Malawis changed political landscape P 2 CSOs give JB honeymoon P 7

Bandas economic reforms in perspective P8

Special pullout WEEKEND NATION 6 APRIL 2013

special essay

death of bingu and rise of joyce banda

By Ephraim Nyondo, News Analyst

editors note

Time for reflection

This week marks yet another milestone in the history of the country. It was on April 5 2012 when the countrys third and serving President, Dr. Bingu wa Mutharika, died of cardiac arrest. Two days later, the fourth and first female President, Joyce Banda, was sworn into office as per constitutional order. It is, thus, exactly 12 months since the death of Mutharika and the rise of Banda, a situation that has inevitably brought change not only to the political landscape, but also the economic front. In fact, due to the different styles of leadership by the two, several changes have taken place in the countryfor the better or the worse; which is why in this special pullout we open a few windows into what these changes are and see what our analysts and commentators have to say. But what comes out clearly is that at the death of Mutharika, Malawi had monumental challenges: Some have persisted and others have been surmounted. President Bandawho has chalked some milestones, notably the restoration of ties with donors and donor-aid inflows, stable fuel supplies, among othersalso has her own challenges to reckon with, notably the state of the economy, food self-sufficiency, public sector delivery, rising corruption and, it can be argued, an uncertain relationship with civil society. All this is happening at yet another critical time, when the country is looking forward to the nations first tripartite polls in about a years time. No doubt this is a time for serious evaluation, reflection and expectation, as some articles in this pullout try to explore. We invite you to give us feedback through our regular channels, so that what Malawi thinks of during this historic month is fairly captured in our subsequent editions and brands. n
PHOTOGRAPH: nation library

Old good days: Mutharika (R) and Banda at one of DPP rallies

Malawis changed political landscape

How did the death of one man bring political triumph to PP and disintegration of DPP?
ometime in November 2011, I called Peter Kaleso, Peoples Party (PP) administrative secretary, for an interview. I wanted to feature him on our Still Around column. He agreed on the spot without much ado. In fact, after I had failed to turn up on the agreed day, he kept on calling, anxiously, to gauge my whereabouts. We rescheduled the interview and, interestingly, he promised to keep calling as a reminder. When I arrived at his office in Nancholi, Blantyre, I found him just outside the premises, waiting. Nobody was around apart

from a gateman. Then he took me to his office on the second floor. It wasnt a magnificent one. There was just an orange Arkay plastic chair, which he sat on, another one which I sat on, and a sizeable table with few papers, bearing names of PP supporters, scattered on it. We talked for close to three hourswith no disturbances from either visitors or phone calls. I also had a chance to visit the PPs office three weeks ago. Kalesos office has completely changed. It is furnished with a carpet, luxurious chairs and a

beautiful office desk. In fact, you cant easily get hold of himand I failed. He is very busy attending to different visitors, taking different calls from various people. In fact, to meet him, according to one of the

gatekeepers I met, you need to book an appointment. The sudden change in

death of bingu and rise of jB, PAGE 3

FACTS

ARCHIVE FAST

President Bingu wa Mutharika died on April 5 2012 and was buried on April 23 2012 Joyce Banda was sworn in as President at Parliament in Lilongwe on April 7 2012 Bandas administration devalued the kwacha by 49 percent and subsequently floated it

Special pullout WEEKEND NATION 6 APRIL 2013

death of bingu and rise of joyce banda

death of bingu and rise of jB, PAGE 2

special essay

the environment around Kalesos job is just an example of how the death of Bingu wa Mutharika has changed the country political landscape at a blink of an eye. It was a pivotal death that nourished PPs instant rise to political stardom at the same time, dramatically, eroding Democratic Progressive Partys (DPP) political glorynow visibly disintegrating. PP: Fed by death Two months after its launch, political scientist Michael Jana, argued that it was formed simply to serve as a social mobilisation platform for Joyce Banda to pursue her political ambition of being the president of Malawi after she was denied the same in DPP. Unarguably, the party didnt have the pull factor within its bloodstream something that could move thousands to abandon their parties and join. Even where it held mass rallies, its colour and pomp wasnt deafening to disturb the public. Death of Mutharika, however, changed all that. The party, today, has become a flickering light in the dark, attracting relentless waves of political moths. Veteran politicians that slewed it at firstfor instance, Kamlepo Kalua and George Mtafu are now shedding off their old political coats for it. Not only that. The party, in the space of not more than a year, has managed to plant structures across the countrystructures which produced not less than 1 000 delegates that graced the three-day K42 million party convention last year. These are the delegates that were not just fed and accommodated, as a show of appreciation; they all went home with a mattress. Additionally, the party, today, has numerous wings

