## _cr05209 ## Source details **Canonical URL:** [_cr05209](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05209.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05209.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05209.pdf.json) --- ### Foreword — Key findings, review process, participation - Considerable improvement in the presentation of findings. - Report presents inputs as actual resources that flowed from Treasury to line Ministry. - Report presents outputs and outcome in most sectors; in some sectors outcome and outputs lack comparable targets. - Impact analysis not presented; comprehensive report should dwell on strategy impact and poverty levels. - Review process comprises three stages: - First stage: analyse progress in implementing the MPRS and achieving targets within it. - Second stage: stakeholders’ workshop. - Third stage: dissemination of the review report. - Complementary policy documents: Malawi Economic Growth Strategy (MEGS), Public Sector Investment Plan (PSIP). - Management information system central to ARR monitoring and evaluation. - Participatory drafting; financial assistance from Department of Foreign International Development, European Union, United Nations Development Programme. - Drafting team chaired by Mr. Ben Botolo; signatories include Hon. David Faiti MP and Hon. Goodall Gondwe. ### Chapter 6.0 — Monitoring & Evaluation (Executive summary and approach) - MPRS formulated 2002 with aim to reduce poverty through economic growth and empowerment. - First review identified challenges: little adherence to implementation; lack of guidelines to translate MPRS activities into the budget; diversion of resources to non-priority ORT. - Second progress report focuses on assessing inputs, outputs and some outcomes. - Inputs analysis includes: - Expenditure by pillars. - Protected pro-poor activities (PPE). - Functional analysis of government expenditure pattern. - Outputs/outcomes evaluated by comparing planned MPRS activities and targets to actual achievements in second year. ### Poverty situation and HIPC/PRGF status - 1998 IHS: 65.3 percent of population below poverty line. - 2004/05 IHS pending finalization to update 1997/98 findings. - Malawi reached HIPC decision point on December 21, 2000 after approval of a three-year PRGF arrangement; HIPC completion point not reached due to repeated policy slippages. ### Key macroeconomic objectives (2003/04 programme period) - Targets: - Attain an average annual growth rate of at least 6 percent. - Reduce inflation to 5 percent. - Increase gross official reserves to about five months of import cover. - Strategies included reducing domestic budget deficit, controlling money growth, and implementing structural reforms. ### Macroeconomic developments and outcomes (2002/03–2003/04) - Real GDP growth: 4.6 percent (Outurn) versus MPRS target 4.5 and 2003/04 Budget target 4.4. - Inflation: rose from 8.5 percent (June 2003) to 11.6 percent (June 2004); MPRS and 2003/04 budget inflation targets were missed by 6.6 and 4.1 percentage points respectively. - Domestic debt stock: rose from MK26.0 billion (end June 2002) to MK54.3 billion (end June 2003); further increases reported (see Financing of deficit). - Exchange rate performance: - Depreciation June–December: 12.1 percent (MK96.8010 to MK108.5669 per US$). - End-year exchange rate: MK108.9080 per US$1. - Fiscal outcomes: - Total revenue and grants outturn: 35.3 percent of GDP against total expenditure of 42.5 percent of GDP. - Overall fiscal operations resulted in a deficit of 7.2 percent of GDP (Outurn). - Expenditures moved from 32.7 percent of GDP (parliament approved) to 42.5 percent of GDP (Outurn). ### Fiscal resource envelope, PPEs and domestic financing - MPRS projections vs Approved vs Outurn (selected figures preserved as presented): - Total Revenues & Grants (MK’ million): 44,390.85 (MPRS); 59,973.06 (2003/04 Budget); 65,574.76 (Outurn). - Total Expenditure (MK’ million): 43,975.70 (MPRS); 56,789.50 (Approved); 78,471.41 (Revised/Outurn). - Deficit / Overall Deficit (MK’ million): 415.10 (MPRS); 3,183.50 (Approved); -12,896.65 (Outurn). - As % of GDP — Total Revenue and Grants: 27.6 (MPRS); 34.5 (Approved); 35.3 (Revised). - As % of GDP — Total Expenditure: 27.3 (MPRS); 32.7 (Approved); 42.5 (Revised). - As % of GDP — Deficit: 0.3 (MPRS); 1.8 (Approved); 7.2 (Revised). - Protected Pro-poor Expenditures (PPE): - MPRS projected PPE at 25.2 percent of total expenditure. - 2003/04 budget projected PPE at 20.5 percent of total expenditure. - Actual 2003/04 PPE outturn: 16 percent of total expenditure (decline of 9.2 percent from MPRS projection and 4.5 percent from budget projection). - Pillar 2 (education and health) received more funding relative to other pillars: Education 8.5 percent of total expenditure; Health 4 percent of total expenditure (of PPEs). - Financing of deficit and domestic debt dynamics: - Budget deficit financed from domestic borrowing. - Domestic debt stock: MK54,907 (end Jun 03); MK57,015 (end Dec 03); MK67,741 (end June 04). - TBs (face): 39,612 (End Jun 03); 47,029 (End Dec 03); 51,986 (End June 04). - RBM Bills: 9,212 (End Jun 03); 2,914 (End Dec 03); 5,199 (End June 04). - W/Means: 2,310 (End Jun 03); 3,320 (End Dec 03); 6,821 (End June 04). - Observation: Rise in domestic debt attributable to increased government expenditure and non-disbursement of donor budgetary support. ### Medium-term macroeconomic prospects and program assumptions (2005–2008) - Growth and inflation projections: - Average growth for next three years expected: 5.5 percent. - By end-2006 inflation rate expected to average 9.7 percent. - By end-2008 annual average inflation rate expected to be 7 percent. - Programme fiscal assumptions and targets: - Programme assumes average overall deficit including grants of 1.7 percent of GDP. - Current net domestic debt stock projected to fall from 22.9 percent of GDP to around 17 percent of GDP by 2008. - Resource envelope projections (as percent of GDP): - 2005/06: revenue and grants projected at 38.9 percent of GDP against total expenditure of 40.2 percent of GDP. - 2006/07: resource envelope expected to be 37.5 percent of GDP against total expenditure of 39.6 percent of GDP. - 2007/08: resource envelope of 36.9 percent of GDP against total expenditure of 38.7 percent of GDP (external assistance expected to decline). - Public expenditure composition assumptions: - Social and community services medium-term assumption: 30 percent of total expenditure (past five years average 30.8 percent). - General administration assumed at 27 percent (historical average 27.4 percent). - Assumed domestic debt service to average 16 percent or less of total expenditure over next three years (historical bulk domestic debt service constituted 20.6 percent). ### Analysis of 2004/05 budget and PPE composition - Share of total MPRS activities in the approved 2004/05 budget is 18 percent less than planned shares in the strategy. - Statutory/expenditure increase driven by interest payments on domestic debt. - 2004/05 budget PPE shares of total budget: - Education: 10.23 percent. - Health: 3.94 percent. - Agriculture: 1.56 percent. - Observation: No significant difference between 2003/04 and 2004/05 pro-poor budget allocations in