My Fellow Malawians, Ladies and Gentlemen,
It is a great honour and privilege to address you all today. It is important that I must update you on developments that have taken place in our country since I last delivered the State of the Nation Address in May this year. In so doing, I will also outline the measures that Government has put in place to address some of the challenges that our country has been facing in the recent past.
My Fellow Malawians, Ladies and Gentlemen,
Accepting the presence of a problem is the first stage in solving any problem. Let us admit that our country has, over the past few years, experienced some challenges that have negatively affected the lives of our people, particularly the poor.I know the pain most of us have been feeling. But I also understand our impatience to urgently get outof our challenges because this nation has suffered in poverty for many years. We are all tired of being a poor country. I hear the silent voices of those who cannot speak; and I can understand the feeling of those who want Malawi to change overnight. But in our silent voices and urgent feelings, I see our collective will to use our challenges as a collective motivation to pursue long term solutions. I only ask for one thing: to focus on the real issues.
We have the poverty we never managed to address for many years.We have a growing population that threatens our limited resources. We have climate change that threatens the survival of our hopes. We have public sector systems that need to function for our needs. And we need a positive mindset that inspires our collective drive for long term solutions.
Two years ago, we as a nation agreed to take this country forward amid serious challenges. We had suffered an unprecedented plunder of public resources and theft of cash from our reserves.
By June 2014, we had a domestic debt of K455 billion. We owed the private sector some K176 billion. We ran a deficit budget. This country was almost bankrupt.
Consequently, public service delivery was affected, especially in a number of key sectors including agriculture, health, education, among others.Cashgate was so devastating that we will continue to face its consequences for the next decade. At the same time, we have had to survive the end of donor budgetary aid. We had to run this country with our local resources.This is a watershed in our history, and another beginning for our country. A country that was almost bankrupt; a country without budgetary support. Our situation was compounded with unprecedented floods, drought and hunger for two continuous years. But we have prevailed in our difficulties.
Today, I want to thank you all Malawians for our resilient spirit, our enduring heart, and our understanding.I thank you all for our unity of purpose. Now I know, we are a small but great nation with a great spirit. Now we know, we have what it takes to endure, to survive, to fight and to earn our national prosperity. With all our shortfalls and misfortunes, we are a great people of a small country.
My Fellow Malawians, Ladies and Gentlemen,
The challenges we face are not insurmountable. Together, with unity of purpose, we can overcome them. Challenges must never be the source of fear. Challenges must be the inspiration of our courage. It is in this spirit that Government, with the support of its partners, has continued to work tirelessly to address the challenges.
Let me therefore proceed to address the current status of our country. Let me focus on the state of the economy, food situation, energy and water.
GENERAL PERFORMANCE OF THE ECONOMY
Following the poor climatic conditions that have had a devastating effect on the production of both food and cash crops, the economic gains achieved up to the early part of 2015 have been reversed. Therefore, the real GDP growth of 6.2 percent recorded in 2014 declined to 3.2 percent in 2015, and is projected to decline further to 2.8 percent in 2016.
Similarly, the stabilizing trend in the exchange rate and the interest rate was reversed. However, the country is still maintaining high foreign exchange reserves. We have the highest reserves in Malawi’s history since independence.
Fellow Malawians, Ladies and Gentlemen,
I am pleased to report that there is increased confidence in the country’s macroeconomic management. Given the improvement in the fiscal performance, which is evident from the fact that we are on track on the Extended Credit Facility arrangement with the International Monetary Fund, it is expected that better weather conditions during the coming growing season will help to establish a robust macroeconomic situation, as well as the resumption of high growth. As we wait for better weather, let me ask you all to work hard in our farming. Let us work to produce and produce more and more.
The availability of food affects the economy. Most families are experiencing acute food shortage. But I repeat: no one will die from hunger. We have bought enough maize and other food stuffs to be given for free to the poorest and the most vulnerable people who cannot afford to buy food.
But there are some of us who can afford to buy maize. What we need is its adequate availability. As such, Government has put together financial arrangements and ADMARC has secured enough maize and this is being sold to the general public.
Government is also taking measures to adapt to the possible recurrence of poor climatic conditions. In this regard, the Government is increasingly promoting both smallholder and large scale irrigation projects, in order to address food shortages. Overall, the Government is collaborating with development partners to implement a plan that is aimed at permanently breaking the cycle of food insecurity in this country.
