspected about 500 workplaces during the year under review.
Mr. Speaker, Sir, delay on workers compensation payments has been a major
concern for a long time. In response to this undesirable situation, Government
is developing a Workers Compensation Fund. Apart from helping to speed up
workers compensation payments, the Fund will also guarantee availability of
finances. This will reduce financial burden to the Government and the private

Tourism, Wildlife and Culture


Mr. Speaker, Sir, the tourism sector has a huge potential to contribute to our
countrys economic growth and development. However, the slow pace of growth
of this sector remains an area of concern to the Government.
In order to create new impetus in the sector and realize full potential, I have,
therefore, moved the Department of Tourism from the Ministry responsible for
Information to the Ministry responsible for Industry and Trade. Tourism must
be understood as an industry.
Government will implement more measures to drive tangible growth and
success in the tourism industry. These include:

implementing the Malawi Tourism 2020 Strategy;

reviewing the Tourism Policy;

upgrading to bitumen standards access roads to places with tourist

value; and

constructing the Malawi Institute of Tourism Campus in Lilongwe.

Further, Government will expedite the enactment of the National Heritage

Council Bill law to ensure promotion and preservation of the countrys rich
cultural heritage.
Integrated Rural Development
Mr. Speaker, Sir, Government is aware that for this nation to develop, priority
must be given to the development of rural areas. In view of this, Government
remains committed to improving the living standards of the rural poor.


During the year under review, Government completed construction of Rural

Growth Centers at Jenda in Mzimba, Malomo in Ntchisi and Monkey Bay in
Mangochi districts. Government also completed construction of a modern
market at Nkhamenya in Kasungu District; Nthandizi, Phalula and Ulongwe
markets in Balaka District; and Mbulumbuzi Market in Chiradzulu District.
Mr. Speaker, Sir, with regards to implementation of social support programmes,
Government disbursed a total of US$20.4 million to a total of 450,131
households through the Community Driven Public Works and Social Cash
Transfer components of the programme.
Mr. Speaker, Sir, during the 2016/2017 fiscal year, Government will continue
implementing the Social Support programme in order to provide cash transfers
to poor households. This will enable them purchase subsidized farm inputs
and food during the lean season. Government will also complete the second
phase of Rural Growth Centers; and complete devolution of functions to Local

Transport Infrastructure
Mr. Speaker, Sir, a good transportation system is a fundamental prerequisite









notwithstanding, our transport costs remain among the highest in the region.
Realising this need, Government has been undertaking measures to reduce
transport costs through the implementation of the National Transport Policy

which we launched in April, 2015. Through this policy a number of remedial

measures in the transport are being undertaken as follows.
Road Transport
In order to increase the amount of resources available for road maintenance,
Government, in the 2015/2016 financial year, implemented a number of
reforms. These reforms aimed at increasing resources collected by the Roads
Fund Administration. The structure of the fuel levy was revised from an
absolute figure to a percentage of pump price; and this led to a 60 percent
increase in the resources available for road maintenance programs. The
collection of transit fees in all our border posts was outsourced on an agency
arrangement with the Malawi Revenue Authority in order to reduce transit fee
leakages. This led to a 30 percent increase in revenues collected from transit
Despite this significant increase in resources available for road maintenance,
the annual financing gap still remains high at about US$55 million. In order to
reduce this financing gap, Government is exploring the possibility of tolling
selected roads under Public Private Partnership arrangement, to provide extra
resources for road maintenance.
Mr. Speaker, Sir, Government will also continue working towards improving









maintenance and construction of new roads in rural areas, focusing on those

areas that are economically active. Some of the key rural roads upgrading
projects that Government will focus on in the 2016/2017 financial year



resumption of the Zomba Jali Kamwendo Phalombe

Chitakale road; and the Thyolo - Thekerani - Muona - Bangula Road;

The continuation of the Jenda-Edingeni Road;

The Completion of the Chiringa Miseu Folo - Chiradzulu road; and

The Completion of the Lumbadzi Dowa Chezi Road upgrading.

