Mutharika Delivers SONA Under The Theme: Harnessing Economic Gains For Sustainable Socio-Economic Development

INTRODUCTION
Mr. Speaker, Sir, I am here to deliver the State of the Nation Address in accordance with Section 89 (3)(a) of the Constitution of the Republic of Malawi and to officially open the 2017/2018 Budget Meeting.

I am particularly excited to deliver this State of the Nation Address because this is my 3rd Anniversary as President and Head of State of our beloved country.

Mr. Speaker, Sir, I therefore intend, this morning, to focus on strategic achievements Government has made and plans for the 2017/2018 Financial Year. I want every Malawian to realize that, under my leadership, Government is paying attention to issues that matter to them most and the economy at large. As I have repeatedly pointed out, our political project has been none other than to develop and transform this country.

Before I outline the achievements, allow me Mr. Speaker, Sir, to express my deepest condolence to you, the entire Honourable House and the bereaved family on the death of Honourable Highton Jiya who, until his death on 2nd January, 2017, was Member of Parliament for Lilongwe Msozi North. May His Soul Rest in Peace.

Mr. Speaker, Sir, as you are aware, our country recently experienced floods in some parts of the country that resulted into loss of lives. Just last month, the country also experienced a tragedy whereby a boat carrying over 75 people capsized on Lake Malawi in Rumphi district and several people lost their lives. May I, therefore, ask the House to stand and observe a minute of silence in honour of the departed souls.

(One Minute Silence)

May their Souls Rest in Peace!

Mr. Speaker, Sir, Malawians, first and foremost, expect their Government to make strategic investments that will bring positive change to their daily lives. Malawians want us to invest in productivity and economic growth that uplifts their lives. People want us to invest in food security; in making available decent and affordable housing; in developing skills and creating employment for them; in developing good transport networks; in making access to quality education available to all. Therefore, we are set to bring to this House an investment plan.

Mr. Speaker, Sir, this country has passed though some of its most difficult times in the last two years. But Government consistently pursued fiscal and monetary policies that focused on improving the social and economic status of the ordinary Malawian. When everything was at its worst; we were at our best. Now, the economy has turned for the better.

Mr. Speaker, Sir, I can see that the tide is changing and the economy is turning on the wheels of recovery. I am determined to ensure that our economy grows, and grow it will! Let those who say “there is nothing happening” keep living a lie while you and I make progress. Let those who see emptiness in everything keep their empty rhetoric while you and I agree that we are making progress. But let those who listen, listen – even the World Bank and the International Monetary Fund agree that we are on the right path. Malawians who are proud of this country have every reason to be optimistic.

On my part, I thank God the Almighty for the good rainy season that has partly contributed to the positive macro-economic developments. I also thank and congratulate you my fellow Malawians for your resilience, your support, and your understanding.

Mr. Speaker, Sir, in spite of the positive outlook, let me say one thing to this august house and the nation. Never be complacent! We still need a lot of patriotism and collective self-sacrifice, integrity, hardwork and discipline for Malawi to become a developed nation. But we have begun this journey. We have set the right policies; taken the right steps and set out into the right national direction. What we need is for us to build on what we have begun. For this reason, Mr. Speaker, Sir, I have named my address Harnessing Economic Gains for Sustainable Growth and Development.

MACROECONOMIC ENVIRONMENT

Mr. Speaker, Sir, let me turn to the country’s macroeconomic environment and its performance. As you are aware, Mr. Speaker, Sir, the country was recently faced with a number of challenges which included prolonged dry spells and floods which contributed to negative growth in agricultural production. In addition, growth in manufacturing, electricity and gas as well as water supply activities in the last two years registered a declining trend thereby hampering the performance of the private sector. As a result, the economy only attained a real GDP growth rate of 2.7 percent in 2016.

Mr. Speaker, Sir, in the year 2017, the economy is showing signs of recovery. We are, therefore projecting an estimated real GDP growth rate of between 5 and 6 percent. This is in anticipation of good maize harvest and strong agricultural season due to favourable rains in most parts of the country and anticipated good performance in the manufacturing, wholesale and retail sectors.

Mr. Speaker, Sir, although the country is coming from a period of drought which heightened food imports, foreign exchange reserves have been maintained at three months of import cover as at end February, 2017. Stronger fiscal management together with tight monetary policies, have anchored the stability of the Kwacha in 2016 and it is anticipated that the situation will remain the same in 2017. It is expected that with this level of foreign reserves, coupled with increased production of legumes and the bringing back on track of the IMF programme, foreign exchange inflows will be boosted to anchor the stability of the local currency.

Mr. Speaker, Sir, the annual rate of inflation has been declining steadily in recent months, reaching 15.8 percent as of end-March, 2017. Mr. Speaker, Sir, this is the lowest level of inflation recorded in recent years and is mostly due to decrease in food prices, a relatively stable exchange rate, and lower international fuel prices. This trend is expected to continue due to a favourable agriculture season we have had this year, and also due to expected decline in international prices for petroleum products.
Mr. Speaker, Sir, we believe we are on course to achieving a single digit inflation rate by the end of next year. The downward trajectory will provide scope for monetary policy to gradually start unwinding its tight stance, thereby allowing the economy to continue recovering.
Mr. Speaker, Sir, Government also managed to control expenditures in the first half of the 2016/17 Financial Year as regards to available generated local finances. This was due to commitment in the implementation of prudent fiscal and monetary policies.

Mr. Speaker, Sir, domestic revenue mobilization performed well in the 2016/17 Financial Year owing to the implementation of tax reforms and improvements in the tax administration system. Due to this good performance, the domestic revenue target was revised from MK783.3 billion to MK840.5 billion at mid-year.
With regards to public debt, Mr. Speaker, Sir, Malawi’s gross public debt has increased over time. However, a recent debt sustainability analysis indicated that Malawi’s debt ratios are below the internationally agreed debt thresholds. Interest charges for domestic debt which is characterized by short term debt, remains high. Government is thus strengthening debt management practices through adherence to public debt policies and medium term debt strategies.
Mr. Speaker, Sir, we intend to carry on with these reforms in the 2017/18 Financial Year in order to spur investment and economic growth. We will, therefore, continue with initiatives to reduce the deficit to levels below internationally acceptable thresholds (3 percent of GDP) in order to reduce pressure on domestic borrowing and interest rates.