Banda (L) receives a sword from Army General Henry Odillo

Fall of DPP , rise of PP

that are holding ravish dinner dances, giving out charities and, most importantly, they are at the front on national issues say planting trees. DPP: Eroded by death After the resounding landslide victory during 2009 general election, a historical victory that defied regional boundaries, DPP , arguably, was one of the countrys biggest parties with a great following. Riding on the back of the incumbency and also a majority in Parliament, the party did not just have the capacity to use its enormous resources to pull a lot of people to its sides. It also had the capacity to distort and suppress every voice to the contrary. For instance, it could parade youths with pangas in the streets to scare critics and got away with it. But Mutharika changed all thatfor the worse. Its popularity is not as vibrant as it used to be. The party has not just lost a number of its legislators in Parliament. It has also failed to retain its two seats in Mzimbasomething political analyst Associate Professor Blessings Chinsinga termed as potent signs of wane. Not only that. Even in the villages, signs of malaise are promiscuous. In Balaka, for instance, the party was evicted from its premises after failing to honour rentals. In Chikhwawa, especially in the constituency of Sidik Mia, what used to be DPP structures have now turned orange. Additionally, faced with leadership tussle between interim president Peter Mutharika and Henry Chimunthu Banda, the party, arguably, is heading towards a potential rift. When Bingu was alive, it was unthinkable for one to come in the open and challenge Peter, Bingus handpicked successor. When Joyce Banda got close to doing that, she was instantly expelled from the party. Searching for reason Malawi is not the first multi-party democracy in the world to experience the death of a sitting president. Zambia lost its sitting leader Levi Mwanawasa in 2008. So too, Nigeria. In 2010, President Umaru YarAdua died in office. However, these countries did not experience the instant and voracious change in their political landscape as witnessed in Malawi. In both countries, vicepresidents automatically rose to the mantle. But what was wrong in Malawi? It should be power politics in the context of how Bingu managed to prevent Joyce Banda, the president-in waiting, from being close to the partys succession agenda, says Jana. He adds that presidents and political parties the country has had lack leadership qualities. How do they vie for presidency and choose a running mate who becomes a vicepresident without having a clear idea on the succession plan? he wonders. Beyond that, Joseph Chunga president of Political Science Association of Malawi (Psam) adds another dimension behind the instant change in the countrys political landscape after Bingus death. Political parties in Malawi have very weak resource base. This is because of personalisation of parties by means of leaders controlling the party funds. This gets worse because private businesses and individuals do not support or do not want to be seen to support opposition parties because of neo-patrimonial politics where government business contracts are awarded to loyalists of the ruling party. Party support/ membership is very fluid in this country. Because parties have no real ideological positions to rally people around, and not because they are not seriously distinguishable, one can switch from one party to another. Leaders are always jumping the ship all the time in favour of the party in power, thereby weakening the opposition, he says. n

