When you took office in April 2012, Malawi was in economic turmoil, with donors withholding financial support and weakened diplomatic ties. You started to work immediately on it and established economic reforms, devaluated the kwacha and reestablished diplomatic relations. Please discuss the need of devaluating the kwacha and the signs of improvement your policies are starting to show nowadays.
It is better for me to start from the point where I was Vice President. As Vice President I saw the corruption, the flaws and the mismanagement of the economy, questioned the leadership and ended up being sidelined completely. So for a year and a half or two years, I was not even invited to cabinet meetings. I was not associated with what was going on. But I helplessly stood by and watched our economy collapse. By the time I took office, under such very strange circumstances, it was obvious that I was going to have a huge journey to repair the damage.
This is a country where 40% of its economy depends on donors. This is one of the poorest countries in the world. The last thing that this country needs is any leadership that comes in and exploits and robs it, through corruption and theft. So by the time I came in, we were off track, and we had antagonized our donors. Most of them had left. We as a nation were stubborn. Tobacco prices were the main foreign exchange earner for Malawi, and prices were at their lowest because we had also chased most of the tobacco buyers.
The previous leader did all those things, which ended up having a negative effect on our economy. As Vice President I was not functional, and from one day to another, I was Head of State. I did not even know what the files said. Mind you, this is a job that has no handover. Even when you become a cabinet minister, you are appointed and when you get there, you must learn how to swim. That is exactly what happened to me.
There was no forex, and as a result of that, we did not have fuel in our filling stations or drugs in our hospitals. We were off track with the IMF, and the President had refused to devalue the kwacha for three years. If he had done that from 2009, it would have meant that it would have devalued by 10% per year, which would not have had the same impact on the poor as it did. Suddenly we had to devalue the kwacha by almost 50%. Obviously we had to very quickly put in place an economic recovery plan, but firstly we had to see how we were going to cushion that shock, especially for the poor.
So we went back to the IMF and the World Bank and asked for resources to provide money for us to introduce and establish social programs that would ease the pain on the poor, such as public works, cash transfer programs and school feeding programs. As if all this was not enough, we also had a bad growing season because of climate change, so 2 million people were faced with hunger. As I speak, that is now the situation here in Malawi.
We had to address all that through special social programs. But it was also important for me to bring everyone on board – not just the private sector – but the whole nation as well. I found a nation that was angry and frustrated. By the time the President died, he had been given 60 days to call for a referendum or resign. Twenty people had been shot dead on the streets. It was a nation whose economy was destroyed, but also, people were really frustrated and facing hunger. I had been castigated and scandalized for two years, so I had to run by example by forgiving everybody and bringing everyone on board, and together move forward to recover our economy.
I would like to say that after a year of that work, the situation now looks better. Inflation that had gone haywire has now gone down to 27% and our interest rates have gone down to 35%. The private sector is now operating full-scale. People were being laid off when I came in, and lines were at the filling stations, but now I must say that the situation has changed. We had to take necessary steps, but I must say that they have paid off.
The economic reforms you introduced have the support of the IMF and the World Bank. What does this say about their confidence in your government and in Malawi?
I have been accused by everybody, especially those who want to come into the State House. They say, “she is a puppet of the donors and of the West and the IMF”. So I insist on saying that the reforms we had to pass and the fact that as a nation we decided to get back on track with the IMF was a decision that both Malawi and I have made together. It was not dictated to us, but we did not even have a choice. I had very clear in my mind that this was the route that we had to take to get to a better place.
I must say that at the end of it all, going back to the IMF and working with them step-by-step to get back on track is what has also shown that I am willing to work with the West and make sacrifices for the sake of my country.
I also want to say that I feel that when a country reaches a point where we are, you must be the first to show that you can make sacrifices. You must be exemplary, so governance is very critical. You cannot afford to compromise your own agenda. For example, in my case, I must make sure that I make sacrifices, and that I am not seen as wanting to take advantage of this position. What has become very clear is that Malawians are looking for homegrown leadership.
Not just in Malawi; it is also the case across Africa. You will find that what people want to see is a leader who puts them first, and a leader who does not think about himself. I have spent 30 years of my adult life at the grassroots level with the ordinary people, and I can see that genuine leadership is a love affair. You fall in love with the people, and the people must fall in love with you. It is not about what you can benefit from the State House – it is about what you can give to the people, and how you can make their lives better.
People are not stupid, including the donors, the Western world and the IMF. They know when a leader is genuine. In my particular case, I came into this office and the first thing I did was give up one third of my salary to people with disabilities. Every month, one third of my salary is automatically given to the poor. I also reduced my convoy. Other people can say whatever they want, but genuinely, the West can look and see when a leader is genuine. That is what has helped build the confidence in us.
You have also voiced your commitment to eradicating poverty through economic growth. This will mainly be done through the Economic Recovery Plan that has identified five key economic sectors to bring short to medium-term forex incomes. What are the main goals and challenges of the Economic Recovery Plan (ERP)?