Mr. Speaker, Sir, with regard to improvement of the condition of the existing
roads, a number of roads in the main cities of Blantyre, Lilongwe, Zomba and
Mzuzu have been targeted for rehabilitation in 2016/2017 fiscal year and
beyond, with a view to improving the flow of traffic and reducing congestion
which of late has become a common problem.
Mr. Speaker, Sir, other road projects which are scheduled for commencement in
the next fiscal year include:

Karonga Songwe Road Rehabilitation Project

Mzuzu Nkhata Bay Road Rehabilitation Project; and

Liwonde Mangochi Road Rehabilitation Project.

Mr. Speaker, Sir, I am pleased to report that Government, through the

Directorate of Road Traffic and Safety Services has been upgrading the Malawi
Traffic Information System with new modules being added to the system in
phases. This system has automated and integrated all aspects of traffic and
safety services. Mr. Speaker, Sir, one of the benefits that has accrued from the
improved system is an increase in revenues collected by the Directorate.


Mr. Speaker, Sir, in order to reduce congestion at Road Traffic and Safety
Services centres, Government will outsource Vehicle Inspection Services to
private service providers. An inspection and testing equipment has already
been procured to facilitate this process.
Rail Transport
Mr. Speaker, Sir, regarding rail transport, Government has continued to
prioritize the Nacala Corridor. I am pleased to report that a 138 km railway
line between Nkaya and Kachaso and a 100km section between Nkaya and
Nayuchi became operational in December last year. However, the operations are
being threatened by attacks along the line. Government is doing everything
possible to stop the attacks. Mr. Speaker, Sir, let me also take this opportunity
to urge all Malawians to show a sense of patriotism and respect for private and
public property, as continued sabotage of the trains will eventually lead to an
increased cost of goods and services caused by increased transportation costs.
Water Transport
Mr. Speaker, Sir, with regard to water transport, let me reiterate Governments
commitment to the Shire-Zambezi Waterway Project.
Mr. Speaker, Sir, the Governments of Malawi, Mozambique and Zambia secured
resources from the African Development Bank through SADC to conduct a
comprehensive feasibility study. I am pleased to report that the preliminary
findings of the study showed that the two rivers are navigable. The three
Governments will, therefore, meet in the next few months to consider the full
report and reach an agreement on the way forward. Upon implementation of
this project, it is expected that transport costs will fall by 30 percent.

Air Transport
Mr. Speaker, Sir, we need to start thinking of Malawi as an air-linked country.
Air transport continues to play an important role in the development of our

Government is, therefore, working towards creating an enabling

environment to facilitate the operations of air transport.

Mr. Speaker, Sir, let me report that Government has sourced funding from the
Japanese Government for the expansion of the terminal building at Kamuzu
International Airport. This will include construction of a new forward holding
departure lounge; and rehabilitation of the domestic passenger facilities.
Construction works are expected to start in July, 2016. In addition, under the
Chinese infrastructural projects, a new airport will be built at Chileka.
Government also plans to rehabilitate and improve the Mzuzu Airport.

Water Development
Mr. Speaker, Sir, Government remains committed to the provision of safe water
to the masses across the country. It is for this reason that Government has
taken significant steps in establishing the National Water Resources
Authority which will serve as a regulatory body for water resources
During the year under review, Government: continued with construction works on Liwonde Barrage and new Liwonde









Programme in collaboration with the Government of the Republic of

Tanzania. Our aim is to improve living standards of the basin population
for both countries; and
Government also completed construction of water supply systems in
Dedza, Chitipa, Nkhata-Bay and Chikhwawa districts.
Mr. Speaker, Sir, in the 2016/2017 financial year, Government will:

continue with expansion works in developing ground water and drilling

boreholes in areas with low water supply coverage;

operationalise the National Water Resources Authority; and

continue with construction works on gravity-fed water supply schemes.

