INTRODUCTION

Mr. Speaker, Sir, it is a great pleasure to be here this morning to preside over the opening of the 2013/2014 Budget Meeting and deliver the State of the Nation Address.

This occasion is very significant because, as is tradition, we reflect on the past year and set out our plans for the coming year and the future.

Mr. Speaker, Sir, as you all know, I took Office on 7^th April, 2012 under very difficult circumstances and amidst many uncertainties. Our economy was on the verge of collapse. Most of the cooperating partners had expressed huge concerns over our situation of poor human rights and economic governance, to the extent that others suspended their direct budget support to Malawi. There was a spirit of despair in the country.

Mr. Speaker, Sir, against this background, in my State of the Nation address on 18^th May last year, I clearly set out my vision to eradicate poverty through economic growth and wealth creation.

In my address I spelt out the two objectives for my Government, namely:

1. 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; and
2. To drive a people’s development agenda that enhances opportunities; reduces inequalities; and overcomes poverty through its political, social and economic programs.

I called upon all Malawians to join me to work together and rebuild our economy. I also announced a national austerity drive that would be painful but necessary.

Mr Speaker, Sir, allow me to acknowledge all sectors of our society: private sector, non-governmental organisations, the faith community, traditional leaders and the general public for the support and resilience demonstrated in the past year. I also wish to extend my gratitude to the development partners for the support in various forms that they provided to my government in the past year.

As a result of decisive action by my Government to institute reforms that would recover the economy, we have started to experience the first signs of the recovery. Mr. Speaker, Sir, I am pleased that even though prevailing circumstances forced to make some difficult decisions, they were the right decisions. Mr. Speaker, Sir, I am very thankful that Malawians have stood with me and continue to do so as we start to see the fruits of our reforms.

Mr. Speaker, Sir, indeed we must remember that the road to full recovery is long, I therefore wish to appeal to all Malawians to remain steadfast and resilient until we reach the full recovery we envisage.

Mr. Speaker, Sir, in the last year my Government has focused on laying the foundations for healing and recovery. Building on these foundations will be the focus for the next phase. We are called upon to set new goals to guide us along the road to recovery and transformation, to sketch a landscape in which we can act on our collective dream and to draft a plan to deliver us from the consequences of our past mistakes.

Mr. Speaker, Sir, as we continue to reconstruct Malawi and reclaim the whole country for all, we break down the divisions and attitudes of the past. We free everyone from the last forces of oppression and cynicism. The emerging period must be a period of all Malawian peoples, to continue working together, building the nation. For it is only when we strive towards this unity, as a people with one destiny, that we will release our energies, enabling us to fully rebuild this great nation.

Mr. Speaker, Sir, It is our task to make the most of our freedom, to entrench it as a fundamental and permanent feature of our existence.

It is our task to continue to work for democracy and good governance in the coming years ensuring that peace and stability prevail throughout this country.

It is our task to manage the economy with prudence and diligence to ensure inclusive growth and prosperity.

The challenge facing each and every one of us is to contribute to a complete and rounded picture of the emerging period.

Mr. Speaker, Sir, the theme of my address is therefore: Malawi on the road to transformation.

Mr. Speaker, Sir, I believe that we have laid a solid foundation for hope, prosperity and growth. During the year under review, we have brought Malawi back from the brink – politically, financially and economically. We are now in a position where we can begin to focus more clearly on the long term.

Restoring Governance

Mr Speaker, in the last year, my Administration sought to restore the foundations for good governance, freedom and human rights in Malawi as the underpinnings of the development of our nation, both in the short term and in the long term:

• My Government has repealed most of the oppressive laws that impinged on peoples’ freedoms and rights. These include Section 46 of the Penal Code which empowered the Minister of Information to close media house.
• New media operations are free to start up as my Government has liberalised the issuance of radio and TV licenses based on the quality of their application and not on political considerations. Organisations who were refused licenses can now operate freely without harassment, restrictions and violence against journalists.

• I note that these changes have contributed to Malawi being the country which made the biggest leap in 2013 World Press Index on press freedom. As a result of my Government’s actions, Malawi has moved from position 146 in 2012 to position 75 in 2013.

• Citizens are now able to organise demonstrations without Government interference or violence against them. The January 17^th demonstrations organised by Consumer Association of Malawi (CAMA) are a clear testimony to my government’s commitment to freedom of assembly and expression.

• We have also seen tolerance and mutual respect return to Government’s relationships with civil society leaders and organisations, where they are recognised as true partners in Malawi’s development.

Looking forward, my Government is committed to the democratic process and free and fair elections in 2014 and beyond. We have already passed the Constitution (Amendment) Act 2012 to allow the holding of Tripartite Elections next year. We have also appointed Commissioners for the Malawi Electoral Commission from all political parties.

Mr Speaker, Sir, through all these measures, we have shown our commitment to fundamentally transforming the way that the Government relates to its people, and how Government works for its people.

Mr. Speaker, Sir, I want to assure this august House that these governance success stories will be deepened in the coming year and my Government is committed to democratic governance, dialogue, rule of law and access to justice.

Macroeconomic stability

Mr. Speaker Sir, let me highlight the fiscal performance for the First Half and Third Quarter of the 2012/13 Financial Year and thereafter, the proposed fiscal plan for the 2013/14 Budget.

As you may be aware Mr. Speaker Sir, when my administration ascended into office, the Extended Credit Facility (ECF) programme with the International Monetary Fund (IMF) resumed. Since the resumption of the programme, two reviews have been successfully undertaken in November 2012 and March 2013, respectively.

Mr. Speaker Sir, to date, a total of US$274million has been released as Balance of Payments Support after meeting most of the agreed programme targets signifying a step in the right direction. This amount excludes the other forms of support that my Government has received from Cooperating Partners such as for emergency drugs procurement, as well as project support. In the just ended ECF review, Mr. Speaker, Sir, I am pleased to inform the August House that my Government met most of the quantitative targets, including the Net International Reserves and Net Domestic borrowing.

Mr. Speaker Sir, my Government adopted a tight fiscal regime anchored by No Net Domestic Financing (NNDF) meaning that at the end of the financial year, net domestic borrowing should be zero. The main purpose of the fiscal anchor is to control expenditure overruns and assist the building of foreign reserves and bring down inflation.

Mr. Speaker Sir, in spite of the many challenges facing the Government, the fiscal performance for the 2012/13 financial Year was on track. Overall domestic revenues surpassed the target by K0.6billion, largely on account of tax revenues, which amounted to K120.9billion against a program target of K118.9 billion. However, non-tax Revenues underperformed by K1.5billion largely on account of low collection from fuel levies and Revenue-collecting Departments such as Lands and Housing and Road Traffic.

Mr. Speaker Sir, Government contained its expenditures within the target. A total of K242.6billion was spent against a mid-year target of K249.8billion.

Mr. Speaker Sir, on the basis of the developments above, government repaid domestic debt amounting to K18.2billion against a repayment target of K17.7billion, a slight over-performance by K0.5billion and thereby reduced the stock of domestic debt from K188.9billion to K170.7billion.

Mr. Speaker Sir, the fiscal performance for the 3^rd Quarter of 2012/13 financial year continues to be encouraging, giving confidence that our end year target will be met. Domestic revenues continued to perform well, exceeding the target of K66billion by K5.3billion. We however missed the target of dedicated grants by K7.7billion on Education SWAP.

Mr. Speaker Sir, the projected expenditure for the third quarter of 2012/13 was K119.3 billion. However, K120.9 billion was spent representing a marginal over-expenditure of K1.6billion. This was largely on account of underperformance of dedicated grants and thereby missing the domestic borrowing target by about K3.0billion. We are however, optimistic that by close of the year, we will recover and meet all our targets.

Mr. Speaker Sir, as you might be aware, the major pressure points on the budgeted expenditure during the quarter emanated from wage and salary increases. In order to meet this demand, a corresponding cut was made across the board on other expenditure lines especially other recurrent transactions (ORT) so as to remain within the targets. Mr. Speaker Sir, going forward to the end of 2012/13 fiscal year, we expect to remain within our targets. I am aware of the many pressure points, however, it will be very critical that we remain on target if we are to consolidate and sustain the progress achieved so far.

Mr. Speaker Sir, the Ministry of Finance has developed a medium term macroeconomic framework from 2013/14 to 2015/16 financial years. Mr. Speaker Sir, the framework draws lessons from the successes as well as implementation challenges of the 2012/13 budget which was aimed at initiating and galvanizing recovery from the economic slowdown experienced prior to the reforms.