share terms. ### Sectoral implementation highlights — Pillar 1: Sustainable pro-poor growth (selected achievements & shortfalls) Agriculture - Sector contribution: about 36 percent of GDP; agriculture contributes about 63.7 percent of total income of rural poor; accounts for 87 percent of total employment. - Extension services: - Planned target: 24,141 extension workers; trained: 4,683 (about 20% achievement). - Yellow vans procured: 2 against planned 8. - New Extension Policy piloted in 4 districts; participatory extension implemented in all 28 districts. - Small-scale irrigation and drainage: - 32,463 treadle pumps installed against target 60,000. - 301 km canals excavated; 219 motorized pumps distributed and maintained. - 8 dams rehabilitated against target 60. - Specific crop and livestock production: - Associations/cooperatives: 133 associations and 4 cooperatives formed against targets 300 and 30 respectively. - Farmer training: 55,552 farmers trained in general crop production against planned 950 farmers. - Basic seeds produced: 4.5 metric tonnes beans; 9.9 metric tonnes maize; 85.4 metric tonnes groundnut; 1.8 metric tonnes pearl millet. - Nurseries developed: 362 cassava nurseries on 161.2 hectares; 821 sweet potato nurseries covering 65.5 hectares; 30 banana nurseries covering 5.45 hectare. - Livestock: 55 percent of feed industries inspected (target 80 percent); 114 farmers trained in animal husbandry; 32 dip tanks operational out of 50; 25 staff trained in disease surveillance against target 411; import monitoring at 6 border posts (22 percent achievement). - Mechanization: - Ploughed area: 588 hectares compared to target 43,200 hectares. - Key constraints: declining soil fertility, low access to credit, weak extension, low technology, over-dependence on rain-fed agriculture, limited irrigation capacity, HIV/AIDS impact, staffing vacancies. - Agriculture recommendations (selected): - Prioritize programmes enhancing soil fertility management. - Consider fertilizer subsidy. - Improve extension by reducing extension:farmer ratio via retention, training and recruitment. - Increase financing for irrigation sub-sector. - Improve marketing information and mainstream HIV/AIDS mitigation. Fisheries - 2003 total catch: 43,000 tonnes valued at MK2.15 billion. - Stock assessment potential: 30,000–35,000 tonnes per year from unexploited deep-water fish. - Small-scale fish farming: implemented in 21 districts; 507 fish farmers reached (101% achievement); 840 ponds constructed against target 1,000; 528 ponds stocked with 634,432 fingerlings. - Constraints: inadequate funding, lack of fingerlings, weak monitoring. - Recommendations: promote fingerling production by farmers, increase Treasury funding for pond construction, support monitoring and supervision, develop management agreements for Lake Malombe. Forestry, Parks, Tourism, Mining — selected outputs & constraints - Forestry: 38 million seedlings planted out of target 50 million; 8 co-management agreements signed; industrial plantation privatization preparatory work advanced; constraints include inadequate financing and weak cross-sector coordination. - Parks and Wildlife: DNPW received about MK32 million PPE funds used for administration, extension, research, maintenance and law enforcement; community CM agreements signed; constraints: poaching, encroachment, inadequate funding, poor staff housing. - Tourism: community-led cultural tourism pilots; 62 managers trained; accommodation classification: 521 units classified out of targeted 1,200, 300 licensed. - Mining: sector employs nearly 3,000 people; small-scale mining focus; projects include lime kiln at Balaka and salt demonstration at Nchalo; equipment procured, JICA assistance; constraints: inadequate funding and slow technical staffing. Rural infrastructure (roads, water, energy, telecoms) - Roads: 350 km rehabilitated; 120 km new road network constructed/upgraded; maintenance outputs reported across urban/district/paved/unpaved categories; many projects delayed or unstarted (selected project achievements listed). - Water and sanitation: - Boreholes constructed: 1,630 out of 2,642 planned. - Boreholes rehabilitated: 421 out of planned 665. - 326 out of 508 rural gravity-fed taps rehabilitated. - Sanitation baseline: 81.4 percent of households had sanitary excreta disposal services by 2002 (target universal access by 2005). - Energy: - Out of target 55 rural trading centres, 41 provided with new electricity installation at cost ~K435 million (government K120 million). - Out of 7,000 stoves target, 6,000 produced. - Constraints: lack of credit facilities, limited generation/distribution capacity, HIV/AIDS attrition. - Telecommunications: network expansions in specific areas; constraints include vandalism, non-payment of outstanding bills, limited funds. ### Human capital development — education, health, HIV/AIDS, nutrition, skills (Pillar 2 highlights) Education - Early Childhood Development (ECD): - ECD policy launched (February 2004); 387 caregivers trained at Chancellor College; 735 ECD centers opened. - Primary education: - 150 teachers’ houses completed out of targeted 800; Teacher to Pupil ratio 1:72; Classroom to Pupil ratio 1:107; provision of teaching/learning materials and teacher training ongoing. - Functional Adult Literacy: - About 3,500 classes opened; registered over sixty thousand learners with women comprising 90 percent; SDIG Project: 400 classes with 10,991 learners (9,771 females); 1,000 instructors recruited, 499 dropped out mainly due to honoraria delays. - Secondary education: - 22 new secondary schools opened in 2003/04; EMIS established; TRF not successfully implemented. - Higher education: - University of Malawi increased access/equity activities; modalities for student loans developed; collaboration with Central University of Technology (South Africa) signed; plans for university-wide HIV/AIDS courses by January 2005. Health and Nutrition - Essential Health Package (EHP) strategies; training allocation K140.9 million in 2003/04 (estimated requirement ~K200 million). - 809 health workers trained in 2003/04. - Minimum annual drug expenditure target: US$1.25 per capita; Approved budget for drugs in year under review: K1.2 billion (~US$0.96 per capita). - ART scale-up: plan to provide free ART in 54 health facilities in July–December 2004. - Counseling and testing scale-up target: test 750,000 clients in 2004 and 2005. - Nutrition: 7 new baby-friendly hospitals; 5 sentinel surveillance sites established; community support systems trained. Technical, Entrepreneurial, Vocational Education and Training (TEVET) - Rehabilitated 90 buildings in 7 colleges; non-apprenticeship full-time enrollment increased to 880; apprentices increased to 2,030; evening/parallel programmes enrolled 1,150 compared with 880 normal-system students. ### Pillar 3 — Safety nets, social protection, disaster management Productivity-enhancing interventions - Targeted Input Programme (TIP) package: 5 kg Urea, 5 kg 23:21:0, 2 kg OPV maize, 1 kg grain legume seed. - Total cost of government-implemented TIP: MK1.394 billion; DfID and government contributed approximately MK1.286 billion and MK108 million respectively (government contribution was carryover fertilizer). - TIP beneficiaries: 