NPC challenges MDAs, councils on MW2063

The National Planning Commission (NPC) has called on ministries, departments and agencies (MDAs), and local councils to be more creative and explore complementary financing mechanisms for their Malawi 2063 designed projects and programmes.

In a statement, NPC director general Thomas Chataghalala Munthali said complementary financing is in addition to government funding.

He said Treasury may not be able to satisfy MDAs funding needs, especially given the volatile economic environment that has arisen lately from the Covid-19 pandemic as well as globally man-made economic shocks and natural disasters.

He said: “The national resource envelop is still very thin at the moment against the massive competing obligations. We have no excuse in developing this country. Be part of the solution.

“MDAs and local councils should be more resourceful and find other funding options such as public-private partnerships, equity investments, joint ventures, pension funds, bonds, NGO funding, foreign grants and international soft loans as viable alternatives for financing the catalytic interventions in MIP-1”.

Munthali said now that the Budget was passed in Parliament, it is upon the various MDAs as well as local councils to implement what has been approved therein, saying banking everything on State coffers may not be realistic in the realisation of the national vision.

However, in an interview, Malawi Local Government Association (Malga) executive director Hadrod Mkandawire differed with NPC, saying councils are already under-funded and wondered how they may creatively get funding for national projects.

He said the vision on implementation at the local authorities may only work if complete decentralisation is achieved, saying the central government still controls resources towards councils.

He said: “The decentralisation policy of 1998 stipulates that government shall provide a minimum of five percent of total annual revenues to the local authorities as unconditional grants, but we have never reached above two percent.

“So the national annual revenue is not being met, the ceded revenue is not being committed, government is dragging the fiscal devolution, it has devolved local authorities’ functions quite well but the responsibilities are not being supported with requisite resources”.

Section 150 of the Constitution of Malawi states that government will ensure that local authorities are well-funded and have enough resources to discharge their mandate.

On the other hand, Section 10 of the decentralisation policy defines revenue sources such as toll gates, but what has been happening is that government is yet to start ceding the resources to councils as whatever is generated goes to Account Number One.

Malga has since called on government to allow councils to start benefiting from ceded revenue that can be drawn from levies, toll gates, mining companies, among others, to facilitate development at the local level.

Deputy Minister of Local Government Halima Daudi said government is committed to addressing the Malga concerns and that the ministry is engaging Treasury on demands for local authorities funding.

She said: “Over the years, we have been in discussion with a lot of ministries that they should devolve some of the activities to councils, but they have been saying that the councils are not capable. But now councils have started showing they are capable that they can handle everything within them and ministries are now devolving the activities to councils”.