Mr. Speaker Sir, precedent to the development of the framework was the following actual performance of the economy and underlying assumptions. Mr. Speaker Sir, the Gross Domestic Product (GDP) growth for 2012 was revised downward from an earlier estimate of 1.9 percent to 1.8 percent. The economy is however, expected to rebound as GDP growth surges to around 5.0percent underscoring the success of the economic reforms that my administration implemented in 2012. Furthermore, Mr. Speaker Sir, prospects for 2014 indicate that the economy will grow at an accelerated pace of 6.1 percent as the policy measures we implemented in 2012 take full effect.

Mr. Speaker Sir, inflation is expected to be relatively high for the remainder of the year. We however expect a sharp deceleration in inflation in 2014 to an average of 7.4percent. My administration will therefore continue to pursue with vigour to bring down inflation and achieve a continued appreciation of the local currency to sustainable level.

Mr. Speaker Sir, building on the 2012/13 financial year, fiscal consolidation and supportive monetary policies aimed at restoring and recovering the macroeconomic environment will continue. In this regard, the Fiscal Anchor for the 2013/14 financial year shall be “a continued No Net Domestic Financing with a net repayment of domestic debt of 0.5 percent of GDP” which is equivalent to K6.8 billion by the end of the financial year. Furthermore, Mr. Speaker Sir, the 2013/14 Budget aims to provide a consistent and coherent economic policy framework to underpin our development objectives. The emphasis continues to be on enhancing the sustainability of growth and development through policies that consolidate economic stability, reinforce resilience to shocks, both internal and external further improve public financial management, and support private-sector-led growth.

Mr. Speaker Sir, it is important at this point in time for the august house to note that there is need to finance the 2014 tripartite elections. The 2013/14 financial year budget will be contractionary resulting in a number of pressures that are anticipated in the course of implementation. Allocations to Ministries and Departments will be constrained due to limited resources. It will therefore be necessary that Government Ministries and Departments be economical in the use of resources allocated to them. Only priority activities should be under taken.

Mr. Speaker, Sir, I would like to appeal to the Nation to continue to be understanding and appreciate the situation our Nation is in. For us to build the economy, we need the support from all the people of Malawi. The developments we have seen in the past 12 months must give us hope that the reforms are working. Yes, there has been pain, and we may continue experiencing pain, though at a reduced level for some time. This is expected any situation like we found ourselves in. Mr. Speaker Sir, it is expecting a miracle for one to recover from the economic death bed without feeling pain. The pain we are suffering is the price we are paying for allowing ourselves into the situation we found ourselves in. It is my hope and prayer that we will learn from the past and accept that procrastinating to take tough decisions for short term gains or to feed our personal political greed will always lead to painful situations.

Removing bottlenecks to economic growth

Mr. Speaker, Sir, when I took over Government, the private sector had challenges with predatory tax audits, and unfair and arbitrary appeals procedures by the Malawi Revenue Authority. All these problems are now history.

Government has reviewed and simplified the tax regime to make it friendly to business, investors, and to support our job creation agenda.

Mr. Speaker, Sir, procedures for business licensing, work permits and visas have also been reviewed and simplified to encourage foreign investment and tourism into Malawi.

Mr. Speaker, Sir, upon assuming power, Government quickly resolved the fuel supply challenges that gripped the country. The prudent macroeconomic policies that were put in place have made it possible for us to procure fuel on a sustained basis, such that our fuel stocks have increased from being negative to 11 days. Government will now focus on increasing storage capacity.

Mr. Speaker, Sir, my Government also revived the Millennium Challenge Compact which was suspended by the United States Government. I am further pleased that the MCA Malawi Office is now established and setting all background work for the implementation of the compact.

Government has signed the World Bank funded Interconnector electricity project with the Mozambican Government. Negotiations with many Independent Power Producers in the energy sector are at very advanced stages.

These initiatives, Mr. Speaker, Sir, are aimed at creating a conducive environment for economic growth in our country, as energy is key to any meaningful development.

Increasing and diversifying exports

Mr. Speaker, Sir, one of my Government’s significant achievements has been to intensify the production and diversification of cash crops that have a bearing on our exports.

Government approved the Integrated Production System last year. Following this approval, tobacco buyers started supporting our farmers by contracting them to produce good quality tobacco in order to attract premium prices on the market. The total projected volume for the 2012/2013 marketing season is about 156 million kg, almost double the 79 million kg sold in the 2011/2012 season. The projected volume is expected to realize more than US$300 million as compared to US$177 million in the 2011/2012 season.

Mr. Speaker, Sir, since the opening of the tobacco marketing season, our farmers have been offered better prices on average than last year.

Projections for other cash crops like cotton, tea, coffee, maize, rice and legumes have also increased this year.

Mr. Speaker, Sir, last year, I launched the National Export Strategy (NES) (2013 – 2018) to boost exports, create employment and enhance revenues. The NES sets out a path to diversify into new export sectors, and crucially move from exporting raw commodities to value added goods. To do this, the NES has looked at those areas where Malawi has a natural competitive advantage, those industries with scope for value addition and crucially where there is strong and growing demand.

Mr. Speaker, Sir, my Government has operationalized the all stakeholders Trade, Industry and Private Sector Development Working Group in order to facilitate and fast track the implementation and monitoring of the National Export Strategy.

Reorganising Industry

Mr. Speaker, Sir, my Government recognises that the private sector is the engine of economic growth. For years now, Government business in the market had been too big. My Government is committed to reducing the scale of Government in order to unlock the potential of the private sector.

Mr. Speaker, Sir, Government has undertaken to restructure the tobacco industry and the review of the Tobacco Act is under way. The Act will reorganise and streamline sector policy coordination.

Mr. Speaker, Sir, Government will establish the first ever Tea Auction Floor in Malawi later this year. This will allow tea to be sold here in the country. It is hoped that this will help Malawi maximise foreign exchange earnings from tea sales. Furthermore, Malawi will be able to overcome the foreign exchange lean period experienced between October and March.

The Livestock Industry has also been reorganised to promote dairy, meat and leather sub-sectors. This is to encourage diversification out of agriculture into manufacturing and agro-processing. Investors have already engaged Government to set up factories in dairy, meat, and cooking oil.

Mr. Speaker, Sir, Government is in discussion with the Nyasa Manufacturing Company to enter into a public private partnership for the expansion of their cigarettes manufacturing factory.

Mr. Speaker, Sir, I am pleased to inform this august House that a Dubai based company is establishing a textiles factory here in Malawi. The company has already identified a site and opened their offices in Lilongwe.

Mr. Speaker, Sir, I am pleased to report that earlier this year I visited a state-of-the art agro processing facility for production and exportation of Mango and Banana pulp which is under construction. The project is managed by MM (Operations) Limited in Salima and is the first of its kind in Malawi. It will set the pace for an increasingly dynamic and diversified agro-processing sector.

Mr. Speaker, Sir, my Government also remains committed to promoting the cotton industry as a way of broadening our export base. During the 2012/2013 financial year, government supported farmers with extension services and distributed 38,918 metric tonnes of certified cotton seed under the Cotton Up-Scaling Programme. Mr. Speaker, Sir, one great achievement in the cotton sub-sector this year, was the passing of the Cotton Act by this House. The Act provides for a regulatory framework in the cotton industry and facilitates the participation of the private sector in the production and processing of cotton. In the next few months, my Government will commission cotton ginneries in Chikwawa, Salima and Karonga districts.

Mr. Speaker, Sir, Sunseed Oil Ltd is putting up a plant to process such crops as soya beans, sunflower, and groundnuts into edible oils and animal feed for both local and export markets. This will help Malawi save US$45 million in crude oil imports. Furthermore, the company projects that it will earn about US$52 million from the export of soya cake.

Mr. Speaker, Sir, my Government is also reorganising non-agricultural sectors to promote greater investment and competition. In the area of transport, Government is implementing an open sky policy to allow more and competitive flights in and out of Malawi. In this regard, Mr. Speaker, Sir, I wish to report that Government identified Ethiopian Airlines as a strategic partner for Air Malawi. The new Air Malawi (2012) Ltd is expected to start operations once all the mandatory requirements have been fulfilled.

As this august House may be aware, Mr. Speaker, Sir, other airlines are also increasing their flights to Malawi. For the first time, we now have Kenya Airways and Ethiopian Airlines flying to Blantyre.

