To mark the first anniversary of his presidency, Prof Peter Arthur Mutharika, the president of Malawi, granted a wide-ranging interview to our editor at large, Baffour Ankomah in Blantyre. Here are excerpts.
Q: 31 May 2015 was exactly one year since you came into office. Have you enjoyed your first year in power?
A: Yeah, yeah, it has been very challenging, very exciting, I have enjoyed it. We have faced new issues that I never expected. Our society is dynamic, every society in Africa now is dynamic. There are new challenges that come up everyday, every week. So yes, I have very much enjoyed it.
In fact, to tell you honestly, my first year has been a mixed bag. A mixed bag in the sense that when I came into office, Malawi was facing challenges as a result of the plunder of government resources due to a corruption scandal famously called Cashgate, which had led to the withdrawal of budget support by traditional donors.
Secondly, at the time the government was putting in place economic and financial reforms to restore donor confidence at the beginning of this year, the country was hit by devastating floods in 15 of our 28 districts, and there was a state of disaster in those regions. The government, with its limited resources, worked tirelessly to respond to the needs of the affected people. Might I add that we are very grateful for all the international support we received during this period.
However, during the same first year, prices of goods and services became stable. That is very good news. The national currency, the kwacha, is also stable and gaining strength against the major trading currencies. We are also delivering on our key election campaign promises, and the donor community is starting to show interest in the country again. This gives me more confidence and determination, going forward.
Q: You were born in 1940 and lived abroad for 40 years, where you had a wonderful career in both academic and legal fields. What made you come home?
A: First of all, I did not leave Malawi voluntarily. I left during the days of the one-party state after the cabinet crisis between President Kamuzu Banda and his ministers who were very close friends of mine. But I came back in 1993, just after the referendum on reintroducing multiparty democracy. While in exile, I was the legal counsel for the Malawi Action Committee that was pushing for human rights and so forth here.
Anyway, I left again and returned in 1995 and was consulted on the drafting of the new constitution. I then left again and came back during the 2004 election campaign, the election that was won by my brother Bingu [wa Mutharika]. I came back because I wanted to have a feel for the campaign. I stayed for about 6 weeks, and as my brother was having difficulty forming a cabinet, I returned to the US briefly and came back to help him, by serving in his government.
I thought I was going to serve for one year but the people in our area, Thyolo East, wanted me to stand for parliament. I actually resisted doing so for almost 8 months. They approached me in November 2007 and I did not agree until July 2008. At the time I had just received another professorship in international law and I wanted to enjoy it a bit. You know, you have to wait to get those academic chairs. You wait until the occupant retires and if you are lucky you get it. But finally I agreed in July 2008 to run for parliament in the 2009 elections. I took a leave of absence from my work in the US, and I was elected.
So why did I come back home? After contributing a lot abroad in social and economic development, one needs to return home and do the same. It is not only through being a president that you can help the development of your country, but by serving in various fields. I didn’t know how Malawians would welcome me in politics, but slowly the supporters of our party, the Democratic Progressive Party (DPP), felt I could lead them after my brother retires, and this was before he died.
Q: So you were elected MP in 2009 and you served not only as an advisor to your brother, but also in various ministerial positions under his government. Did that prepare you for your current job?
A: Yes, to some extent. But you cannot really prepare for this job, because it is a job without any description. In most cases you apply for a job and they want to see your qualifications, MBA in financial management or MBA in marketing or something. But in this job, as president, there are no qualifications. You just do it!
The important thing about my current job is to understand issues when there are issues, real issues, and then to sift between the issues and non-issues, and find ways of resolving the real issues. I think the long period outside and the experience in the cabinet under my brother, and also my long academic and international career, all combined to prepare me for this job. I felt prepared.
But having said that, nobody can be fully prepared for this job because the things that happen are so many and unpredictable that you try to deal with them as you go along. There is a saying that experience is the best teacher. Politics is dynamic and varies from country to country. I used to dream that one day I was going to be president. Now when you want to succeed in life, you need to familiarise yourself with what you want to be in life. My inclusion in my brother’s cabinet made me understand Malawi’s politics practically. Once or twice in the past, I had been consulted for the democratic constitution of Malawi, but I had little knowledge of the practicality of politics until I became a cabinet minister.
Q: Having been a high profile international lawyer, what is your comment on the 2010 attempt by your late brother to name you as his successor over and above the then Vice President Joyce Banda, which led to tensions in the DPP and the sacking of Mrs Banda from the party, which eventually pushed her to form her own party. That was not one of the highest points in your life, was it?