Government is aware of the water shortages experienced particularly in the

cities of Lilongwe and Blantyre. Government will continue to implement short,
medium and long term strategies to address the prevailing situation, including
construction of a dam across Diamphwe River in Lilongwe, drawing water from
Lake Malawi, and tapping water from Mulanje Mountain to Blantyre.
Energy Development
Mr. Speaker, Sir, Government is determined to restructure the energy industry
with the aim of providing a level playing field for private sector participation in
the generation and supply of electricity. In this respect, ESCOM will be
responsible for transmission and distribution and a separate Electricity
Generation Company will be responsible for generation of electricity.


enabling Bill will be presented to this August House during this sitting.

Mr. Speaker, Sir, Government has so far signed 26 Memorandum of

Understanding with potential Independent Power Producers Investors in the
Power Sector. The project proposals range from solar, coal and hydropower
generation technologies.
Apart from the Malawi Challenge Account Project whose main focus is
rehabilitation and upgrading of Nkula A and building of high voltage
transmission across the country, Government is also implementing the Energy
Sector Support Project funded by the World Bank and African Development

The project focuses on conducting feasibility studies for additional

Hydro Power generation in the country.

In the coming fiscal year, Government will continue providing solutions to
challenges faced in the energy sector. Among priority projects, Government will
soon sign a financial Agreement with the Exim Bank of China for
Kammwamba Coal Fired Power Project.
Information and Communication Technology
Mr. Speaker, Sir, Information and Communication Technology (ICT) is one of
the key catalyst for socio-economic development. Government is, therefore,
taking progressive steps to improve ICT governance by creating the enabling
environment for development of ICT. In this regard, I am pleased to report that
the E-Transactions Bill, Communications Bill, and Access to Information Bill
were submitted to this august House and are awaiting enactment.
Government has also completed implementing various national and regional
communications infrastructure projects. Our goal is to improve the speed, cost


and penetration of the internet services. We have now launched the fibre optic
project connecting Malawi through Zambia and Tanzania.


Disaster Risk Management
Mr. Speaker, Sir, in response to food shortages caused by the adverse weather
conditions, Government has been providing relief food and cash to the targeted
food insecure households. This is being done with support from development
partners, civil society organisations, the private sector and individuals within
and outside the country. This far, a total of 70,000 metric tons of maize was
released for distribution to the targeted food insecure households.
Mr. Speaker, Sir, disaster recovery interventions are being guided by the
National Disaster Recovery Framework which was developed after carrying out
post disaster needs assessment. The assessment revealed that MK168.6 billion
is required for disaster recovery interventions. I am pleased to report that
MK53.4billion has already been secured from the World Bank under the
Malawi Flood Emergency Recovery Project. I, therefore, once again appeal to
Development and cooperating partners, NGOs, the private sector and
individuals to contribute towards the implementation of the national disaster
recovery framework.
Mr. Speaker, Sir, in terms of progress made in the implementation of the
disaster recovery framework, I wish to report that:-


798.6 kilometers of feeder roads have been rehabilitated, 118.9 hectares

of land re-afforested and 5.7 kilometers of irrigation canals that were
damaged by the floods have been re-constructed using labour intensive

a total of 33, 241.64 metric tons of maize was procured for restocking the
Strategic Grain Reserve;

reconstruction and improvement of roads and bridges in the affected

areas is under way; and

a thorough assessment of all education and health facilities that were

heavily damaged by the floods in Mulanje and Nsanje districts has been
done and reconstruction works will commence soon.

Further, we have so far provided relief assistance in terms of food and non-food
items to about 32, 198 households in 25 districts.
Going forward, Government will:

facilitate the development of a National Disaster Risk Management and

Resilient Framework;

promote the implementation of community based risk reduction

interventions such as afforestation programmes to address disaster

finalise the review of the Disaster Preparedness and Relief Act; and

continue the implementation of recovery interventions under the Malawi

Floods Emergency Recovery Project.