We need adequate water supplies for our homes, our industries and our farms. Therefore, Government has initiated a project that will install water pipes from the lake to the hinterland, to address the challenge of water shortages. It is planned that these may be placed in three locations along the lake.
The Government has ensured that programmes and projects that stalled or were suspended because of Cashgate are resuscitated, and we are determined to complete them. These include the Lower Shire Irrigation Project, as well as several road construction projects, such as the Livingstonia – Njakwa Road in the North; the Old Airport – Kasiya Road in the Centre; and the Mangochi – Makanjira Road in the South. Additionally, plans are afoot to rehabilitate the Beira – Blantyre – Lilongwe Railway Line, as well as the Nacala Railway Line to Liwonde.
Of even more importance is the fact that the Public Finance Management Reform Programme is vigorously being implemented, such that Cashgate-like fraud has been contained, and the challenge of lack of reconciliations of Government accounts has been commendably addressed.
These measures should restore confidence in both the donor community and investors, and assist in the management of our economy to achieve recovery.All in all, the Government is looking forward to the next year, 2017, with high expectations of improvements in the performance of the economy.
FOOD SECURITY
My Fellow Malawians, Ladies and Gentlemen,
Let me outline some details on food insecurity. Our country is currently experiencing its worst food insecurity crisis in over a decade. We have 8.4 million people affected and 6.5 million people in need of humanitarian assistance. This is due to the effects of El Niño weather conditions the country experienced during the last growing season.
We have contained the food insecurity. In my State of the Nation Address in May this year, I outlined some of the plans Government had put in place to avert food crisis which was then looming.I assured the nation that despite the food requirement gap being the largest in the decade, no one would die of hunger in the season.The measures we have taken are now more reassuring than ever.
My Fellow Malawians, Ladies and Gentlemen,
I am pleased to report that following my declaration of state of national disaster on 13thApril this year, Government, in collaboration with humanitarian partners, developed the 2016/2017 Food Insecurity Response Plan to guide the response program. The total budget for the Response Plan is US$395.13 million, out of which $307.5 million will assist the affected people with relief food.
The response is in two modalities: in-kind food transfer, targeting 4,751,862 people and cash transfers, targeting 1,734,806 people. It is pleasing to note that Government, development partners and the civil societies responded favorably by providing in-kind and financial support towards the implementation of the Food Insecurity Response Plan. Government, using its own resources and support from partners, has sourced a total of 276,742 Metric Tons of humanitarian relief maize that will cater for all the food insecure people needing humanitarian food assistance.
Government started providing relief food to the food insecure people in July with one district, Nsanje. We targeted 236,028 people. In November, we rolled out to 19 districts, targeting 5.7 million people. By January, 2017, the response programme will be rolled out to allthe affected districts, targeting 6.5 million people. This is a need-based approach.
Let me also report that the Malawi Vulnerability Assessment Committee (MVAC) update assessment that was conducted in October reported an additional 200,267 food insecure people who were missed out during the first assessment in June. This brings the total number of food insecure people to about 6.7 million people.
Government, in collaboration with its partners is in the process of sourcing relief food for these additional food insecure people.
In our medium to long term measures, we are breaking the cycle of food insecurity using the National Resilience Strategy which Government has developed. This plan outlines strategies that will be implemented to break the vicious cycle of food insecurity for the next 5 years.
My Fellow Malawians, Ladies and Gentlemen,
The Food Insecurity Response Plan which I have mentioned earlier on, estimated that 261,555 MT of cereals, which includes maize, riceand sorghum, will be required to satisfy the projected demand. It also indicated that 30percent of the cereal needs will be covered through cash transfers. It is pleasing to note that to date,the total of Government purchases and donor commitments have surpassed the projected cereal requirements.
According to our records, the country has about 300,000MT of cereals earmarked for humanitarian support, which is enough to cover the affected communities until March 2017.
Let me also inform you that the country’s Strategic Grain Reserve (SGR) has been restocked with about 113,000 Metric tonnes of maize. We have also a number of partners who have come forward with their support in kind which on aggregate means that we have adequate cereals for the response plan.