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Malawi College of Health Sciences PUBLICATION OF US$ 625 FINE IMPOSED ON RADIO ISLAM FOR BREACHING CLAUSE 2(a) OF THE THIRD SCHEDULE TO THE COMMUNICATIONS ACT AND CLAUSE 10.1.3 OF THEIR LICENCE BY DENIGRATING OTHER RELIGIOUS BELIEFS
{Pursuant to Section 54 (5) (c) of the Communications Act}
The Malawi Communications Regulatory Authority hereby imposes US$625 fine on Radio Islam for breaching Clause 2(a) of the Third Schedule to the Communications Act and Clause 10.1.3 of its Licence by denigrating other religious beliefs. In January, 2013 Radio Islam aired a program where they denigrated the Christian religion by among other things stating that Jesus Christ is not the Son of God and all people who follow him shall perish in hell. Upon hearing representations from Radio Islam, they admitted to have aired the program in breach of both the Communications Act and their Licence terms and conditions. Radio Islam has been warned before for the same conduct of denigrating other religious beliefs. Therefore, pursuant to Section 54 (5) (c) of the Communications Act, the Authority has imposed a fine of US$625 on Radio Islam which is a quarter of their Licence fees. In accordance with Section 54 (4) of the Communications Act, the Authority hereby publishes the imposition of the fine and the reason for the imposition. Dated this 28th day of March 2013 CHARLES NSALIWA DIRECTOR GENERAL

Press Release
Malawi College of Health Sciences Management wishes to inform all continuing students that the next semester will not commence on 8th April, 2013 as earlier announced. The new date for opening will be communicated in due course. For further clarification, you may contact The Registrar at Malawi College of Health Sciences on 01 756 777 Email: mchs@malawi.net

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PROCUREMENT REFERENCE NO.MARDEF/2012/2013/02 PROCUREMENT OF EXTERNAL AUDIT SERVICES DATE 6th APRIL 2013
1. Malawi Rural Development Fund (MARDEF) invites sealed proposals from eligible and qualified bidders for the provision of External Audit service for MARDEF and YEDF . 2. Bidding will be conducted through National Competitive (NCB) procedures as contained in the Public Procurement Act 2003 and regulations of the Republic of Malawi in so far as proposals are concerned. 3. Bids shall be valid for a period of 30 days after bid submission and closing date. 4. It is the responsibility of each bidder to ensure that bids are submitted in accordance with INSTRUCTIONS TO BIDDERS contained in the bidding document as non-compliance to the instructions will lead to disqualification and rejection of the proposal. 5. Interested eligible bidder should collect tender documents at the address below on payment of a non-refundable fee of MK5, 000.00 in cash or bank certified cheque. 6. Bids in sealed envelopes clearly marked PROPOSAL FOR EXTERNAL AUDIT OF MARDEF AND YEDF in bold letters, must be delivered to the address below and deposited into the Tender Box bidders and/or their representatives on or before 14:00 hours (2:00pm) Friday, 6th May, 2013. Electronic submission of the Proposal document will not be acceptable. Any proposal received after the stipulated date and time will be considered late and will be rejected. The Chairman Internal Procurement Committee Malawi Rural Development Fund Area 6/160 P.O Box 779 LILONGWE

INVITATION FOR BIDS

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The Registrar of Financial Institutions wishes to inform the general public that as at 31st March 2013, the list of licensed capital market players is as follows: 1 2 Stock Exchange 1. Malawi Stock Exchange Portfolio Managers & Investment Advisers 1. Alliance Capital Limited 2. CDH Asset Management Limited 3. First Merchant Bank Limited 4. INDETrust Limited 5. NBM Capital Markets Limited 6. NICO Asset Managers Limited 7. Old Mutual Investments Group Limited Brokers 1. African Alliance Securities Limited 2. CDH Capital Limited 3. FDH Stockbrokers Limited 4. Stockbrokers Malawi Limited Investment Advisers 1. FDH Holdings Limited Collective Investment Schemes 1. National Investment Trust Limited 2. Old Mutual Unit Trust Company (Malawi) Limited

3.

BLANTYRE SYNOD HEALTH & DEVELOPMENT COMMISSION

4 5

VACANCY ANNOUNCEMENT
Blantyre Synod Health & Development Commission is a development arm of the CCAP Blantyre Synod. Applications are invited from suitably qualified persons to fill the following position: Production Manager ( Domasi Likuni Phala Production Unit in Zomba) The successful candidate will report to the Programme Coordinator. He will be required to live near or within Domasi Mission Campus. This is not negotiable. Responsibilities * Supervising factory workers in all Production stages of fortified Likuni Phala and cream of maize flour * Planning and implementing production capacity for each month * Maintaining production at high quality level * Ensuring that production machinery are in good working order at all times * Preparing monthly reports of production and staff welfare * Performing any other duties as may be advised by the Programme Coordinator. Qualifications * Possess at least a Diploma in Food Processing or certificate in Food Processing with 3 years work experience * Must have adequate knowledge in milling industry * Willing to work odd hours to meet production targets * Must be a committed Christian * Should be aged between 30- 40 years. Interested persons should submit their applications inclosing an updated Curriculum Vitae with three traceable referees to; The Human Resources and Administration Manager Blantyre Synod Health & Development Commission P. O. Box 413 Blantyre Not later than 16th April,2013.