A: Let me correct you that it is not my late brother who named me to succeed him. Looking at my skills, DPP supporters and the party’s National Governing Council believed I deserved to take over from him. Actually it was going to be the people, during the DPP convention, to choose a leader of their choice. What Bingu did was simply clarify that as a Malawian myself, the constitution allowed me to contest for any seat, whether as an MP or president. It had nothing to do with the relationship between my late brother and myself. This clearly demonstrated that it was not Bingu who wanted me to become president but the people of Malawi. And it happened, as they wanted.
Q: Are you on talking terms with your predecessor, Mrs Joyce Banda?
A: Well, that is an interesting question. But you know the history of this obviously, don’t you? After my brother died in 2012 and Mrs Banda became president, there was a campaign against my family, they seized my properties, vehicles, and I myself was arrested and faced trumped-up charges of treason. So there were no good relations, in fact there were no relations at all between her and myself before the 2014 elections.
But after I won the election, I invited her to the inauguration, and she decided not to come to hand over power to me, which is very unusual. The Sword of State, which is the symbol of power and authority in this country, had to be handed over to me. But she refused to come and hand it to me. Then, again, Malawi was the chairperson of SADC at the time of the 2014 elections. There is a badge that is the symbol of SADC authority that she had to hand over to me, so that I could in turn hand it over to President Mugabe of Zimbabwe who succeeded me. But Mrs Banda refused to give me that badge.
She again refused to attend our 50th independence celebrations last July. In fact a day before the celebrations, she left for South Africa. So there has been that situation, but as I said in my inauguration speech, I hold an olive branch in my hand and I am prepared to work with all the parties in the country and their leaders.
So far Mrs Banda has not reciprocated the gestures extended to her. But who knows the future, if she changes her mind and calls me, I will respond and we can work together. But for now she is going around the world talking about imaginary persecution.
Otherwise, I am on talking terms with all the other opposition leaders. In fact just after I assumed office, I invited all of them to a lunch at the presidential palace. Fifty years after independence, it is time to practise progressive politics. That is why in my inauguration speech I offered a reconciliatory hand to all the opposition leaders who contested for this highest office.
Q: So with Mrs Banda, is it just a matter of sour grapes?
A: I don’t know. I don’t know what it is, but she claims that she is being persecuted. Mrs Banda has not been arrested. She has not been charged with anything. So I don’t know what oppression she is talking about.
Q: You named one of your defeated political opponents, Atupele Muluzi, as a minister in your cabinet. That is not the normal practice in Malawi?
A: My decisions are for the benefit of all Malawians. When I appointed him, the country had just come out of an election campaign that almost divided us on political and regional lines. Fifty years after independence, our politics must be different. Thankfully, Honourable Atupele Muluzi is a competent person to be a minister in my government.
Q: In this year’s State of the Nation Address you said: “The first 50 years of independence were a mixed bag. While we have so far registered a number of successes, we have also not done well in some areas.” Can you expand on this?
A: You know, 50 years of independence is a long time, and people would naturally expect to see the country making progress, for example, building new roads and other infrastructure, which I think we did under President Kamuzu Banda. When we got independence in 1964, there were only about 60 miles of tarmac roads in the country – from Blantyre to Mulanje, which is about 30 miles; then from Blantyre to Zomba, which is 25 miles; and Blantyre to Chileka Airport, which is 5 miles. Now we have over 3,000 miles of tarmac roads. That is progress. We have also established universities.
That is why I said in my 50th independence speech that it was not true that nothing had happened in 50 years, as some people tend to say. We have produced so many university graduates. In 1964, there were maybe 20 university graduates in this country. There are now thousands and thousands. So progress has been made.
There is now better housing. People are even dressing better. Life has become better.
But I am saying we could have done more. And mercifully, that is what we are trying to do now in terms of infrastructure, building better roads and bridges, a better transportation system, improving the hospitals and schools. And this is a real challenge, I must say, because of our limited resources.
Q: The DPP, your party, has been part of the governance structure of the last 50 years. Your brother was in power from 2004 to 2012, wasn’t he?
A: Yes, but I am being honest. For example, if you go around the country, you will be shocked at the pace of development in the last 50 years. However, the DPP government has embarked on many infrastructural developments, including the construction of new roads, a state-of-the-art national stadium, parliament building, new universities, and even a five-star hotel. The first years of the DPP government under my late brother restored faith in ourselves. We proved that Malawi can be the second fastest growing economy in the world, and that it is possible to grow abundant food and have affordable prices. But we can do more if Malawi gets united. The problem of Malawians is that they don’t stop doing politics and concentrate on development. They start election campaigning immediately after an election.
Q: In the same State of the Nation Address, you said: “As a nation we have enough reasons to celebrate the gains that we have achieved in the past 12 months. With the strong foundation we have laid, I can confidently say that the agenda to transform this country is on course.” Can you explain?