INTERNATIONAL MONETARY FUND EXTENDED CREDIT FACILITY

Mr. Speaker, Sir, you are aware that the International Monetary Fund (IMF) has been supporting Malawi under the Extended Credit Facility (ECF) which was approved by the IMF Executive Board in 2012. The Ninth Review of the Facility was extended to June 30, 2017. I am pleased to report that Government is currently on track with the Facility. We believe the IMF Executive Board will soon meet to approve the completion of the Ninth Review of Malawi’s economic performance. Government is currently working hard to meet the targets set for end-June, 2017 in order to successfully complete the ECF arrangement. Successful conclusion of the arrangement will facilitate negotiations for a new macroeconomic programme with the IMF.

PROGRAMME BASED BUDGET REFORMS

Mr. Speaker, Sir, you will recall that Government is implementing Programme Based Budget Reforms with a view to enhancing achievement of value for money for Government resources through linking the budget to results that can be traced to strategic outcomes. In the 2016/2017 Financial Year, the programme based budgeting was rolled out to all Line Ministries. In 2017/2018 Financial Year, the reforms will be rolled out to local councils and subvented organizations.

PUBLIC FINANCE AND ECONOMIC MANAGEMENT REFORMS

Mr. Speaker, Sir, Government remains committed to implementing public finance and economic management reforms with a view to improving management of public finances.
Mr. Speaker, Sir, among several achievements registered under the Public Finance and Economic Management reforms agenda, Government installed and activated a continuous monitoring tool for the Integrated Financial Management Information System (IFMIS) during the year under review. This is allowing Government to detect, in good time, any irregular transactions, and stop the processes before payment is effected. As a result we are able to avoid loss of money through fraudulent transactions. Meanwhile, Mr. Speaker, Sir, Government is in the process of procuring a new IFMIS solution in order to enhance fiscal discipline and controls. A review of the Public Finance Management Act 2003 was also initiated in order to align the legal framework for the management of public finances with the on-going reforms.

FINANCIAL SECTOR REFORMS

Mr. Speaker, Sir, under the financial sector reforms agenda, Government continued implementing measures to strengthen the legal and regulatory framework as well as the infrastructure of the financial system. This will improve financial stability, improve access and deepen the sector. Some of the notable achievements include the enactment of the Payment Systems Act, 2016 and the Financial Crimes Act, 2017. These instruments will strengthen the legal and regulatory frameworks for payment services and dealing with financial related crimes, respectively. Furthermore, the Automated Transfer System (ATS) and National Switch were rolled out to facilitate digital payments for both Government and private sector institutions.

Mr. Speaker, Sir, Government also launched a roadmap for digitizing Government payments. The roadmap outlines steps that will be followed by Government in order to migrate from cash and cheque payments to digital payments over the next few years.

Mr. Speaker, Sir, Government will, in the 2017/18 Financial Year, continue implementing measures to address structural, regulatory and infrastructural weaknesses in the financial sector. The measures will include reviewing the Financial Services Act, 2010 and the Pensions Act, 2010; and developing institutional and regulatory frameworks for non-interest bearing financial services and mortgage finance. Government will also roll out the contributory pension scheme for civil servants aged thirty-five years and below and newly recruited employees.

LONG TERM AND MEDIUM TERM DEVELOPMENT PLANNING

Mr. Speaker, Sir, you will recall that Government made a decision to establish the National Planning Commission to facilitate development initiatives in the country. The Commission will be responsible for formulating both long term and medium term development strategies for Malawi, as well as coordinating their implementation. I am pleased to report, Mr. Speaker, Sir, that a Bill to formally establish the National Planning Commission was passed in this august House, and the Commissioners will be announced this afternoon to start their work.

Mr. Speaker, Sir, while awaiting the formal establishment of the National Planning Commission, Government through the Ministry of Finance, Economic Planning and Development has been coordinating the formulation of the successor to the Malawi Growth and Development Strategy II to be implemented from 2017/18 to 2021/22 financial years. I am pleased to report, Mr. Speaker, Sir, that consultations on the strategy were concluded and drafting of the strategy is currently under way and will be concluded before the end of the current Financial Year.

SUSTAINABLE ECONOMIC GROWTH

Agriculture and Food Security

Mr. Speaker Sir, let me start by assuring Malawians that, at national level, this season, Malawi will have enough food, largely due to good rains in most parts of the country. The preliminary crop estimates suggest that the country’s maize production will register an increase of 37.5 percent from 2.4 million metric tons in 2015/16 season to 3.3 million metric tons in 2016/17 season.

Mr. Speaker, Sir, however, Government is aware that some families will experience hunger due to abnormal heavy rains, floods and drought in some parts of the country. Government will, in collaboration with its humanitarian and development partners, continue to provide relief food and cash to the affected households. We will do our best as we have done before.

Mr. Speaker, Sir, I am pleased to report to this august House that Government adopted the National Agriculture Policy, National Fisheries and Aquaculture Policy and the National Irrigation Policy. The adoption of these policies will strengthen coordination, leadership, governance and financing of the agriculture sector.

Mr. Speaker, Sir, Government plans to adopt, in the forthcoming financial year, key policy and legislative instruments such as the National Seed Policy, Fertiliser Policy, Plant Breeders’ Rights Bill and Plant Protection Bill with a view to further improve the agriculture sector.

Farm Input Subsidy Programme

Mr. Speaker, Sir, under the Farm Input Subsidy Programme, a total of 90,000 metric tonnes of fertilizer, 4,500 metric tonnes of improved maize seed and 1,800 metric tonnes of legume seed were made available in the current season across the country targeting 900,000 beneficiaries. Government initiated key reforms such as increasing private sector participation and fixing the value of fertiliser coupon at MK15,000.00 to ensure effectiveness and efficiency of the Programme.

Mr. Speaker, Sir, Government will continue with implementation of FISP reforms to ensure that the Programme is delivered efficiently by specifically strengthening private sector participation in supply, delivery and retailing of inputs across the country.

Tobacco Production and Marketing

Mr. Speaker, Sir, in the 2016 tobacco season, our auction floors registered sales of 195 million metric tonnes generating an estimated revenue of US$ 276 million, representing 18 percent lower than the 2015 sales. However, Mr. Speaker, Sir, the season was characterized by over production and in some instances low quality leaf. These resulted in high rejection rates and low average prices being offered to farmers.