All licensed entities are required to display prominently a valid licence on their premises and clients are expected to check that they are dealing with a licensed entity. Members of the general public are cautioned not to deal with any entity not listed above. The Registrar therefore wishes to appeal to anybody with information on any person or firm that is not on the above list and is conducting business without the necessary licence, to communicate through the following address: The Director, Microfinance and Capital Markets Supervision Reserve Bank of Malawi P. O. Box 565 BLANTYRE Tel: 01 820 299 /01 820 444 /01 770 600 /01 771 600 Fax: 01 830 628/ 01 822 118 /01 774 289 E-mail address: reserve-bank@rbm.mw All communication shall be treated with the strictest confidence.

Charles S R Chuka REGISTRAR OF FINANCIAL INSTITUTIONS 3rd April, 2013

Special pullout WEEKEND NATION 6 APRIL 2013

FEATURES
Emmanuel Muwamba Staff Reporter

death of bingu and rise of joyce banda

alawis politics is characterised by short-lived party coalitions because there are no distinct ideological differences between and among parties. The contemporary history of political alliances in Malawi dates back to the early 1990s. The local political and social groupings joined forces and succeeded in voting out the 30-yearold one-party regime of Kamuzu Banda in 1994. The making, unmaking and remaking of political party coalitions has been a recurrent characteristic of Malawi politics. Some have argued that the limited opportunities outside State House, the absence of a dominant party in an ethnically divided country and the rapid fragmentation of the party system have made it obligatory for parties to coalesce to access or maintain power. In 2011, a year before president Bingu wa Mutharika died, at least, 15 political parties held talks and to some extent agreed to form a coalition and field one presidential candidate against the then ruling Democratic Progressive Party (DPP) in 2014. The parties accused Mutharika of trying to sideline and isolate his vice-president Joyce Banda. He expelled her from the party in 2010 for refusing to endorse Peter Mutharika, his brother, as its torch bearer during the 2014 presidential election. Mutharika also expelled the British High Commissioner Cochrane-Dyet in 2011 following a leaked cable which described him (Mutharika) as arrogant and autocratic. On July 20 2011, nationwide protests occurred, sparked by worsening fuel shortages, rising prices and high unemployment.

MCP president John Tembo and former UDF leader Bakili Muluzi addressing a joint rally after forming an alliance

