Project funding delays worry budget committee
The Budget and Finance Committee of Parliament has expressed concerns that the delay to assent to loan authorisation Acts passed by Parliament is affecting the release of donor funds.
Following Budget and Finance Committee meetings last week, the committee’s chairperson Gladys Ganda noted that the Malawi Digital Acceleration Project and Fiscal Governance Project for Results loan authorisation Acts passed in Parliament in July are yet to be assented to.
In an interview on Thursday in Lilongwe, she said delays coupled with local governance and public finance bureaucracies, including procurement and budget execution, have delayed critical donor-funded projects.
She said: “We have observed in our meetings with several ministries, department and agencies [MDAs] that delay to assent to the Acts as well as lengthy procurement processes have delayed donor-funded projects.
“This is limiting the government’s capacity to access funds that would have otherwise been used to finance reforms.”
Collectively, the two projects could enable government to access 112.6 million special drawing rights (SDR) or about $150 million s from the Malawi Digital Acceleration Project.
Commenting on the issue, economist Bond Mtembezeka cautioned that the delays could ultimately lead to “expenditure overruns, reduced economic benefits for the people and, in the process, worsen poverty levels in the country”.
“Historically, delays in procurement completion and capacity constraints in procurement were some of the major challenges that affected the timely delivery of public services and the implementation of development operations in the country,” he said.
Mtembezeka urged the government to restructure governance institutions to streamline critical processes and reduce bureaucracies, which are widely credited to be the source of inefficiencies.
Economics Association of Malawi acting president Bertha Bangara-Chikadza said in an interview on Friday that the reforms would require political will from the government to mitigate the resistance to change from within the governance system.
She said: “Although the commitment to the reforms can be there at certain levels, resistance by some levels of administration derails the entire process.
“It is, therefore, considerably hard to roll out the system if other key members are not in support of the development.”
The World Bank-supported Fiscal Governance Project for Results is designed to address procurement challenges identified in the World Bank’s 2023 issue of the Malawi Methodology for Assessing Procurement Systems Report.
The project document states that Malawi has to enhance resource transparency and accountability by “improving fiscal risk management and public procurement oversight and transparency