In view of these challenges, Government will continue to encourage managed production through contract farming and also enhance agricultural extension services so that farmers produce quality leaf that can attract better prices.

Greenbelt Initiative (GBI) and Irrigation Development

Mr. Speaker, Sir, with regard to the Green Belt Initiative (GBI), I am pleased to report that Government developed the Green Belt Initiative Authority Bill, 2017 that will create the Green Belt Initiative Authority as an independent body. This will change the pace, the direction and strengthen strategic oversight and coordination of commercial irrigation farming in the country. The Bill will be presented to this House during this sitting of Parliament.

Mr. Speaker, Sir, in addition to the Green Belt Initiative activities taking place in Salima District, Government completed the designs and environmental impact studies for the construction of the 1,000 hectares Nthola-Ilola-Ngosi Irrigation Scheme in Karonga District. The construction works will commence in the forthcoming financial year.

Mr. Speaker, Sir, with the support from the World Bank and the African Development Bank, Government will, implement the Shire Valley Irrigation Project which aims at developing a total of 43, 500 hectares of irrigable land in the Chikwawa and Nsanje districts. More than 100,000 households will directly benefit from the Project by growing high value crops consistent with the country’s export strategy. Government will also launch 2 new irrigation projects and these are: Agricultural Infrastructure and Youth in Agribusiness Project; and Programme for Rural Irrigation Development.

Mining Development

Mr. Speaker, Sir, the mining sector has potential to significantly contribute to the country’s sustainable economic growth and development. During the year under review, Government implemented several initiatives which included:-

• the establishment of a modern geo-data management platform to provide investors with a trouble-free access to geo-scientific information essential for making well informed mining investment decisions;

• the setting up of a modern computer-based mining cadastral system to provide a more transparent, effective and efficient platform for the processing and management of mineral rights; and

• the review of the Mines and Minerals Act of 1981 to align it with the national Mines and Minerals Policy. Mr. Speaker, Sir, Government will continue advancing various reforms to support the mining industry in order to help boost the country’s economy by providing competitive mining incentives, equitable shares of profit, sound infrastructure development and local community investments.

Industry, Trade and Private Sector Development

Mr. Speaker, Sir, industry and trade play a critical role in sustained economic growth and development of our country. Therefore, Government will continue implementing the National Export Strategy as a roadmap for building our economy’s production capacity.

Mr. Speaker, Sir, some of the activities being implemented under the National Export Strategy include legal and regulatory reforms aimed at improving the ease of doing business in Malawi. I am pleased to report that the country’s ranking on the World Bank ease of doing business index improved from 141 in 2015 to 133 in 2016 out of 189 global economies as a result of the implementation of these reforms.

Mr. Speaker Sir, some of the reforms that were implemented in the 2016/2017 Financial Year include:-

• development of the Warehouse Receipts Systems Bill to increase access to agricultural credit by SMEs through use of warehouse receipts;

• development of the Trade Remedies Bill to allow government to take remedial action against imports that cause material injury to the domestic industry; and

• review of the Control of Goods Act to provide for the legitimate control on imports and exports.

Mr. Speaker, Sir, allow me also to report that the Malawi Investment Forum that Malawi convenes every year continue to attract important investments into Malawi. Following the 2016 investment forum, a total of eleven memoranda of understanding were signed with foreign investors in energy development, water supply, agriculture development and other infrastructure development projects.

Mr. Speaker, Sir, under trade facilitation and development, let me report that Government successfully launched the Trade Portal, which is constantly updated and easily accessible by business communities wishing to access trade related rules and procedures.

Turning to industrial development, Mr. Speaker, Sir, during the period under review, Government:-

• embarked on the establishment of Special Economic Zones (SEZs) in order to attract foreign investments in industrial development. Sites for Special Economic Zones have already been identified in Mzuzu, Nkhata-Bay, Lilongwe, Liwonde and Blantyre, among others;

• commenced the construction of the State of the Art Laboratory of the Malawi Bureau of Standards in Blantyre. This will enhance the country’s capacity to both save and generate foreign exchange by certifying exports locally instead of using outside facilities. The facility will also be used by neighbouring countries, thus contribute to earning foreign exchange. On the import side, the facility will ensure effective import quality monitoring; and

• continued to provide matching grants to Micro, Small and Medium Enterprises through the Competitiveness and Job Creation Support Project with the aim of empowering Malawians to participate in economic activities. So far, 64 Micro, Small and Medium Enterprises in various value addition enterprises have already benefitted from these matching grants in Lilongwe, Dedza, Mchinji, Blantyre, Nkhotakota, Mzuzu, Kasungu, Rumphi, Salima, Dowa and Zomba districts.

Mr. Speaker, Sir, Government will continue implementing reforms in the Industry and Trade Sector to improve the country’s competitiveness and investment environment.

Natural Resources and Environmental Management

Mr. Speaker, Sir, during the year under review, Government intensified efforts to ensure that the country’s natural resources and environment are preserved. In this regard, Government registered the following achievements:-

• adopted a National Climate Change Management Policy (2016) that will provide an enabling environment for the implementation of climate change related programmes;
• adopted the revised National Forestry Policy to ensure proper management of forests and forest products; and
• revised the Environment Management Act No 23 of 1996 to strengthen the management of natural resources.

Mr. Speaker, Sir, in the 2017/2018 Financial Year, Government will:-
• enhance environmental awareness campaigns to promote positive behavioural change in environmental conservation;
• upscale enforcement activities to ensure a total ban on the production, distribution and use of thin plastics in Malawi; and
• enforce the Environment Management Act, 2016 to promote good environmental management practices.

Labour and Employment

Mr. Speaker, Sir, Government believes that increased access to skills is critical for improved productivity, industrialisation, trade performance and employability. For this reason, Government has focused on the establishment of Community Technical Colleges. We have so far established 12 Community Technical Colleges across the country.