Why short-lived coalitions

Malawis Health Ministry confirmed 20 deaths as a result of police using live ammunition to quell protests. Then Mutharika was unapologetic and said he would smoke out all his enemies. This was accompanied by a crack-down on Malawian journalists, human rights activists and lawyers, including the current Justice Minister Ralph Kasambara. Other events that marred his presidency were the activities surrounding the 2011 academic freedom standoff between Mutharika and the University of Malawi lecturers, and the death of engineering student Robert Chasowa. The events above were just some that compelled the 15 political parties to discuss a possibility of forming an alliance that would field one candidate to challenge the DPP . But after the death of Mutharika on April 5 last year, the parties lost direction. Some pulled out from the alliance while others disbanded and joined the Peoples Party (PP) of President Joyce Banda. Political commentator Humphrey Mvula who was among the brains behind the formation of the alliance, said the events after April 7 2012 changed the political terrain because one of the parties, PP , in that loose opposition group was now in government. Some of the opposition parties no longer had incentive to work together, while others joined the party in government, with others opting to go it solo in their self-belief that they are popular enough to wrestle the reins of power at the ballot box in 2014, said Mvula. He also cited inherent pride and greed among the leadership of parties in the country as some of the reasons political parties cannot genuinely work together. None of the leaders would like to play second fiddle or accept a subservient role. Besides, each of the leaders seem convinced that 2014 is the only year there will be a presidential election or the general fear that, the respective leadership may be less relevant beyond 2014, he said. Chancellor College political analyst Joseph Chunga observes that alliances in Malawi are temporal and after achieving their agenda they do not have new ideas to proceed. Commenting on the coalition of the 15 political parties during the reign of Mutharika, Chunga said the parties have nothing to fight against in the absence of Bingu. If the agenda was to fight Bingu, then we would not blame them [that they abandoned the coalition]. In the absence of Bingu, there is nothing. We have seen alliances before. The whole issue is to achieve something, he said. Chunga further noted that most parties in the country have very little in common. He cited the differences in political ideologies. In the absence of that, it makes the coalition shaky. We do not have to expect much from them, he said. The opposition political parties have, however, revived the idea of forming a coalition to unseat PP in 2014. The alliance interim leader George Nnesa confirmed in an interview recently that political parties have resurrected the idea of a coalition because the country lacks direction. But the alliance has suffered a setback as it lost some of the parties that had pledged their support before Mutharika died. Leaders of Congress for Democrats (Code) and Malawi Democratic Party, Ralph Kasambara and Kamlepo Kalua respectively, joined PP while New Republican Party founder Gwanda Chakuamba wants to rejoin his former party, Malawi Congress Party (MCP). The Peoples Transformation (Petra) party also pulled out of the alliance and is contemplating of fielding a presidential candidate in 2014. But major opposition political parties such as the DPP , MCP and United Democratic Front (UDF) have grown cold feet to join the alliance. But the bottom line is that alliances have failed and will fail to hold because of greed among leaders and distinct ideological differences in local political parties. To date, most of these parties can only be identified with specific tribal and elite groups as well as party colours, but not with unique ideology-based policy orientations. Coalitions in Malawi tend not to survive because they are not a policy platform but a strategy by leaders for their political and career advancement. n

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Special pullout WEEKEND NATION 6 APRIL 2013

death of bingu and rise of joyce banda

FEATURES

CSOs give JB honeymoon

ANTHONY KASUNDA Staff Writer

resident Bingu wa Mutharika must have died a bitter man. Not because somebody wronged him, but he died with a perception that the civil society organisations (CSOs) and the media in the country had ganged up against his presidency. From the statement State House released few weeks before Mutharikas sudden death, one would clearly see that the former president felt uncomfortable with CSOs criticisms. The relationship between the State and CSOs was that of a cat and mouse. And rightly put, Mutharikas government was put on the spot by an aggressive civil society. The State House has yet again noted with grave concern the continuing habit by some civil society organisations and sadly, too, media houses to insult the Head of State, His Excellency Ngwazi Professor Bingu wa Mutharika, stated a statement from the State House press office. It added: Deliberate attempts have been made to distort statements and actions by the State President with the intention to misinform the nation, thereby stirring unnecessary panic among Malawians and bring anarchy in this country. Mutharika was ready to use the old laws which some quarters have been agitating for repeal to whip the naughty CSO leaders. He reminded Malawians in the statement that there was a law that forbids insulting the presidency. Section 3 (2) on the Protected Flag, Emblems and Names Act clearly states that: Any person who does any act or utters any words or publishes any writing calculated to or liable to insult or to show disrespect to or with respect to or with reference to the Presidentshall be liable to a fine of 1 000 pounds and to imprisonment for two (2) years. Once again, the State House will no longer stand by and watch His Excellency Ngwazi Professor Bingu wa Mutharika, President of the Republic of Malawi, being ridiculed and insulted, warned

Kwataine: I cannot say CSOs are doing nothing the State House. The statement came when dialogue , which originated from the July 20, 2011 mass demonstration petition, was not making progress as government was unwilling to implement some of the recommendations from the two teams. Centre for Human Rights and Rehabilitation (CHRR) executive director Undule Mwakasungula agrees that there was bad blood between Mutharikas government and CSOs, especially in his last two years in office. It was more of a relationship based on mistrust, says Mwakasungula. At the time, the State House made it clear that it was fed up with the CSOs and media in the country. It became obvious that Mutharika brought unity of convenience among the critics. I dont think we were united but we had a common cause of defending human rights and our democracy, argues Mwakasungula. Even in that common cause, we had differences. Malawi Health Equity Network

