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Decision expected to help southern African nation overcome shortage of foreign currency needed to import fuel.
People expect new president to create jobs and attract foreign investment.
Former vice-president takes over as leader, following the death in office of President Bingu wa Mutharika two days ago.
Banda was ousted from ruling party but retained her position as VP of Malawi, making her leader after president's death.
No official word yet on successor as state radio confirms Bingu wa Mutharika's passing, after reported heart attack.
Medical sources say Bingu wa Mutharika suffered fatal heart attack, though 78-year-old's death not officially announced.
Bingu wa Mutharika asks supporters to "step in and defend" him as he struggles with aid freeze and opposition pressure.
Recent protests across Malawi saw 19 people killed, but the government has blamed the victims for their deaths.
Leaders of anti-government protests say Bingu wa Mutharika has until August 16 to address their grievances.
Mutharika accused opposition leaders for the deaths of at least 18 anti-government demonstrators.
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Featured on Al Jazeera
Italy struggles to deal with growing flood of migrants willing to risk their lives to reach the nearest European shores.
Israel's Operation Protective Edge is the third major offensive on the Gaza Strip in six years.
Muslims and Arabs in the US say they face discrimination in many areas of life, 13 years after the 9/11 attacks.
At one UN site alone, approximately four children below the age of five are dying each day.
 
 
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