Elderly and Persons with Disabilities

Mr. Speaker, Sir, the Government remains committed to improving the welfare
of the elderly and those living with disabilities. Therefore, during the 2015/16
financial year Government provided various vocational and skills training to
over 216 persons; launched the National Disability Mainstreaming Strategy;
and undertook an investigative study to establish the root cause of attacks and
killing of persons with albinism. The study was conducted in Machinga,
Mulanje, Zomba, Dedza and Chitipa Districts. Government has prosecuted
those suspected to be engaging in these heinous activities and they have been
speedily convicted by our courts.
Mr. Speaker, Sir, Government undertook a comprehensive public awareness
on promotion and protection of the human rights of older persons and on the
fight against witchcraft related violence.

Being elderly is not a crime and,

therefore, all old persons must be respected, protected, and taken care of.
Government will in the next financial year intensify awareness campaign on the
rights and welfare of people with disability, review the 1911 Witchcraft Act
and develop a National Elderly Bill for presentation to this august house.

Public Health

Mr. Speaker, Sir, Government is committed to ensure healthy lives and promote
well-being for all Malawians. Government is, however, aware, that the health
sector continues to face a number of challenges, including critical shortage of
staff, essential drugs and equipment. Government has, and will continue to
work tirelessly in order to address these challenges. During the 2015/2016
fiscal year, Government, through the Central Medical Stores Trust, developed a
Concept of MUST HAVE list of medicine and medical supplies. This will
rationalize the use of the scarce resources that are made available for
procurement of health commodities.
In order to address the shortage of medical personnel, Government is currently
processing the recruitment of 1,412 young men and women who have
graduated from the Malawi College of Health Sciences and the Christian Health
Association of Malawi (CHAM) training colleges. We have also received a list of
51 fresh graduate Medical doctors, 10 Optometrists, 28 Physiotherapists and
34 Pharmacists from the College of Medicine, who will be placed on 18 months
internship at Queen Elizabeth Central Hospital and Kamuzu Central Hospital.
Mr. Speaker, Sir, to further improve delivery of health services, during the
2015/2016 fiscal year, Government:

continued the construction of 140 houses under Umoyo Housing

programme and five flats for staff;



Association of Malawi






aimed at increasing access to essential health

services especially for rural remote communities; and


secured resources from Global Alliance for Vaccines and Immunisations

for non-traditional vaccines amounting to over 14 million USD.

Mr. Speaker, Sir, in the forth coming year, Government will:

continue to

provide resources to Central Medical Stores Trust on a

quarterly basis to enable the Trust to, among others, process tenders in a
more predictable and efficient manner;

reduce pilferage of drugs through strengthening oversight functions of

hospitals by health advisory committees;

review the Pharmacy, Medicines and Poison Act, specifically to ensure

that stiffer penalties are included in this Act; and

commence construction of New Phalombe Hospital.

Malaria, HIV and AIDS Management

Mr. Speaker, Sir, with regard to Malaria, HIV and AIDS management, I am
pleased to report that Government secured resources from Global fund for
Malaria, HIV and TB. These resources will ensure complementation of
Governments efforts in reducing cases of malaria as well as increasing the
number of people receiving free Anti-Retroviral Therapies.

Education, Science and Technology


Mr. Speaker, Sir, education is a means for building human capital. Government
is, therefore, committed to ensuring provision of quality education at all levels.
I am pleased to report that, during the year under review, notable achievements
were made in the sector including the following:

timely payment of teachers salaries across the country owing to the

decentralization of payment of salaries of teachers to the education

opening of Chiradzulu Teachers Training College which has a capacity of

560 student teachers;

construction of laboratories and libraries in 33 Community Day

Secondary Schools. These will give students a better chance to compete
with their counterparts learning in conventional secondary schools on
equal basis;

upgrading of 33 Community Day Secondary Schools to conventional

secondary schools; and

the Establishment of a Higher Education Students Loans and Grants

Board to manage the loan facility for students in public universities.

