20110820
Reuters
BLANTYRE (Reuters) - Malawian President Bingu wa Mutharika, facing a public outcry over his administration, has dissolved his cabinet, a state-owned radio reported on Friday.

No reason was given for the dissolution, the Malawi Broadcasting Corporation said. It was not immediately known when a new cabinet will be announced.

Economists have argued that the cabinet of 42 ministers, including their deputies, was bloated and needed to be trimmed to cut government spending.

Protesters last month staged unprecedented rallies against the president that killed 19 people at a time when tensions were rising between the president and foreign aid donors, costing the country close to $1 billion in aid funding.

Civil society groups want the president to declare his wealth, solve dollar and fuel shortages that have hit the economy and restore diplomatic relations with former colonial ruler and major aid donor Britain.

The rights groups have for now agreed to United Nations-facilitated mediation. But they promised more protests if the president did not address the chronic poverty and fuel shortages affecting most of the southern African country's 13 million people.

Britain suspended aid after Malawi expelled its ambassador during a row with Mutharika, a former World Bank economist.

The aid freeze has left a yawning hole in the budget of a country reliant on handouts for 40 percent of its revenues, and intensified a dollar shortage that this week saw the government devalue its kwacha currency by 10 percent to 165 against the U.S. dollar.