Africa-Press – Malawi. Malawi risks losing about K150 billion in crucial funding for rural development due to slow government processes and low absorption of funds, officials and experts warn.
The Transforming Agriculture through Diversification and Entrepreneurship (Trade) Programme, which started on August 28, 2020, and runs for six years, has total funding of $125.8 million (about K220.3 billion). Five years into the project, Malawi has only used about $40 million (K70 billion).
The programme, funded by the International Fund for Agricultural Development (Ifad) and other partners, aims to improve sustainable livelihoods in rural areas through seven key value chains: groundnuts, soybeans, sunflower, dairy, beef, honey, and potatoes.
Minister of Local Government and Rural Development Ben Phiri, under whose ministry the programme operates, said delays are largely due to slow procurement processes and decentralisation of procurement to local councils. “We have set up a task force immediately, which will be reporting weekly. Our target and goal is that by the 1st of January, all the challenges will be ironed out. Our target is that we should not lose the money,” Phiri said on Wednesday.
Ifad’s June progress report highlighted staff shortages, procedural non-compliance in bid evaluation, lack of procurement audits, and inaccurate cost estimates as major barriers.
Agriculture economist Steve Kayira said the inefficiency is costing rural communities valuable time and opportunities. “This reflects inefficiencies in public sector implementation and leads to rural communities losing time-sensitive chances for income generation and improved resilience. Reforms should focus on simplifying and standardising procurement procedures, building capacity at council level, and introducing digital procurement systems to enhance transparency and speed,” he said.
Christopher Mbukwa, an economist at Mzuzu University, added: “It’s even more disheartening that the forex that is already committed cannot be utilised because we are unable to use the funds quickly enough, and we risk losing them next year. There are tendencies among project implementers to do work only if they can benefit directly, which is costing the country dearly.”
Agriculture policy expert Tamani Nkhono-Mvula suggested centralising procurement under Trade to bypass local council delays. “It would be better that the conditions for farmers to access these loans or resources be lessened so that they can access them much easier,” she said.
The warning comes as local councils already lost about K25 billion in performance-based grants under the Governance to Enable Service Delivery (Gesd) programme in February 2024 because of failure to fully utilise the funds. Experts say unless urgent reforms are made, Malawi could continue losing millions meant to transform rural livelihoods.
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