Mr. Speaker, Sir, there are many other industrial projects that are in the pipeline. These investments clearly demonstrate the growing confidence in Malawi’s economic recovery programme.

These initiatives will create jobs for our people; create local market for our farmers and broaden foreign exchange reserve for our country.

Social Protection Programmes

Mr. Speaker, Sir, under the Social Protection component of the ERP, my Government has implemented policies and programmes that are aimed at addressing the negative impact of the reforms. Such programmes include the Public Works Programme, Cash Transfer Programme, School Feeding and Bursary Programme, and the Food Aid Programme. These programmes are designed to meet the needs of vulnerable households.

Mr. Speaker, Sir, since July 2012, my Government has rolled out the Social Cash Transfer Programme amounting to MK24 billion. The programme targeted 10 percent of the lowest ultra poor and operated in 15 districts, namely Mchinji, Salima, Mangochi, Machinga, Chitipa, Likoma, Phalombe, Nsanje, Chikwawa, Mwanza, Neno, Balaka, Mzimba, Zomba and Mulanje.

Mr. Speaker, Sir, Government plans to roll out the Social Cash Transfer Programme to all 29 districts by June 2014. The programme will reach a total of 315,000 households benefitting 1.5 million Malawians.

Mr. Speaker, Sir, Government also implemented the Public Works Programme in all 29 districts. In the 2012/2013 financial year, about 600,000 households benefited from the programme. The Government also specially targeted urban districts for implementation of this program in order to benefit the urban poor households.

Mr. Speaker, Sir, furthermore, my Government distributed food to about 2 million families that were food insecure. In addition to this, 1.6 million children benefited from the school feeding programme which was rolled out in over 1,000 schools across the country.

Mr. Speaker, Sir, as I have earlier on said, I wish to once again thank Malawians for the resilience and understanding during this difficult time.

Enhancing Income Generation Projects at Household Level

Mr. Speaker, Sir, improving household incomes is high on my Government agenda. In this regard, my Government has put in place a number of initiatives to enhance income generation at household level.

Mr Speaker Sir, my Government is implementing Community Savings and Investment Programme (COMSIP) in order to promote the culture of savings.

Participants from Social Protection Programmes are encouraged to participate in savings and investment activities as a graduation process. This component aims at inculcating a culture of savings through capacity building in group dynamics, financial literacy, business management, skills training and cooperative formation.

To date a total of 4,457 groups have been formed and are functional comprising 99,153 members of whom 65,441 are female and 33,712 are male participants. These 4,457 groups have mobilised a total of MK672 million to date. These savings are used for on lending for various small scale businesses such as hawkers, restaurants, irrigation, pig farming and chicken rearing. The groups will now participate in buying cash crops for exports.

Mr. Speaker, Sir, under the Presidential Initiative on Poverty and Hunger Reduction, my Government committed resources for the promotion of legumes such as ground nuts, soya beans and pigeon peas. These are high value crops that have potential to increase household incomes.

Mr. Speaker, Sir, 100,000 smallholder farmers benefitted from 1,570 metric tons of legume seed distribution under this programme. It is expected that this will result in an estimated production of 40,000 metric tons of legume in the 2012/2013 cropping season.

Mr. Speaker, Sir, during the 2012/2013 financial year, my Government distributed 8,680 goats and sheep to 140 groups, 5 groups per district. Furthermore 12,600 farmers were trained on goat and sheep management under the Small Stock Livestock Production Project. This programme is on a pass-on arrangement.

Mr. Speaker, Sir, I also launched a One Cow a Family Project aimed at helping poor families to increase their nutrition intake and enhance their household incomes. Through this project, 201 cows have so far been distributed to farmers in Phalombe, Ntchisi, Lilongwe, Zomba, Nkhota-kota and Mulanje districts. Mr. Speaker, Sir, this project will also be implemented using the pass-on principle. My Government’s target is for the programme to reach 1 million families across the country by end of 2015. Farmers in Ntchisi and some parts of Lilongwe have been trained in cattle management and khola construction. Training is currently underway in Phalombe, Zomba, Mulanje and parts of Lilongwe.

ERP Medium Term Focus Areas

Mr. Speaker, Sir, let me now turn to the five priority sectors of the ERP and highlight the progress that has so far been registered as well as the priority projects that Government has identified.

Agriculture and Food Security

Mr. Speaker, Sir, the agricultural sector is the key source of growth and employment in the country. It accounts for about 36 per cent of GDP, 87 per cent of total employment and supplies more than 65 per cent of the raw material requirements for the manufacturing sector. It also feeds our nation and is central to our efforts to reduce poverty.

Mr. Speaker, Sir, my Government is therefore restructuring the agriculture sector to better serve our objectives of economic growth, employment and poverty reduction.

Managing Farming as a business

Mr. Speaker, Sir, Government is mobilising farmers through extension services, farmers clubs and cooperatives to move our farming community from subsistence to commercial farming.

Government is also intensifying the popularisation of the Warehouse Receipts Scheme. The scheme provides a ready market for farmers and motivates them to take farming as a business. For industries, the scheme will guarantee supply of raw materials. As a nation, the scheme will help us aggregate national production, reduce post harvest losses, build up our strategic reserves and increase our opportunities for exports.

Mr. Speaker, Sir, I am pleased to inform this august House that the Export Development Fund (EDF) has earmarked US$50 million for the scheme.

Mr. Speaker, Sir, my Government will establish two departments in the Ministry of Agriculture and Food Security: one focusing on Rural and Subsistence Farming and another focusing on Commercial Farming. This is intended to make commercial farming a clear priority of my Government. In this regard, one of the main focus areas of this new department will be commercialisation of maize for both local and export markets.

Diversification for export

Mr. Speaker, Sir, our economy has depended mostly on two crops: maize and tobacco. This has constrained Malawi’s ability to achieve sustainable growth. In view of this, my Government has prioritised diversification of cash crops within the agriculture sector including: rice, cotton, coffee, cassava, and legumes such as groundnuts, soya, sugar beans, pigeon peas, and sunflower. We are also promoting increased production of flue cured tobacco.

Mr. Speaker, Sir, in order to scale up the programme, Government embarked on production and distribution of quality seeds for cotton, legumes, and cassava. Government is expanding integrated production system in the tobacco sector and also introducing contract farming in the cotton, cassava and other crops. A delegation of small scale tobacco farmers left for Zimbabwe to learn new technology for curing the leaf.

Mr. Speaker, Sir, Government has put in place deliberate policy to support private sector investment into agriculture especially commercial farming. Government will make a concerted effort to remove investment barriers in such areas as land, energy, transport infrastructure and in the issuance of permits.

Expanding production

Mr. Speaker, Sir, in addition to lack of diversification, one of the challenges Malawi faces is low agricultural production. To address this challenge, my Government is promoting two crops a year through expanded irrigation. Mr. Speaker, Sir, this will be discussed in detail when I turn to the Irrigation sector.

Mr. Speaker, Sir, Government has also introduced a special loan scheme for agricultural inputs called the Farm Input Loan Program (FILM). This is a public private partnership programme where private sector will offer loan facilities for inputs to deserving and qualifying farmers. It is my hope, Mr. Speaker, Sir, that this programme will scale up production of maize and other crops, and enhance the country’s food security, household incomes and export earnings. Mr. Speaker, Sir, this programme will run side by side with the Farm Input Subsidy Programme (FISP).

The Farm Input Subsidy Programme

Mr. Speaker, Sir, under the Farm Input Subsidy Programme (FISP), my Government increased the number of beneficiaries from 1.4 Million in 2011/2012 to 1.5 million in 2012/2013 fiscal year. As a result, maize production is estimated to increase from about 3.5 million metric tons in the previous season to 3.6 million metric tons this year. This represents a 1.5 percent increase. Mr. Speaker, Sir, I am pleased to inform this August House that this year FISP programme registered tremendous improvements. These include: security of coupons, and uncovering of some malpractices due to participation of the police in the programme.

Mr. Speaker, Sir, as this august House may be aware, there were some sporadic dry spells in the course of the season that will affect crop production, including maize, in districts like Rumphi, Mzimba, Salima, Lilongwe, Kasungu and Dedza. To mitigate this situation and ensure food security, my Government is encouraging and supporting smallholder farmers to grow a second crop. Government will also ensure that surplus maize is moved to these districts in good time.

Mr. Speaker Sir, in the coming year, my Government will continue to implement the Farm Input Subsidy Programme because it significantly contributes to economic growth and the attainment of food self – sufficiency.