Mr. Speaker, Sir, I am pleased to report to this august House that 690 students have completed their studies in our Community Colleges in the first cohort that graduated in December, 2016. By January 2017, we have seen an 18 percent increase of enrolment in various Community Colleges compared to last year. This means the Youth are increasingly responding to the call for skills development across the country.
Mr. Speaker, Sir, Government is committed to improving the occupational safety, health and welfare of workers. In this regard, the Occupational Safety, Health and Welfare Act is currently under review to ensure that all categories of workplaces are covered in the Act and that stiffer penalties are given for all labour infringements. In addition, Government adopted the National Employment and Labour Policy which offers a real opportunity for Government to take a more holistic and focused approach in addressing the challenge of unemployment.
Mr. Speaker, Sir, in the 2017/2018 Financial Year, Government will, among others, rehabilitate 10 Community Technical Colleges, 10 Skills Development Centres, 4 National Technical Colleges and 3 Trade Testing Centres.

Tourism, Wildlife and Culture

Mr. Speaker, Sir, Government recognizes the importance of tourism sector to the country’s economy. In view of this, during the year under review, Government continued developing the tourism sector to effectively contribute to the sustainable economic growth of the country.

Mr. Speaker, Sir, in the 2016/17 Financial Year, Government:-
• commenced the upgrading, to bitumen standards, access roads to resorts in Salima District; and

• developed a Tourism Marketing Strategy for marketing Malawi locally, regionally and internationally, which, among others, is aimed at increasing direct investment in the tourism sector from MK16 billion to MK50 billion.

Mr. Speaker, Sir, under Wildlife, in the 2016/2017 Financial Year, Government:-
• established the Wildlife Investigation Unit which has seen an increase in number of arrests and convictions of wildlife poachers; and

• re-stocked Nkhotakota National Park with elephants in order to make the Park more attractive to tourists. A total of 261 elephants were moved from Liwonde to Nkhotakota.

Mr. Speaker, Sir, in the forthcoming financial year, Government plans to develop public beaches in Salima, Nkhatabay and Mangochi districts. Meanwhile, land for the project has already been identified in Salima and Nkhata Bay districts.

Integrated Rural Development

Mr. Speaker, Sir, Government is committed to improve the livelihoods of rural people in the country through the implementation of the Integrated Rural Development Strategy. Through this approach, Government, during the year under review:-

• completed construction of the basic social infrastructure at Nambuma in Dowa, Nthalire in Chitipa and Neno Growth Centres. The second phase of the Rural Growth Centres Development Programme is underway at Chitekesa in Phalombe, Chapananga in Chikwawa and Mkanda in Mchinji districts;

• commenced construction of modern markets at Nsanje, Chinakanaka and Mulanje Mission;
• completed the construction of Balaka main market and Sadzi market in Zomba City; and
• Commenced construction of stadia in Karonga, Rumphi, Kasungu, Mangochi, Mulanje, Ntcheu and Zomba.

Mr. Speaker, Sir, Government will continue to construct stadia and modern markets during the forthcoming financial year.
Mr. Speaker, Sir, with regard to Productive Public Works Programme, about 980,000 households benefited from the Programme of which 53 percent are female-headed. An additional 225,000 households benefited through emergency response.
Mr. Speaker, Sir, in the coming financial year, Government will continue implementing programmes aimed at improving the living standards of the rural people and ensuring their active participation in the fight against poverty.

TRANSPORT INFRASTRUCTURE

Mr. Speaker, Sir, reliable transportation and access to services is a prerequisite for socio-economic growth and development. To this end, Government will continue to improve the country’s road, air, rail and water transport infrastructure.

Road Transport

Mr. Speaker, Sir, there has been good progress in the area of road construction and rehabilitation. During the year under review, Government resumed construction works on the Zomba – Jali – Kamwendo – Phalombe – Chitakale Road, and the Thyolo – Thekerani – Muona – Bangula Road. Government also commenced rehabilitation works on the Mzuzu – Nkhata Bay and the Liwonde – Mangochi Roads.

Mr. Speaker, Sir, I wish to report to this august House that the following projects were completed during the year under review:
• the Kapoka-Kalenge – Misuku Road in Chitipa;
• the Parachute Batallion – Lifuwu Road in Salima;
• the Nsangwe – Dolo Road in Chikwawa; and
• the Kasinje – Kandeu Road in Ntcheu.

The completion of these roads, Mr. Speaker, Sir, will improve accessibility to the surrounding areas, markets and other social services.

Mr. Speaker, Sir, Government, in a bid to reduce the traffic congestion in the cities of Lilongwe and Blantyre, has mobilized resources for the dualization of some of the roads starting from the 2017/18 financial year. Further, feasibility and design studies for the construction and rehabilitation of the following roads will be undertaken:-
• Nsanje-Marka Road;
• Rumphi–Nyika-Chitipa Road; and
• Phase II of the Jenda-Edingeni Road.

In addition, the following roads will be rehabilitated
• Karonga-Songwe Road;
• M1 section between Lumbadzi-Kasungu-Mzimba Road; and
• Kacheche – Chiweta Road.

Water Transport

Mr. Speaker, Sir, Government realizes the importance of safety in water transport. In this regard, during the 2016/2017 Financial Year, Government commenced the installation of aids for navigation on Lake Malawi and strengthening law enforcement exercises. In the forthcoming financial year, Government will commence construction of a jetty at Likoma Island to facilitate easy transportation.

Rail Transport

Mr. Speaker, Sir, in a bid to improve rail infrastructure, Government, in collaboration with Central East African Railways (CEAR), is in the process of rehabilitating the Limbe to Nkaya railway line which is expected to be completed by the end of 2017. Government has identified funds for the rehabilitation of the Nkaya to Mchinji railway section which is expected to commence in the 2017/2018 Fiscal Year.

Air Transport

Mr. Speaker, Sir, with regard to air transport, during the year under review, Government developed a Civil Aviation Bill which is intended to create the Civil Aviation Authority to effectively and efficiently manage our aviation sector. The Bill is expected to be tabled during the current sitting of Parliament.

Mr. Speaker, Sir, let me report to this august House that Government will procure and install essential aviation safety and security equipment for Kamuzu and Chileka International Airports using a loan from European Investment Bank which was already approved by this House.

