There was jubilation and ululation on the streets of Malawi’s capital Lilongwe when news broke out that President Bingu wa Mutharika had died following a heart attack in his office. This was in April 2012, three years into his second term of office. Many blamed him for turning his back on 18 years of democracy in a country fondly described as the ‘Warm Heart of Africa’. Mutharika had come to power in 2004 and presided over a seven-year economic boom – underpinned by a successful fertilizer subsidy programme and increased foreign aid – that had given Malawi one of the world’s fastest-growing economies.

The boom ended in 2011 after Mutharika squabbled with Britain – the former colonial power (independence came in 1964) and the country’s biggest aid donor. This led to tit-for-tat diplomatic expulsions and the freezing of aid; which, aside from agriculture exports, is the country’s key driver. The cause of the row was a leaked diplomatic assessment that labelled Mutharika ‘autocratic and intolerant of criticism’. What followed was an acute dollar crunch that hampered imports of fuel and medicines.

The economic plight worsened in July 2011 when the US suspended a $350-million grant to rehabilitate the faltering power grid after police killed 20 people in a crackdown on an unprecedented wave of anti-government protests. So when Mutharika died, many, including donors, had cause to celebrate.Malawians placed all their hopes in Vice-President Joyce Banda – a women’s rights activist and no relation to Hastings Banda, who led the country from independence until 1994 (nor indeed to this reporter). When Joyce Banda was sworn in, she became the first female President in southern Africa and only the second on the continent after Liberia’s Ellen Johnson Sirleaf.

With a groundswell of support, Banda embarked on a range of reforms that her mercurial predecessor had refused to implement. She stopped the kwacha being pegged to the US dollar, triggering a 49-per-cent devaluation, in an attempt to right a sputtering economy. She also announced a 30-per-cent pay cut and that she was selling the fleet of 60 Mercedes limousines used by ministers and the presidential jet bought by Mutharika when he was chair of the African Union. The good news is that measures such as these have managed to restore aid flows.

The bad news, however, is that her popularity is waning as food and commodity prices soar – inflation reached 38 per cent in February. The latest data focusing on the cost of living in urban Malawi says that a family of six now needs an average of $200 per month to meet basic food demands – bad news in a country where the minimum monthly wage is about $20. Backed by the IMF, Banda is optimistic that the country is at a tipping point, that inflation will soon start dropping and prompt the central bank to revisit the base lending rate. There are, however, unlikely to be any quick fixes for Malawi’s economy and this is Banda’s achilles heel as she gears up for an election in May 2014. Her party is in a minority in government and this may weaken her resolve to continue with the new reform agenda.

In such circumstances it is hardly surprising that Banda has in recent months refused to increase the price of fuel. She faces another challenge in the dispute between Malawi and Tanzania over the ownership of Lake Malawi. This may threaten peace, regional integration and trade if it remains unresolved. In a country where gender inequality is high and many cultural attitudes are entrenched, it remains to be seen how far Banda can go.

Fact file

Leader	President Joyce Banda.
Economy	GNI per capita $360 (Zambia $1,160, UK $37,780).
Monetary unit	Kwacha. Last year the currency peg to the US dollar was scrapped, which resulted in a devaluation of 49%.
Main exports	Tobacco, sugar, tea, coffee. Tobacco accounts for over 60% of exports and 15% of GDP. However, earnings from it have dropped by 80% in recent years because of poor prices affected by the global anti-smoking lobby and by poor leaf quality.
People	14.9 million. Annual population growth rate 2010-15 3.2%. The population is youthful with 54% aged 18 years and below. People per square kilometre 126 (UK 253).
Health	Infant mortality 58 deaths per 1,000 live births (Zambia 69, UK 5). Lifetime risk of maternal death 1 in 36 (UK 1 in 4,700). HIV prevalence rate 11%. AIDS has decimated an entire generation of the adult age group and left a million children orphaned in the last 20 years.
Environment	Land degradation resulting from significant loss of soil fertility, soil erosion and deforestation remain Malawi’s biggest challenges.
Culture	Chewa 32%, Lhomwe 18%, Yao 13%, Ngoni 11%, Tumbuka 9%, Tonga 2%, Ngonde 1%, other 14%.
Religion	Christian 83%, Muslim 13%, other 4%.
Language	Chewa is the official language but English is widely used. Other Bantu languages are used by the various ethnic groups.
Human Development Index	Human Development Index: 0.418 – 170th of 186 countries (Zambia 0.448, UK 0.875).

Country ratings in detail

Income distribution	The rich continue to get richer and the poor poorer. This is because of the widespread corruption of the political élite. Some 51% of people still live below the poverty line.
Literacy	63%. The introduction of free primary education some 19 years ago has not changed much on the ground – the policy increased pressure on the sector and the use of unqualified teachers compromised the quality of education.
Life expectancy	54 years (Zambia 49, UK 81). The life expectancy rate has recovered from the terrible AIDS-inflicted low of 39 years a decade ago.
Freedom	The country still has a critical press, an opposition, civil society and a people that speak freely. Though draconian laws still bar people from speaking freely in anger against the President.
Position of women	The gender inequality index is high at 0.573. But political participation by women has increased in the last decade and Banda has appointed many women to positions of influence in the last year. The percentage of women parliamentarians (22.3%) actually exceeds that in the UK (22.1%).
Sexual minorities	Homosexuality is illegal in Malawi and carries a maximum sentence of 14 years in prison.
New Internationalist assessment	After one year in power, Banda and her People’s Party are seeking to win the hearts and minds of the voters ahead of next year’s polls. Desperate to win, Banda, like other leaders before her, has barred the opposition from using state media. She is distributing free maize drawn from reserves for campaign purposes. Whether all this will be enough to overcome unpopularity resulting from her austerity programme, which is hitting poor people hard, is an open question.