Mwakasungula: I dont think we were united But after Banda took office as the third multiparty President, the public started expressing dissatisfaction with the way CSOs discharged its mandate as watchdog to government. Some observers argue that CSO leaders have been silenced by lucrative jobs and positions that President Banda gave them in statutory corporation boards. It became apparent that the aggression and the zeal which NGOs showed towards the Mutharika administration was no longer there even when Malawians were complaining about deteriorating economic situation in the country, resulting from the devaluation of the kwacha. Observes Kwataine: I would say there has been less than expected force and voice from most CSOs. But that is not enough to cause us to conclude that CSOs are not doing anything. There is space for engagement between government and civil society unlike in the era after 2009. But she agrees that the general public expects more from the CSOs although Malawians

(Mhen) executive director Martha Kwataine shares Mwakasungulas views that CSOs stood firm against shortage of fuel that caused unnecessary deaths in hospitals. Asked if there was unity among CSOs to fight Mutharika, Kwataine says: Not entirely, we saw other CSO members pulling out of the mother bodies and [creating] parallel CSOs to speak against mainstream CSOs. There shall always be diversity in views and that is a welcome development in democracy and that is what encourages growth. The perceived unity among the CSOs was also apparent immediately after Mutharikas death when officials from the then ruling Democratic Progressive Party (DPP) and government were delaying to hand over power to the then Vice-President Joyce Banda. CSOs came out strongly to press the DPP administration to follow the Constitution by allowing Banda to be sworn in as President following rumours that there were plans to block her presidency.

should understand that activists sacrificed a lot when they fought the Mutharikas undemocratic rule. There is still more work for CSOs. New challenges have emerged and we are working very hard to ensure that we remain united. We are not necessarily disintegrated as people allege, she says. On the observation that the CSOs have become softer toward the Joyce Banda administration, Kwataine argues that Malawians have to learn to differentiate between entitlements and privileges. She said appointments in boards had nothing to do with scones. This is normal not only for Malawi but for several other countries where inclusivity of professionals from diverse fields is encouraged for the public good. I cannot speak for others but the truth is it depends on ones integrity and honesty. It is for the Malawians to judge who has eaten scones or not as long as they say that without malice, envy or ill intentions, she says. Mwakasungula says it was sad that Mutharika died before addressing some of the challenges the country was going through although Joyce Bandas ascendancy seemed to have offered hope to the country. I dont believe civil society has disintegrated. I think its struggling in repositioning. But at the same time, people are looking and waiting for the same civil society to champion national issues, he says. Despite the general observation that the civil society has been lenient with the present government, Consumers Association of Malawi (Cama) can be singled out to have refused to remain quiet. Unfortunately, as was the case before, this has led to its executive director John Kapito being put on the spot by those that do not like his criticism of the government. When all is said and done, Malawians are the best judges as the President and her government serve the same society that the non- governmental organisations are servants to. n

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Special pullout WEEKEND NATION 6 APRIL 2013

death of bingu and rise of joyce banda

features

Bandas economic reforms in perspective

Soon after taking over office, President Joyce Banda introduced economic reforms to end fuel, foreign exchange shortages and rising inflation that were crippling the countrys economy. But how have the reforms affected Malawians and is there hope that Malawi will recover any time soon? Our Reporter INNOCENT HELEMA writes about this and other issues:
industry have borne the brunt of the Joyce Bandas economic reforms. Knight Frank, in its 2013 Africa Report, released recently says the reduced level of industrial activity and weak demand for industrial property in the country is leading to stagnation in rental levels and property values. Knight Frank argues that the devaluation of the kwacha has negatively affected office development and triggered landlords demand for rental increases, especially rents not linked to the dollar. The construction of Gateway Mall in Lilongwe, according to the report, was delayed by the recent economic uncertainty. Justice Property managing director Allen Justine recently said people are failing to buy property due to the devaluation and prohibitive interest rates. Commenting on the economic situation in the country, Economics Association of Malawi (Ecama) executive director Nelson Mkandawire said governments economic reforms have hit hard the middle class. He was, however, optimistic that soon the pain will be over and the economy will be back on track. The middle class has been bruised by the economic reforms because the cushioning measures were meant for the poor. It is our hope that government will come up with budgets and policies that are all inclusive and do not necessarily target a particular group., said Mkandawire. All in all, the rising fuel prices, the fall of the kwacha, the scarcity of maize, rising interest rates and run away inflation have certainly caused a lot of misery to many Malawians. Looking at the trend in the indicators, it is doubtful that government will achieve a single digit inflation, ensure food security to all, and achieve a three- month import cover by December 2013. n

