MALAWI President Joyce Banda is seeking to repeal the law which bans homosexuality in her country.
Banda, who assumed the presidency in April, has embarked on a charm offensive to repair relations with key Western donors which were left frayed by her predecessor, Bingu wa Mutharika.
Mutharika died in office in April. Banda, who was vice president, stepped in to serve out his term which ends in 2014.
"Indecency and unnatural acts laws shall be repealed," she said in her first state of the nation address.
But repealing a law requires a parliamentary vote, and it is unclear how much political support Banda would have for sweeping changes in her conservative country.
Malawi faced international condemnation for the conviction and 14-year prison sentences given in 2010 to two men who were arrested after celebrating their engagement. They had been charged with committing "unnatural acts" and "gross indecency".
Mutharika pardoned the couple on "humanitarian grounds only" while insisting they had "committed a crime against our culture, against our religion, and against our laws."
Banda’s speech was welcomed by human rights activists, but they cautioned getting the necessary backing from parliament will not be easy.
"The issue of homosexuality has been a contentious issue," said human rights activist Undule Mwakasungula. "Definitely it will raise controversy in parliament."
Banda said her government wants to normalise relations with "our traditional development partners who were uncomfortable with our bad laws."
Britain has already called for urgent action to prevent a Greece-style financial crisis in Malawi after problems Banda inherited and her recent abrupt currency devaluation left the new government with a gaping hole in its budget.
The 33 percent currency devaluation - although widely recommended by economists - has put huge strain on the treasury, and on many ordinary Malawians, as the price of imported goods has soared.
"Malawi is at a crossroads today and action in three to six months may be too late," said Andrew Mitchell, Britain's Secretary of State for Development.
The UK was among those which suspended direct aid to Malawi last year after Mutharika expelled the country's envoy for publicly criticising him.
Banda conceded that the country needed urgent help.
"We need a lot of support, very quickly - in the region of $500 million," she said, while insisting that the country’s problems would be resolved.
"We have moved quickly. The situation was self-made therefore things can be corrected - and the good thing is that we know what to do.”
Western diplomats have warned of the possibility of economic collapse and a backlash against President Banda, if the situation isn't handled firmly and fast.
"An inflationary spiral is a real threat - if the economy collapses, Banda will lose support and political instability could follow. The cost of rescuing Malawi will be much more expensive than supporting it now," said one diplomat, speaking on condition of anonymity.