Internet Connectivity

Mr. Speaker, Sir, it is imperative for us to take our country into the digital world if we are serious about development. This means Malawi needs affordable and high speed internet connectivity. I am therefore pleased to report that Government has launched the National Fibre Backbone Connectivity Project to provide cheaper and fast internet to the people of Malawi. This will have a transformational effect on public service delivery, improving procurement and payment systems, Human Resource Information Management and, above all, access to digital information in education, health, commerce and other sectors. This is transformation.

Water Resources Development and Management

Mr. Speaker, Sir, with regard to water resource development and management, during the year under review, Government continued upgrading the Kamuzu Barrage at Liwonde under the Shire River Basin Management Program Phase 1 by installing the first six (6) gates, completing the stop log guides and the first section of the new bridge. The eight (8) remaining gates for phase 2 are expected to be completed soon.

Mr. Speaker, Sir, using the Line of Credit from India, Government will facilitate the development of the Mulanje-Blantyre Water Scheme including the rehabilitation of systems to improve delivery of water supply. Government has also embarked on an ambitious project to tap water from Lake Malawi to Lilongwe City and surrounding districts. This Project, once completed, will address the current water shortages.

Energy Development

Mr. Speaker, Sir, energy is a catalyst for socio-economic development. In this regard, Government is implementing programmes and projects aimed at improving energy generation, transmission and distribution. We have set out to expand, diversify and liberalise energy production to say farewell to blackouts in our homes and industry. I dare say – we have done in two years what this country could not do in the last fifty years.

Mr. Speaker, Sir, some of the major achievements for the 2016/2017 Financial Year include:
• Enactment of the Electricity Act of 2016 in order to restructure the power market and pave way for the creation of the Electricity Generation Company (EGENCO), which has now taken over the electricity generation function from Electricity Supply Corporation of Malawi (ESCOM);

• Completion of a Feasibility Study and Environmental and Social Impact Assessment for Malawi and Mozambique Power Interconnector.

• Commencement of the Malawi Rural Electrification Program (MAREP) Phase 8 which will connect a total of 336 rural centres throughout Malawi to the national electricity grid and is expected to be completed by the end of next financial year;

• Completion of feasibility studies for the 300 Megawatt Kamwamba Coal-fired Power Plant; and

• Completion of feasibility studies, geotechnical investigations and Environmental and Social Impact Assessments on three potential hydropower sites at Fufu, Mpatamanga and Kholombidzo which will add about 700 Megawatts to the electricity generation capacity.

Mr. Speaker, Sir, during the 2017/2018 financial year Government’s main focus will be to mobilize resources for the implementation of the sector’s projects. Construction works for the Kamwamba Coal-fired Power Plant is expected to start in this 2017/2018 financial year.

Information and Communications Technology

Mr. Speaker, Sir, Government is determined to promote and regulate access to public information and spearhead the development of products and services of Information and Communications Technology (ICT) through utilization of innovative technologies.
During the year under review, the following achievements were realised under the ICT Sector:
• enactment of the E-transactions and Cyber Security Act, the Communications Act and the Access to Information Act to provide an enabling environment for access and utilisation of ICTs in Malawi;

• development of E-Visa System that will help speed up Visa application and issuance processes; and

• commencement of the development of Physical Addressing and Postcode System which will improve physical traceability of institutions and residences.
Mr. Speaker, Sir, Government will continue implementing various initiatives with a view to improving the ICT sector in the country.

Lands, Housing and Urban Development

Mr. Speaker, Sir, Government remains committed to implementing measures to improve tenure security and equitable access to land; as well as increase access to decent and affordable housing. In this regard, Government registered, among others, the following achievements in the 2016/2017 Financial Year:-

 enacted ten pieces of new land related legislation with a view to providing a comprehensive framework for implementing land reforms and improving land governance in the country;

 continued to construct and improve houses targeting low income Malawians under the Decent and Affordable Housing Subsidy Programme (DAHSP), benefitting about 18,000 Malawians since the Programme started in 2014; and

 continued with boundary demarcation and reaffirmation exercises with neighbouring countries of Mozambique and Zambia to ensure territorial integrity and maintain cordial relations with the neighboring countries.

Mr. Speaker, Sir, in 2017/2018 Financial Year, Government will:-

 construct a total of 10,000 houses for the security institutions namely: Malawi Defence Force, Malawi Police Services, Immigration and Prisons Services;

 continue with construction and improvement of low income houses targeting about 15,000 houses; and
 continue with boundary re-affirmation and demarcation exercises with Mozambique and Zambia.

SOCIAL SUPPORT AND DISASTER RISK MANAGEMENT

Elderly and Persons with Disabilities

Mr. Speaker, Sir, Government remains committed to promoting the quality of life of persons with disabilities and older persons to ensure that they participate fully in all spheres of socioeconomic development.
Mr. Speaker, Sir, during the 2016/17 Financial Year, Government, among others:-
• provided vocational skills and rehabilitation training to 360 persons with various disabilities;

• provided assistive devices to over 300 persons with disabilities throughout the country. These devices included wheelchairs, clutches and walkers to improve their mobility and promote their independency;

• amended the Penal Code in order to provide a comprehensive framework for dealing with criminal offences against persons with albinism; and

• implemented a comprehensive public awareness campaign on promotion and protection of the human rights of older persons and on the fight against witchcraft related violence.

Disaster Risk Management

Mr. Speaker, Sir, Government continues to prioritise disaster risk management because of its potential to reducing and mitigating the impact of disasters such as floods and drought.

Mr. Speaker, Sir, in the 2015/2016 growing season, our country experienced a strong El Niño weather phenomenon that resulted in prolonged dry spells and floods in different parts of the country. These harsh weather conditions resulted into maize production deficit of 790,000 metric tons, leaving 8.4 million people food insecure.

Mr. Speaker, Sir, I, therefore, made an appeal for humanitarian assistance to assist the food insecure population in the country. It is pleasing to note that national and international humanitarian partners as well as international governments responded favourably by providing humanitarian assistance. I would, therefore, once again like to thank all those that generously contributed to this noble task. No single person died from hunger.

Mr. Speaker, Sir, during the 2016/2017 rainy season the nation also experienced floods in Lilongwe City, Salima, Ntcheu Nkhotakota, Dedza, Zomba, Chikwawa and Karonga districts. A total of about 30,000 households were affected by the floods. Government, in collaboration with local humanitarian partners assisted the affected households with relief items.