Livestock Development

Mr. Speaker, Sir, my Government is aware and appreciates the important role that the livestock sector plays in our economy. Livestock contributes 11% of the Gross Domestic Product (GDP) and about 38% overall agricultural production to GDP.

Livestock constitutes a very important part of food security. It is a reliable source of income through sales of animals and animal products. Furthermore, livestock products such as hides and milk are used as raw materials for industrial development.

Mr. Speaker, Sir, the cattle population has now gone up from 650,000 in five years ago to 1.2 million, whilst goat population has risen from 3.4 million to 5.2 million. Despite this improvement, my Government will continue to provide support for livestock development through animal breeding programs, extension services and improved animal health programmes.

Mr. Speaker, Sir, my Government has keen interest in working in close collaboration with the private sector, and non-governmental organizations in this sector. In view of this, Government will work closely with partners like the Heifer International, Malawi Milk Producers Association and Feed the Future Project in developing the livestock sector.

ADMARC

Mr. Speaker, Sir, my Government acknowledges that the Agricultural Development and Marketing Corporation (ADMARC) has not performed to the expectation of many Malawians. It has been a major burden on the budget and as this August House may be aware, ADMARC current debt stands at about MK6 billion. In view of this, my Government has decided to restructure ADMARC so that it becomes viable and deliver on its mandate.

Energy

Mr. Speaker, Sir, the country continues to face a number of challenges in the energy sector. These include inadequate capacity to generate electricity and intermittent supply. Consequently, economic activity in areas such as mining and manufacturing are affected. To address these problems, my Government is implementing a number of projects.

In the year under review, Government registered the following key achievements:-

• continued to implement the Kapichira Hydro-power Project Phase 2. I am pleased to inform this honourable House that Kapichira Hydro-power Project Phase 2 will be commissioned in December this year. It will add 64 Mega Watts to the national grid;
• distributed 2 million free energy saver bulbs across the country which resulted in power savings of up to 45 Mega Watts;
• started installation of a USD 6 million solar power plant that will add 850 Kilo Watts to the national electricity grid. The project is expected to be commissioned in August this year at Kamuzu International Airport in Lilongwe; and

In the forthcoming financial year, my Government plans to:-

• implement the three year Coal Fired Power Generation Project whose Memorandum of Understanding has already been signed with China Gezhouba Construction;
• Malawi has signed a Memorandum of Understanding with TBEA of China to upgrade the eastern line from Nkula to Bwengu via Salima and Nkhota-kota.

The feasibility study has been finalised and project works are expected later this year, and

• Electrify 27 rural trading centres by December 2013, under the Malawi Rural Electrification Programme (MAREP) 7.

Tourism

Mr. Speaker, Sir, Government’s objective in the Tourism sector is to ensure that Malawi becomes an attractive and competitive tourist destination. The tourism industry has the potential to generate foreign exchange earnings and create jobs. It is for this reason that my Government has identified tourism to drive diversification out of agriculture.

Mr. Speaker, Sir, my Government has therefore intensified campaigns in major international and regional markets of South Africa, United Kingdom, Germany, Switzerland, Netherlands and China.

In the 2013/2014 Financial Year, Government:-

• Will continue to promote private sector participation in the tourism industry by addressing bottlenecks that hinder private sector entry in the sector;
• Is finalising the procurement of an operator for the President Hotel, the Bingu wa Mutharika International Conference Centre and Presidential Villas. This will promote Malawi as a leading destination for conferencestourism. The Operator will give a face lift to the Presidents Hotel and the Bingu wa Mutharika International Conference Centre by building a modern village between the hotel and Capital Hill; and a fly over to Sunbird Capital Hotel.
• Introduce tourists cruise vessels on Lake Malawi and Shire River. The project to build vessels has already started in Monkey Bay. This will create jobs for our people; and
• Construct an ultra-modern Malawi Institute of Tourism campus in Lilongwe. This project seeks to build capacity in the tourism sector in anticipation of the growing demand.

Mining

Mr. Speaker, Sir, the mining sector continued to grow steadily and its contribution to the GDP grew from 3 percent in 2009 to 10 percent in 2012, resulting in a substantial increase in exports. My Government continued implementing measures aimed at creating a conducive environment that encourages investments in the sector.

Mr. Speaker Sir, I am pleased to inform the honourable House that during the year under review, Government has:

• Launched the Mines and Minerals Policy in April this year, which will, among other things, guide and promote sustainable development of the mining sector;
• Reviewed the Mines and Minerals Act which will be tabled in this House before the end of this year;
• Issued exploration licences to investors as one way of encouraging mining activities in the country;
• undertook measures to organize small scale miners into groups and cooperatives in order to promote artisanal and small scale mining operations in the country; and
• started developing a generic Petroleum Sharing Agreement that will be used by all companies wishing to explore oil and gas in Malawi.

Mr. Speaker, Sir, in the 2013/2014 Fiscal Year, Government will:-

• continue to implement the Mining Growth and Governance Support Project with financial support from the World Bank and European Union;
• introduce training courses in mining in our institutions of higher learning. I am therefore pleased to inform this honourable House that the Malawi Polytechnic, a constituent college of the University of Malawi, has started developing a curriculum in mining. I am pleased to announce that the Government of Botswana has offered full scholarships for Malawian students to study Bachelor of Science degree in Geology and Mining Engineering in Botswana.
• Launched airborne geophysical mineral exploration programme to be carried out by Nuenergy Gas of Australia in the Chikwawa and Nsanje districts; and
• develop an Artisanal and Small Scale Mining Policy.

Mr. Speaker, Sir, with the current developments in the mining sector, it is projected that the sector’s contribution to the country’s GDP may rise from 10% to over 20% in the next five years.

Infrastructure Development

Mr. Speaker, Sir, my Government has made steady progress in the implementation of transport infrastructure projects that were prioritised in the ERP.

Railway Infrastructure

I am pleased to report to this August House that Construction of the new railway line from Kachaso in T.A. Chapananga in Chikhwawa passing through Mwanza and Neno districts to Nkaya in T.A. Msamala in Balaka which I officially launched on 6^th December 2012 has commenced and progress is already at over 25%. The Project is wholly being financed by Vale and is estimated to cost around USD1billion. It is expected to be completed by December 2014.

Regarding the rehabilitation of the 201km Limbe-Makhanga-Bangula-Nsanje-Marka Railway line, I would like to inform this August House that draft Terms of Reference for Request for Proposals have been developed and consultations are currently underway to conduct feasibility studies. Preparatory works for the rehabilitation of the Limbe-Balaka-Salima-Lilongwe-Mchinji section of the Nacala Corridor have been carried out.

Mr. Speaker, Sir, my Government is currently undertaking on-going spot emergency repairs of the existing railway line from Lilongwe to Balaka to ensure usability of the line.

(I now turn to) Road Infrastructure

Mr. Speaker Sir, access to transport services is an important determinant of economic growth as it facilitates investments and growth in other sectors such as agriculture, mining, tourism, and manufacturing.

Mr. Speaker, Sir, allow me at this point to outline some of the achievements that we registered in the transport sector during the 2012/2013 financial year.

With regard to road transport, Government continued to implement several projects with support from our cooperating partners. Some of the notable projects include:

• the commissioning of the 101 km Karonga-Chitipa Road which was inaugurated in January this year;
• the upgrading, to bitumen standard, of 25 km of the Ekwendeni-Ezondweni-Mtwalo Road which was completed and inaugurated in January this year;
• the maintenance and rehabilitation of a 46 km section of the Chikhwawa-Ngabu section of the Chikhwawa-Nsanje Road; and
• the completion and commissioning of a 74 meter long new bridge across South Rukuru River on the M1 road in Rumphi District.

Mr. Speaker, Sir, Government commenced the construction of the Lilongwe Western Bypass whose ground breaking ceremony took place in January this year.

Mr. Speaker, Sir, I am pleased to report that some of the projects that had stalled due to a number of challenges, including delayed payments and fuel shortages, have resumed. These include reconstruction and rehabilitation of the Liwonde – Naminga Road and the 60km long Zomba – Blantyre Road. The Zomba-Blantyre Road project is expected to be completed by March 2014.

Mr. Speaker, Sir, in the coming year, under the ERP road transport sub sector, Government plans to upgrade 9 roads namely Ntcheu- Tsangano-Neno-Mwanza Road, Rumphi-Nyika-Chitipa Road, Lilongwe Old Airport-Kasiya-Santhe Road, Lirangwe-Chingale-Machinga Road, Mangochi (Chingo)-Malindi-Makanjira road, the Jenda – Edingeni Road; the Chikhwawa-Chapananga-Mwanza Road, the Lirangwe-Changalume-Machinga Road and the Linthipe-Lobi-Mitundu road; as well as the continued rehabilitation and maintenance of the existing road network. On the Thekerani Road, I am pleased to report that the constructor is already on site.

