The Development Situation in Malawi - International Development Committee Contents

3  The future: mechanisms for providing aid

Change of Government in Malawi

16. President Mutharika suffered a fatal heart attack on 5 April 2012. The Malawian Constitution states that—upon the death of a sitting President—the Vice-President assumes the Presidency. Given that the Vice-President, Joyce Banda, no longer represented the same party as the President, elements within the DPP sought to prevent her from doing so. Within 48 hours, however, it became clear that such plots would be unsuccessful: on 7 April, a peaceful transition was completed and Banda was sworn in as President.[23]

17. Following her succession to the Presidency, Banda appointed what was essentially a national unity cabinet: it included eight DPP members who had also been Ministers under President Mutharika, together with representatives from a number of other parties.[24] Peter Mutharika, the late President's brother, was relieved of his Cabinet duties.[25] When the new Parliamentary session opened on 18 May, it became apparent the 107 out of 193 MPs were willing to support the new Government, thus giving it a working Parliamentary majority.[26] President Banda has also replaced the Inspector-General of Police, the Head of the State Media and the Reserve Bank Governor, [27] as the previous occupants of these posts were regarded as political appointees.

18. The above developments are to be welcomed insofar as they demonstrate President Banda's commitment to reform. We are nevertheless concerned that some recent developments—since President Banda's ascent to the Presidency—have been unconstitutional. Section 65 of the Malawian constitution states that MPs must resign their seats if they change parties, but this does not appear to have been enforced in respect of those joining President Banda's PP. (We do accept, however, that rigid enforcement of Section 65 could have been destabilising in the circumstances and undermined effective government.) Furthermore, we have received written evidence which claims that President Banda may have strayed beyond her remit by firing certain senior officials.[28] As Mark Miller said to us in his written evidence:

...if the UK government donors want checks and balances to constrain bad presidents, they should also encourage them to constrain good presidents. [29]

19. Following the death of the late President Bingu wa Mutharika, the achievement of a peaceful and constitutional transition of power is a tribute to the people of Malawi. President Banda's early weeks in office have been extremely promising, and she has taken hugely significant steps to reverse the damaging policies of her predecessor. We note that some recent developments—since President Banda assumed office—have themselves been unconstitutional: it is important that the Government of Malawi continues to operate within the broad framework of the constitution.

New Government's attempts to resolve the economic crisis

20. The new Malawian Government has moved quickly to reverse the damaging economic policies pursued by its predecessor. The Reserve Bank of Malawi (RBM) has devalued the Malawian kwacha by almost 50%, and has switched to a floating exchange rate.[30] In her State of the Nation address on 18 May, President Banda stressed that this was part of her strategy to resolve the shortage of foreign exchange. Her Government's immediate aim is to ensure availability of sufficient foreign exchange reserves to meet three months' import requirements; in the medium-term, it aims to have sufficient reserves for six months' import requirements.[31]

New Government's attempts to resolve the political crisis

21. The new Malawian Government has also taken steps to reverse the drift towards autocracy. It has, for example, indicated its intention to repeal the laws which the previous Government left under Law Commission review, such as those allowing the Minister of Information to ban publications and allowing the police to search properties without a warrant.[32] Further indications of the new Government's intention to restore civil liberties are as follows:

  • intention to bring the inquiry into the shootings of 20 July 2011 to a "conclusive end" (this inquiry had already been launched under the Mutharika administration), and to launch several additional inquiries: into the deaths of various individuals in police custody, and into the death of Robert Chasowa, a political activist widely believed to have been murdered, and
  • intention for the Malawi Broadcasting Corporation to act as a "public broadcaster" rather than a "mouth-piece of a ruling party."[33]

Implications for DFID's delivery of aid

22. Following the change of Government in Malawi in April 2012, DFID told us that it had agreed to release £10 million of sector budget support for Malawi's health sector, together with a further £20 million of assistance of which details were "still being finalised."[34] (This was not 'new' funding, but an earlier-than-planned disbursement of already-allocated funds.[35]) In addition, the Secretary of State told us that the Bank of England had agreed to provide technical assistance to the Reserve Bank of Malawi.[36]

23. We welcome DFID's swift disbursement of funds for Malawi's health sector. Clearly the change of Government in Malawi enabled the UK to respond more quickly than it would otherwise have done.

