LILONGWE (Reuters) - Prominent women's rights campaigner Joyce Banda was sworn in as Malawi's president on Saturday, becoming southern Africa's first female head of state and raising hopes for a fresh start in the small, poor nation after the death of her mercurial predecessor.
Banda, a 61-year-old policeman's daughter who has won international recognition for championing the education of underprivileged girls, had served as vice president under Bingu wa Mutharika, who died on Thursday following a heart attack.
She succeeded him under the terms of the constitution.
Aid-dependent Malawi had slid into economic crisis over the last year as Mutharika, a professorial but temperamental former World Bank economist, squabbled with major western donors who then froze millions of dollars of assistance.
Banda took the oath of office on Saturday in the Chinese-built National Assembly in the capital Lilongwe, as flags flew at half mast in mourning for Mutharika, whose death was only officially announced by Malawi's government on Saturday.
"I want all of us to move into the future with hope and a spirit of unity," Banda, wearing a black, silver and pink robe and headdress, said amid loud applause and singing.
The two-day delay in the official announcement of Mutharika's death had raised worries that there could be a power struggle. Banda was expelled from Mutharika's Democratic Progressive Party (DPP) in 2010 after an argument about the succession, though she retained her state position.
But fears of a political crisis in the landlocked former British colony receded as top officials and the army backed the handover of the presidency to Banda under the constitution.
In a sign that she has support across the political spectrum, opposition leaders called for her to be swiftly sworn in as head of state and some 20 members of the DPP's national governing council also backed her.
Banda said she had already held a "good meeting" with Mutharika's Cabinet.
Malawians, many of whom had viewed Mutharika as a stubborn autocrat, appeared to welcome their first female president.
"We now have a female president, this to me is the greatest day because she is a mother and a mother always takes care of her children," said Alice Pemba, a vendor in Lilongwe.
"She will be able to do a good job and surmount the challenges to work with the IMF and World Bank and win back the donor support which we need," said a local businessman who gave his name only as Tiyazi.
Earlier, Banda appeared at a news conference to dispel fears of a succession struggle and declare 10 days of official mourning for Mutharika, who had been in office since 2004.
"I call upon all Malawians to remain calm and to keep the peace during this time of bereavement," Banda said, flanked by members of the Cabinet, the attorney general and the heads of the army and the police.
"As you can see, the constitution prevails," she said.
Malawi's constitution says the vice president takes over if the president dies, but Mutharika appeared to have been grooming his brother Peter, the foreign minister, as his de facto successor. Peter Mutharika did not attend Banda's swearing-in.
Banda is expected to run the country until elections scheduled for 2014.
DONORS EXPECTED TO RETURN
The streets of the main cities Lilongwe and Blantyre were calm on Saturday, though police guarded strategic locations.
There appeared to be little public sorrow at Mutharika's death. Many of Malawi's 13 million people held him personally responsible for an economic crisis that stemmed ultimately from a diplomatic dispute with former colonial power Britain a year ago.
On news of Mutharika's death, the black market rate of Malawi's kwacha currency dropped from 285/290 kwacha to the dollar to 270/275, with people anticipating more foreign currency coming into the country.
Major donors Britain and the United States had urged a smooth transition respecting the constitution.
In Washington, White House spokesman Tommy Vietor welcomed Banda's swearing in and said the United States looked forward to a strengthened partnership with Malawi.
"By following constitutional procedures for this transition, the government and people of Malawi have reaffirmed their commitment to democratic principles and demonstrated the critical importance of sound democratic institutions," he said.
After clashing with Mutharika over his economic policies and heavy-handed repression of dissent, Britain and others froze aid worth some 40 percent of government spending, fuel supplies dried up and food prices soared.
This led to popular unrest and attacks on Mutharika's economic policies by bodies as diverse as the Roman Catholic Church and the International Monetary Fund.
"It's sad that he is leaving behind so many unsolved problems," said Stella Mataka, a waiter at a lodge near Blantyre's Chileka International airport.
As reports of the death of the self-styled "economist in chief" swept the capital, there were bursts of drunken jubilation among those who accused Mutharika of turning back the clock on 18 years of democracy in the "Warm Heart of Africa."
Medical sources said Mutharika's body was flown to South Africa because Malawi's energy crisis was so severe the Lilongwe state hospital would have been unable to conduct a proper autopsy or even keep his body refrigerated.
Banda said the government would announce details of the return of Mutharika's body from South Africa and arrangements for the funeral.
(Additional reporting by Jon Herskovitz and Frank Phiri in Blantyre, Sherilee Lakmidas in Johannesburg, and Laura MacInnis in Washington; Writing by Pascal Fletcher and Ed Cropley; Editing by Andrew Roche and Doina Chiacu)