Mr. Speaker, Sir, Government will scale up early warning systems to enhance the country’s early communication of climate and weather change information to help communities prepare in advance and be resilient of the effects of disasters.
Mr. Speaker, Sir, Government will continue to implement the Malawi Floods Emergency and Recovery Project in order to reduce the impact of the floods and improve the income of the rural communities that are affected by the floods.

SOCIAL DEVELOPMENT
Health
Mr. Speaker, Sir, with regard to the health sector, the goal has remained to improve the health and wellbeing of all Malawians. A number of strategies are in place to achieve this goal, including provision of accessible, affordable and quality health services.
Mr. Speaker, Sir, during the year under review, Government, among others:-
• commenced construction works of a Cancer Treatment Centre at Kamuzu Central Hospital in Lilongwe which is expected to be completed within 18 months. Meanwhile, seventeen (17) students are already undergoing training in preparation for the establishment of the Centre; and
• completed procurement of a contractor for construction of the new Phalombe District Hospital which is expected to be completed by June, 2019.

Mr. Speaker, Sir, despite these achievements, the health sector continues to face challenges including shortage of health personnel and less than optimal stock levels of essential medicines and medical supplies. To address these challenges, Government is currently recruiting 1,222 health professionals with support from Global Fund. Furthermore, the Ministry of Health, in collaboration with District Councils is closely monitoring the drug situation targeting procurement, storage as well as usage. This has led to improved stock levels at the Central Medical Stores Trust.
Mr. Speaker, Sir, regarding the fight against HIV/AIDS, it is encouraging to note that Anti-Retroviral Therapy (ART) services are now accessible to more people who are infected with HIV across the country. This is due to, among other things, the increase in the number of HIV/AIDS treatment sites from 3 in 2003 to 711 sites by 2016.
As a result, Mr. Speaker, Sir, the number of people on ART now stands at 585,660 representing 59 percent of the 1 million people living with HIV. In order to intensify the fight against HIV/AIDS, Government has developed a comprehensive HIV/AIDS (Prevention and Management) Bill, 2017 which will be presented to this august House during this sitting.
Mr. Speaker, Sir, Government has made good progress in reducing deaths for mothers during pregnancy and child birth. In this regard, Maternal Mortality Ratio (MMR) is currently at 460 per 100,000 live births from 670 maternal deaths per 100,000 live births in 2010.
Over the same period, survival prospects for children have improved. Specifically, the country has made substantial progress in reducing under-five mortality rate by about 50 percent from 112 deaths per 1,000 live births in 2010 to 63 deaths per 1,000 live births in 2016. Furthermore, the prevalence of stunting, a longer term measure of malnutrition, has declined from 47 percent in 2010 to 37 percent in 2016.
Mr. Speaker Sir, in addition, as one of the reform areas in the sector, Government established a special Multi-Sectoral Unit to deal with drug pilferage and strengthen systems in commodity supplies. This has helped to apprehend some individuals who are engaged in the malpractice. We have made progress in curbing this bad practice.
Mr. Speaker Sir, I wish to inform the august House that in 2017/18 Financial Year, Government will commence construction of district hospitals in Lilongwe and Blantyre, and rehabilitate the following 9 district hospitals: Chitipa, Chikwawa, Dowa, Nsanje, Machinga, Balaka, Kasungu, Mulanje, and Rumphi.

Education, Science and Technology

Mr. Speaker, Sir, Government considers high quality and relevant education as the key to the development of our human resource base and capacity. As such, Government remains committed to improving access to quality and relevant education.

Mr. Speaker. Sir, I am pleased to report to this august House that during 2016/2017 Financial Year, Government:-

• trained 204 new primary school inspectors and advisors and inspected 141 schools using a new inspection framework;

• commenced construction of classrooms and ancillary buildings for 115 primary schools in city councils through the Local Development Fund;

• commenced construction works in 21 Community Day Secondary Schools across the country through the upgrading programme of community day secondary schools to conventional secondary schools;

• commenced rehabilitation of technical wings of 12 secondary schools that offer technical subjects;

• completed the rehabilitation of 3 national secondary schools, namely: Blantyre Secondary School, Lilongwe Girls Secondary School and Mzuzu Government Secondary School;

• Opened Nalikule Teachers Training College in Lilongwe with a total enrolment of 203 students;

• disbursed loans to about 7500 university students under the Higher Education Students Loans Programme; and

• decentralized fully the management of salaries for primary school teachers.

Mr. Speaker, Sir, for the 2017/2018 Financial Year, Government will:-
• construct primary schools including Hara, Mpapa, Nkhwazi, Thabwa, Ndakwera, Ching’ombe, Miteme, Takumana, Viyele, Malundu, Chimwamwezi, Msambaisa, Chiputula and Matope primary schools;

• continue with the construction works for Machinga and Thumbwe Secondary Schools;

• continue with the expansion of infrastructure in public universities including Mzuzu University and The Polytechnic and Chancellor College of the University of Malawi; and

• continue with the construction of new teacher training colleges in Rumphi, Mchinji and Chikwawa districts.

Youth Development and Empowerment
Mr. Speaker Sir, turning to sports development, I officially opened Bingu National Stadium in January this year. This is a state-of-the-art stadium which will enhance sporting activities in the country. We are in the process of preparing to build a new stadium to replace the KamuzubStadium in Blantyre.

Mr. Speaker, Sir, with regard to youth development, Government continued to implement initiatives with a view to empowering the youth. In the coming financial year, Government, with support from development partners, will establish the Jobs for Youth Project. This project will provide entrepreneurship training and start-up capital to our youth to venture into businesses. The project has lined up a number of initiatives that will create thousands of jobs for the youth. It is important for me to stress that job creation and youth empowerment are at my heart because the Youth means everything for the future of this country.

Gender, Women and Development

Mr. Speaker, Sir, Government appreciates the important role that women play in the political and socio-economic development of our Nation. To this end, I am pleased to report that during the year under review, Government made some considerable progress in women empowerment as follows:-.

• disseminating gender related laws to Traditional Authorities to facilitate the harmonization of their by- laws;

• rolling out the Gender Based Violence (GBV) Module, which is part of the Integrated Information Management System in 13 districts;

• developing and implemented nationwide strategy to strengthen men’s engagement and HeforShe initiatives in Gender Equality and Women’s Empowerment; and

• training 389 groups of women in various business skills in 14 districts under the Economic Empowerment Program.

