Accompanied by her husband and other delegates, Banda is on her first official visit to South Africa following her recent inauguration this month.
She rose to the highest office in Malawi after the death of President Bingu wa Mutharika, who was buried last week.
During her visit, Zuma and Banda were expected to exchange views on issues of mutual interest and common concern, the International Relations department said.
The meeting would focus on Malawi’s economic problems, particularly fuel shortages and foreign exchange, said spokesman Clayson Monyela.
Malawi is one of South Africa’s top ten trading partners in Africa.
During the Freedom Day event, Congress of the People (Cope) president Mosiuoa Lekota said the day was an opportunity for all South Africans to give thanks for the nation’s progress.
He spoke at length about the days of apartheid, a time when black South Africans were harrassed and arrested if they were found near the Union Building.
Lekota said the country’s youth had since lost the freedom fighter spirit, which helped people like former president Nelson Mandela attain freedom.
The Inkatha Freedom Party’s Oscar Maseko said 18 years of democracy meant it was now time to tie up “the loose ends of the reconciliation reached”.
The Democratic Alliance’s Wilmont James said education should be prioritised in the democratic dispensation.
The United Christian Democratic Party said this was the day “the Lord had made” and all South Africans should “rejoice in it”.
“Who would have guessed or known that we would be here on these lawns? Who would have guessed we would one day come this far?”said the party’s Isaac Mfundisi.
When Zuma arrived earlier, he was greeted with cheers, whistles and shouting.
Adorned in green and gold, the military band entertained the crowd with music.
People cheered loudly during a fly-past by the SA Air Force, and a 21 round gun salute.
Several military aircraft shot through the sky as a big contingent of photographers tried to capture pictures.
With one hand firmly on his chest, Zuma joined in the singing of the national anthem.
Other dignitaries present at the event were deputy president Kgalema Motlanthe, Chief Justice Mogoeng Mogoeng, Arts and Culture Minister Paul Mashatile and Tshwane Mayor Kgosientso Ramokgopa. Zuma was expected address the crowd at midday. – Sapa