Mr. Speaker, Sir, in the next financial year, Government will, among others:

commence the construction of three teacher training colleges in Rumphi,

Chikhwawa and Mchinji districts;

continue with the construction of Machinga and Thumbwe Secondary


upgrade 21 CDSSs to conventional secondary schools; and

continue with the expansion of infrastructure in the various public

universities and four Technical Colleges in Lilongwe, Salima, Soche and

Gender, Women and Development

Mr. Speaker, Sir, Government is determined to empower women by ensuring
that they are active participants in the development of this country. In this
regard, in the year under review, Government:

launched the revised 2016-2021 National Gender Policy which will guide
gender mainstreaming and women empowerment initiatives;

institutionalized gender mainstreaming in academic institutions by

facilitating development of gender policies in our Public Universities;

trained 246 Magistrates, Police Prosecutors and Social Welfare Officers in

Gender Related Laws; and

undertook mobile court sessions through which 49 gender based related

cases were handled in 14 districts.

Mr. Speaker, Sir, in the 2016/2017 financial year, Government will scale up
women economic empowerment activities. Among other things, Government
will provide various business skills to Village Savings and Loans business


Child Protection and Development

Mr. Speaker, Sir, children need love, care and protection because experiences
they undergo as they grow up will affect their destiny. To this end, Government
remains committed to the protection of our children, as well as the provision of
Early Childhood Development (ECD) centres across the country.
During the year under review, Government:

completed the construction of 8 ECD centres;

raised awareness of ECD programmes amongst the public through the

launch of the Early Childhood Development week;

strengthened the child protection system through training of 80 trainers;


re-united 72 street children with their parents and guardians;

In the coming financial year, Government will continue to increase access to

Early Childhood Development Services by constructing more ECD centres and
protecting our children from all forms of abuse. We will also roll out Child
Protection Information Management System at District level; and continue
removing street kids and beggars from the streets.
Lands, Housing and Urban Development
Mr. Speaker, Sir, land still remains the basis for achieving socio-economic
development. Realising this, Government has continued to work tirelessly to
make land available to all Malawians and credible foreign investors.
Additionally, Government is committed to ensure the provision of decent and

affordable houses for Malawians in rural and urban areas. To this end,
Government has continued to implement the Decent and Affordable Housing
Subsidy Programme (Cement and Malata) which was launched during the
2014/2015 fiscal year.
In this regard, during the 2015/2016 fiscal year, Government:

under the Decent and Affordable Housing Subsidy Programme,

completed 1,700 houses whilst 8,040 are under construction;









construction of houses by public officers through the public

servants House Ownership Scheme; and

Allocated 94.8 hectares to Daeyang Luke Hospital in Lilongwe City

under Phase III for the construction of the University Teaching
Hospital among other projects.

Mr. Speaker, Sir, in the coming financial year, Government will continue
implementing the Cement and Malata Programme to ensure that rural areas
have decent houses. There is no turning back because we have an obligation to
improve the quality of life for those who cannot afford.
Youth Development and Empowerment
Mr. Speaker, Sir, as you are aware, more than 60 percent of our population is
made up of the youth. If empowered, they will certainly play an assertive and
constructive role in the development of our nation. Therefore, Government will
continue to empower the youth in a number of porgrammes. These include the


construction of Youth Multipurpose Learning Centers, which provide a platform

for the youth to access a variety of education and skills building programs.
I am pleased to inform this august House that Government launched the first
ever Youth Status Report which captures indicators that can be used to assess
the status of young people in our country. This enables us to make more
informed decisions for the Youth.
In the coming financial year, Government will continue to implement
programmes that will empower the youth to become productive citizens of our

Democratic Governance
Mr. Speaker, Sir, my Government is determined to promote the rule of law,
justice, democracy and good governance. The Government is also committed to
promote strict adherence and observance of the tenets and dictates of the
Constitution in order to promote the welfare of Malawians.
Government remains committed to ensuring that the poor and vulnerable
people are not denied access to social services through corruption, fraud and
theft. For this reason, my Government remains resolute to prosecute cases
involving theft of public funds popularly known as cashgate.
My Government handled 21 Cashgate cases. We have concluded 6 of them and
13 are at advanced stages. More prosecution is to come.
We will recruit more lawyers in order to efficiently and effectively deliver
services in all spheres of justice delivery. Government will also embark on