1.702 million farm families (1.7 million government TIP beneficiaries and 2,000 AAH TIP beneficiaries). Public Works Programs (PWP) - Three types: food for work, cash for work, input for work. - Achievements: - 224 PWP implemented by MASAF; 92,005 people benefited; MK765 million cash transferred to 259,901 beneficiaries through RCWP. - 12,899 Km of roads rehabilitated/constructed (MASAF II – LAMP and Africare). Welfare-enhancing and direct transfers - Direct transfers managed by Ministry of Gender, Child Welfare and Community Services with donor assistance; 156 students received school fees assistance worth K572,385 in Central region. - Nutrition and food aid distributions (selected): - 80.60 tonnes of DSM at cost of MK2,532,597.21 (MoH). - 19,806 beneficiaries received 545.35 tonnes cereal; 58.79 tonnes pulses; 152.02 tons corn-soy blend; 69.55 maize meal; 55.22 tonnes vegetable oil (COGUARD Consortium). Disaster management - National Disaster Management Plan completed; flood contingency plans for Salima, Karonga, Machinga and Phalombe; K95,146,750 worth of food and non-food relief provided to disaster victims. ### Pillar 4 — Good governance, decentralization, human rights, cross-cutting Governance and anti-corruption - Legislation enacted: Public Audit Act 2003, Public Finance Management Act 2003, Public Procurement Act 2003; Corrupt Practices Act (Amendment) 2004. - ACB activities: sensitisation workshops, newsletters, anti-corruption clubs, campaigns; detection and prosecution units established. Judiciary, justice, police and prisons - Judiciary launched five-year Strategic Plan (November 2003); mediation introduced; training of magistrates and judges on mediation. - Malawi Police Service: recruited 1,492 constables (435 women); trained detectives; VCT Centres opened; community policing initiatives and forensic capacity building undertaken. - Prisons decongestion: community services used for 5,346 offenders. Decentralization - Seven district assemblies computerized accounting systems; activity based budgeting introduced; 1,854 staff trained; devolution plans for 9 sectors facilitated; constraints include limited district capacity and delayed sector devolution. Human rights, democratization and elections - 20th May 2004 elections: ~5.6 million registered voters, slightly over 3 million voted; observations included late funding, management issues and unlevel playing field. - Human rights awareness campaigns widely conducted; MHRC and Ombudsman activity increased reporting. Cross-cutting issues - Gender: focal points established; proportion of women parliamentarians increased to 14 percent from 8.8 percent; 80 Community Action Groups established. - HIV/AIDS: infection rate 15 percent; national HIV/AIDS policy launched; 9,000 people put on free ARVs; recommendations to translate policy into local languages and ensure ARV management standards. - Science & Technology and Environment: ICT and S&T initiatives advanced (DISTMISI, National ICT policy draft); EIA and environmental standards work advanced; some projects proceeded without EIAs. ### Monitoring, evaluation and institutional arrangements — key items - MEPD completed ‘Design for a District based performance monitoring and evaluation system’ in November 2003; report produced ten recommendations (not implemented). - MEPD produced MPRS Monitoring and Evaluation Master Plan; database on project monitoring developed. - Civil society M&E: MEJN, CISANET, MHEN, CSCQBE conducted monitoring and informed MPRS review. - Recommendations: develop sector MIS, include inputs/outputs/outcomes/impact indicators, strengthen coordination and M&E capacity at districts and sectors. ### Emerging issues, conclusions and overall recommendations (Chapter 7 and Chapter 8 material) - Macroeconomic performance fell short of MPRS targets: high inflation, sluggish GDP growth, increased domestic debt, continued Kwacha depreciation. - 2003/04 budget allocation to MPRS as percentage of total expenditure less than planned; increased government spending without proportional MPRS activity increase. - Lead institutions face constraints: inadequate financial and human resources, HIV/AIDS, non-prioritization of activities, non-functional M&E at sector level. - Cross-cutting recommended actions (selected): - Prioritize limited funds toward activities with direct impact on growth and poverty reduction. - Institutionalize HIV/AIDS mainstreaming across sectors and use 2 percent budget directive for HIV/AIDS activities. - Empower districts: income-generating activities, proposal-writing training, capacity building for pro-poor activities. - Conduct sector-specific impact assessments after two years to measure poverty reduction effects. ### Public Expenditure Management and Public Sector Reform — appendix highlights Appendix 3 — PEM progress and recommendations - Simplified budget structure: Not yet simplified; IFMIS introduced in few ministries; recommendation to complete IFMIS implementation by end of fiscal year 2004/05 and have input/output information by 2005/06. - Quarterly expenditure reports submitted to Cabinet Committees; no action taken on overspending ministries; recommendation to enforce Public Finance Management Act measures starting 2004/05. Appendix 4 — Public Sector Review progress and recommendations - Public Service Remuneration Board established; new salary and grading structure implemented. - Functional review and decentralization progress limited due to funding constraints. - Recommendations include a comprehensive civil service wage policy, implementation of performance contracts, contributory pension fund by 2005/06, phased fiscal devolution and capacity building before devolution. Appendix 5 a–c — Central Government Operations (selected figures reproduced exactly) - Key nominal aggregates (levels): - Total Revenue and Grants: 2003/04 Actual: 65,368; 2004/05 Proj.: 87,730; 2005/06 Proj.: 99,406; 2006/07 Proj.: 109,463; 2007/08 Proj.: 121,844; 2008/09 Proj.: 134,049. - Total Expenditure: 2003/04 Actual: 78,598; 2004/05 Proj.: 96,839; 2005/06 Proj.: 102,707; 2006/07 Proj.: 115,584; 2007/08 Proj.: 127,820; 2008/09 Proj.: 142,393. - Overall Balance (incl. grants): 2003/04: -14,719; 2004/05: -9,109; 2005/06: -3,301; 2006/07: -6,212; 2007/08: -5,977; 2008/09: -8,344. - Key ratios (% of GDP): - Total Revenue and Grants as % of GDP: 2003/04: 34.9; 2004/05: 39.7; 2005/06: 38.9; 2006/07: 37.5; 2007/08: 33.9; 2008/09: 36.0. - Total Expenditure as % of GDP: 2003/04: 41.9; 2004/05: 43.8; 2005/06: 40.2; 2006/07: 39.6; 2007/08: 38.7; 2008/09: 38.2. - Net Domestic debt as % of GDP: 2003/04: 25.1; 2004/05: 23.3; 2005/06: 22.1; 2006/07: 19.4; 2007/08: 18.1; 2008/09: 16.6. Appendix 5c — Pro-Poor Activities (2003/04) — aggregated PPE totals (figures preserved) - Total PPE: - 2003/04 MPRS Budget: 11,088.76 - 2003/04 Approved Budget: 11,621.36 - 2003/04 Revised Budget: 12,522.67 - MPRS budget as % of Expenditure: 25.22 - Approved budget as % of Expenditure: 20.5 - Revised budget as % of Expenditure: 16.0 - Pillar allocations and selected activity entries reproduced exactly in Appendix 5c. Appendix 5d — Protected Expenditures as share of total (Actual 2003/04 — Approved 2004/05) - Total Priority Expenditure: 13,164,124,000 (Actual 2003/04) — 15,638,664,000 (Approved 2004/05). - Total Government Expenditure: 77,186,606,897 (Actual 2003/04) — 89,735,793,930 (Approved 2004/05). - Largest actual 2003/04 sector allocations: Education 7,697,348,000; Health 2,995,086,000; Agriculture 1,032,241,000. - Selected program shifts (preserved values): Drugs (Health) increases from 1,077,450,000 to 1,500,000,000 (Approved 2004/05); Agriculture Extension rises from 160,290,000 to 741,745,000. Appendix 6 & 7 — Some sectoral and policy matrix recommendations (selected) - Monetary/Financial: instill fiscal discipline; reduce Bank rate. - Agriculture: prioritize soil fertility programs; increase irrigation financing; mainstream HIV/AIDS. - Fisheries/Forestry/Parks: promote cost-sharing and proposal-writing capacity; conduct ecological studies; increase funding. - Health/Education: recruit/train personnel; ensure timely Treasury disbursements; mainstream HIV/AIDS; improve EMIS/M&E capacity. - Fiscal: respect the budget as passed by parliament; develop domestic debt policy and formulate ways to reduce current debt stock. - Structural: conduct comprehensive privatisation review; civil service structure review and capacity assessment. ### Emerging issues summary (Chapter 7 & 8 synthesis) - Lands and Housing recognized as emerging priority; 26 Land Clerks trained; 13 Land Technicians trained out of 50; 13 estates purchased for redistribution; constraints: shortage of technical staff and equipment, inadequate funding, exclusion of lands and housing from initial MPRSP. - Cross-cutting constraints: inadequate funding and erratic flows; HIV/AIDS undermining human capacity; weak M&E and information flows; need for impact assessments to inform reformulation. - Overarching conclusion: macroeconomic stability and fiscal discipline critical to restore donor confidence, reduce domestic borrowing, lower interest rates, reallocate resources to pro-poor activities and achieve growth needed for poverty reduction. *Source: _cr05209 — 2003/04 MPRS second annual progress report (excerpts and appendices reproduced exactly from the provided content).* ### Foreword ### Foreword ### Key findings on the Annual Review Report (ARR) - Considerable improvement in the presentation of findings. - The report presents inputs as actual resources that flowed from Treasury to line Ministry. - The report presents outputs and outcome in most sectors. - In some sectors, outcome and outputs lack comparable targets against which to measure progress. - The impact analysis has not been presented in this report. - A comprehensive report will dwell much on the impact of the strategy and on the poverty levels of the country. ### Review process and institutional linkages - The review process comprises three stages: - First stage: analyse progress in implementing the MPRS and achieving targets within it. - Second stage: stakeholders’ workshop. - Third stage: dissemination of the review report. - The annual reviews are Malawi’s central policy reviews. - Complementary policy documents integral to the review process include: - Malawi Economic Growth Strategy (MEGS) - Public Sector Investment Plan (PSIP) - At the centre of the ARR is the availability of a management information system that will form part of the monitoring and evaluation system. - The depth of issue analysis will depend on a vibrant monitoring and evaluation system. ### Participation, financing, and acknowledgements - The report is the result of an extensive participatory process by government officials and development partners, including civil society. - Financial assistance for the review process was provided by: - Department of Foreign International Development - European Union - United Nations Development Programme - Acknowledgement to the drafting team under the chairmanship of Mr. Ben Botolo. - Signatories: - Hon. David Faiti MP, Minister of Economic Planning and Development - Hon. Goodall Gondwe, Minister of Finance *Source: _cr05209 - Foreword* ### Chapter 6.0: Monitoring Evaluation __________________________________ 100 ### Chapter 6.0: Monitoring Evaluation ### Executive Summary - The Malawi Poverty Reduction Strategy (MPRS) was formulated in 2002 with the aim to reduce poverty through economic growth and empowerment of the poor. - The first review identified challenges: little adherence to implementation of MPRS activities; lack of guidelines to assist sectors translate MPRS activities into the budget; diversion of resources meant for MPRS activities to fund non-priority other recurrent transactions (ORT). - The second progress report focuses on assessing inputs, outputs and to some extent outcomes of the MPRS implementation. - Inputs analysis in the report includes: - Expenditure by pillars. - Protected pro poor activities. - Functional analysis of government expenditure pattern. - Outputs and outcomes analysis compares planned activities and targets in the strategy to actual progress and targets achieved over the second year of implementation. ### Poverty Situation - The National Statistical Office is finalizing the 2004/05 Integrated Household Survey (IHS); results are expected to update 1997/98 IHS findings. - The 1998 IHS revealed that 65.3 percent of the population in Malawi lives below the poverty line. - On December 21, 2000, Malawi reached the decision point under the HIPC initiative following approval of a three-year PRGF arrangement by the IMF and World Bank Executive Board. - Malawi has not reached a completion point for the HIPC initiative due to repeated policy slippages. ### Key Macroeconomic Objectives for 2003/04 programme period - Attain an average annual growth rate of at least 6 percent. - Reduce inflation to 5 percent in line with MPRS target. - Increase gross official reserves to about five months of import cover. - Strategies to achieve objectives included: - Substantially reduce domestic budget deficit by increasing revenues and containing expenditures. - Control the growth of money. - Implement key structural reforms. ### Macroeconomic Developments and Budgetary Issues (2002-03 and 2003-04) - In the first year of MPRS implementation (2002-03), performance in attaining macroeconomic stability was generally below expectations. - Achievements: considerable progress in lowering inflation rates (earlier period), but fiscal issues remained serious. - Domestic debt: - Stock of domestic debt more than doubled from MK26.0 billion by end June 2002 to MK54.3 billion by end June 2003. - Inflation: - Inflation rate rose from 8.5 percent in June 2003 to 11.6 percent in June 2004. - The MPRS and the 2003/04 budget inflation targets were missed by 6.6 and 4.1 percentage points respectively. - Real GDP: - Real GDP grew by 4.6 percent during the period under review. - Comparable targets: MPRS target of 4.5 percent and 2003/04 budget target of 4.4 percent. - Exchange rate and currency performance: - During June to December (first half of fiscal year under review) the Malawi Kwacha depreciated by 12.1 percent from MK96.8010 to MK108.5669 per US dollar. - At end of the fiscal year the exchange rate was MK 108.9080 per one United States dollar. - Fiscal balances: - Both the MPRS and 2003/04 budgetary assumptions resulted in budgetary surpluses of 0.3 percent and 1.8 percent of GDP respectively. - Outcome linkages: - The depreciation of the Kwacha coupled with other economic fundamentals not holding resulted in a higher than projected inflation rate of 11.6 percent at end of the fiscal year. ### Monitoring Focus and Analytical Approach - The report analyzes: - Expenditure by pillars. - Protected pro-poor expenditures. - Functional classification and pattern of government expenditure. - Outputs/outcomes are evaluated by comparing planned MPRS activities and targets to actual achievements in the second year of implementation. *Source: _cr05209 - Chapter 6.0: Monitoring Evaluation* ### 35.3 percent of GDP against total expenditure of 42.5 percent of GDP. ### _cr05209 - 35.3 percent of GDP against total expenditure of 42.5 percent of GDP. ### Fiscal outcomes and protected pro-poor spending - Total revenue and grants outturn: 35.3 percent of GDP against total expenditure of 42.5 percent of GDP. - Protected Pro-poor Expenditures (PPE): - MPRS projected PPE at 25.2 percent of total expenditure. - 2003/04 budget projected PPE at 20.5 percent of total expenditure. - Actual 2003/04 PPE outturn declined by 9.2 percent of the MPRS projection and by 4.5 percent of the budgetary target. - Actual PPE amounted to 16 percent of total expenditure for the fiscal year under review. - Interpretation: overall government expenditures increased while PPEs were held constant in absolute terms. ### Financing of the deficit and domestic debt dynamics - The budget deficit during the review period was financed from domestic borrowing. - Total domestic debt stock increased from MK54.9 billion to MK67.7 billion during the fiscal year under review. - Drivers of domestic debt rise: - Increased government expenditure. - Non-disbursement of budgetary support by various donors. ### Medium-term macroeconomic prospects (2005–2007) and program assumptions - MPRS implementation period: three years; final year is 2004/05 fiscal year. - Objective: stimulate economic growth while maintaining gains from first three years of MPRS implementation. - Growth and inflation projections: - Average growth for next three years expected to be 5.5 percent. - By end-2006 the inflation rate expected to average 9.7 percent. - By end-2008 the annual average inflation rate expected to be 7 percent. - Inflation targets conditional on government fiscal targets holding and prudent monetary policy. - Shocks and mitigation: - Exogenous production shocks such as drought assumed to be fully mitigated by crop irrigation during winter cropping season. - Exchange rate assumption: - Exchange rate assumed to remain free of restrictions and multiple currency practices for current international transactions. - Deficit and debt path: - Programme assumes an average overall deficit including grants of 1.7 percent of GDP. - Current net domestic debt stock projected to fall from 22.9 percent of GDP to around 17 percent of GDP by 2008. - Reduced government borrowing expected to enable monetary authorities to cut lending rates. - Resource envelope projections: - 2005/06: revenue and grants projected at 38.9 percent of GDP against total expenditure of 40.2 percent of GDP. - 2006/07: resource envelope expected to be 37.5 percent of GDP against total expenditure of 39.6 percent of GDP. - 2007/08: external assistance expected to decline by 0.6 percentage points, leaving a resource envelope of 36.9 percent of GDP against total expenditure of 38.7 percent of GDP. - Decline in resource envelope mainly due to overall decline in external assistance. - Public expenditure composition assumptions: - Social and community services average share for past five years: 30.8 percent of total resources. - Medium-term assumption: share of social and community services remains at 30 percent of total expenditure. - General administration historical average: 27.4 percent of total expenditure; assumed requirement for next three years: 27 percent. - Debt service: - Bulk of debt service was domestic and constituted 20.6 percent of total expenditure. - Assumption: domestic debt service will average 16 percent or less of total expenditure over next three years. - Resources released from debt service to be reallocated to economic sector to boost growth. ### Analysis of 2004/05 budget and PPE composition - Share of total MPRS activities in the budget is 18 percent less than planned shares in the strategy. - Increase in expenditure driven by interest payments on domestic debt, constituting most statutory expenditure. - Protected Pro-Poor Expenditure in 2004/05 budget (shares of total budget): - Education: 10.23 percent. - Health: 3.94 percent. - Agriculture: 1.56 percent. - No significant difference between 2003/04 and 2004/05 pro-poor budget allocations in share terms. ### Sustainable pro-poor growth — sectoral implementation highlights Agriculture - Key constraints: declining soil fertility and degradation; low access to credit; weak extension systems; low technology development; over-dependence on rain-fed agriculture. - Extension services: - Planned target: 24,141 extension workers; trained: 4,683 (about 20% achievement). - Yellow vans: 2 procured against planned 8. - 40 AEDOs trained in participatory extension methods and other topics. - New Extension Policy piloted in 4 districts; participatory extension implemented in all 28 districts. - 133 farmer cooperatives and 4 associations formed. - Marketing: - 38 enumerators recruited and deployed in 38 major markets; two refresher courses conducted. - Small-scale irrigation and drainage: - Activities included awareness on treadle pumps, procurement/distribution on loans, river diversion irrigation encouragement, dam rehabilitation facilitation, staff reviews, and testing new technologies. - Specific crop and livestock production: - Associations/cooperatives: 133 associations and 4 cooperatives formed against targets of 300 associations and 30 cooperatives. - Farmer training: 55,552 farmers trained in general crop production against a planned figure of 950 farmers. - Basic seeds produced: 4.5 metric tonnes of beans; 9.9 metric tonnes of maize; 85.4 metric tonnes of groundnut; 1.8 metric tonnes of pearl millet. - Nurseries developed: 362 cassava nurseries on 161.2 hectares; 821 sweet potato nurseries covering 65.5 hectares; 30 banana nurseries covering 5.45 hectare. - Livestock sector: - Feed industry inspections: 55 percent versus 80 percent target of all feed manufacturing industries inspected. - 114 farmers trained in animal husbandry practices. - 32 dip tanks operational out of 50. - 60 farmers provided veterinary services out of 200 (cost-sharing basis). - Private sector animal breeding/health services monitored in 7 institutions. - 25 staff trained in disease surveillance against a target of 411. - Import monitoring of livestock products done at 6 border posts (22 percent achievement). Land, mechanization and natural resources - Land policy: - New policy on land acquisition developed and approved by government. - Project on consolidation and public acquisition/redistribution not launched. - Soil conservation training: - 4,683 farmers trained against target of 24,141. - 223,023 farmers trained in low cost soil fertility techniques against original target of 183,330. - Farm mechanization: - Difficulties acquiring work oxen, ox-drawn equipment