Audit report exposes Yedef flaws

An Auditor General Performance Audit report on implementation of Youth Economic Empowerment (YEE) programmes has revealed some flaws in the Youth Enterprise Development Fund (Yedef), including the disregard of principles governing the programme.

The audit, conducted by the National Audit Office in 2017 but whose results were released in October 2018, reviewed 461 Yedef loan account files from eight sampled districts which revealed that Yedef did not follow principles of economy, efficiency and effectiveness in the implementation of YEE programmes under the Ministry of Labour, Youth, Sports and Manpower Development.

Yedef beneficiaries were meant to have some entrepreneurial skills

The audit report reads in part: “The Malawi Rural Development Fund (Mardef) officials did not adhere to Yedef operational guidelines when disbursing the loans. A review of 461 Yedef loan account files from eight sampled districts revealed that 52 percent, 33 percent, 25 percent and 23 percent were not supported with business plans, were not endorsed by traditional authorities [T/As], and the beneficiaries were above the age limit of 35, respectively.”

In 2016, government gave up on reclaiming the billions of kwacha it loaned out to some youths through Yedef.

The then minister of Labour, Youth, Sports and Manpower Development Henry Mussa said government had given up the money due to non-repayment.

Between 2009 and 2013 when Yedef was in operation, it had loaned out K1.6 billion, but only recovered K352 million.

Minister of Finance, Economic Planning and Development Goodall Gondwe as well as Secretary to the Treasury Ben Botolo could not be reached for comment as their phones went unanswered yesterday.

But a senior government official, who spoke on condition of anonymity, also blamed government for abusing taxpayers’ money in programmes that are not helping the nation.

Said the official: “It is sad that government is continuously abusing taxpayers money in programmes that are not helping at all, government is losing billions in these programmes. Yedef failed and they introduced Medef, which is also failing.

“People take it as political appeasement; hence, they do not return the money. During the Joyce Banda administration, there was a revolving loan fund for female civil servants which also went down the drain. People did not repay the loans up to now.”

The official further called for a change of focus, adding, “otherwise, taxpayers money will keep on being wasted”.

Meanwhile, a youth development expert, Chris Misuku, has warned that the country will continue in its poverty vicious cycle if government does not put its house in order on programmes aimed at uplifting young people’s lives.

Misuku, who trains youths in business management skills under Active Youth Initiative for Social Enhancement (Ayise), said the findings depict realities of how poorly Yedef was implemented.

He said it is shocking that up to 52 percent of loans had no business plans.

Said Misuku: “It makes you wonder how this happened. Government needs to follow this to its logical conclusion. Who approved these loans? Who were the beneficiaries? Youth organisations and all stakeholders should push government to hold those responsible to account. If we continue operating like this as a country, we will never come out of poverty.”

According to the report, the impact of Yedef on the youths’ livelihood has not been significant due to external and internal factors which include political interference and low prioritisation in allocation of both human and financial resources for implementation, monitoring and evaluation of YEE programmes.

Misuku, therefore, warned against the politicisation of such national programmes.

According to the report, a review of structured interview minutes with Mardef senior officers revealed that only 30 percent of disbursed loans was recovered at national level between 2011/12 and 2013/14 financial years.

There was also a longer period for the loan recoveries as most of them exceeded the maximum repayment period. A review of 40 randomly sampled Yedef loan account records from sampled districts revealed that loan recoveries took an average of 60 months, much longer than the 24 months stated in the operational guidelines.

The audit report has since recommended that the Ministry of Labour, Youth, Sports and Manpower Development should set realistic  targets and budgets for YEE-related trainings, allocate adequate staff to youth outreach services and ensure compliance on Yedef operational guidelines, among others.

A brainchild of former president Bingu wa Mutharika, Yedef started with an initial capital of K3 billion, but government later pumped in more resources, citing rising demand.

The fund was managed under Mardef, which has morphed into Malawi Enterprise Development Fu n d ( Medef), after absorbing Yedef and Farm Input Loan Programme operations.

Youth development and empowerment is among the pillars that government is implementing through the Malawi Growth and Development Strategy (MGDS) III running from 2017-2022. YEE was set up as an initiative to meet the strategies falling under this pillar.

Major components of YEE programmes are, Yedef, scheme, technical, vocational, agribusiness and entrepreneurship skills trainings; and attachment of young entrepreneurs to successful entrepreneurs.

The overall objective of YEE programmes is to reduce high unemployment rate among young people in Malawi so as to enhance their capacity to be job creators and uplift their income-earning capacity.

However, despite the efforts to uplift the lives of the youth since the introduction of YEE in 2002, no major improvement  in lives can be shown. n

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