Saturday, June 30, 2012

From The Mouth of President Joyce Banda at the National Dialogue on The Economy Conference in Mangochi

STATEMENT


BY


HER EXCELLENCY MRS. JOYCE BANDA


PRESIDENT OF THE REPUBLIC


OF MALAWI


ON THE OCCASION OF THE OPENING


OF THE NATIONAL DIALOGUE ON THE


ECONOMY CONFERENCE


NKOPOLA LODGE, MANGOCHI



29TH JUNE TO 1ST JULY, 2012


Your Excellency the Chief Justice Richard Banda, SC (Retired)

Right Honourable Khumbo Kachali, Vice President of the Republic of Malawi and Minister of Health,

Honourable Ministers and Deputy Ministers present,

Mr. Jonathan Oppenheimer, Founder and Chairman of Brenthurst Foundation,

Chief Secretary to the Government, Mr. Bright Msaka, SC.,

Ambassadors, High Commissioners and Members of the Diplomatic corps,

Hon. Henry Chibwana, Secretary General of the People’s Party,

Hon. J.Z.U. Tembo, Leader of Opposition in Parliament and President of the Malawi Congress Party,

Honourable Members of Parliament,

Heads of Parastatal Organisations,

Chief Executives of Companies,

International Experts and all panelists,

Distinguished Invited Guests,

Ladies and Gentlemen.

It is with a deep sense of gratitude that I stand before you, Distinguished Ladies and Gentlemen, this afternoon to preside over the conference on the National Dialogue on the Economy here at Nkopola Lodge in Mangochi a tourist district in the Warm Heart of Africa.


Malawi is at a critical transition. The country has suffered greatly from poor decisions over the past few years.


Of course, we, as a country bear the responsibility for the consequences of those decisions. It is up to us to make the decisions necessary to change our course.


Distinguished Ladies and Gentlemen,

You may recall that in my State of the Nation Address delivered during the state opening of the 2012/2013 national budget, I highlighted challenges our country was facing.


When I took over office of State President on 7th April 2012, there was poor political and economic governance, the economy of this country was on the verge of collapse; shortage of fuel and foreign exchange were the order of the day. There was acute shortage of drugs in hospitals; manufacturing capacity of many industries went down; many businesses scaled or closed down thereby shedding off a lot of jobs.

For example, Unilever sent most of its staff on leave due to some of these challenges.


I would like to underscore that these challenges inevitably eroded the gains that the country had achieved over the past years. Therefore, my government prioritized to reverse this trend as a matter of urgency. In this regard, Government has put in place tangible measures to address these challenges in the immediate, medium and long term. So far, the main goals of my administration have been:


Firstly, to launch an economic recovery plan. In the short term, some of the measures under this goal include the devaluation of the Malawi Kwacha, normalization of bilateral relations with our cooperating and development partners, and repealing of punitive laws that have retarded political and social economic development of our country.


Although I promised Malawians that our efforts will start bearing fruit after a year, I am pleased to report that, with God’s grace some of these measures have already started yielding the desired results. The traditional relationship between the United Kingdom and Malawi has been restored. Closer home, we have renewed our relationships with our neighbors including Mozambique.


On 19th June, 2012, the International Monetary Fund (IMF) wrote a Letter of Comfort to our development and cooperating partners requesting them to start disbursing resources that were withheld because of the suspension of the programme.


Furthermore, Distinguished Ladies and Gentlemen, on 22nd June, 2012, the Millennium Challenge Corporation (MCC) Board approved the Malawi Compact programme that was suspended due to the country’s poor governance record. These, undeniably, demonstrate the trust and confidence that our development and cooperating partners have in my Government.


The second goal is to eradicate poverty. This includes enhancement of opportunities, reducing inequality, and wealth and job creation. I am aware that the measures that we have taken to reinvigorate the economy are hard and may have a negative impact on the poor. In this regard, starting from July, 2012, Government will implement the labour intensive public works, school meals and cash transfer programmes, mostly in those vulnerable communities that did not harvest enough food this year. It is my expectation that the conference, through the vast expertise and experience in this gathering, will assist in suggesting to government other sustainable and practical social protection programmes that can prevent Malawians from falling into poverty.


The third goal is to restore political governance, respect for freedoms and rule of law as we recognize the strong link between democratization and economic growth; and finally:


A fourth goal is to implement a peoples’ Development Agenda by restructuring the economy. Here the focus is macro-economic stabilization, Private sector promotion, public sector reform, and infrastructure development.


Distinguished Ladies and Gentlemen

Here at home, I have conducted consultations with business, traditional leaders, civil society organisations, development partners and public servants. I have also taken foreign visits to some African countries: South Africa, Mozambique, Liberia and Nigeria, and to the United Kingdom in Europe and to United States of America. There have been interesting lessons and experiences from these visits.