and tractors. - Tractor hire scheme constrained by limited tractors in good working condition. - Ploughed area: 588 hectares compared to target of 43,200 hectares. Fisheries - Stock assessment potential: 30,000-35,000 tonnes per year from unexploited deep-water fish. - Localized overfishing near shores due to resource constraints of artisan fishers. - Small-scale fish farming implemented in 21 districts; stocked species: Talapia rendalii, Oreochromis shirunus, and Oreochromis karongae. - Need for better understanding of Chambo biology and enhancement/restocking strategies highlighted. Forestry, parks, tourism and mining - Forestry: - Forest Collaborative Management advanced pro-poor rural empowerment; Kasungu and Liwonde Reserves demonstrated multiple institutional arrangements. - Department promoted community planting of indigenous and exotic species; political support needed for reforestation. - Parks and Wildlife: - Department received about MK32 million of PPE funds in 2003/04; used for administration, extension, research, supervision, maintenance, staff house rehabilitation, law enforcement and crop protection. - Complementary funds from USAID Nature Program coordinated by DEA. - Tourism: - Community-led cultural tourism pilots developed (Yao, Chewa, Ngoni, Tumbuka cultural villages); curio stall site identification preparatory work done. - 62 managers trained (27 in Salima, 16 in Karonga, 19 in Nkhata Bay) for SME accommodation management; tour guide training not implemented due to inadequate funding. - Accommodation classification: out of targeted 1,200 units, 521 units classified; 300 complied with published standards and were licensed. - Mining: - Sector employs nearly 3,000 people; formal employment projected to increase to 10,000 by 2004; informal employment expected to double by 40 percent within same period. - MPRS focus on small-scale mining (quarry stone, gemstones, pottery-ceramics, salt aggregate, limestone, sand, clay). - Projects: lime demonstration kiln at Balaka; salt making demonstration at Nchalo; relevant associations established; salt production increased. Roads, water, energy, telecommunications, commerce and industry - Roads: - EU-funded construction of Dwambadzi, Kalwe, Liwaladzi, Kasangadzi and Lisasadzi bridges. - 88 km Masasa-Golomoti-Monkey Bay at cost of K1.02 billion; work started March 2003; contract duration 730 days. - EU-funded Karonga-Songwe road not constructed. - MABARIM mainly EU-funded; other partners include IDA, NDF, African Development Bank, KFW, OPEC fund, others. - Water and sanitation: - National Water Development Project implementation completed; activities: regional water boards establishment/strengthening, rural/semi-urban gravity-fed piped schemes, borehole construction/rehabilitation. - District Water Supply III and Lilongwe/Dedza ground water development projects completed. - UNICEF and NGOs implemented borehole construction, shallow wells, springs protection, PHAST training, Village Health and Water Committees training, CBM of water supply and sanitation. - Sanitation baseline: 81.4% of households had sanitary excreta disposal services by 2002; target was universal access by 2005. - Energy: - Strategy to increase access to affordable, sustainable rural energy; planned activities include rural network expansion, promotion of efficient stoves, credit for stove production, biogas, photovoltaic revolving fund, market development for photovoltaic, fuel distribution margin rationalization, low-cost electrification, efficiency improvements, interconnection with Mozambique, and rehabilitation of power infrastructure. - Revolving fund established for photovoltaic systems; negotiations with commercial banks underway to administer fund. - Market system for photovoltaic energy not developed. - Telecommunications: - Recognized as enabling sector; government urged to improve access to telecommunication, postal, radio/TV broadcasting, internet and computing services. - Commerce and industry: - Formation and development of product-specific farmer cooperatives and associations supported. - 30 extension workers trained in formation of clubs, associations and cooperatives. - 2,500 members trained in business and association management; trained members registered into cooperative societies. - Support to a fruit juice processing industry provided; no support to soya processing groups as planned. - Monitoring and import ban on poultry products to protect local producers. ### Human capital development — education, health, HIV/AIDS, nutrition, and skills - Education: - Focus: improve quality, access, relevance and equity across early childhood, primary, secondary, higher and technical/vocational education. - Early Childhood Development (ECD): - ECD policy launched; supporting documents produced. - District trainers trained; 387 caregivers trained at Chancellor College. - 735 ECD centers opened. - Of 45 Social Welfare Assistants enrolled, 38 graduated from Magomero College. - Primary education: - Activities: provision of teaching and learning materials, teacher salaries improvement, primary teacher education, construction of teachers’ houses. - Functional Adult Literacy: - About 3,500 classes opened; learning cycle registered over sixty thousand learners with women comprising ninety percent. - Numbers dipped in January and February due to farming activities. - SDIG Project in 10 districts: 400 classes operational, registering 10,991 learners (9,771 females). - 1,000 instructors recruited; 499 dropped out mainly due to delays in honoraria payments. - Secondary education: - New secondary schools constructed by government and partners. - EMIS established in 2003/04 with plans to extend to divisions and districts. - Open Learning Centers established in many conventional and community day secondary schools. - Textbook revolving fund (TRF) not successfully implemented because generated funds were remitted to general government account. - Higher education: - University of Malawi implemented access, equity, quality and relevance activities and worked to reduce reliance on subventions. - Structures for disabled students put in place. - Modalities for needy students to benefit from Government Students Loan Trust Fund developed; discussions to establish Public Universities Students Loan Trust Fund underway. - Collaboration with Central University of Technology (South Africa) signed. - Plans to introduce university-wide HIV/AIDS generic courses by January 2005. - Health: - Essential Health Package (EHP) strategies: improve quality/availability, access/equity, and administration/financing of essential health services. - Budgetary training allocation: K140.9 million allocated in 2003/04 for ongoing training of health cadres; estimated requirement approximately K200 million. - Accelerated training: 809 health workers trained in 2003/04. - Minimum annual drug expenditure target: equivalent of US$1.25 per capita. - Approved budget for drugs in year under review: K1.2 billion (~US$0.96 per capita). - Shortfall due to weakening Malawi Kwacha against foreign currencies. - HIV/AIDS: - National clinical Unit established for ART, counseling and testing, and management of HIV-related diseases. - Plan finalized to scale up ART to provide free ART in a total of 