Our primary agenda as a nation, as country and as government is poverty eradication, via economic growth and job creation. In order to achieve this, when I came into office I organized a national dialogue on the economy. We did not just invite Malawians from the private sector and stakeholders, we also invited the international community to come and sit with us. Not donors, but the private sector, we invited distinguished people in the financial sector around the world to sit with us and look through the Economic Recovery Plan. After looking at the time I had (just 24 months), although we had a Malawi Growth and Development Strategy, I believed that we needed to focus on five sectors in the time remaining, namely infrastructure, tourism, energy, mining and agriculture.
Secondly, we can easily show how people’s lives have changed. We can easily demonstrate that the private sector is now operating full-scale. These are some of the benefits of implementing the ERP. In addition to this, we have ongoing social programs. The public works will be starting soon. Those are some of the programs that we put in place so that as we pass through this difficult time, people do not feel the pain that much.
The second tier is improving the lives of ordinary people at the grassroots level, as part of poverty eradication. In this regard, I am talking about the Village Transformation Initiative. The three Presidential Initiatives we have set will move side by side, and include Maternal Health and Safe Motherhood, Poverty and Hunger Reduction and the Village Transformation Initiative.
The Maternal Health and Safe Motherhood program has been operating for over a year and a half, and we are beginning to yield results already. When I first came in, 675 women were dying giving birth. We introduced initiatives where we engage the local leadership (the chiefs) and ordinary people. The chiefs encourage all women in the village to go and deliver in the clinic, and they establish their own by-laws to ensure that those who do not are punished. This way we have reduced maternal mortality from 675 per 100,000 to 460.
My aim now is to use the same local leaders, who are custodians of our tradition and culture, to fight school dropouts, because they can also insist that every girl child in the village has to go to school. They can also encourage women to eat better and change the customs and cultures that affect pregnant women. There is so much that can happen around that initiative.
The second initiative concerns poverty and hunger reduction. We are working with a foundation to grow cash crops. I have worked at the grassroots level for 30 years, and I believe it is about income. When you go out in the village and you find that a woman has 10 children and you ask her to stop having more, they will tell you that you have wealth, and I have children.
When you go into a hospital and you find young girls between the ages of 15 and 19 dying giving birth, they are not going to secondary school because they cannot afford the $50. So unless there is income going into that household, the girls will continue to drop out of school, and they will continue to get married early and die. If you do not address the issue of household income and families who view children as wealth, they will continue having children, so the issue of overpopulation will be a very serious problem.
We established a one-stop destination, where women who are being abused can go. The last time I went there to open the place, I found a woman with an 18-year old child, being raped by her father every day. This woman did not even report it to the police.
The neighbor did that. I said to this woman “you must be a fool to allow your 18-year child to be raped by your own husband, and not report it to the police”. She looked at me and said: “What do you want me to do?” Unless this woman is in power and has her own means and income, she will continue to stand by as the man in her household abuses her. So for me, we do not even have a choice. The second presidential initiative is where we bring income into the poor households. That is where we are working with former President Clinton.
The third initiative is the Village Transformation Initiative. I think it is unacceptable that us Africans and Malawians, have been independent for 50 years, but our people continue to live in dilapidated houses and villages, and poverty beyond imagination. We must change this. We must provide water, schools, clinics and income and a second crop a year and growing of cash crops – taking a holistic approach for me is about accelerating the development at grassroots level and transforming the lives of people at this level. In our particular case as a nation, that is 85% of Malawians.
Your government is also committed to improving the business climate by introducing new policies as well as implementing infrastructure. When you were in Washington last March, you stated that Malawi aims to be in the top 100 of the World Bank’s Ease of Doing Business Index for 2014. What have been your most notable reforms so far and what response are you receiving from the private sector?
When I came in, I said that we were going to grow our economy through the private sector. For that to happen, we very quickly realized that the situation in the country then, and the incentives that the private sector were receiving were not going to grow our economy the way we wanted it to, unless we did several things. Secondly, we were ranked over 100 on the Ease of Doing Business ranking, because of the laws. We do not know the actual number yet because they are working on it, we have passed about 31 pieces of legislation through parliament (small and major laws) in order to increase our ranking. We have made a lot of progress.
It is imperative for us to look at that and change the situation. Some of the laws are very simple. For example, one of the laws addresses issues where an entrepreneur could not get a license to start construction. It was just a question of removing those barriers. We have made progress, but there is still so much that we need to do. I believe that as far as the private sector is concerned, as Malawians, and as women in particular, we need a lot of sensitization. Malawians are not typical entrepreneurs like in Western Africa. We are not structured as such. Some of us took that route and have benefited.
My own view is that economic empowerment for women through the private sector is a tool for them to gain social and political empowerment as well. It is not as if we have a choice. We need to support the private sector and opportunities here. It starts with me, the leader, which is what was difficult hitherto. I have never been able to understand why. I think we have reached a stage where the private sector must be a partner. It is the engine for growth in any case.
