Friday 18 May 2012
State Of The Nation AddressINTRODUCTION
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.
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 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.
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 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.
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.
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 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.
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.
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 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 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.
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
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, 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%.
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.
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;
- 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.
- Tomato paste, sauce and ketchup;
- Banana puree and soft drink;
- Fruit juices, fruit concentrates;
- Dried fruits and titbits;
- Canned fruits, jams, candy fruits.
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.
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 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.
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.
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, 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.
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.
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.
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.
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 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.
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.
- 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.
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.
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.
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.
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;
- trained 15,000 ECD caregivers; and
- oriented 23 district ECD teams on parenting education.
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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;
- 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.
- 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.
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:
- 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.
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.
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.
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.
- 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.
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.
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.
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.
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.
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, 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.
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.
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 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.