A: Sure, sure. What I meant was that during the last 12 months, in fact, let me go back to the 2014 election campaign, if you look at our manifesto, I promised three things: public service reform, community colleges for skills training, and a housing subsidy for cement and iron sheets. I want to see that in 10 years’ time there will be no house in this country roofed with grass or built with mud, they should all be bricks, and cement, and roofed with iron sheets.
So in fulfillment of the campaign promises, we have launched a community colleges programme. There will be a college in each of the 28 districts of the country. So far we have built 11, but by the end of this year we will have a college in each of the 28 districts. By the end of next year or after, we will have one community college in each of the 123 constituencies in the country. This will bring a huge change in skills development because it is difficult to get a university place here. Only 10% of our students go to university, so there are a lot of kids who have nowhere to go. That is why I promised community colleges during the campaign, and we are doing it.
I also promised a housing subsidy of cement and iron sheets for the bottom section of our economy. It is not for everyone but the people at the lower end of the ladder, so they can have decent housing. And we are doing it.
I promised public service reform. And we are doing it. For example, the Presidency has given up some of its powers. You know it is unusual for people to give up their powers, but I have done that. We have already significantly reduced the powers of the Presidency by transferring some departments from the Office of the President and Cabinet (OPC) to relevant ministries. This means the OPC is now focussing on its core functions. We are now reforming the financial sector, the one that led to the Cashgate scandal. After that we will reform the parastatals and the judiciary. These are the things I promised, and we have made progress fulfilling them.
Q: You have also stabilised the economy, haven’t you?
A: Yes, the kwacha has been stabilised since January 2015. When I came to power, the country had an import cover of just 3 weeks. Now we have an import cover of over 5 months. It is the largest in the history of the country. We now have reserves of about $600m in the public system, in the Reserve Bank, and another $300m in the bureaux de change and banks. Almost a billion dollars! This has never happened before in this country. That is why I am saying we have made progress in the last 12 months. Also, for the first time in 6 years we have had an agreement with the IMF. You know, when you get an agreement with the IMF, it is a sign of approval of the policies you are pursuing.
Q: So are your traditional donors happy with the way your government has handled affairs in the first year?
A: I hope so, because a lot of the donors left after the Cashgate scandal. The donors provide about 40% support for our recurrent budget, but in overall terms it is less than that. Anyway, they withdrew their support after the Cashgate scandal. So for the past year, we have run the government without budget support from donors. We had both bilateral and multilateral donors, and the bilaterals have said they will not come back. The Norwegians and Germans have made it clear that they will not come back, but we don’t know about the British yet.
However, the multilaterals are coming back, the African Development Bank has actually given us some money; but I don’t know about the World Bank. The point is that we have run the government for a year without donor support. We have used our domestic resources, and it has not been easy. It has been a challenge. This year’s budget, announced in May, is a zero-aid budget. So yes, we would like the donors to come back.
But I have said publicly to both the African Union and the international community that I want Malawi to be self-sufficient in 5 years’ time. We would not need any donor support after 5 years for our recurrent budget, but we shall continue to need support for the development budget because every nation, including even the US, needs development budget assistance. But for the recurrent budget we want to be self-sufficient in 5 years’ time. To get there, we will need donor support in the interim period. We don’t want to depend on donor support forever. We have been dependent for 50 years now, at some point it has to stop.
Q: Practically, what are you doing to ensure that in 5 years’ time Malawi will not need recurrent budget support?
A: We are doing a number of things, for example, we have cut back on government spending. I have reduced the cabinet by half.
Q: That’s very commendable.
A: Thank you. We now only have 18 ministries. The cabinet is made up of 20 people, including the vice president and myself. So the actual ministries are 18, and the cutback has allowed us to make huge savings.
Q: Are the 18 ministers able to do the work that effectively, 36 ministers used to do?
A: Oh yes. They are doing the work very well. We have a good civil service and they have been able to do the work so far. Nobody has complained that anything has collapsed.
We are still providing good services, whether it is health or whatever. No, the government is functioning normally. No question about it. We have a vibrant civil society here and if the government was not functioning, we would have heard from them.
We have also cut back on travel and restricted ministers to three international trips per financial year. We have reduced domestic travel as well. That alone will save us over 90 billion kwacha in 5 years. If you divide 90 billion by the current exchange rate of 440 kwacha to one US dollar, you get about $204.5m. That is a huge amount of money for us, considering the size of our economy.
