However, she remains part of cabinet as the constitution states that the President, his deputies and ministers shall constitute cabinet.
It is not yet clear why he left her out, but analysts believe that this is the latest fall-out in what has been a factitious relationship that culminated in violent street demonstrations on July 20-21 this year.
University of Malawi constituent college Associate Law Professor, Edge Kanyongolo, said omitting Banda from the list of cabinet members appointed last Wednesday did not mean she had lost her place in government.
President Mutharika announced a 32-member cabinet two weeks after the dissolution of the previous one.
The other one had 42 members, which activists had long said was too much and placed a burden on taxpayers.
President Mutharika’s trimming could stem from the drying up of budgetary support from the West.
The West stopped giving Malawi money after President Mutharika expelled Britain’s Ambassador in Lilongwe for disrespecting his government.
The UK in turn expelled Malawi’s top envoy in London and thereafter cut off support.
President Mutharika subsequently said Malawi would not beg for support and would realign its priorities to meet the changed circumstances.
President Mutharika has had sour working relationships with his two deputies since he came into power in 2004.
In his first term, he accused his then deputy – Dr Cassim Chilumpha – of plotting to assassinate him. Current VP Banda is accused of forming parallel structures and plotting to stage a coup de tat during the July demonstrations.
A criticism President Mutharika faces, and which was one of the protestors’ grievances, is that the state pays his wife a US$6 000 monthly salary for the charity work she does as First Lady.
Commenting on the smaller cabinet, Human Rights Consultative Committee national co-ordinator Undule Mwakasungula said though they would have loved an even slimmer structure, ‘the gesture to reduce it to 30 is welcome’.
In the new cabinet, several ministries have been combined while others have been scrapped.
Those dropped include Ken Kandodo (Finance) and Etta Banda (Foerign Affairs) were dropped.
Other casualties include the Anna Kachikho (Local Government) and Grain Malunga (Energy and Mining).
President Mutharika’s brother Peter has been moved from the Ministry of Education Science and Technology to head the Ministry of Foreign Affairs and International Co-operation.
It is widely believed that the President is grooming him to take over in 2014 and this appointment is part of that process.