Mutharika, the brother of president Bingu wa Mutharika who died in office in 2012, appealed to the 11 other presidential candidates to "join me in rebuilding the country" after some -- including Banda -- contested the results.
Joining Vice President Saulos Chilima in taking the oath of office before a chief justice, Mutharika said he felt "very humbled" to stand as the fifth president of the impoverished southern African nation.
Conceding defeat earlier today, Banda congratulated Mutharika for his "victory in a closely contested election," according to a statement.
The results of the May 20 vote were announced yesterday minutes after the high court refused a last-ditch attempt to block their release and allow time for a recount.
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The electoral commission said Mutharika took 36.4 per cent of the votes cast against Banda's 20.2 per cent, with the commission chief Maxon Mbendera declaring Mutharika "president-elect".
Party spokeswoman Jessie Kabwila told AFP the MCP would challenge the results in court.
Banda, who became the country's first female president in 2012, had sought to have the polls declared "null and void" on the grounds of "serious irregularities".
But she made no mention of fraud as she issued a statement conceding defeat and urging the country to throw its weight behind Mutharika.