Maize scarcity characterised one year of President Joyce Bandas administration billion as emergency budget support, European Union disbursed K17.5 billion and K15.4 billion came from the United Kingdoms Department for International Development (DfID), among other donors. In May 2012, government devalued the kwacha by a whopping 49 percent and subsequently floated it in pursuance of a fully liberalised exchange rate regime. The adopted regime was meant to stabilise the local currency and ensure that supply matches demand and therefore improve forex availability. To date, the kwacha has nosedived by over 150 percent to a dollar from around K165 to about K415. Surprisingly, official foreign exchange reserves remain anaemic, below one month import cover. In the wake of the devaluation, the Reserve Bank of Malawi (RBM) also raised the base lending rate to 16 percent from 13 percent as part of measures to reduce the inflationary pressure resulting from the newly-adopted liberalised exchange rate regime. Consequently, the average commercial bank base lending rate shot to 22.83 percent from 17.75 percent. Later in July 2012, RBM raised the rate to 21 percent and in December, it went up again to 25 percent, causing an automatic rise in commercial lending interest rates to an average 31.42 percent. As at now, due to illiquid money market and government heavy domestic borrowing, the commercial interest rates have gone up to around 40 percent. Mid last year, government boldly adopted an automatic pricing mechanism (APM) on fuel so that its price reflects real price of the product on international market. Since then, fuel availability has improved but its price has shot through the roof, making it too expensive and unaffordable to many. Since April 2012, petrol has risen by over 88 percent from K380 to K714.90; diesel has shot up by 92 percent from K360 to K693.60 while industrial paraffin has risen by a whopping 259 percent from K171 to K613.9 per litre. Food, which account for 50.2 percent in the Consumer Price Index (CPI)a tool that examines the weighted average prices of consumer goods and services, has generally been is short supply in the country. The price of maize, Malawis staple food, has not only gone up but the grain was also scarce, especially during the lean season period between November and March, pushing up the price of a 50-kilogramme bag of maize to K10 000. This is far above government minimum monthly wage of K8 500. As a result of rise in fuel prices, scarcity of maize, prohibitive interest rates and the kwacha going in the wrong direction, inflation worsened in the last 12 months. Since April 2012, inflation has risen by over 200 percent from 12.4 percent to 37.9 percent in February 2013. Generally, consumers and

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he Joyce Banda administration came up with the Economic Recovery Plan (ERP) to fix the ailing economy it inherited from the Democratic Progressive Party (DPP) government after the death of Bingu wa Mutharika on April 5 2012.Officially launched in September, ERP identifies areas of intervention in immediate, short and medium-term. The plan seeks to achieve, among others, a three-month import cover, single digit inflation, an annual gross domestic product (GDP) growth rate of 5.7 percent and 100 percent household food security. The set goals are expected to be achieved by December 2013.To restore donor confidence, the PP administration worked hard to conclude a new Extended Credit Facility (ECF) with the International Monetary Fund (IMF). This was expected to trigger balance of payments and budget support from other bilateral and multilateral partners. The US also lifted its suspension of the energy Millennium Challenge Compact (MCC). In his mid-term budget review speech, Finance Minister Ken Lipenga said Malawi had received about K104 billion by mid this fiscal year. The World Bank disbursed over K13.7 billion, African Development Bank released K10.7 billion, United Kingdom released K10.3