Also we are expanding our export base. We have just produced a compendium, the first of its kind in the country, of all the bankable projects in this country, sector by sector, from power, infrastructure – in fact it covers all the eight sectors we have here, and it comes to a grand 123 bankable projects. Already over 50 investors have shown keen interest in the energy sector. On 29 June, Malawi will hold the first-ever national business forum, where over 300 business people from all over the world
will come to Lilongwe. We hope that when we expand the export base, we will earn more foreign reserves to ease the pressure on the economy.
Q: Your vice president is from the private sector, is that right?
A: Yes, our economy is going to be private sector driven, that is why I appointed Honourable Saulous Chilima as my vice president. It is perhaps the first time in Africa, if not the whole world, that a president has appointed a vice president from outside politics, because I believe in the private sector. If we can manufacture and export our products, we will easily overcome the dependency on donors. Others have done it, so we can do it too. I have good plans for Malawi. To transform this country, we need to conduct business unusual.
Q: You expect Malawi’s annual average inflation to drop from 23.8% last year to 16.4% this year. How do you see the economic prospects going forward?
A: If we can achieve macroeconomic stability, we should be on our way. Remember that for three years from 2009 to 2011, Malawi had the second-fastest growing economy in the world after Qatar, and we didn’t have oil as Qatar had and still has. But for those three years, under the government of my late brother, we had a growth rate of 7.8%, the second fastest in the world.
We are not in that league now, but we hope that we can reach a growth rate of 5% this year. Of course, the floods in the early part of the year have affected us negatively, but next year we hope to grow at 6.4%, and in two or three years’ time at about 7.5%. I think it will happen. The economy has the potential to grow and we are doing everything we can to achieve our goals. Our fiscal and monetary policies are aimed at ensuring that annual inflation remains low, stable and within single digits. We are targeting 16.4% inflation in 2015 and 12% by mid 2016. We aim to reduce and eventually eliminate our huge domestic borrowing and balance of payments deficit.
Q: To date, certificates for investments worth $211m have been granted by your government. Are you happy with the level of foreign direct investment into Malawi?
A: I am more hopeful that more investors will come because we have a conducive environment here. We have political stability, and our laws are very conscious of business and protect investments. There are two things investors worry about: protection of investments, and physical security. We have both here. We assure all investors that their investments will not be expropriated, and there will be no creeping taxation. In fact investors will find Malawians a very attractive people. The biggest investment in this country has come from Brazil, $2 billion, which I negotiated when I was at foreign affairs.
Q: And what about markets?
A: Yes, I know that some investors are worried about Malawi’s alleged “small market” of 17 million people, but we are a member of both SADC and COMESA, which combined, constitute a huge market. We shall soon have a Tripartite Agreement involving SADC, COMESA and the East African Community that will make up a market of 60% of Africa. And not only that: we have access to the African Union, we have access to AGOA, and we have access to the European Union through the Everything But Arms Initiative. So it is a huge market, which is available to any investor who comes to Malawi. They will be able to export to all the markets I have mentioned. We have also just completed a countrywide Airborne Geophysical Survey which has shown huge investment opportunities in the mining sector. So there are enough opportunities here for every investor who wants to come.
Q: Talking about investment opportunities reminds me of tobacco, which is a strategic crop for Malawi and a major contributor to your foreign exchange earnings. Through tobacco, you expect to generate about $300m this year for your farmers. You have said your government is aware of the risks posed by the Framework Convention on Tobacco Control and the anti-smoking lobby. But Malawi, like Zimbabwe, will continue to grow tobacco big time. Is that not helping people to kill themselves?
A: No, no, people have the option to smoke or not to smoke. We are not forcing them to smoke, we are just growing tobacco so we don’t have to feel guilty. Tobacco forms about 60% of our foreign exchange earnings. When I was in Washington last year, I talked to all the big US tobacco companies about the Framework Convention on Tobacco Control and the activities of the tobacco lobby. The market is going to go down, no doubt about it; but somebody is always going to smoke, whether it is in Vietnam or China or Taiwan. People have been smoking since time immemorial, even before Jesus Christ walked on this earth. And people will continue to smoke. So there will always be a market, it may be smaller, but it will be there.
What we are trying to do is to diversify our economy from tobacco, by going into mining and other cash crops. We are going to put one million hectares of land under irrigation at Salima near Lake Malawi to grow rice, legumes, sugar cane, and mangoes. We hope that with mining and diversification for other crops, we can reduce our dependence on tobacco.
But I don’t think people will completely stop growing tobacco. I was even told by the US tobacco giant, Philip Morris, that they are coming up with new forms of tobacco because of the danger inherent in smoking. They are also going to increase their research into less dangerous tobacco to ensure that the industry survives. At the moment Malawi is dependent on tobacco, but we are moving away slowly to other areas. We will be okay.