Results of the Fourth CAS (FY07-FY11)
The 4th CAS set out to help Malawi build foundations of prosperity. This meant focusing on such issues as agriculture, education, HIV/AIDS, private sector development, and ensuring better public expenditure management. These issues were divided into four pillars with the following results:
SMALL HOLDER AGRICULTURE
Increasing productivity and food security was a priority, with yields expected to improve through increased irrigation and market incentives, specifically for smallholder farmers in the 11 districts supported by the Bank program. Through three projects: Community Based Lands Development Project (CBRLD), Irrigation, Rural Livelihoods and Agricultural Development Program (IRLADP) and the Agricultural Development Program-Support Project (ADP-SP) the following had been achieved by 2010:
- The country’s four major irrigation schemes rehabilitated and fully functional, and more that 3000 ha on small and medium scale irrigation schemes, increasing rice and maize yields by a minimum of 30 per cent. Together with the Farm Input Subsidy Program, the majority of households were food secure in the last 2 years.
- Fifteen thousand people were resettled from densely populated areas, enabling them to double or treble their food production capacity. From this resettlement program, Government has drawn lessons to inform its land reform program.
- Micro-weather insurance schemes initiated with Bank support are expanding on commercial terms with growing interest from the Banks and Insurance Association of Malawi.
However, a lot more remains to be done to put agriculture in Malawi on a commercial footing. The Bank is still in the initial stages of work with the Ministry of Agriculture and Food Security to develop a project to promote more commercialized farming practices.
HIV/AIDS AND NUTRITION
Behavior changes were expected in order to contribute to a slowing HIV infection rate and an increased number of people on ARV treatment. It was also expected that government would develop a coherent Program on improving the nutritional status of children under two years of age. The following was achieved:
- Number of people living with HIV/AIDS receiving anti-retroviral treatment improved from approximately 57000 in 2006 to close to 200,000 in 2010, exceeding original targets.
- Malawi’s HIV adult prevalence rate decreased to 10% by the end of 2011. Access to treatment has also contributed to improving life expectancy to 52 years from 38 years in 2005.
- Chronic malnutrition now at 36% compared to about 49 per cent in 2005.
Malawi still lacks a coherent program on nutrition although a nationwide awareness and information campaign which was undertaken promoted good feeding practices for under-5 and school-age children. A multi-partner sector study examining determinants of infant and child feeding practices has been completed, and will provide a basis for a nutrition program. The Bank and other donors will follow on with a nutrition project in the 5th CAS.
ENVIRONMENT FOR DOING BUSINESS
The program expected to achieve improvements in the efficiency and reliability of electricity supply, and “Doing Business” indicators for increased trade across borders and reductions in the costs to start a business. The major achievements were:
- Access to commercial justice improved with the establishment of the High Court Commercial Division in 2007. Time to settle commercial disputes reduced to 98 days in 2011, down from 337 in 2006.
- Time to register a business reduced from 88 days in 2010 to 49 days in 2011.
- Improvement of the sector management and governance due to the establishment in 2008 of the Malawi Energy Regulatory Authority (MERA), and an increase in tariff levels by an average of 56% from very low levels, which will strengthen the financial position of the power utility ESCOM.
- Improvement in the condition of the road network: The Bank’s Road Maintenance and Rehabilitation Project (ROMARP), which closed in June 2006, established the roads database and the Road Fund, and supported significant institutional reform of financing and planning in the roads sector. Investments in the road sector have resulted in a significant improvement of the network: the Ministry of Transport and Public Infrastructure reports that 83% of classified roads are in good or fair condition. The Bank and European Commission have supported the preparation of a multi-modal transport study and Government is preparing a Transport Sector Investment Program. The condition of the road network has improved significantly, and the outlook for the financing of maintenance through road user charges is encouraging.
The underperformance emanated from three main areas: lack of improvement of the business environment especially the energy agenda where the interconnector project was cancelled; delayed implementation of reforms; and, the deteriorating political economy.
IMPROVEMENTS IN GOVERNMENT EXPENDITURE MANAGEMENT
Malawi was expected to achieve improvements in expenditure management as measured by the public financial management (PEFA) indicators. Below are some major achievements:
- Comprehensiveness and transparency of the budget: Government progressed in improving the linkage between the MGDS and the budget. Since 2008/09, Government introduced an output based budget framework where Ministries, Departments and Agencies (MDAs) are now required to make their budgets according to MGDS priorities. Further, the presentation and structure of the budget, together with the associated chart of accounts, have been improved to become compliant with international fiscal reporting standards.
- External Audit and Scrutiny: Progress has been made to improve the timeliness and coverage of audits. Government has since cleared the backlog of audits and is now current with the audit of the 2009/10 financial statement.
- Progress on capacity development in internal audit with all ministries now having internal audit units, and at least 60% of the ministries have fully functional audit committees.
The key challenge in audit and external scrutiny is to make timely follow-ups of the audit issues raised by the Public Accounts Committee of Parliament.
ANALYTICAL AND ADVISORY ACTIVITIES
Some of the notable AAA that have made a significant contribution to the Malawi planning and policy environment include the Education Country Status Report (CSR), the Mining Sector Review, the Country Economic Memorandum (CEM), the 2008 Financial Sector Assessment (FSAP) and the Malawi Social Protection Stock Take. The CSR brought into focus issues affecting the quality of education in Malawi at various levels. The findings fed into the National Education Sector Plan (NESP) which has assisted the Government to leverage resources from various donors and the Fast Track Initiative (FTI). The Mining Sector Review (MSR) in 2009 brought worldwide experiences in the management of mining transactions and informed the design of the Mining Policy which is undergoing Cabinet review. Malawi needed such experience since it is a newcomer in the mining arena and the MSR provided the analytical underpinnings of a new Mining Governance and Growth Support Project which is scheduled for Board in March 2011. The CEM is a rich piece which acknowledges the progress that Malawi has made in improving its macroeconomic environment and proposes options on maintaining the status quo or ensuring continued future growth. The 2008 FSAP was instrumental in bringing financial sector development to the policy debate in Malawi and its recommendations have greatly assisted in leading to other AAA such as the development of the Malawi Financial Sector Development Strategy and Finscope Demand and Supply Side Surveys. A Financial Sector TA operation has also been developed to implement the recommendations of the FSAP. The Social Protection Stock Take informed the design of the social protection policy through provision of a stock take of social protection in Malawi and, in partnership with the development of a Malawi Social Protection Framework, helped Malawi move towards the development of the Social Support Policy and Program.
Last Updated: Oct 09, 2014