54 health facilities countrywide in July–December 2004. - Counseling and testing scale-up plan: planned target to test 750,000 clients in 2004 and 2005. - Nutrition: - New baby-friendly hospitals established; one integrated child health day campaign conducted. - Two documentaries on infant feeding and HIV/AIDS aired. - Community support systems for infant feeding established and trained. - 5 nutrition sentinel surveillance sites established in health centers; 12 districts providing nutrition information; process ongoing to establish more sites. - Technical, entrepreneurial, vocational education and training: - Ministry of Labour completed rehabilitation of 90 buildings in 7 colleges. - Non-apprenticeship full-time enrollment increased to 880. - Total apprentices in colleges increased to 2,030. - Evening/parallel programmes enrolled 1,150 students versus 880 in normal system. ### Safety nets and social protection - Strategy recognizes need for productivity-enhancing and welfare transfer interventions. - Productivity-enhancing: - Targeted Input Programme (TIP) and Public Works Programmes (PWP). - TIP package: 5 kg Urea, 5 kg 23:21:0, 2 kg OPV maize, 1 kg grain legume seed. - Total cost of government-implemented TIP: MK1.394 billion. - Contributors: DfID and government contributed approximately MK1.286 billion and MK108 million respectively. - Government contribution in form of carryover fertilizer from previous year’s TIP. - Public Works Programs: - Three types implemented: food for work, cash for work, input for work. - Welfare-enhancing interventions: - Food supplements and therapeutic feeding (targeted nutrition), direct welfare transfers, capacity building programs; majority implemented by NGOs. - Targeted nutrition: - No famine in 2003-04; NGOs distributed food to vulnerable groups (children, pregnant/lactating mothers, sick). - WFP supported nutrition rehabilitation centers, NGOs and hospitals. - Direct welfare transfers: - Managed by Ministry of Gender, Child Welfare and Community Services with donor assistance. - 2003-04: school fees assistance and relief food distribution. - Central region: 156 students received school fees assistance worth K572,385 (providers: Red Cross, Lions Club-Lilongwe, HIPC funds). ### Good governance, decentralization, human rights and cross-cutting issues - Political leadership: - Change of leadership in year under review; State President launched a Road Map (May, 2004) to transform Malawi from poor to middle income; emphasis on fighting poverty and shifting from consuming to producing economy. - Safety, security and access to justice: - MPRS advocates improved safety, security and access to justice. - Judiciary: - Launched five-year Strategic Plan and Development Programme in November 2003. - Malawi Police Service (MPS): - Conducted training to improve capacity and professionalism; HIV/AIDS activities targeted at police officers and families. - Recruited civilian staff in Finance Management; drafted Civilian Management Policy awaiting approval. - Anti-corruption: - Anti-Corruption Bureau (ACB) conducted National Anti-Corruption Day and decided it will be observed annually. - Seminars on free and fair elections, anti-corruption campaigns across districts, anti-corruption newsletters produced for two quarters, support for university anti-corruption clubs, posters, T-shirts, radio and talk-show campaigns. - Decentralization: - Ministry of Local Government and Rural Development developed accounting and financial management systems; seven district assemblies computerized accounting systems; five assemblies failed to do so mainly due to under-budgeting for procurement. - Democratization: - Many activities by state institutions, political parties and civil society focused on general elections in 2004; proliferation of political parties noted. - Human rights: - Awareness campaigns conducted in almost all districts; increase in reported cases to human rights organizations and state institutions; increased media coverage. - Gender and empowerment: - Gender mainstreaming efforts in the budget cycle; training held for planning and budgeting officers. - Draft acts/bills and reviewed laws submitted to parliament to make legal system fair to all gender groups. - HIV/AIDS (cross-cutting): - HIV infection rate: 15 percent (noted as one of highest, especially in younger age groups). - Official launching of national HIV/AIDS policy and development of implementation plan for ARVs programme. - Science, technology and environment: - DISTMISI achievements: drafting National ICT policy; maintenance of Health Management Information System; failure to computerize Education, Health, Gender and Labor sectors. - Department of Environmental Affairs reviewed and approved EIA, Environmental Audits and project briefs across sectors; some projects proceeded without EIAs due to ignorance or defiance. ### Monitoring, evaluation and institutional arrangements - Ministry of Economic Planning and Development completed a study report entitled ‘Design for a District based performance monitoring and evaluation system’ in November. *Source: _cr05209 - 35.3 percent of GDP against total expenditure of 42.5 percent of GDP.* ### 2003. This report brought out ten crucial recommendations to MEPD for the design and ### _cr05209 - 2003. This report brought out ten crucial recommendations to MEPD for the design and ### Emerging Issues - The previous review omitted lands and housing from the MPRS formulation; the current review recognizes these issues need to be taken on board. - Although lands and housing were not included in MPRS activities, a number of activities related to land and housing were implemented during the period under review. - The Ministry produced the MPRS Monitoring and Evaluation Master Plan during the year under review. - A database on project monitoring was developed during the review period. ### Conclusions and Recommendations (summary of findings) - Macroeconomic performance remains far from achieving macroeconomic stability as targeted in the MPRS. - Almost all macroeconomic targets set in both the MPRS and the 2003/04 budget were not achieved, as manifested by: - high inflation rate; - sluggish GDP growth; - increased domestic debt; - continued depreciation of the Malawi Kwacha. - The 2003/04 budget allocation for the MPRS as a percentage of total expenditure was less than programmed in the MPRS and budget, revealing increased government spending without a proportionate increase in MPRS activities. - The 2002/03 annual progress report recommendations (development of guidelines to link MPRS to the budget, establishment of planning units in all ministries and government departments, establishment of monitoring and evaluation systems in all sectors, and carrying out impact studies) are ongoing. ### Introduction and Review Process - MPRS formulated in 2002 with aim to reduce poverty through economic growth and empowerment of the poor. - Annual reviews recommended to assess implementation progress; first-year implementation was 2002/03. - First review challenges included: - little adherence to MPRS implementation; - lack of guidelines to translate MPRS activities into the budget; - diversion of resources meant for MPRS activities to fund non-priority ORT related