Let me, however, report that we have a gap on non-cereals and some twining costs which Government and other partners are working on to close. We have received pledges from the US Government amounting to US$23 million of which US$18 million will be used for pulses. We also have pledges from CADECOM of about US$0.5 million, which will improve the situation. In addition to these pledges, the country will receive an insurance pay-out from the African Risk Capacity of US$8.1 million. The process to unlock these resources is at an advanced stage. We could also use this money to procure pulses, among other things, and reduce the shortfall in this area.
At this juncture, I would like to highly commend all our partners for their contributions to this extremely noble cause. Specifically, I wish to recognize contributions received from, among others, DFID, Swiss Natcom, USAID, ECHO, World Bank, Irish Aid, Belgium, Scottish Government, Sweden, Canada, WFP, Germany, Chinese Government and the African Development Bank.
I would also like to acknowledgeand appreciate Civil Society Organizations, Faith Based Organization and business communities and individuals too numerous to mention, that have come forward to support us.
Let me briefly touch on the maize for sale. As you may be aware, Government provided ADMARC with someguarantees to borrow money from commercial banks to procure maize both locally and internationally for sale throughout the country.The plan was to allow ADMARC to stock about 300,000metric tonnes of maize grain for the season. The Corporation has, to-date, procured about 105,000metric tonnes locally, 100,000 metric tonnes from the Republic of Zambia and 100,000 metric tonnes from Romania, thereby meeting the set plan. It follows, therefore, that the country has sufficient grain for both humanitarian response purposes and commercial purposes.
WATER
My fellow Malawians, Ladies and Gentlemen,
The importance of water in Malawi’s development cannot be overemphasized. Water is critical for industrial, householdand crop production uses.
Indeed, water is essential for generation of electricity. Most of us are aware that due to erratic rains we had last year, there has been scarcity of water in most parts of Malawi. This problem is affecting our lives in many ways. Most of our homes and industries are experiencing electricity shortage. Most homes and industries are affected by the low water table across the country. As I have said before, this country did not invest to expand water and electricity generation for many years. This is the situation we are changing and we are making progress.
Initiatives and Strategies
Government is taking urgent measures to address the water shortage. We are determined to make this problem to be history. Some of the initiatives include:-
• Rehabilitation of Mudi Dam and water treatment works and upgrading of infrastructure for Blantyre Stations;
• Procurement of heavy duty generators for Blantyre stations, to avert the frequent power outages;
• Comprehensive maintenance of plant and equipment to sustain the current production;
• In medium term, we have initiated a project to tap water from Likhubulariver in Mulanje to supplement the current water supply to Blantyre, parts of Mulanje, Chiradzulo and Thyolo.
• We are also launching a project to tap water from Lake Malawi to Lilongwe, parts of Salima and Dowa.
• LWB has sunk 12 additional Boreholes for Northern Zone. These have added a yield 5 million litres per day of water and is serving 50,000 people living in parts of area 25, Mchezi, and Kamuzu International Airport;
• Under the Emergency Ground Water Development, 60 deep boreholes will be sunk. Currently, 11 boreholes have been drilled already along the Western Bypass and AirwingMbavi areas. This will bring on board about 10 million additional litres per day targeting Area 47, Area 9, Area 56 and part of Area 3;
• Lilongwe Water Board also plans to implement Lilongwe Water Programme tapping water from Diamphwi Dam.
ENERGY
My fellow Malawians, Ladies and Gentlemen,
Energy is critical factor in Malawi’s economy. We need good supply of electricity for our industries to run and for our day to day lives. Currently, we areexperiencing frequent blackouts because of load shedding. The water table is low and we did not sufficiently invest in energy as a country.
Our vision is to generate sufficient amount of energy to meet the economic and social demands.
To achieve this goal, we have put in place short and long term measures.
Short Term Measures
• Procurement of 46 Mega Wattsdiesel peaking generatorswhich will be ready for use in Lilongwe and Mzuzu.
• Acquiring of 78 Mega Watts of Emergency Power Plant by ESCOM on lease basis for an initial estimated period of 18 months.
• Procurement of 70 Mega Watts of PV Solar power from Independent Power Producers (IPPs). Currently, a number of IPPs have expressed interest to invest in power production using solar technology. The Power Purchase Agreements (PPAs) are being signed soon.
