Malawi, traditionally dependent on Western aid donors, would look for "new friends" in countries such as China and Russia, new President Peter Mutharika said at his inauguration.
Mutharika, who takes power in one of the world's poorest countries, where 40 per cent of the budget comes from aid, said the donor nations were "welcome to stay here".
Foreign policy would be based on what was best for Malawi, he said. "We will continue with traditional relationships, but we are now looking for new friends in emerging economies such as Brazil, China, India, South Africa and Russia," he said.
Britain and the US have pledged to work with him.
Mutharika said he regretted Banda's absence, saying she had "declined to come here and hand over power to me".
He added: "I was looking forward to shaking her hand and burying the past. I have an olive branch in my hands."
A spokesman for Banda said: "She was not officially invited and her official presidential convoy was withdrawn … as soon as it was announced that Peter Mutharika had won the presidency. It would have been difficult for the outgoing president to travel to Blantyre."
Banda received a further political blow when her party was declared to have won only 26 out of 192 seats, according to the electoral commission. Mutharika's Democratic Progressive Party won 50 seats, while the Malawi Congress Party led by Lazarus Chakwera, who came second in the presidential election, bagged 48 seats. Up to 52 independents won seats across the poor southern African state.
Mutharika takes over despite facing treason charges for attempting to conceal the death in office two years ago of his brother, Bingu wa Mutharika, in an alleged bid to prevent Banda - then vice-president - from assuming power.
"It's been a long journey," Mutharika said of his ascent to power. "We didn't know we would reach this far. I have been imprisoned and tried on flimsy charges of treason. I have been tear-gassed three times. But that's in the past."
The treason charges against Mutharika are likely to be dropped as Malawian presidents have immunity from prosecution while in office.
But there has been speculation that Mutharika might now try to turn the tables on Banda and have her charged with corruption over a US$30 million graft scandal.