initiatives and reforms that revolutionize the operations of the Ministry of

Justice and Constitutional Affairs as part of Public Sector Reforms. For
example, the Government plans to establish online case management system
and a computerized civil registry to improve data management and tracking of
case files. This will help Government and all stakeholders to easily follow and
track cases as they progress at every stage. Government will also computerize
the record management system at the Administrator Generals Department to
ensure improved management of deceased estate case files.
Mr. Speaker, Sir, Government will also develop the National Prosecution Policy.
This will provide guidelines for the conduct of public prosecutions by setting
standards that will underpin all prosecutorial principles and practices of
common values. As a result, these measures will promote consistency and
professionalism in key decision making processes and trial practices.
Mr. Speaker, Sir, with regard to international obligations, I am pleased to
report that my Government has made great strides in meeting Malawis
international human rights obligations by leading efforts to clear Malawis State
party Report backlog. In the 2015/2016 financial year, Malawi successfully
presented her initial and combined report on the African Charter on Human
and Peoples Rights and the Protocol on the Rights of Women. In fact, Malawi
was recorded as the first country to comply with the African Commission state
party reporting Guidelines. Malawi also successfully presented her 7th periodic
report on the Convention on the Elimination of Discrimination Against Women
(CEDAW) and her second cycle report on the Universal periodic Review (UPR) to
the United National Human Rights Council.


The Fight against Corruption

Mr. Speaker, Sir, my Government maintains a zero tolerance stand against
corruption. We are prosecuting 50 cases in the courts involved in theft of
public funds, including those involved in cash gate. So far, 12 convictions have
been secured, whilst the other cases are at various stages of trial in the courts.
Investigations are also continuing in other cases and once these are concluded
the suspects will be brought before the courts to be charged and tried.
I also wish to report that the Anti-Corruption Bureau, in consultation with
various stakeholders, is coordinating efforts to review the National AntiCorruption Strategy. This will provide a more holistic focus to tackling the
problem of corruption. In addition to this, the fight against corruption is also








Mr. Speaker, Sir, Government is aware of the challenge of resources that the
fight against corruption faces. Government will, therefore, continue to ensure
that resources and other support are provided to consolidate efforts to tackle
corruption in Malawi.
Public Sector Reforms
Mr. Speaker, Sir, as you are aware, I have prioritized the reform agenda since
taking Office in May, 2014. I established a Public Service Reforms Commission
to help in the implementation of the reforms agenda. Under the Vice Presidents
supervision, Government is implementing bold and decisive reforms to ensure
a well-motivated, competent and result-oriented public service. In our
transformation drive, we aim to instill a business-like culture that will

increasingly hold public officials and service providers accountable for their
decisions and actions.
Mr. Speaker, Sir, Controlling Officers in Government Ministries, Departments
and Agencies are now signing binding performance contracts to deliver on
certain targets and outcomes. Soon these contracts will also be signed by
individuals and there will be consequences for poor performance.
I have also instructed that performance evaluation should be conducted by
entities outside Government, in order to lend some objectivity, credibility and
integrity to the whole exercise.
During the year under review, Government:

On a pilot basis, turned Lilongwe and Mangochi Post Offices into One
Stop Shop Service Centres in a bid to facilitate easy and quick access to
public services;

commenced implementation of reforms aimed at improving service

delivery in sixty four parastatal organizations including the three regional
boards, ADMARC, ESCOM and MBC to mention but a few;









decentralizing the Malawi Traffic Information System in Lilongwe,

Blantyre, Mzuzu and Zomba and establishment of auxiliary centres at
City Centre in Lilongwe and Makata in Blantyre;

launched Malawi Community of Practice on managing for development



established the Greenbelt Initiative Holdings Limited in order to

accelerate investments in the irrigation sector;

initiated the establishment of Malawi School of Government that will,

among other things, promote skills development, responsible behaviour
and productive work culture within the Civil Service;








Assurance and Public Sector Reforms;









Standardized Quality Assurance and Meteorology Laboratory. This will

enable testing and certification of Malawian products for export to be
done locally;

reduced the number of Principal Secretaries from 46 to 20 as part of the

process to rationalize the public service; and

Conducted a personnel audit in all Ministries, Departments and Agencies

to enable us reconcile records and make appropriate decisions in view of
the soaring wage bill;

Mr. Speaker, Sir, these are only highlights. Much more is happening.
In the forthcoming fiscal year, we will continue to:

review the Service Commissions;

resuscitate Integrated Rural Growth Centres to promote establishment of

Satellite Model Villages;


review the Public Service Act (1994) and develop a Public Service
Management Policy; and

construct four more One Stop Shop Service Centres in Salima, Mzuzu,
Mzimba and Blantyre using part of the US$15 million grant funding from
the World Bank.