Mr. Speaker, Sir, during the forthcoming financial year, Government will continue implementing women economic empowerment initiatives across the country including:-

• building capacities of female Ward Councillors in transformational leadership;
• establishing the national platform on women economic empowerment; and

• facilitating advocacy and awareness initiatives on gender related laws, Gender Based Violence prevention, response and management.

Child Protection and Development

Mr. Speaker, Sir, our children are the future of our nation. As such, investing in child development guarantees future human capital and product. In this respect, Government, during the year under review, continued to implement the following child protection and development programs:-

• commencement of the review of the National Early Childhood Development Policy;
• construction of 50 Early Childhood Development (ECD) centers across the country;
• training of 2000 ECD care givers and 120 care group leaders on care for child development; and
• Operationalization of the national child helpline.

Mr. Speaker, Sir, during the forthcoming year, Government will continue with the provision of child protection and development services across the country.

GOVERNANCE

Democratic Governance

Mr. Speaker, Sir, in a bid to promote values and principles of democracy and good governance, Government instituted a number of reforms in the democratic governance sector during the year under review. These include the establishment of a Human Rights Section within the Ministry of Justice and Constitutional Affairs to champion the implementation of the National Human Rights Action Plan. This is a strategy document mapping out the vision of the country in promoting and protecting human rights.
In the 2016/2017 Financial Year, Malawi submitted the following state party reports:
• the African Charter on the Rights and Welfare of the Child;
• the United Nations Convention on the Rights of Persons with Disabilities; and
• progress report on the International Covenant on Civil and Political Rights.
Mr. Speaker, Sir, I am pleased to inform this House that Malawi was reviewed by the Committee on the Convention on the Rights of the Child and we have received positive feedback, with several recommendations, from the Committee. One of the recommendations was to align the marriage age to the Convention on the Rights of the Child. As this House is aware, the Constitution has now been amended raising the marriage age from 16 to 18.

Mr. Speaker, Sir, Government is determined to promote the rule of law in order to uphold good governance and foster development. In the year under review, Government prepared and presented to this honourable House 44 Bills out of which 39 were enacted.

In the coming financial year, Mr. Speaker, Sir, Government will continue with efforts that will enhance delivery of justice in the country.

The Fight against Corruption

Mr. Speaker, Sir, Government remains determined to fight corruption in the country. In the year under review, Government through the Anti-Corruption Bureau successfully investigated a total of 200 cases out of which 116 cases were completed. Of the completed cases, a total of 42 cases were prosecuted out of which 15 cases were completed. Of the completed cases, 49 percent resulted in convictions. Furthermore, 900 corruption complaints were also handled and processed.

Moving forward, Mr. Speaker, Sir, Government will continue intensifying the fight against corruption by ensuring that offenders are prosecuted accordingly. We will also intensify the measures for the prevention of corruption. In this regard, I call upon the public, all Malawians, everybody to prevent and act on corruption. The culture of corruption can only end if we all change our mindset and take action collectively against this evil. Resist corruption; Report corruption to the Anti-Corruption Bureau and other responsible institutions; and bring evidence in order to secure conviction.

Public Sector Reforms

Mr. Speaker Sir, the reforms agenda which I initiated in 2014 has been internalized and is gaining roots, as evidenced by important milestones that have been achieved in many reform areas.

Mr. Speaker Sir, let me point out that the end of the tenure of the Public Service Reforms Commission does not stop the noble journey of reforming our country but marks the beginning of intensifying the implementation of its recommendations to be spearheaded by the Office of the President and Cabinet in accordance with the Public Service Act.

Mr. Speaker Sir, the following are some of the notable milestones of the reforms agenda that have been achieved during the year under review:-

• signing of Performance Contracts on 10th March, 2017, by six (6) ministries namely: Ministry of Agriculture, Irrigation and Water Development; Ministry of Labour, Youth, Sports and Manpower Development; Ministry of Gender, Children, Disability and Social Welfare; Ministry of Home Affairs and Internal Security; Ministry of Information and Communications Technology; and Ministry of Defence;
• launching of National Identity Cards and issuance of Registration of Birth and Death Certificates on 27th October, 2016;
• issuing of national identity cards to 6,000 citizens;
• outsourcing of motor vehicle inspection services for Certification of Fitness (CoF) of motor vehicles to private service providers in order to enhance efficiencies;
• enactment of reform related Bills in this august House including the Electricity (Amendment) Bill 2016, 11 Land related Bills, E-Transaction Bill and Access To Information Bill;
• unbundling of ESCOM which has led to the creation of the Electricity Generation Company (EGENCO) which started operating as a separate company on 1st January, 2017;
• completed reconfiguration of Lilongwe and Mangochi Post Offices into Integrated Public Service Delivery Centres under the brand name “Mlambe” as one way of providing citizens a single access point to government information and services; and
• Introduced prepaid billing systems in some water boards which has resulted in increased revenue collection and reduction of non-revenue water.

Mr. Speaker Sir, as the Public Sector Reforms process continues to take shape and bring about positive change to the citizenry, a number of activities have been laid down for 2017/2018 fiscal year as follows:-

• rolling out of the National Identity Card Project to all the districts;
• Adoption of the amendment of the Public Service Act of 1994 and the Public Service Management Policy; and
• launching of the Integrated Public Service Delivery Centres programme, and establishing eight (8) more Integrated Public Service Delivery Centres across the country.

Mr. Speaker, Sir, let me assure the nation that the reforms agenda will continue in order to improve efficiency in public service delivery.

National Peace and Security

Mr. Speaker, Sir, with regard to national peace and security, Government prioritises the fight against crime and preservation of public order to ensure that Malawi remains safe, secure and peaceful. At the same time, we are providing a conducive environment for investment for socio-economic development.

Mr. Speaker, Sir, in the 2016/2017 Financial Year, Government registered the following achievements:-

• development of the National Security Policy and the National Peace Policy that will complement each other in ensuring that peace and security are sustained in the country;
• improvement in police-population ratio from 1:3000 to 1:1200;
• reduction in recorded crimes by 6 percent; and
• reduction in road accidents by 9 percent.