One of the most important lessons is that most governments are ready and willing to support our efforts to improve our situation. Secondly, there is an overwhelming interest by private and public companies to come and invest in Malawi. Thirdly, there is such a rich community of Malawian diaspora in Africa, Europe and the United States of America that are keen and willing to support the development efforts of their Government. The Malawian diaspora could provide a significant source of foreign exchange, transfer of skills, technology and capital. Their networks abroad could be very strategic for our growth agenda.


Distinguished Ladies and Gentlemen

I am pleased to report that Parliament on Wednesday, 27th June, 2012, approved the 2012/2013 national budget to allow government business to proceed.


With all this, I wish to express my sincere appreciation to our development and cooperating partners for the support that they have so far rendered to us. I also wish to thank the people of Malawi for their understanding and giving my government a chance to institute tough but necessary measures that are aimed at turning around the economy for the benefit of our country.



Distinguished Ladies and Gentlemen

The question I ask myself is how do we quickly garner this goodwill into a force of growth in my country? I then realize that the first objective we confront in this regard is that we must ourselves take the responsibility to answer the question: how do we achieve our objectives?


Allow me to proceed to say that our vision is very clear: to eradicate poverty through economic growth and wealth creation. To realize this, we have set for ourselves a value system of integrity, honesty, tolerance, selflessness and stewardship whilst embracing three cornerstones of Unity, Equity and Development.


As a Government, we desire to see Malawians enjoy their freedom, dignity and sense of pride; and maximize their capacity to realize their social, political and economic empowerment.

Government has thus developed strategies to realize this vision. As discussed above, we have:

1. Established an Economic Recovery Programme to deal with current challenges of political and economic governance by:

Creating sustainable and progressive monetary and fiscal policies to stabilize the economy

Introduced austerity measures to cut on waste and promote prudent fiscal management programme.

2. Developed a fresh, more diversified and productive economic model which will re-instate traditional drivers of growth that can generate foreign exchange. Government has decided to promote a private sector-led economic growth with the following priority areas:

Diversified commercial agriculture with irrigation programmes

Tourism

Mining

Energy

Infrastructure Development including ICT, Rail, Roads and Airline.



Distinguished Ladies and Gentlemen

You may recall that in the State of the Nation Address, I also mentioned that Malawi must identify, “Development tablets” to guide our development agenda regardless of which government is in power. If I may repeat, these “tablets” include:


1) Creating an enabling environment for business by reviewing the rules and regulations for doing business if we have to become competitive and attract investment. This demands a comprehensive audit and review of procedures in doing business, including review of tax and tariffs regimes.

2) Restructuring the energy sector. This is another important area that we need to focus on as a country to ensure that there is adequate electricity to drive the economy.


At the current level of electricity generation, distribution and supply, production and investment output is grossly affected and cannot achieve its full potential. However, with the approval of the Millennium Challenge Corporation (MCC) compact, I have all the confidence that this programme will assist Government restructure the sector and come up with projects that will increase power generation, improve efficiencies and allow other players and investors into the sector through Independent Power Producers (IPPs). Government has also re-opened negotiations with the World Bank and the Mozambican Government on the interconnection to the Mozambique Power Grid which would provide a mid-term solution to our power challenges.


Distinguished Ladies and Gentlemen,

As you may have observed, the long queues for fuel have disappeared. Government is working on a long lasting formula that will ensure sustainable availability of fuel in the country. I am pleased to report that Cabinet has approved the automatic energy price adjustor based on market forces, which will assist government, through Malawi Energy Regulatory Authority (MERA), to come up with realistic prices for energy such as fuel and electricity. Government will no longer subsidize energy products and this measure will ensure that fuel and electricity are sustainably made available to Malawians on a cost recovery basis.


Distinguished Ladies and Gentlemen,

3) Another development “tablet” that my government has put in place is to boost industrial production, which has generally slumped mainly due to shortages of foreign exchange and inadequate electricity. I expect improvements in this sector as a result of the improved situation on foreign exchange and the conclusion of the agreement with the MCC compact.


4) Government has decided to review agricultural product market and pricing policy to allow increased productivity while at the same time stimulating wealth creation through value addition and crop diversification.


Distinguished Ladies and Gentlemen,

5) Boosting exports is another important development opportunity that we need to seriously promote. My administration is committed to promotion of high value crops from this year. In this respect, we have identified rice, groundnuts, pigeon peas, sweet peas and sunflower as the key non-traditional crops that government will focus on for the export market.


Government will develop an export policy and strategy to guide the growth of our export base. Currently Government is in the process of developing an Export Investment Strategy for Malawi.


6) Concerning the tobacco industry, government attaches special attention to boost the industry by restructuring the legal instruments, production and marketing aspects of the crop. You may recall that last year, tobacco prices slumped and our farmers did not benefit from that crop season. However, this year, the prices have tremendously improved to the benefit of our farmers and the economy. Government will further review the policy regime and ensure policy coherence within the agriculture sector to align with crop diversification programme.