Mr. Speaker, Sir, I have directed that the 28 graders that are being kept at Private Vehicle Hire Organisation (PVHO) be distributed to each district to develop rural roads in support for agriculture and rural development.

Air Transport

On Air transport, Government plans to boost tourism in the lake shore by constructing a new Mangochi Airport. We are currently in the process of identifying potential investors for the project.

Mr. Speaker, Sir, with regard to air transport, Government continued rehabilitation and extension of the Chileka International Airport Terminal Building. The works are expected to be completed within the first half of the 2013/2014 financial year.

With respect to water transport, I wish to report that rehabilitation of the MV Ilala which had developed serious defects is almost complete. The ship was withdrawn from service for a comprehensive re-fit and is expected back in service by end of May 2013.

(Mr. Speaker, Sir, I now turn to) Private Sector Development, Industry and Trade

Mr. Speaker, Sir, my Government prioritised the private sector as the engine for economic growth and is therefore pivotal to the implementation of the ERP. In this regard, Government is implementing policies and strategies aimed at promoting a competitive and conducive environment for doing business and economic diversification.

During the year under review Government:-

• Removed restrictive business practices and legal provisions as well as structural constraints in order to improve Malawi’s ranking in the Ease of Doing Business Survey Index from the low position of 157 out of 185 countries in 2013 into the top 100 countries in 2014; and
• continued to build capacity and strengthen the Competition and Fair Trading Commission for the agency to efficiently and effectively ensure fair play in the economy.

Information and Communication Technology

Mr. Speaker, Sir, Information and Communication Technology (ICT) is one of the key pillars that facilitates sustainable economic growth. In this respect, Government prioritized ICT for its recovery programme.

During the year under review, Government commenced the development of a legal framework for the ICT sector and started preparations for the migration from analogue to digital television broadcasting.

In the 2013/2014 fiscal year, Government plans to:

• finalize the Access to Information Policy and Bill;
• expand the Government ICT network infrastructure from the Capital City to all the 28 districts;
• introduce a central electronic population register and a system for continuous and instant updating of records; and
• establish a National Data Centre that will rationalize data storage and data processing facilities.

Youth Development and Empowerment

Mr. Speaker, Sir, youth development and empowerment is critical for socio-economic development of the country.

During the 2012/2013 financial year, Government trained 5,435 young people in vocational and entrepreneurial skills and provided start-up tools to various vocational technical centres including Katuli in Mangochi, Mpherembe in Mzimba, DAPP Mikolongwe in Chiradzulu, Livingstonia Technical College in Rumphi, Area 25 in Lilongwe, Masache and Bangula in Chikhwawa.

Government is implementing Youth Economic Empowerment Programmes and Projects to enhance their income earning capacity. I am pleased to report that the construction works under the Integrated Youth Development at Neno have been completed. The center has production units for crop and animal husbandry such as piggery, poultry, bee-keeping and fish farming.

SUSTAINABLE ECONOMIC GROWTH

Natural Resources and Environmental Management

Mr. Speaker, Sir, my Government has intensified implementation of measures aimed at integrating climate change mitigation and adaptation into development planning.

During the period under review, the Government:-

• developed the Environment and Climate Change Communication Strategy (ECCCS) as a way of creating and enhancing public awareness on environment and climate change management issues;

• developed a National Climate Change Investment Plan (NCCIP), which is expected to assist in the mobilization of investments in the management of climate change in Malawi;

• developed the National Climate Change Policy (NCP);

• introduced a polluter pays principle and banned the use of thin plastics as a demonstration of our commitment towards the promotion of a green growth;

• reviewed the Environmental Management Act (EMA) in order to incorporate emerging issues in environmental management;

• implemented the Public Private Partnership for Sustainable Land Management Project with support from the Global Environment Facility and the United Nations Development Programme (UNDP) in order to reduce land degradation in the Shire River basin; and

• developed Atomic Energy Regulations and approved the establishment of the Atomic Energy Regulatory Authority to oversee the implementation of nuclear programs in mining, medical and industrial applications.

Mr. Speaker, Sir, turning to Forestry Management, I am pleased to report that Government continued implementing measures aimed at increasing the forest cover. Government, in collaboration with the civil society and the private sector facilitated replanting of a total of 3,700 hectares of industrial timber plantations and signed 211 agreements with local communities for the co-management of the forest reserves.

In the 2013/2014 Fiscal Year, My Government will:-

• finalize the review of the National Forest Policy, National Forest Act, National Meteorological Policy, National Meteorological Act and National Climate Change Act;
• continue to address challenges besetting the sector, including deforestation, poor waste management and pollution; and
• intensify enforcement of compliance with relevant laws and regulations.

Lands

Mr. Speaker, Sir, turning to the land sector, my Government remains committed to the provision of land management services to members of the general public and other stakeholders to ensure that developments in the sector take place in an orderly and sustainable manner.

In the 2012/2013 financial year, Government made the following achievements in this area:-

• approved the Land Bill, 2012 and 11 other related legal instruments which are currently awaiting enactment into laws by this august House;
• facilitated the acquisition of Chikwawa Estate in Salima from Press Agriculture Limited for the Green Belt Initiative; and
• prepared the National Land Use Planning and Management Policy.

Mr. Speaker, Sir, Government also made remarkable progress on the international boundary re-affirmation and demarcation exercise. I, therefore, wish to inform this august House that mapping for 399 km of Malawi-Zambia boundary was completed and mapping for the remaining 239 boundary km stretch is underway. Furthermore, Government completed a joint field reconnaissance survey covering a total of 430 km of a boundary stretch between Malawi and Mozambique in Phalombe, Dedza and Nsanje districts and erected boundary pillars on a stretch covering 152 km in these districts.

Mr. Speaker, Sir, in the coming financial year, Government will continue to sensitise the general public about the Land Bill, 2012 and prepare subsidiary legislation for its implementation and administration. Government will also adopt the National Land Use Planning and Management Policy.

Employment and Labour

Mr. Speaker, Sir, my Government recognizes that employment and labour are key policy issues for sustainable economic growth and development.

During the 2012/2013 financial year Government:-

• introduced the South Korean and Dubai Employment Programme for the youth as one way of reducing youth unemployment and build their skills capacity;
• Government has opened offices in South Korea and Dubai to deal with issues of labour, trade and immigration and arrangements are underway to increase capacity at these offices;
• The Minister of Labour has already visited South Korea and interviews for the youth have been conducted and visas are being processed.
• developed a National Employment and Labour Policy which places employment as a central macroeconomic and sectoral policy pillar and mainstreams employment and labour issues in all development policies;
• conducting a Labour Force Survey and establishing a Labour Market Information System as a basis for assisting government and other stakeholders in employment planning, labour utilization and making evidence-based employment and labour market interventions; and
• agreed with Trade Unions, under the umbrella of Malawi Congress of Trade Unions to work together to strengthen collective bargaining as a tool for resolving differences and reaching mutual agreements.
• develop and implement National Youth Service Program that aims to train and mentor youth on their skills development.

Water Development and Irrigation

Mr. Speaker, Sir, Government recognizes the fundamental role that water development and irrigation play in the development of this country. To this effect, Government has embraced an integrated approach to water resource management to properly manage the country’s precious resource and make it readily available for multiple uses such as domestic and industrial water supply, irrigation, tourism and livestock production.

During the 2012/2013 Financial Year, Government continued to implement the National Water Development Programme. In an effort to address the water problems faced in our cities, Government has been working on detailed designs for the construction of new water sources for cities of Lilongwe, Blantyre and Mzuzu. Government has also finalised the preparatory work for the upgrading of Kamuzu Barrage at Liwonde. The Barrage will be a state-of-the-art facility which will improve regulation of the Lake Malawi-Shire River System, weed management and traffic management.

Mr. Speaker, Sir, in the 2013/2014 financial year, Government will construct a total of six multipurpose dams across the country and continue to implement the National Water Development Programme and other programmes under the Public Sector Investment Programme.

Mr. Speaker, Sir, with regard to irrigation, Government continued to develop more land for irrigation in order to support agricultural production.