Mr. Speaker, Sir, let me, however, express my disappointment with the rise in cases of mob justice and vandalizing of police stations in some parts of the country. I am therefore urging all honourable Members of this august House to sensitize their constituents against being involved in such criminal and inhumane acts.

In the 2017/2018 Financial Year, Mr. Speaker Sir, Government will:

• increase police visibility in urban, border and rural areas in order to combat and reduce crime;
• review relevant pieces of legislation in the sector including the Prisons Act; and
• re-locate the refugee camp from Dzaleka in Dowa to Katiri in Karonga.

Mr. Speaker, Sir, with regard to national defence, I wish to report that the Malawi Defence Force (MDF) continued to conduct operations in defence of the sovereignty and territorial integrity of our country. Among other things, MDF troops were deployed to some of our country’s borders to prevent the smuggling of maize and other commodities to other countries. On the international scene, the MDF deployed its troops in support of United Nation Missions in Sudan, Western Sahara, Ivory Coast and the Democratic Republic of Congo.

In line with the Public Sector Reform Programme, the MDF plans to establish a second Engineers Battalion which will, among others, enhance its technical capacity. Furthermore, Government intends to construct a state-of-the-art Military Referral Hospital in Lilongwe. The Hospital will improve access to medical care services to both uniformed as well as the civilian population.

INTERNATIONAL RELATIONS

Mr. Speaker, Sir, let me now turn to international relations. In line with Government’s Foreign Policy objective of safeguarding Malawi’s interests abroad, my administration is focusing on development diplomacy.

Mr. Speaker, Sir, allow me to highlight some notable achievements in this area during the year under review:

On Multilateral relations, Government participated in international engagements and fora at global, continental and regional levels. At global stage, Government actively participated in the 2016 United Nations General Assembly (UNGA) Heads of State and Government Assembly where world leaders renewed their commitment to the implementation of Sustainable Development Goals (SDGs).
During the forum, I signed the Paris Agreement on Climate Change and advocated for increased funding for universal education under the International Commission on Financing for Education. I am privileged to have been appointed as a Co-Convener of the Commission and one of the Global Champions for Education.

Mr. Speaker, Sir, at the continental level, Government participated in the African Union Annual Summit held in January, 2017. During the Summit, I strongly advocated for the urgent need for the continent to equip the youth with requisite skills and expertise and integrate them fully in meaningful economic development in order to achieve demographic dividends. The African Development Bank committed to generate 25 million jobs for the youth in the next five years to which Malawian youth will also benefit.

Mr. Speaker, Sir, with regard to bilateral relations, Malawi continued to enjoy cordial and fraternal relations with other countries in the region and beyond. During the year under review, Government established diplomatic relations with the State of Oman, Kosovo and Andorra. This is a clear demonstration of the strong bilateral and fraternal relations that Malawi enjoys with her partners.

Mr. Speaker, Sir, Government took measures to assist Malawians stranded abroad. This included the repatriation of 73 Malawian women who were stranded in the State of Kuwait, and the repatriation of destitute Malawian women and children from Tanzania, Zimbabwe and South Africa. Furthermore, Government, in collaboration with the Government of Mozambique and the UNHCR, coordinated the return of Mozambican asylum seekers to their country.

Mr. Speaker, Sir, with regard to Foreign Service reforms, Government has:-

• right-sized all Malawi missions by reducing the number of diplomats and local staff to a maximum of 6 in each mission leading to, among other things, a saving of K7 billion in the annual wage bill;
• reviewed the country’s Foreign Policy of 2000 by aligning it with the current global geo-political developments;
• commenced the development of a Foreign Service Bill in order to further improve operations of the Foreign Service;
• commercialized VIP lounges at Kamuzu and Chileka Airports to improve service delivery, efficiency and inclusivity;
• Purchased an office in New York as a way of reducing expenditure on rented property.

Mr. Speaker, Sir, In the 2017/18 Financial Year, Government will rehabilitate properties in London, Ottawa, Washington D.C., Windhoek, Pretoria, Johannesburg, Cape Town and Berlin.

CONCLUSION

Mr. Speaker, Sir, this country has come a long way. Our economic progress has been slow for many decades. Countries such as China that we equalled in GDP by 1979 have overtaken us. By the time I took this Government, poverty had become a vicious circle; unemployment for the Youth was rising, the quality of life for most Malawians has been at its lowest, some systems had collapsed and many more challenges. Yet, we have everything we need to develop in this country. The question is: why?

Here is my answer Mr Speaker. By the time I was taking over this Government, the structure of the economy was not really ready for growth. We have been thinking small because we did not plan to grow big.

We did not invest in expanding and diversifying our energy production to serve the growing population and match a growing industry. We were not thinking about developing our industry to make Malawi a producing and exporting country. Yes, we did not invest to expand our water systems because we planned as if our population would never grow.

Our airports remained small because we were not planning Malawi to be developed to host huge aeroplanes and international travellers. It is time for us to think globally and act locally.

We kept thinking in analogue and forgot that a developed Malawi needs to be on affordable and fast internet to connect people, information and markets in a new digital world.

Our road network was confined to connecting towns and cities because we were not thinking about our 85% of the rural people into the production line to modern markets.

We left unemployment of the Youth to rise and productivity to fall because we thought as if we can develop with unskilled labour force. No country develops in this world without a skilled labour force.

Year in, year out, we came to this Parliament and budged for the interests of a particular year rather than investing for the future. We have come to do things differently.

Today, many years to come, I want our children, and their children to remember that on this day we met and planned for their future. And I expect, all of us to be patriotic on this course.

DIRECT BUDGET SUPPORT
Mr. Speaker, Sir, as I continue on our economic performance, I have good news. Last night, the World Bank has resumed Direct Budget Support to Malawi and they have approved US$ 80 million. This is the first budget support financing approved by the World Bank for Malawi since Cashgate. This direct budget support is a vote of confidence in us and how we are managing our economy. We expect more such news from the European Union, the African Development Bank and others.

Mr. Speaker, Sir, I now declare the 2017/18 Budget Meeting of Parliament officially open. May God Almighty, therefore, guide you all throughout your deliberations!

God bless you all
God bless Mother Malawi
Thank you, Mr. Speaker, Sir.

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