Again, these are only highlights.

National Peace and Security

Mr. Speaker, Sir, Government recognizes that national peace and security are a
prerequisite for socio-economic and political development. It is for this reason
that Government has continued to put in place peace and security
Mr. Speaker, Sir, in order to counteract new and complex areas of security such
as transnational organized crime and illegal migration, Government continues
to strengthen our security institutions to enable them adequately respond to
the prevailing security threats.
During the year under review, Government recruited an additional 1,800 new
officers in the Malawi Police Service. In so doing, we reduced the police officer
to population ratio from 1 to 1,300 to 1 to 1,100. This is a 15 percent
improvement. Our target is to achieve the United Nations benchmark of 1 to
500 and completely minimize crime.
Further, Government is implementing a universal and compulsory registration
of births and deaths. This is currently piloted in four districts of Chitipa,

Lilongwe, Ntcheu and Blantyre. Structures are being put in place in the
remaining districts, and it is expected that every district will be registering
births and deaths by the end of this year. All this is building on the process
towards registration and issuance of national identity cards to all bona-fide
Malawians, resident aliens and an additional Identification system for refugees
and asylum seekers.
Mr. Speaker, Sir, Government has already identified a reputable international
firm to roll out the registration and issuance of National Identity cards to
Malawians from the age of 16. The pilot phase is expected to issue 5,000
Identity cards and later reach 100,000 Malawians in selected districts and
Traditional Authorities by December, 2016. We will issue over 9 million Identity
cards by July, 2018.
Mr. Speaker, Sir, Government is currently hosting over 25,000 refugees and
asylum seekers from the central and north east African regions, and over
10,000 asylum seekers from Mozambique. To ensure that we manage the entry
and exit of our borders, we are currently in the process of automating our
border posts. The project will enhance tracking of immigrants and increase
efficiency in clearing both people and goods.
Other reforms and measures in the pipeline include automation of the Permit
Issuance System and installation of E-visa Application and Issuance System.
Moreover, we also intend to enhance the security policy and legislation
framework. We will introduce the first ever National Security Policy and
Migration and Citizenship Policy. Laws that are under review include the
Refugees Act, the Prisons Act and the Firearms Control Act.


As regards to peace support operations, Mr. Speaker, Sir, the Malawi Defence
Force continues to participate in various peace keeping operations. Currently,
Malawi Defence Force is participating in observer missions in Darfur, Ivory
Coast and Democratic Republic of Congo. These Missions provide the
opportunity for our military personnel to acquire special skills and experience
which is critical to capacity building of our Defence Force. I am pleased to
report that the Malawi Defence Force has consistently been commended by the
international community for its discipline.
In the coming financial year, Government will continue to provide the
necessary support to our security institutions in order to ensure the safety and
security of all people in this country. Among other measures, we will:

recruit more officers and make security machinery more visible,

accessible and responsive;

ensure that our security institutions continue to work with relevant

stakeholders in the protection of the rights of persons living with
albinism, children, the elderly and other vulnerable groups;

intensify border patrols and constructing one-stop shops in order to curb

cross border crimes; and

procure and install improved security communication infrastructure to

improve coordination.