Mr. Speaker, Sir, at the onset of the rainy season in December 2012, a total of 95,637 hectares of land had been developed, with 45,637 hectares under smallholder farmers and 50,000 hectares under estates. Government continued to implement various irrigation initiatives in collaboration with stakeholders. Among the initiatives being implemented is the Green Belt Initiative (GBI). In the year under review, Government started to construct 530 hectares of Chikwawa GBI Scheme in Salima out of the 6,293 hectares that is available. In support of the ERP, 130 hectares of Chikwawa Scheme was planted with soya beans benefitting 346 households. It is expected that about 180 metric tons will be produced.

In the forthcoming fiscal year, Government plans to complete the construction of Chikwawa GBI Scheme, and commence the construction of 1,000 hectares of Nthola-llora-Ngosi irrigation Scheme in Karonga.

Housing and Urban Development

Mr. Speaker, Sir, with respect to housing and urban development, Government continued to implement a number of programmes aimed at increasing access to decent, safe and secure shelter.

Government is currently developing a National Housing Policy which is expected to be launched in the first half of the 2013/2014 Financial Year.

In the year under review, Government commenced the construction of a clinic at Capital Hill which is expected to be completed during the first half of the 2013/2014 Financial Year. Government also commenced the construction of the new state of the art stadium at Area 48 in Lilongwe which is expected to be completed within 24 months.

SOCIAL DEVELOPMENT

Health

Mr. Speaker, Sir, I now turn to public health, HIV and AIDS, Nutrition and Maternal Health and Safe Motherhood Management.

Public Health

With regard to public health, my Government continued to work towards the improvement of quality of life of all Malawians through, among other strategies, increasing access to health facilities and improving the health service delivery system.

In the year under review, Government, in collaboration with development partners, continued to implement measures aimed at improving access to Essential Health Package (EHP) through the development of infrastructure. The health services infrastructure development projects that were implemented during the year included the upgrading of health facilities at districts and central hospitals, the construction of new health centres across the country and the construction of the state of the art district hospital in Nkhata-Bay.

Government also strengthened the Health transport system in order to improve access to health services through referrals. To this effect, Government procured 28 ambulances.

Mr. Speaker, Sir, my Government responded quickly to the stock outs of drugs in the public hospitals by offering an emergency tender so that we could have drugs for central hospitals. Currently, emergency drug kits, containing essential medicines are being distributed to CHAM and public health centres across the country.

Mr. Speaker, Sir, in the 2013/2014 financial year, Government will continue working with our partners to improve service delivery in the health sector. The DFID has agreed to bring forward 16 million pounds to purchase essential drugs and medical supplies to enable the Central Medical Stores Trust to have adequate drugs that can be sold to district hospitals.

Government will also develop a National Health Financing Strategy to guide health sector financing. Furthermore, Mr. Speaker, Sir, Government will upgrade and build more health centres across the country.

Nutrition, HIV and AIDS Management

Mr. Speaker, Sir, let me now turn to nutrition, HIV and AIDS management. In the 2012/2013 financial year, Government achieved the following:-

• over 80,000 acute malnourished under-five children were diagnosed and treated in nutrition rehabilitation units across the country;

• over 98 percent of children aged 1 – 5 years were de-wormed surpassing the 90 percent target;

• launched a Five Year Nutrition, HIV and AIDS Project which is jointly funded by the World Bank and Canadian International Development Agency,
• rolled out a new regime for ART which has fewer side effects to HIV positive pregnant women and children; and
• intensified awareness of youth friendly sexual and reproductive health and HIV services which resulted in up to 2.9 million visits by the young people to access the services which is almost double the target for the year.

Mr. Speaker, Sir, during the 2013/2014 financial year, Government will lobby for more funding from development partners for the implementation of nutrition and HIV and AIDS programmes.

Maternal Health and Safe Motherhood

Mr. Speaker, Sir, during the year under review, Government intensified the implementation of maternal and newborn health services to improve quality of care. The Presidential Initiative on Maternal Health and Safe Motherhood has tremendously contributed to this programme. It is therefore not surprising that as a country, Malawi is making some strides on maternal and child health indicators. New data from the United Nations Estimates (2012) shows that Malawi’s maternal mortality is at 460 per 100,000 live births down from 675 per 100,000 live births in 2010. Much as this is a welcome development, my government strongly believes that the fight is far from being won.

Mr, Speaker, Sir, the establishment of the Chiefs’ Committees also helped in sensitising communities on sexual reproductive health services and encouraged pregnant women to seek services at hospitals.

Furthermore, through the initiative, Government is constructing maternity waiting homes across the country. Construction of a maternity waiting home has since been completed and opened at Mulanje District Hospital. The shelter at Dowa Hospital is completed and ready for opening.

Currently, maternity waiting homes at Ulongwe in Balaka, Chilumba in Karonga, Mkanda in Mchinji, Lumbadzi in Dowa, Malosa in Zomba, Lungwena in Mangochi, and a maternity unit in Senior Chief Kwataine’s area in Ntcheu are at various stages of construction.

Mr. Speaker, Sir, currently, 200 young women, from 20 districts across the country have been recruited through their Chiefs for an 18 months community midwifery training program. Upon graduation, the community midwives will be bonded and work for their respective communities for five years. The aim is to ensure that mothers do not travel long distances to seek maternal health care services thereby averting possible pregnancy complications.

In the coming financial year, Government will allocate enough resources to ensure that these efforts are sustained so that our mothers should not die while giving birth.

Education, Science and Technology

Mr. Speaker, Sir, Education Science and Technology empowers people by providing them with the relevant knowledge, skills, expertise and competencies. To this end, Government is determined to increase access to quality education at primary, secondary and tertiary levels.

Mr. Speaker, Sir, Government has adopted a Sector Wide Approach to properly plan, implement and monitor developments in the sector. During the 2012/2013 financial year, Government has registered the following achievements:-

• commenced the process of promoting about 11,500 primary school teachers; over 2,000 secondary school teachers and 65 teacher training college tutors;
• continued with infrastructure development in order to increase access to and improve quality of education at all levels;
• commenced the review of secondary school curriculum to promote relevance and quality of education; and
• supported 12,000 secondary students with bursaries.

In the 2013/2014 financial year, Government will train and upgrade more teachers at all levels. For instance, our aim is to attain a primary Pupil to Qualified Teacher ratio of 60 to 1 by 2017/2018, down from the current 74to 1 ratio.

Mr. Speaker, Sir, to support deserving students who need financial support, my Government will bring before this august House during this sitting a Higher Education Students’ Loan Bill. This Bill will institutionalise the framework for students’ loans. The loans will cover students in both public and private universities.

Early Childhood Development and Child Protection

Mr. Speaker, Sir, my Government recognizes that investing in early childhood development programmes guarantees high quality future human capital and productivity. Children also need special protection so that they grow into productive and responsible citizens.

In the year under review, Government trained 240 District Civil Protection Committees from 16 districts affected by food shortage and floods. The Committees have been empowered to monitor human rights violation. They will also provide basic child social services including psycho-social support, early childhood development and general child rights education to the affected communities. Government is developing a Child Protection Management Information System to strengthen the provision of child protection services in the country.

In the 2013/14 financial year, Government will implement a comprehensive strategy of removing children from the streets.

Gender and Development

Mr. Speaker, Sir, gender parity, women empowerment and uplifting of women’s rights are prerequisites to poverty reduction and sustainable development.

Recently, I launched the Malawi Millennium Development Goals (MDG) Acceleration Framework and Country Action Plan aimed at accelerating progress towards the attainment of the MDG number 3 on Gender Equality and Women Empowerment.

Government also launched a White Paper for strengthening the National Gender Machinery in Malawi. The White Paper provides roadmap to enable the country to move even faster in promoting gender equality, equity and women’s empowerment.

Mr. Speaker, Sir, I am pleased to report that I have promoted more than 100 women to decision making positions. These include 9 ministers and deputy ministers; the Chief Secretary to the Government, the Acting Chief Justice, two deputy Reserve Bank Governors, the Solicitor General, the Deputy Inspector General of Police, 18 principal secretaries and other heads of government departments.

Mr. Speaker, Sir, in view of the 2014 tripartite elections, my Government hosted a National Conference on Women in Politics which focused on providing measures to be adopted and implemented by political parties to enable increased number of women in effective political participation. In the 2013/2014 financial year, Government will intensify activities that promote the participation of women in politics with the objective of increasing the number of women parliamentarians from the current 22 percent to 50 percent and women Councillors from 9 percent in 2000 to 50 percent in 2014.