• For Immediate measures, and through Government and ESCOM intervention, dredgers have been deployed at Nkula and Kapichira Power Stations to manage siltation.
Long Term Measures
• Generation, Transmission and Distribution Expansion and Reinforcement
The carrying capacity of the Transmission Lines will increased to about 1,150MW by 2018.
A 400kV Transmission Line is currently being constructed from Phombeya (Balaka) to Nkhoma. The Line is expected to be completed by September 2018. The Phombeya Sub-Station will be the landing point for the Malawi-Mozambique Interconnector.
• Hydro Power Projects
o We are making good progress on the following hydropower projects:
170MW plant at Lower Fufuon South Rukururiver in Rumphi District, to be commissioned by 2021;
200MW hydro power plant atKholombizoon the Shire River to be commissioned by 2022; and
350MW plant at Mpatamanga also on the Shire River to be commissioned by 2021.
Nkula A Rehabilitation and Modernization Project will add 12MW by September 2018; Tedzani III Rehabilitation and Modernization project will add 10MW by October 2017; Tedzani IV Power Project for 18MW will be commissioned by end of 2019.
The 41MW Mbongozi Hydro Electric Power Site on Bua River is being developed by HE Power, an IPP. The project is scheduled to be commissioned by 2020.
• Coal Fired Power Projects
o Our goal is to diversify and expand sources of power. Government is pursuing a coal fired power station project at Kam’mwamba, which is expected to add an extra 300MW to the grid. Everything being equal, it is envisaged that the first fruits of this project will be realised by mid-2019, when the country will be able to tap 100MW of power from this unit and the rest by the end 2020. In addition to Kam’mwamba, there are three other private sector investors who are in discussion with Government to develop coal fired power plants.
• Heavy Fuel Oils (HFOs) by IPPs
o Government is in discussion with InfraCo Africa Energy who have shown interest to develop 80MW in Salima. The Power Plant is expected to be commissioned by end 2017
HEALTH
My Fellow Malawians, Ladies and Gentlemen,
Allow me to highlight some of the measures that we have put in place in a bid to address the challenges in the health sector, particularly with regard to the shortfall of drugs and equipment as well as inadequate medical personnel.
We have registered phenomenal improvement in drug pilferage because of our tough stand on drug theft and sealing the loopholes.
We have improved the procurement system to make drugs more available in a shorter time. Currently, Government has awarded procurement contracts of over MK10 billion for medicines whose deliveries are expected in the coming weeks.
Additionally, we have invested in drug storage systems both at facility and central levels.With the support from the US and UK Governments, we have installed 115 prefabricated drug storage units across the country. DFID has also committed to furnish us with an additional 4 million pounds towards the project.
Moreover, we are also recruiting health workers in this financial year. We are recruiting Medical Doctors who recently graduated from the College of Medicine.
I am pleased to report that we are recruiting an additional 1,440 health workers with assistance from the Global Fund and PEPFAR.Out of this figure, we have already processed the recruitment of 960 health workers across all cadres under the Global Fund and PEPFAR.
We are also pursuing the plan to construct the Cancer Centre. Government has also advertised to procure a contractor for the civil works component.
With regard to the construction of the New Phalombe District Hospital, allow me to report that advertisement for the Contractor was also done.We expect construction to be completed by June, 2019.
EDUCATION
Fellow Malawians, Ladies and Gentlemen,
Since Malawi introduced the policy of expansion of access to education, the Education Sectorhas been facing a number of challenges. These include insufficient teaching and learning materials, inadequate school blocks, shortage of qualified teaching personnel. This as you are aware, is a manifestation ofmany years of poor investment in the sector.
I am however pleased to inform you my fellow Malawians that my Government has put in place short and long term measures to improve the quality of Education in the country. These measures include the following:-
1. Approval of the first ever National Education Policyfor a systematic implementation of our plans at all levels.
2. Rolling out the National Reading Programme and distribution of standard 1 and 2 text books to all primary schools since September 2016. Government is now training Primary School Advisors, supervisors and Inspectors in monitoring of the programme.
3. Constructing classroom blocks and sanitary facilities across the country. For example, with financial support from DfID, Government has embarked on a GBP 6.3 million project to add structures in existing 50 schools, translating into 262 classrooms, 86 houses, 33 administration blocks, 461 latrines, 58 urinals.