International Relations


Mr. Speaker, Sir, in line with the policy objective of safeguarding Malawis
foreign interests abroad, socially and economically, the main thrust of
Governments foreign policy has been development diplomacy. Government has,
therefore, worked hard in this regard, and registered a number of successes in
the past financial year.
In order to expand physical presence in other jurisdictions, Government
opened a new Embassy in Geneva, Switzerland, with accreditation to United
Nations agencies based in Geneva. The main aim of opening this embassy is to
strengthen strategic ties with the Government of Switzerland and other
European countries as well as all other Geneva based UN Agencies. Malawi has
also recently opened a Consulate in Tete, Mozambique, to facilitate trade and
investment between Malawi and Mozambique.
Government has also maintained cordial and fraternal relations with the
Government of the Republic of Tanzania. This has been manifested in the
wellbeing of our two peoples and continued growth in trade and business
engagements between our two countries. This notwithstanding, the two
Governments continue to work on an amicable solution to the so called Lake
Malawi boundary dispute. I say so clear because the issue of the boundary
has been so clear for 126 years.
Mr. Speaker, Sir,

during the 2016/17 fiscal year, Government plans to

rationalize our foreign missions in order to make them lean and efficient with
the right numbers of personnel with requisite competences. We will also recall
individuals who, in some cases have stayed in these missions for up to 10 or 15


Mr. Speaker, Sir, before I conclude, let me emphasize that we are making
progress and delivering on our electoral mandate despite the challenges that we
are facing as a nation at the moment. In saying this, I know and understand
that there is still more that needs to be done. As a small player in a highly
complex, volatile and globalized economy, we are bound to face many more
challenges along the way due to externally induced pressures and shocks.
Mr. Speaker, Sir, in such unpredictable and competitive environment,
Government will do everything possible within its powers to safeguard the
interests of our nation. I have no doubt whatsoever that the resilience that we
have always shown as a nation will once again prove vital in addressing most of
the prevailing economic and social problems. It is our duty to ensure that the
economy is revived faster so that Malawians can begin to lead a fulfilled and
dignified life. Government considers the enjoyment of this right as being sacred
and absolute.
Mr. Speaker, Sir, I therefore call upon all Malawians to unite in building a
better and inclusive society for all. At fifty plus as an independent nation, I feel
we are at the critical stage of development where patriotism, hard work,
discipline, commitment to duty and above all selflessness and sacrifice must be
exemplified by all of us including members of this august House. All the efforts
by the Government shall be in vain if we do not bury our differences and put
the interests of our country and people first. There must be no room for divisive
elements and complacency in our society. We all must sacrifice, and subject
our own personal needs to the needs of our nation.


Mr. Speaker, Sir, I am emphasizing unity because we will from time to time, as
a nation, be required to make difficult but necessary choices. We will also be
required to carry out strategic reforms that must put our country on a
sustainable path for sustainable growth. That journey must begin now and
involve all of us. Our collective resolve should be to employ innovative ways that
will expedite and maximize delivery of the much needed basic services to the
people of Malawi - the hallmark of the DPP Manifesto. We must target and
achieve radical economic transformation.
I would, therefore, like to salute various local, international and bilateral
development partners for their contribution towards the development of our
country and ameliorating the suffering of Malawians. You did not hesitate to
come to our rescue when I appealed for support towards food shortages in the
country as the realities of climate change continue to affect us. Guided by the
famous saying a friend in need is a friend indeed, we will continue to work
together in addressing the socio-economic challenges facing our nation today.
I would also like to thank all Malawians and in, particular, leaders of various
faith based organizations who regularly come to discuss with me on various
issues affecting our nation. I see them as a moral compass and conscience of
our society. In that vein, I reaffirm today that I am open to honest and
constructive conversations on development of our beloved nation.
Members of this august House also deserve special recognition for the
important role that you have played in the past twelve months. Let us continue
working together in the furtherance of our national interests. After all, we
belong to different branches of the same Government. History has placed on
our shoulders, an important responsibility of changing the circumstances of

our people together. History will harshly judge us if we fail to seize this Godgiven opportunity to bring about the much needed change.
Above all, Mr. Speaker, Sir, I am indebted to the Almighty God for the peace
and stability that we continue to enjoy in this country. This gives me hope and
confidence that most of our present predicaments will shortly be history.
God bless you all
God bless Mother Malawi
Thank you, Mr. Speaker, Sir.