Social Support and Disaster Risk Management

Mr. Speaker, Sir, turning to social support and disaster risk Management, I wish to inform this august House that Government is determined to improve the rights and welfare of the vulnerable and households affected by different forms of disaster.

Persons with Disabilities and the Elderly

Mr. Speaker, Sir, with regard to persons with disabilities, you will recall that this august House passed a Disability Bill that is aimed at protecting the rights and improving the living standards of persons with disabilities. I am pleased to inform this august House that I directed the Ministry of Finance to allocate 30 percent of my salary to the Ministry of Disability and Elderly Affairs to help them improve MACOHA’s service delivery.

Mr. Speaker, Sir, during the 2012/2013 Financial Year, Government:

• Trained 200 persons with disabilities in vocational skills and other professional skills through Community-Based Rehabilitation Programme in the districts of Phalombe, Lilongwe, Machinga, Mzimba, Blantyre and Salima;
• Supported 15 deserving students with disabilities through the education sponsorship programme; and
• introduced sign Language Interpretation on MBC TV with the aim of giving access to information to persons with hearing impairment.

Mr. Speaker, Sir, with regard to the elderly, Government, among other things, supported Community Based Organizations with 1,650 iron sheets for construction and renovation of houses of the elderly and care centers in Chitipa, Karonga, Mchinji, Lilongwe, Zomba, Neno and Nsanje districts.

In the 2013/2014 financial year, Government will inter alia provide low cost housing to 50 older persons and other vulnerable people and roll out Community Based Rehabilitation Programme in Kasungu, Mulanje and Karonga districts.

Disaster Risk Management

Mr. Speaker, Sir, our country continues to face disasters that disrupt people’s livelihoods; endanger human lives and food security; and damage infrastructure such as houses, roads and bridges. In the year under review about 60,000 households were affected by floods, stormy rains and strong winds. Of the affected households, about 33,000 had their houses and properties damaged while 26,000 had their crops in the field damaged.

Mr. Speaker, Sir, in response to these disasters, Government distributed various relief items to destitute people across the country. Currently, Government and other stakeholders are distributing agricultural inputs to affected households with access to wetlands so that they should engage in irrigation farming.

Mr. Speaker, Sir, the report by the Malawi Vulnerability Assessment Committee in the year under review indicates that 1.9 million people were food insecure. Government through the Humanitarian Response Programme distributed relief food items to the affected households.

To ensure proper and well coordinated responses to disasters, Government launched, in February this year, the National Platform for Disaster Risk Management aimed at bringing together all stakeholders involved in the disaster risk management. Government is also implementing and coordinating a number of disaster risk reduction programmes and projects aimed at mitigating the impact of disasters, including the multi-million dollar Shire River Basin Management Programme.

Local Government

Mr. Speaker, Sir, Local Government and Rural Development is key to promoting local governance and participatory democracy by creating an enabling environment for socio-economic development.

In this sector, my Government is focusing on the following areas:

Chief’s Administration:

Mr Speaker Sir, Government is committed to continue improving the welfare of chiefs through among other things providing houses and offices. In this regard, Government completed the construction of a house for Paramount Chief Lundu in Chikhwawa which will soon be handed over. Meanwhile, construction of houses for T/A Malemia in Nsanje and Senior Chief Tsabango in Lilongwe are at an advanced stage. Preparatory works for the construction of a house for Senior Chief Mbwana at Usisya in Nkhata-Bay is underway.

Mr. Speaker, Sir, my Government has noted that of the 62,000 Group Village Heads and Village Heads in the country, only 22,000 are officially registered. In this regard, my Government has decided to bring onto the official register 20,000 chiefs broken down as follows: 15,000 Village Heads and 5,000 Group Village Heads. The District Commissioners will manage the exercise to identify those chiefs that will be upgraded to the official register.

Mr. Speaker Sir, In order to facilitate efficient operations of Chief’s Administration, Government initiated the review of the Chief’s Act. The review process has currently undergone a series of consultations throughout the country.

MASAF 4:

Mr. Speaker Sir, I am pleased to report that Government intends to continue supporting communities particularly in rural areas with various socio economic services. As this august House may be aware, the Malawi Social Action Fund (MASAF) project has been one of the flagship projects for implementing such interventions in Malawi for many years now.

Mr Speaker Sir, funding for the MASAF 4 project which finances most of the community development projects is coming to an end this year and as government, we have already started engaging the World Bank for assistance to finance the MASAF 5. Meanwhile, the World Bank sent a Project Identification Mission which was in the country from 18^th March 2013 to 5^th April 2013. The Mission discussed with the Government the potential support.

Construction of Rural and Urban Markets:

Mr. Speaker Sir, during the 2012/2013 financial year, Government completed construction of modern markets at; Mataware in Zomba City, Dwangwa in Nkhotakota , Mangochi boma in Mangochi, Thyolo Boma in Thyolo, Nkhamenya in Kasungu, Limbuli in Mulanje and Ekwendeni in Mzimba districts.

Mr. Speaker, Sir, the following markets are at various stages of construction: Bvumbwe in Thyolo, Enukweni in Mzimba. Regarding Nsanje, Tsangano and Lizulu markets, construction works will start later this year.

Construction of Rural Growth Centres:

Mr. Speaker Sir, under this Programme, Government has completed construction of basic social infrastructure at Neno and Nthalire Rural Growth Centers in Neno and Chitipa. The two centers are ready for hand over to the Councils. The Nambuma Rural Growth Centre in Dowa district, construction is expected to be completed in June this year.

With regard to the second phase of the Rural Growth Centres, Government embarked on construction works at Chitekesa in Phalombe, Chapananga in Chikhwawa and Mkanda in Mchinji districts. The first phase of construction works at Chitekesa which includes construction of the market, bus depot and community ground is almost complete whilst the first phase of construction works at Mkanda and Chapananga Rural Growth Centers which include construction of the market and the bus depots are completed.

Mr. Speaker Sir, Government is committed to ensure that the Rural Growth Centers are contributing to the growth of rural economy. In this vein Government is expected to complete the second phase of Rural Growth Centers construction during the 2013/2014 fiscal year.

GOVERNANCE

Mr. Speaker, Sir, good governance is a prerequisite for this country’s socio-economic development. To this end, Government is committed to promote good economic, corporate, democratic and public sector governance as well as stamping out corruption and maintaining sound international relations.

Human Rights

Mr. Speaker, Sir, I am pleased to report that the country’s human rights record has tremendously improved from the time my administration took over the reigns of power .

Mr. Speaker, Sir, for the first time, Malawi sent a delegation to attend the 53^rd session of the African Commission on Human and Peoples’ Rights which was held in Banjul Gambia in April, 2013. This marks Malawi’s re-engagement with the African Commission. Malawi has also completed her first ever state party report under the African Charter on Human and People’s Rights. This report will be debated by the African Commission at its 54^th session in October this year.

Mr. Speaker, Sir, in addition to this, Government has embarked on an ambitious program to clear a backlog of various state party reports which are pending before the United Nations Human Rights system and the African Union Rights System. The reports to be presented within the next financial year include – the International Covenant against Torture and the Protocol to the African Charter on Human and Peoples’ rights on the Rights of Women.

Tripartite Elections

Mr. Speaker, Sir, Malawi will, for the first time, hold Tripartite Elections in May, 2014. This is an important milestone for our country because Malawians will have the opportunity to elect a President, Member of Parliament and a Councillor at the same time.

Mr. Speaker, Sir, as you may be aware, Malawians have, since the year 2000, been denied their constitutional and democratic right to choose a representative at local government level. The holding of the Tripartite Elections is, therefore, a clear demonstration of my Government’s commitment to uphold our country’s constitutional and democratic principles.

Mr. Speaker, Sir, I wish to assure the nation that my Government will support the electoral process to ensure free, fair and credible elections. I, therefore, urge Honourable Members to support Bills which will shortly be presented in this august House to facilitate the holding of the Tripartite Elections.

Mr. Speaker, Sir, I am pleased to inform this august House that the Malawi Electoral Commission has since completed the process of ward demarcation in all districts and city councils.

Mr. Speaker, Sir, the Tripartite Elections will be funded by Government and our Development Partners. I would like to request our Development Partners to support us in providing the much needed resources to the Malawi Electoral Commission to ensure that the elections are free, fair and credible. I also call upon Civil Society Organisations to provide the required civic education to our citizens.