4. Liberalizing procurement of primary school textbooks and guidelines in a bid to reduce inefficiencies that come with central procurement of teaching and learning materials. The decentralized procurement is expected to give schools the liberty to procure teaching and learning materialsfrom local publishers based on the school’s needs.
5. Establishing Complementary Basic Education Centresto reach out to 26,200 out of school youth in 13 districts. It is the intention of the Government to roll out the programme to the rest of the districts.
6. The upgrading of thirty-three (33) Community Day Secondary Schools (CDSSs) to conventional secondary schools.21 of these willbe constructed with financial assistance from the European Union (EU). Contracts for these CDSSs have been signed and works will commence anytime. Under Phase III of Japanese International Cooperation Agency (JICA) support, 12 CDSSs are being constructed. The European Union will also support the rehabilitation of technical wings of the 12 secondary schools that teach technical subjects.
7. Training of forty (40) non-education degrees teachers from all the six education divisions is being conducted through the University Certificate of Education (UCE) program to ensure that all teachers have the necessary skills. Twenty (20) teachers are pursuing their studies at Mzuzu University (MZUNI) and the other twenty (20) at Chancellor College.
8. Procuring of teaching and learning textbooks and science kits for the new secondary school curriculum with assistance from the African Development Bank, under the Project of Protection.
9. Improving the efficiency in the management of loans by the Higher Education Students Loans and Grants Board.
10. Expanding of infrastructure in Mzuzu University, The Polytechnic and Chancellor College; and in the Technical Colleges of Lilongwe, Salima, Soche and Nasawa.
11. Commissioning of the construction of Teacher Training Colleges ofRumphi, Chikwawa and Mchinji is expected soon. The financiers are Arab Development Bank (BADEA), Saudi Fund and OPEC Fund for International Development (OFID).
I am further pleased to inform the nation that there has been tremendous improvementin the payment of teachers’ salaries following the decentralization of management of payrolls to the education divisions. As a result of this reform, teachers are now able to get their salaries in time.
LAND REFORMS
My Fellow Malawians, Ladies and Gentlemen,
As you are aware, we have recently adopted new land laws as part of land governance reforms. The review of outdated land lawswhich started several years ago has resulted in ten land related bills being drafted, including the Land Bill, 2016;the Customary Land Bill, 2016; the Physical Planning Bill, 2016; the Land Survey Law, 2016;which were tabled and passed by the National Assembly during the 2016 Budget Sitting. The remaining six bills are expected to be tabled during the forthcoming sitting of Parliament.
I am aware of the various misgivings from some segments of the society, particularly on the Customary Law. However, let me assure you that these legal reforms have more benefits than whatever challenges we think we see. These new laws will bring administrative order in land management, empower our chiefs and restore confidence in our business investors.
Specifically, these new land laws create an enabling environment for improving land governance as theyprovide for decentralized land administration functions to district and urban councils, chiefs and village committees. As more players get involved in land issues through decentralisation, there will be increased transparency and accountability in land administration and management.
Additionally, decentralised land administration and management structures will also reduce the cost of processing land registration and doing business in general.
THE FIGHT AGAINST CORRUPTION
My Fellow Malawians, Ladies and Gentlemen,
Corruption still remains a very big challenge, and therefore, the fight against corruption remains a key priority for Government. In spite of whatever challenges, we will continue to fight corruption at various levels. Fighting corruption is the only way to ensure that the resources allocated for development are used for their intended purpose. This fight needs concerted efforts of different stakeholders.
Let me reiterate my Government’sunwavering stanceineradicating corruption from our society.The successful prosecution of suspected corrupt cases requires clear evidence, which in some cases, is very difficult to obtain. It is therefore incumbent upon all Malawians to ensure that we provide evidence when we are called to by the relevant authorities. As I have always said, those found to be involved in this malpractice will surely face the long arm of the law.
As a nation, allow me to report that Government is prosecuting suspects involved in theft of public funds. Presently Government is pursuing over 50 cases in the courts related to Cashgate and other cases. So far, 13 convictions have been secured, whilst the other cases are at various stages of trial in the courts. Investigations are also continuing in other cases and once these are concluded, the suspects will be brought before the courts to be charged and tried.