U.S.-Malawi relations go back to the 1960s with the arrival of the Peace Corps. Malawi has been a benefactor of U.S. development aid through the Millennium Challenge Corporation, USAID and other organizations. If economic growth continues in Malawi, the U.S. could become a serious business partner rather than mainly being an aid donor. Please discuss your views on U.S.-Malawi ties, the shift to the U.S. becoming more of a trade and investment partner than aid donator and the strengthening of the relationship since you took office.
Allow me to just dwell on the business side. I feel that America is our largest partner and donor, but I think we could do more as far as business is concerned. I deliberately said that it is time for us to move from aid to trade. The day I met President Obama, I literally presented a petition to him. We had gone out in the morning to meet another official who said, “Well, I hope you do not give a hard time to the President this afternoon.” I decided to ease the pressure; I needed to go with a speech. I read three quarters of my speech and then I abandoned it, because I wanted to speak to President Obama face to face.
I wanted him to understand that I am looking for a partner, and that I see that partner in him. We need to do several things, and President Obama is in a position to help me. I do not want handouts or it to come easily, but I want to get the support in order to support the private sector. The way to do that is via OPEC, USAID, MCC and AGOA. There are public institutions in America that can help us grow our private sector as a nation. We are not looking for handouts; we are moving from aid to trade.
But in order for trade to take place, it must start with President Obama. The way it starts is by encouraging those institutions. All the institutions I am talking about are not here; they do not operate in Malawi. So I believe that through OPEC, they can encourage a lot of private sector companies in America to come and invest here. I said that income is required in poor people’s households, and that can be done through the private sector. Right now as we speak, there are huge quantities of soya beans here, so if an American company comes here and sets up a plant, it means that all that soya will be bought.
That is the kind of partnership I am looking for. I want to grow this economy, create wealth and jobs. I can only create jobs if I get international support.
It breaks my heart that the ability of Malawians to do it is there, but I must turn up every year on the donors’ doors and beg for support. You have to look at me and understand what that does to my dignity; but we do not have a choice – we must do it. But I have said to my international donors that I want that to happen side by side as I get support for our private sector, and encourage them to grow, and stand independent as a nation.
Malawi’s huge investment potential and improving business environment is undeniable. What investment opportunities would you like to highlight to our American audience?
There are three main opportunities that I see in Malawi right now – tourism, agribusiness (value addition of agriculture production) and mining. We did not know that we were that rich – we have just discovered that we have vast natural resources. I want to act like a wise leader and draw lessons from those countries that rushed into mining without looking very closely as to how the mineral wealth would benefit the people of that nation.
In my case, I am wise enough to realize that they have a lifespan. You cannot mine and mine until eternity. In a 20 to 30 year period where you have a mineral resource, how are my people going to benefit? I want Malawians to look back and say that we have had this oil and gas, and this is how we invested the returns wisely.
Therefore, I tell my cabinet that there is no rush. We have to seriously think about this, and have a mining code, which protects Malawians, because at the end of the day, they are the owners of these natural resources.
Forbes magazine has named you the "most powerful woman in Africa" and 47th in the world, and you will also chair the SADC organization this month. How do your life and the positions you hold inspire women in Africa and what does it mean for Malawi?
Things are upside down for me. I did not set out to become President; I set out to help the poor and underprivileged. Coming into the State House is a result of that work. So for me, when they tell me that I am the most powerful woman in Africa, I always feel that it affects me differently than if I had set out to chase it. My hope is that it makes all African women proud. I also hope that younger women see me as a role model, and aim for the same. But for me, this is Joyce Banda, and in a country such as this, women only hold maybe 22% in leadership positions. I am not going to rest until more and more women get into leadership positions.
When I was Gender Minister, I championed the passing of the Domestic Violence Bill. That is how I got into politics. I wanted to go to where the laws were made so I could contribute towards changing laws that had a negative impact on women and children.
When I got there, the first thing I wanted to do was to pass the Domestic Violence Bill. We championed this and we were only 27 women. We did it. I realized then that this world is going to stay the same as far as women’s participation is concerned if we are not there at the policy formulation table. That is why it is very important for us to involve our women and young people in everything we do. For that to happen, women must become economically empowered, so that they can be able to compete equally with their male counterparts.
I therefore must end by asking our donors to help us develop programs that push people into leadership, particularly women into Parliament. If they are not sitting there, things are not going to move. As I am sitting here, the Head of the Civil Service is a woman and the Solicitor General and the Chief Justice are women. It needed a President here first in order to realize that we could get more women sitting around the table, making rules for this nation and running state matters, side by side with our brothers. So Africa must head towards that.
It is all well and good for us to be proud of two female presidents at the AU, but what is going to satisfy us is when we do not even need to count it. When we stop counting, that is when it is going to matter the most.
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