24. Subsequent to its announcement of this funding, in late May 2012, DFID re-launched its Operational Plan for Malawi. (This plan is aligned with the Malawian Government's 'Malawi Growth and Development Strategy II' or 'MGDS II,' which was agreed by the new Government recently.) The Operational Plan states that DFID will "narrow its focus", since—compared to other donors—it has a low ratio of staff to programmes in Malawi. It sets out a proposed 'division of labour' between donors, with:

  • DFID leading on health and education;
  • the US and the Global Fund for AIDS, TB and Malaria leading on malaria, and
  • multilateral agencies (e.g. World Bank, EU) leading on infrastructure.

25. DFID also states in its Operational Plan that:

  • It will "consider whether general budget support should be resumed through the Common Approach to Budget Support (CABS) process." (The Secretary of State told us that he hoped to reinstate general budget support before the end of 2012.)
  • For health, HIV and education it intends to use sector budget support.[37] (As stated above, sector budget support remained in place throughout the period of crisis.)

26. Given DFID's status as Malawi's largest bilateral donor, whatever decision it takes on general budget support is likely to have a catalytic effect—other donors are likely to follow suit. The Secretary of State told us that he had held discussions with a number of donors, including the Government of Germany, the EU, the IMF and the World Bank.[38] In his Budget address of 8 June, the Malawian Minister of Finance—Dr Ken Lipenga—announced that the IMF had agreed to resume support and the World Bank was proposing to provide $150 million of additional funding.[39]

27. Subject to the continuing progress of economic reforms in Malawi, we urge DFID to reinstate general budget support. In view of President Banda's commitment to reform, general budget support is likely to be the most effective way of providing support to Malawi. It is important to avoid continuing uncertainty, especially given that other donors are likely to follow DFID's lead. DFID currently expects to make a decision by the end of 2012, but we would urge it to make its decision as soon as possible.

28. If general budget support is reinstated, it will be important to minimise the risk of it being suspended again. One way of doing this would be to support the strengthening of Malawi's democratic institutions. There is no guarantee that future presidents will share President Banda's respect for democracy, so it is important that presidential power is subject to appropriate checks and balances.[40] The Secretary of State assured us that DFID is willing to respond to any requests from the Government of Malawi for assistance with this.[41]

29. We welcome DFID's willingness to assist with the strengthening of democratic institutions in Malawi. If general budget support is reinstated, DFID's work to strengthen democratic institutions may help to minimise the risk of it being suspended again.

23   "Malawi's Joyce Banda puts women's rights at centre of new presidency", The Guardian, 30 April 2012, p 14 ; Ev 28; Ev w18 Back

24   Ev 29 Back

25   "Malawi President Banda sacks rival Peter Mutharika", BBC News Online, 27 April 2012, Back

26   "DPP 'tsunami' in Parliament, PP in majority", Nyasa Times Online, 18 May 2012,  Back

27   Ev 29 Back

28   Ev w45; "JB faulted on appointments", The Daily Times Online, 16 April 2012,  Back

29   Ev w45 Back

30   Ev 28 Back

31   State of the Nation address by Her Excellency Mrs Joyce Banda, President of the Republic of Malawi, 18 May 2012 Back

32   Malawi's political settlement in crisis, 2011, Africa power and politics background paper (Diana Cammack), November 2011,; State of the Nation address by Her Excellency Mrs Joyce Banda, President of the Republic of Malawi, 18 May 2012 Back

33   State of the Nation address by Her Excellency Mrs Joyce Banda, President of the Republic of Malawi, 18 May 2012 Back

34   Ev 28-9 Back

35   "Britain stands by Malawi", DFID press release, 12 May2011 Back

36   Q 33 Back

37   DFID Malawi, Operational Plan 2011-2015 (refreshed May 2012) Back

38   Q 33, Q 46 Back

39   2012/13 Budget Statement, delivered in the National Assembly of the Republic of Malawi, 8 June 2012. Back

40   Ev w45 Back

41   Q 44 Back

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© Parliamentary copyright 2012
Prepared 24 July 2012