Malawi President Mutharika’s SONA speech

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 Meeting.

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.

 MACRO-ECONOMIC ENVIRONMENT AND REFORMS

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 nation’s 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.

 

PROGRAMME BASED BUDGETING REFORMS

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 Government’s initiative on institutional performance assessment. Let us note that PBB framework provides an effective linkage between resources utilized and results achieved.

FINANCIAL SECTOR REFORMS

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:

1. The Credit Reference Bureau (Amendment) Bill, 2015;
2. The Payment Systems Bill, 2016;
3. The Financial Services Amendment Bill, 2016l;
4. The Banking Amendment Bill, 2016;
5. The Malawi Deposit Insurance Corporation Bill; and
6. 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.

MEDIUM AND LONG TERM DEVELOPMENT PLANNING

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 successor.

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.

SUSTAINABLE ECONOMIC GROWTH

Agriculture

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;

1. 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.
2. 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.
3. We inaugurated a third Cotton Ginnery for ADMARC in Balaka;
4. We supported cotton growers with about 670 metric tons of certified cotton seed on cash as well as a loan basis;
5. 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;
6. 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;
7. We completed maintenance of old government irrigation schemes in Karonga, Nkhotakota and Machinga and  over  400 hectares was developed for gravity fed irrigation in Blantyre, Thyolo and Phalombe districts;
8. 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; and
9. 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 maize.

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, Malawi’s 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.   Clients 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 country’s 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 economy’s productive base. In the ending financial year, Government implemented a number of policy, administrative, regulatory and institutional reforms to enhance Malawi’s attractiveness as a destination for private investment. In this regard:

1. Government launched the Malawi Business Registration System which allows for online registration of businesses and companies;
2. Government developed a collateral registry at the Department of Registrar General to improve business registration and ensure investors access to capital from the Banks;
3. Government operationalized the Companies Act (2015) through the passing of the Insolvency Bill;
4. Government commenced the establishment of the Malawi Trade Portal to facilitate the Ease of Doing Business in the country; and
5. Government formulated and approved the National Trade Policy and the National Industrial Policy

Mr. Speaker, Sir, these reforms will improve Malawi’s 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 pot ential 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 Kam’mwamba 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 approvedby 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 Malawi’s 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 aWorkers’ 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 sector.

Tourism, Wildlife and Culture

Mr. Speaker, Sir, the tourism sector has a huge potential to contribute to our country’s 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:

1. implementing the Malawi Tourism 2020 Strategy;
2. reviewing the Tourism Policy;
3. upgrading to bitumen standards access roads to places with tourist value; and
4. 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 country’s 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 Authorities.

INFRASTRUCTURE DEVELOPMENT

Transport Infrastructure

Mr. Speaker, Sir, a good transportation system is a fundamental prerequisite to any country’s economic growth and human development. That 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 fees.

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 accessibility and mobility for the country’s rural population through 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 include:

1. The  resumption of the Zomba – Jali – Kamwendo – Phalombe – Chitakale road; and the Thyolo – Thekerani – Muona – Bangula Road;
2. The continuation of the Jenda-Edingeni Road;
3. The Completion of the Chiringa – Miseu Folo – Chiradzulu road; and
4. 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:

1. Karonga – Songwe Road Rehabilitation Project
2. Mzuzu – Nkhata Bay Road Rehabilitation Project; and
3. 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 Government’s 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 economy.  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 management.

During the year under review, Government:-

1. continued with construction works on Liwonde Barrage and new Liwonde Bridge;
2. continued implementing the Songwe River Basin Development 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
3. 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:

1. continue with expansion works in developing ground water and drilling boreholes in areas with low water supply coverage;
2. 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.  An 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 Bank.  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 Kam’mwamba 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.

SOCIAL SUPPORT AND DISASTER RISK MANAGEMENT

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:-

1. 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 methods;
2. a total of 33, 241.64 metric tons of maize was procured for restocking the Strategic Grain Reserve;
3. reconstruction and improvement of roads and bridges in the affected areas is under way; and
4. 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:-

1. facilitate the development of a National Disaster Risk Management and Resilient Framework;
2. promote the implementation of community based risk reduction interventions such as afforestation programmes to address disaster risks;
3. finalise the review of the Disaster Preparedness and Relief Act; and
4. 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 aNational Elderly Bill for presentation to this august house.

SOCIAL DEVELOPMENT

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:-

1. continued the construction of 140 houses under Umoyo Housing programme and five flats for staff;
2. signed a Memorandum of understanding with Christian Health Association of Malawi  aimed at increasing access to essential health services especially for rural remote communities; and
3. 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:

1. 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;
2. reduce pilferage of drugs through  strengthening oversight functions of hospitals by health advisory committees;
3. review the Pharmacy, Medicines and Poison Act, specifically to ensure that stiffer penalties are included in this Act; and
4. 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 Government’s 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:-

1. timely payment of teachers’ salaries across the country owing to the decentralization of payment of salaries of teachers to the education divisions;
2. opening of Chiradzulu Teachers’ Training College which has a capacity of 560 student teachers;
3. 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;
4. upgrading of 33 Community Day Secondary Schools to conventional secondary schools; and
5. 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 School;
• 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 Nasawa.

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:-

1. launched the revised 2016-2021 National Gender Policy which will guide gender mainstreaming and women empowerment initiatives;
2. institutionalized gender mainstreaming in academic institutions by facilitating development of gender policies in our Public Universities;
3. trained 246 Magistrates, Police Prosecutors and Social Welfare Officers in Gender Related Laws; and
4. 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 groups.

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:-

1. completed the construction of 8 ECD centres;
2. raised awareness of ECD programmes amongst the public through the launch of the Early Childhood Development week;
3. strengthened the child protection system through training of 80 trainers; and
4. 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:-

1. under the Decent and Affordable Housing Subsidy Programme, completed 1,700 houses whilst 8,040 are under construction;
2. Continued to provide mortgage loans for purchase and construction of houses by public officers through the public servants House Ownership Scheme; and
3. 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 nation.

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 General’s 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 Malawi’s international human rights obligations by leading efforts to clear Malawi’s 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 People’s 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 Anti-Corruption Strategy. This will provide a more holistic focus to tackling the problem of corruption. In addition to this, the fight against corruption is also being strengthened through various prevention and public education initiatives.

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 President’s 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:-

1. 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;
2. 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;
3. strengthened the Road Traffic and Safety Services including 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;
4. launched Malawi Community of Practice on managing for development results;
5. established the Greenbelt Initiative Holdings Limited in order to accelerate investments in the irrigation sector;
6. 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;
7. collaborated with the Parliamentary Committee on Government Assurance and Public Sector Reforms;
8. commenced construction of the Malawi Bureau of Standards Standardized Quality Assurance and Meteorology Laboratory. This will enable testing and certification of Malawian products for export to be done locally;
9. 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:-

1. review the Service Commissions;
2. resuscitate Integrated Rural Growth Centres to promote establishment of Satellite Model Villages;
3. review the Public Service Act (1994) and develop a Public Service Management Policy; and
4. 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 arrangements.

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:

1. recruit more officers and make security machinery more visible, accessible and responsive;
2. 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;
3. intensify border patrols and constructing one-stop shops in order to curb cross border crimes; and
4. procure and install improved security communication infrastructure to improve coordination.

International Relations
Mr. Speaker, Sir, in line with the policy objective of safeguarding Malawi’s foreign interests abroad, socially and economically, the main thrust of Government’s 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 years!

CONCLUSION

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 God-given 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.

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