Let me say this emphatically. In our fight against corruption and theft of public funds, there are no sacred cows. As long as there is evidence, I repeat as long as there is evidence,it does not matter whether it is my Government or anyone’s government.
We know that there are some civil servants who continue to steal public funds as I speak. Some years ago, some civil servants created a syndicate by which they pay themselves twice or three times their salaries. I want to hear that these suspects have been brought to justice. I also want to hear that civil servants who have been investigated and found with cases in various ministries have been acted upon. I want to hear action taken.
PUBLIC SECTOR REFORMS
My Fellow Malawians, Ladies and Gentlemen,
With regard to public sector reforms, I am delighted to report that it is now evident that the reform agenda has been internalized and is gaining roots, not only in twelve Pioneer Ministries, but also in ParastatalOrganisations as evidenced by important milestones that have been achieved in many reform areas.
The business unusual approach is gradually being accepted and is becoming a way of doing things. Among the notable milestones include, but not limited to the following:
• Registration of Births and Deaths and Issuance of Certificates was launched on 27th October, 2016.
• The long-awaited fulfilment of the production and issuance of National Identity Cards was being realised. The National Identity Card was launched on 27th October, 2016. A total of 5,856 cards were printed under the Proof of Concept and distribution started after the launch. Currently, the National Registration Bureau has rolled out the registration exercise. Among others, the national Identification Cards will facilitate capturing of demographic Bio-data for effective, objective and rational socio-economic planning and development by all sectors in our country’s economy.
• Government outsourced Vehicle Inspection Services for Certification of Fitness (CoF) to private service providers starting with Lilongwe and Blantyre, in order to bring efficiencies in the issuance of CoF through the MALTIS System in the Ministry of Transport and Public. In Mzuzu, service providers are currently installing equipment.
Improving the legal framework for various systems and programmes.
• In the last two years, we have tabled and passed 60 percent of reform related bills. This includes the Electricity Bill. The unbundling of ESCOM was, therefore, approved and is expected that implementation will start in January, 2017. This is the legal framework for the diversification and expansion of electricity generation.
• Government is introducing Integrated Public Service Delivery Centres to enable citizens a single access point to government information and services under one roof.
• We are also training senior civil servants in efficient and effective administration of the civil service. We are proud of our civil servants because they are the engine of implementation of our vision. Therefore, we will do everything possible to equip them with the necessary skills to transform the way we run Government.
With the current momentum in the implementation of the reforms agenda, it is envisaged that Malawi will have improved service coverage in the areas of water, electricity, health care, education and housing, among others. We are all, therefore, requested to play our rightful role in driving and implementing thesereforms.Let us all make Malawi Work!
NATIONAL SECURITY
National peace and security are a prerequisite for our socio-economic and political development. Government has, therefore, continued to put in place measures and initiatives that ensure that the country enjoys peace, security and tranquility at all times. Strengthening institutions such as the police through recruitment of officers and provision of equipment have been one of the Government’s priorities.
I am aware that some parts of the country are experiencing various forms of insecurity. In the recent past, we have known incidents of abduction and the killings of people with albinism. I pleased to inform you fellow Malawians that that measures that Government put in place have reduced cases of abduction and killing of people with albinism. This fight is not yet over though. Therefore, Government will continue to tighten security not only for people with albinism but for all Malawians. In addition Government will continue prosecuting those found engaging in the heinous crimes.
I wish to urge all Malawians to join hands in reporting to the relevant authorities of any activities that will threaten peace and security of the nation.
Conclusion
My Fellow Malawians, as you can see, there is so much that is happening to improve our situation in the country.
These measures are the result of the collective effort of my political will, the determined drive of my Ministers and the technical expertise of various Principal Secretaries and their officers. Some of these achievements are the results of various heads of statutory corporations. And to all Malawians listening to me now, if you have any alternatives that can help us improve, I invite you to submit your ideas to me through the Chief Secretary to Government. Upon receipt of your suggestions I will organize a platform to discuss these.
And to the hardworking civil servants and public officers, I know that many of you spend long hard working hours and sleepless nights to produce the results we need. It takes us all, and our unity of purpose, to keep Malawi going against the challenges we began with. It is in our unity of purpose, patriotism, integrity and hardwork that we become a great people in a small country.
Thank you!
God Bless you all!
And God Bless Malawi!
