Councils are racing against time to access $19.6 million (about K34 billion) from the World Bank meant for Governance to Enable Service Delivery (Gesd) projects ahead of the March 2026 deadline.
From the $135 million (about K260 billion) total package, government has received $126.4 million (around K226 billion), of which $20 million is being used now, leaving $19.6 million unclaimed.
In an interview yesterday, National Local Government Finance Committee executive director Kondwani Santhe acknowledged some lapses in project implementation resulting in low utilisation of resources and poor quality of outputs.
He said: “Councils received $20 million, which they have to utilise now and after this, we have to submit plans and unlock the remaining $19.6 million from the World Bank. The deadline is March and we cannot afford to lose this money.
“We will need to utilise the $20 million received now fully and unlock the remainder. We have experienced and seen some lapses in project implementation where there is low utilisation of resources, but also quality.”
On his part, Malawi Local Government Association (Malga) executive director Hadrod Mkandawire said delays to get feedback when councils submit documentation for approval complicate project implementation cycles.
“Price fluctuations have affected implementation because Gesd projects are on fixed contracts; hence, the price adjustment cannot happen anyhow. This also sometimes delays project implementation.
“The projects stall for a long time because the project does not provide [for] advance payment [to] contractors. Some contracts have been terminated and starting procurement processes over again takes time,” he said.
Speaking last Saturday in Salima during a quarterly review meeting for councils, Minister of Local Government and Rural Development Ben Phiri said these challenges, including low absorption rates, emanate from, among others, delays in procurement and project implementation.
Said the minister: “As we speak, $19.6 million [K34 billion] for the Gesd project remains undisbursed—locked up at the World Bank—simply because some councils have not submitted the required documentation.
“We also have councils that refuse to use the Project Management Information System, the very tool designed to make reporting simple, transparent and efficient. If these funds are not accessed [come March 30, 2026] they will be lost.”
Fumed Phiri: “Some councils are either delaying or failing to account for the money entrusted to them. They cannot produce basic evidence of how funds were used. No council will continue to receive funding if it cannot account for what it already has.
“It is either you go or I go. I refuse to go. I will, therefore, allow you to go. Why should you fail to develop Environmental and Social Management Plans? Why should you fail to do procurement on time and fail to supervise projects?”
Meanwhile, the minister has ordered councils that are delaying or failing to liquidate the funds for Gesd, Regional Climate Resilience Programme as well as Transforming Agriculture through Diversification and Entrepreneurship Programme (Trade) projects to do so by Friday, November 21 2025.
The Gesd project development objective is to strengthen core national and local government institutions to improve their efficiency.
This would not be the first for financially struggling local councils to underutilise Gesd resources as last year, they lost K25 billion for failing to fully absorb the money.
Just last week, The Nation reported that the country risks losing about $75 million (about K148.8 billion) due to low funding absorption for the Trade Programme meant to improve sustainable livelihoods in rural areas.
