"I must have to decline to grant the application to Madonna," Judge Esmie Chondo said in a ruling, which came after a closed-door hearing on Friday.
It is reported that the application has been rejected over residency rules that require the prospective parents to be resident in the country for 18 to 24 months.
According to Reuters, court registrar Ken Manda told reporters Madonna's adoption application was turned down because the singer was not a resident of Malawi.
However, the rule was waived in 2006, when the “Queen of Pop” was allowed to adopt another child, David Banda, now three-years-old, from Malawi.
Madonna, who flew to Malawi on Sunday, had sought to adopt Chifundo James, whose name translates into English as Mercy James, a four-year-old Malawian, who is in the same orphanage that previously housed David.
In her closed-door ruling today, Judge Chombo also warned against the trend of celebrity adoptions, fearing it could lead to child trafficking.
"Anyone could come to Malawi and quickly arrange for an adoption that might have grave consequences on the very children that the law seeks to protect," she said.
Madonna, who did not attend the hearing, had previously said: “I am able and willing to securely provide for Chifundo James and make her a permanent and established member of my family".
"To deny Chifundo James the opportunity to be adopted by me could expose her to hardship and emotional trauma which is otherwise avoidable," she continued.
Madonna’s second adoption had drawn much criticism from activists who accused her of using her fame and money to fast-track the adoption process. However, the singer said she had followed standard procedures.
"She must follow procedure," said Mavuto Bamusi, the head of Malawi's Human Rights Consultative Committee. "She is simply using her money and profile to manipulate the process. We must not be seen to be legalising child trafficking."
But, Malawi’s child welfare minister, Anna Kachiko, had endorsed the 50-year-old singer’s adoption application. "We have close to 2 million orphans in Malawi who need help," said Kachiko. "We can’t look after all of them as a country. If people like Madonna adopt even one such orphan, it’s one mouth less we have to feed."
The impoverished southern African state has one of the highest rates of HIV/AIDS in the world. AIDS has orphaned more than one million children in Malawi. According to the United Nations’ estimates, 18 million African children will have lost a parent to this highly infectious disease by 2010.
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