Distinguished Ladies and Gentlemen


In building the medium to long term economic programme, last month I invited Brenthurst Foundation, a policy think tank organization based in South Africa to consult with business, development partners, civil society organisations and the Cabinet on the challenges we are facing and inform Government on some of the strategies on moving forward. Brenthurst Foundation has provided similar support to Governments in Africa including Mozambique and Rwanda. They also hold periodic camp meetings on post-conflict economic recovery programmes. They have extensively written policy papers on various issues across the world. A must-read book authored by Dr Greg Mills is Why Africa is poor. I would recommend all of you to read it. The book throws some light on how Africa can improve itself.


When I received the report of their first consultative meeting, I decided to convene this conference this weekend where we are expected to build on the achievements highlighted above and link these to our medium and long term programme.


In this regard, this conference will seek to:

1) Re-establish and propose solutions to the current problems facing our economy;

2) Work out strategies that will realize opportunities for Malawi;

3) Identify and re-instate the traditional drivers of growth, and

4) Establish a fresh, more diversified and productive economic model.

I want to acknowledge and thank Mr Jonathan Oppenheimer, a friend of Malawi, who offered to finance this process and support future activities of the Presidential Advisory Committee on the Economy for the coming two years. I will announce the composition of the committee when closing this symposium on Sunday. Thank you Jonathan!

I also wish to thank our local private sector partners who have supported this conference. These are: TNM, CDH Bank, Airtel Malawi and Standard Bank.


Distinguished Ladies and Gentlemen

In order to realize these grand objectives, our public service will need to reform. We cannot continue with business as usual. We need to find ways to motivate our public service enhance efficient service delivery and vigilantly implement the decentralization programme so that our people on the ground can participate in developing themselves.


Distinguished Ladies and Gentlemen

In view of the need to transform and turn around the economy, this conference has been convened to solicit views from a wide spectrum of our society so that through the discussions concrete decisions necessary for drawing up a road map for economic growth and prosperity for Malawi can be arrived at. Government, therefore, expects the conference to come up with an Economic Road Map for the medium and long term.


I want to leave with you five questions to consider as you deliberate during this Conference. These are:

1) How can we re-envision Malawi to be the best small country in the world to do business in?


2) How can we re-establish our economic reputation, that is, the role Malawian culture can play in opening doors in new markets and the need to consider a strong support for initiating the Cultural Ambassador model with the appointment of sporting, business and food ambassadors? The establishment of a strategic communications unit in the Government should be a priority.


3) How can we re-engage with the emerging markets, that is, highlighting the importance of a “structured mobilisation” of the diaspora which could be effective in areas such as mentoring, offering placements and internships, developing an investment vehicle through which the diaspora could provide seed funding for Malawian business; and in communicating positive messages?


4) How can we re-energise our country, that is, identifying the need for a programme for mentoring winning managers? Malawi should focus on increasing its exports not just for products and services, but also its systems and processes in areas where Malawi has particular expertise such as in the agricultural products, Banking and Insurance.



5) How can we reform Malawi? This could be the foundation of the previous four pillars encompassing a range of reform initiatives the Government could consider to enhance business and job creation opportunities.


These are important questions and need answers.


Let me underline that this conference must not concentrate on theoretical solutions; but it must focus on practical and realistic home-grown plans that are tailor-made for Malawi. These solutions should be workable and have a long-lasting and sustainable impact on Malawians.


Distinguished Ladies and Gentlemen,

This conference must also touch on issues regarding beneficiation in investment. I am looking at how investments such as mining can benefit Malawians through the provision of vital social and economic services and infrastructure like schools, hospitals and roads. I am aware that this is happening elsewhere in other countries and so I am asking: why not in Malawi? In this regard, contract negotiation skills have to be enhanced in the country. I expect the newly-established Contracting Unit in my office to assist government to effectively negotiate contracts to the benefit of Malawians.


Distinguished Ladies and Gentlemen

You may have noted that we have invited international experts and guest speakers in this conference. The international experts are here to facilitate the conference and share with us their vast experience and best practices which can firm up our plans. However, I expect Malawians in this conference to assume ownership and take a lead in the discussions and drafting of the economic road map.


As we may be aware, the Malawi Growth and Development Strategy (MGDS) is the country’s national medium term development strategy whose ultimate aim is to reduce poverty through sustainable economic growth and infrastructure development. Therefore, the MGDS will form the benchmark of our discussions in this conference.


At this juncture, Distinguished Ladies and Gentlemen, I would like to wish you fruitful discussions and request the conference to think outside the box.


Finally, I would like to thank all those that have contributed immensely to the organization of this conference both financially and technically. These include the international specialists and local panelists. Let me recognize Dr. Greg Mills and his team, the Chief Secretary to the Malawi Government and his office; and my staff at State House for making this event a success.


Distinguished Ladies and Gentlemen

It is now my singular honour to declare this conference on the National Dialogue on the Economy officially opened.


I thank you all for your attention. God bless you and God Bless Malawi.



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