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on the occasion of the STATE OPENING OF THE 2016/2017 BUDGET MEETING OF PARLIAMENT, LILONGWE, Friday, 20th May, 2016

THEME: Towards Recovery and Sustainable Socio-Economic Development



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.




Mr. Speaker, Sir, agriculture remains one of the key priorities for Government because of its significance to our economy. Government will, therefore, continue to place highest priority on the sector to ensure both national and household food security as well as support agro industries.

Overview of the 2015/16 Season

Mr. Speaker, Sir, the 2015/16 growing season has been badly affected by adverse weather conditions caused by the El Nino phenomenon. This has negatively affected crop production including maize the staple food. Maize production has declined by 12.4% in the 2015/16 growing season. Thus, maize production declined from about 2.8 million metric tons in 2014/15 growing season to about 2.4 million metric tons in 2015/16. The country will, therefore, experience a deficit over another deficit registered in the previous season.   Over three million Malawians are expected to be food insecure.

Mr. Speaker, Sir, this august house must note we have already declared Malawi a State of Disaster and appealed for humanitarian relief assistance.

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

Mr. Speaker, Sir, in addition, a consortium of International Non-Governmental Organizations also contributed towards the relief program in form of cash transfers that benefited about 430,000 Malawians.   Vulnerable households in all the 28 districts were also provided with sweet potato vines and cassava cuttings to mitigate food shortage.

Mr. Speaker, Sir, besides mitigating the food shortages;

  • We implemented the Farm Input Subsidy Programme benefiting 1.5 million resource poor farmers. This year farmers’ contribution was increased from MK1, 500 to MK9, 000.
  • We implemented the Legume Production and Marketing Programme. We are diversifying to more crops like soya beans, pigeon peas and groundnuts seed. This is one area where the future of our forex lies.
  • We inaugurated a third Cotton Ginnery for ADMARC in Balaka;
  • We supported cotton growers with about 670 metric tons of certified cotton seed on cash as well as a loan basis;
  • We launched the US$2.4 billion Irrigation Master Plan and Investment Framework to guide the expansion of the irrigation sub-sector by 116,000 hectares. Some of the major projects under this framework include Shire Valley Irrigation, Bwanje Scheme expansion, Songwe River and Greenbelt Initiative Schemes; 
  • We completed construction of seven solar pump irrigation schemes covering an area of about 780 hectares under the Agriculture Infrastructure Support Project, and 150 hectares under the Climate Adaptation for Rural Livelihoods and Agriculture Project in Karonga, Neno, Chikhwawa and Nsanje;
  • We completed maintenance of old government irrigation schemes in Karonga, Nkhotakota and Machinga and over  400 hectares was developed for gravity fed irrigation in Blantyre, Thyolo and Phalombe districts;
  • 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
  • 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.

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:-

  • continued with construction works on Liwonde Barrage and new Liwonde Bridge;
  • 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
  • Government also completed construction of water supply systems in Dedza, Chitipa, Nkhata-Bay and Chikhwawa districts.

Mr. Speaker, Sir, in the 2016/2017 financial year, Government will:

  • continue with expansion works in developing ground water and drilling boreholes in areas with low water supply coverage;
  • operationalise the National Water Resources Authority; and
  • continue with construction works on gravity-fed water supply schemes.

Government is aware of the water shortages experienced particularly in the cities of Lilongwe and Blantyre. Government will continue to implement short, medium and long term strategies to address the prevailing situation, including construction of a dam across Diamphwe River in Lilongwe, drawing water from Lake Malawi, and tapping water from Mulanje Mountain to Blantyre.

Energy Development

Mr. Speaker, Sir,  Government is determined to restructure the energy industry with the aim of providing a level playing field for private sector participation in the generation and supply of electricity. In this respect, ESCOM will be responsible for transmission and distribution and a separate Electricity Generation Company will be responsible for generation of electricity.  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.


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:-

  • 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;
  • a total of 33, 241.64 metric tons of maize was procured for restocking the Strategic Grain Reserve;
  • reconstruction and improvement of roads and bridges in the affected areas is under way; and
  • a thorough assessment of all education and health facilities that were heavily damaged by the floods in Mulanje and Nsanje districts has been done and reconstruction works will commence soon.

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

Going forward, Government will:- 

  • facilitate the development of a National Disaster Risk Management and Resilient Framework;
  • promote the implementation of community based risk reduction interventions such as afforestation programmes to address disaster risks;
  • finalise the review of the Disaster Preparedness and Relief Act; and
  • continue the implementation of recovery interventions under the Malawi Floods Emergency Recovery Projects
  • 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.
  • 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.
  • 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.
  • 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.