The Fight Against Corruption

Mr. Speaker, Sir, my Government’s stance in the fight against corruption remains steadfast. It is for this reason, that my Government has introduced a number of measures to fight corruption. Mr. Speaker, Sir, let me put on record that my Government will not condone corrupt practices at any level. Anyone caught in corrupt acts will face the full force of the law.

Mr. Speaker, Sir, during the period under review, the Anti-Corruption Bureau concluded 418 corruption investigations and commenced 74 new prosecutions. A total of 34 prosecutions were completed resulting in 9 convictions, 2 acquittals. Judgements are being awaited on the remaining 23 cases.

Mr. Speaker, Sir, in the past there has been gross negligence in the implementation of corrective measures to improve financial prudence leading to massive losses of public funds meant for national development. The Auditor General’s Report for the financial year ended June 2011 for instance, states that about MK3 billion meant for national development was lost through financial mismanagement.

Mr. Speaker, Sir, fiscal discipline is at the heart of this Government. In this regard, Government will fast tracking the implementation of corrective measures as recommended by Internal Audit Reports, Procurement Audit Reports and Auditor General’s Reports. Mr. Speaker, Sir, time when these reports were ignored is long done. Responsible officers will be made accountable on the findings of these reports. Government will also roll out the updated 2013 Treasury Instructions as one way of combating financial misappropriation in the 2013/2014 Financial Year.

My Office shall provide overall over sight of these measures through Organizational Performance Agreements with public institutions. We need to build and bring back the culture of fiscal discipline in the public service by ensuring compliance with our economic governance laws, provisions, regulations, rules and best practices.

Peace and Security

Mr. Speaker, Sir, my Government attaches great importance to issues of national security, including security of people’s life and their property. I am, therefore, happy to report that during the 2012/2013 Financial Year, the country’s overall security situation continued to improve.

The Malawi Police Service continued employing a number of professional strategies in ensuring peace and tranquillity in the country.

Mr. Speaker, Sir, in order to reduce congestion in our prisons my Government will continue to construct new prisons in the country. Currently, construction of Lilongwe maximum prison is underway.

Public Sector Reforms

Mr. Speaker, Sir, in order to respond to demands for high quality service in the public sector, Government continued to implement reforms aimed at enhancing accountability, transparency and efficiency in public service delivery.

Mr. Speaker, Sir, in the 2012/2013 Financial Year, Government:-

• started the process of developing the Public Service Management Policy framework and revising the Public Service Act (1994);
• continued to promote Public Service Delivery accountability through Service Charters;
• completed the merger of a number of parastatals including SEDOM, MEDI and DEMAT which were merged to form Small and Medium Entrepreneurs Development Institute (SMEDI) through a Trust Deed; and
• introduced an Organisational Performance Assessment System in the public service to monitor and evaluate performance in ministries, departments and agencies.

Mr. Speaker, Sir, an efficient Public Service is important in the execution of Government development agenda. In this regard, my Government will make deliberate efforts to ensure that the Public Service is incentivized within the limited resources to provide quality services.

Mr. Speaker, Sir, Government will in the next financial year effect a salary increase to the Public Services. The salary increase will include an increase of the Honoraria that we give to our Traditional Leaders. The increase will take into consideration the medium term remuneration package to ensure that salaries are reviewed regularly. My Government will be tabling the Remuneration Board Bill to address this and also to address the problem of irregularities in the pay scales.

I have also directed that Government examines critically the problems of non-promotions of high performing officials so that we create an environment conducive to high performance.

International Relations

Mr. Speaker, Sir, my Government recognizes the importance of good bilateral and multilateral relations with our neighbours and all other Governments and agencies with whom we have relations. It is for this reason that my Government has worked hard to restore and improve our bilateral relations with the international community as well as with our neighbouring countries.

I am pleased to report that the Government of Brazil is in the process of opening a resident mission in Lilongwe. My Government has also reopened its resident mission in Nairobi, Kenya. These missions will help to facilitate trade and investment opportunities between Malawi and the two countries.

Mr. Speaker, Sir, my Government is also finalizing the process of opening of a consulate in Tete in Mozambique to facilitate the trade and investment linkages between our two countries.

Mr. Speaker, Sir, Malawi will be taking over as chair of the Southern African Development Community when we host the 33^rd Ordinary session in August, 2013. My Government has already started making necessary preparations for hosting the Summit.

CONCLUSION

Mr. Speaker Sir, the 2010 Integrated Household Survey showed that the poverty head count in Malawi did not significantly decrease over the past ten years. Statistics show that in 2004/2005 poverty head count was at 52.4% and in 2010/2011 it had only dropped to 50.7%. The government is concerned by the slow pace of eradicating poverty and therefore government is determined to rejuvenate rural economies, improve the social economic conditions of rural communities and bring real incomes into households.

Against this concern of deep levels of poverty in most rural Malawi, I have decided that for the first time, the Government will specifically target the individual villages across the country with comprehensive high impact interventions that will accelerate the betterment of well being of rural and urban poor. In this regard, I am pleased to announce to this August House that I will set up the Mudzi Transformation Trust, whose objective will be to mobilise accessible, responsive and flexible resources to support social and economic projects for the transformation of the lives of Malawians in all 29 districts.

Mr. Speaker, Sir, as earlier stated, Government will formalize the registration of 20,000 village heads as the Trust will work with these village heads to mobilize communities for implementation of the programme.

Mr. Speaker Sir, the Mudzi Transformation Trust will be a private sector led initiative to which both local and international private sector is invited to invest in. I must say, the past year has given me valuable experience on how keen, effective and responsive the private sector has been in supporting community development programs. The private Sector organizations are looking at their participation in development programs in Malawi from both a business case and a corporate social responsibility perspective. Therefore, I am pleased to inform the House that the Trust will be an opportunity for partnership with Private Sector for the transformation of Malawi.

Mr. Speaker Sir, my vision is that the Trust will support villages to access social and economic services that address most of their basic needs. The package of interventions will among other things include the following:

1. Provision of clean and portable water;
2. Building assets of households;
3. Support farmers clubs access farm inputs on loans;
4. Support rural farmers grow cash crops;
5. Facilitate access to markets;
6. Provide support for roads, health and education infrastructure development;
7. Provide support for the development of cottage Industries.
8. Provide special housing schemes for serving low grade civil servants, for example, health workers, teachers, community and extension workers, police men and women.

Mr. Speaker Sir, the Mudzi Transformation Trust, will compliment all other existing development programs that the Government is currently implementing. It is a vehicle for the acceleration of Malawi’s attainment of internationally accepted standards for human development.

Mr. Speaker Sir, I wish to further inform the honourable House that I will launch the Mudzi Transformation Fund later this year. It is my hope that all Malawians of goodwill will join me in this journey to eradicate poverty in our country.

Mr. Speaker, Sir, in my address to this August House last year, I had said, “I also have a dream”. That dream still lives on:

I see Information Communication Technology lowering the cost of delivery of services and unlocking economic opportunities for communities. I see vocational education for the youth expanding income opportunities for youth. I see health and economic opportunities empowering our citizens for healthier, productive and smaller families. I see our economy being transformed.

Mr. Speaker, Sir, yes, this journey to realise our dream lives on. Indeed, I see our lower grade civil servants who have been left out for a long time getting an opportunity to own a decent home of their own. I see our rural communities properly organised with modern villages. I see cottage industries established in our rural communities to create jobs for our rural population. I see our villages being transformed. I see a Malawi on the road to transformation.

Mr. Speaker Sir, I wish to reaffirm my Government’s commitment to deepening our democracy; strengthen the rule of law, and safe guard Malawi’s impeccable standing in the international community.

I further commit my Government to protect press freedom, nurture the independence of the three arms of government and continue with the reforms until we realize full economic transformation.

Finally, Mr. Speaker, Sir, allow me to express my personal gratitude and that of my Government to all Malawians for their sacrifices and the confidence entrusted in me and my government during this period of recovery. The road to recovery has not been easy. Nonetheless, let me reassure this August House and all Malawians that our economy is now turning around. Our country is attractive again to both local and foreign investors. There is a bright future for our nation. To God be the glory.

Let me at this point, Mr. Speaker, Sir, pay special tribute to our Development and Cooperating Partners for the support that they have rendered to our country. I would also like to express gratitude to you, Mr. Speaker, Sir, and all Honourable Members for your continued support to my administration.

Mr. Speaker, Sir, it is now my singular honour to declare the 2013/2014 Budget Meeting of the 44^th Session of Parliament officially opened.

May the Almighty God bless Malawi.

Thank you, Mr. Speaker, Sir.