expenditures; - lack of information related to implemented activities. - The second progress report assesses inputs, outputs, and to some extent outcomes; inputs analysis covers expenditure by pillars, protected pro-poor activities, and functional analysis of government expenditure. - The review process consolidated original 21 thematic working groups into nine working areas and used a drafting team including government and civil society officials. - Drafting team consultations: senior government officials in January 2005; development partners on 11th January 2005; civil society organisations on 17th January 2005; drafting team finalized stakeholder comments by 11th February 2005. - The 2003/04 annual progress report comprises eight chapters, with Chapter 8 presenting major conclusions and recommendations. ### Background: Poverty, HIPC, PRGF and Policy Implications - 1998 IHS revealed 65.3 percent of the population in Malawi lives below the poverty line. - On December 21, 2000, Malawi reached decision point under HIPC after approval of a three-year PRGF arrangement by IMF and World Bank; Malawi has not reached HIPC completion point due to repeated policy slippages. - PRGF arrangement was anchored in the MPRS and required successful implementation of MPRS policies and PRGF benchmarks for at least one year to reach HIPC completion point. - Key macroeconomic objectives during 2003/04 programme period: - attain an average annual growth rate of at least 6 percent; - reduce inflation to 5 percent in line with MPRS target; - increase gross official reserves to about five months of import cover. - Main challenge to 2003/04 PRGF programme: budget management and failure to reverse fiscal deterioration, leading to stalled negotiations with the Fund. - Fiscal slippages since MPRS formulation were mainly due to sharp increase in interest rates associated with rising domestic public debt; unstable wage bill; repeated bailouts of non-performing parastatals. - Donor budget support withdrawal led government to finance current outlays through domestic borrowing, contributing to soaring domestic debt and increased interest rates. ### Macroeconomic Developments and Budgetary Issues — Key Targets and Outcomes - The MPRS and 2003/04 budget outlined targets for inflation, exchange rate, GDP growth, domestic debt and government fiscal deficit (Table 3.1 in source). - Table 3.1 (selected variables and values as presented): - Inflation (%) — MPRS targets 5.0; 2003/04 Budget (Jul03-Jun04) 7.5; Outurn 11.6 - GDP growth (%) — MPRS targets 4.5; 2003/04 Budget 4.4; Outurn 4.6 - Budget Deficit/Surplus (% of GDP) incl. Grants — MPRS targets 0.3; 2003/04 Budget 1.8; Outurn -7.2 - Exchange rate — MPRS targets 7489.46; 2003/04 Budget 108.90; Outurn 80 - Total Revenues & Grants (MK’ million) — MPRS targets 44,390.85; 2003/04 Budget 59,973.06; Outurn 65,574.76 - Domestic revenues (MK’ million) — MPRS targets 31,360.63; 2003/04 Budget 36,014.04; Outurn 42,576.99 - Grants (MK’ million) — MPRS targets 13,030.22; 2003/04 Budget 23,959.02; Outurn 22,997.77 - Expenditures (MK’ million) — Outurn 78,471.41 - Budget Deficit/Surplus (MK’ million) — MPRS targets 415.1; 2003/04 Budget 1,891.4; Outurn -12,896.65 - Inflation: - Inflation rose from 8.5 percent in June 2003 to 11.6 percent in June 2004. - MPRS and 2003/04 budget inflation targets were missed by 6.6 and 4.1 percentage points respectively. - Drivers of higher inflation: increases in food and petroleum prices; increases in farm input prices; depreciation of the Kwacha; expansionary monetary policies accommodating uncontrollable government expenditure. - GDP Growth: - Real GDP grew by 4.6 percent during the period under review. - Comparable to MPRS target 4.5 percent and 2003/04 budget target 4.4 percent. - Growth expected to improve with implementation of the Malawi Economic Growth Strategy (MEGS). - Moderate growth mainly attributed to underperformance of small-scale agriculture due to poor weather and high farm input prices following Kwacha depreciation. - For significant poverty reduction, economy requires growth of at least 6 percent. - Sector growth (Table 3.2 highlights, values preserved as presented): - Agriculture overall 2.7 - Small-Scale -1.4 - Large-Scale 20.5 - Manufacturing 6.9 - Electricity and Water 7.5 - Construction 10.9 - Distribution 6.9 - Transport and Communication 7.2 - Financial and Professional Services 7.3 - Real GDP Growth at Factor Cost 4.6 - Analysis of sources of growth: - Main sources of growth during period: construction (10.9), utility sector (7.5), transport and communication (7.2), financial and professional services (7.3), distribution (6.9). - Overall agriculture growth was 2.7 percent, with small scale –1.4 percent and large scale 20.5 percent. - Recommendation: put policies in place to increase the size of large scale production given Malawi’s dependence on small-scale agriculture. - Exchange Rate: - Kwacha depreciated by 12.1 percent during first half of fiscal year (June to December), from MK96.8010 to MK108.5669 per US dollar. - Kwacha stabilized during second half due to Reserve Bank foreign exchange sales. - End-of-year exchange rate reported as MK 108.9080 per one United States dollar. - Depreciation drivers: decline in tobacco prices internationally; importation of maize; expected donor budget support failing to materialize due to government failure to meet IMF-PRGF targets; sluggish export performance; large current account trade deficit; speculation. - Gross official reserves dropped to as low as 1.9 months of import cover. ### Fiscal Resource Envelope and Outcomes - MPRS assumptions for 2003/04: - Domestic revenue MK31.4 billion; - External assistance MK13.0 billion; - Total resource envelope MK44.4 billion (27.6 percent of GDP) against total expenditure 27.3 percent of GDP; - Resulting overall surplus 0.3 percent of GDP. - 2003/04 budget assumptions: - Domestic revenue MK36.0 billion; - External assistance MK24.0 billion; - Total resource envelope MK60.0 billion (34.5 percent of GDP) against total expenditure 32.8 percent of GDP; - Resulting budget surplus 1.8 percent of GDP. - Outturn: - End-of-year outcomes diverged: exchange rate depreciation and other factors produced inflation 11.6 percent and resource envelope 35.3 percent of GDP against total expenditure 42.5 percent of GDP. - Overall fiscal operations resulted in a deficit of 7.2 percent of GDP. - Expenditures moved from 32.7 percent of GDP as approved by parliament to 42.5 percent of GDP. *Source: 2003/04 MPRS second annual progress report (chapters and tables as presented in source content).* ### 3.2 Macroeconomic Policies ### _cr05209 - 3.2 Macroeconomic Policies ### Monetary Policy - Objective: contain inflationary pressure through monetary instruments. - Measures implemented by Reserve Bank of Malawi (RBM): - Intensified open market operations (OMO). - Adjusted liquidity reserve requirement (LRR) and the discount rate. - Targeted reserve money to control money supply. - Selected Monetary Policy Indicators (MK’ Mn): - Money Supply (M2): 35,182.7 (2003); 40,520.0 (2004) - M2 Growth Rate (annual in %): 29.3 (2003); 35.7 (2004) - Reserve Money: 13,742.9 (2003); 16,108.5 (2004) - Total Foreign Reserves (excluding encumbered reserves): 19,832.7 (2003); 18,113.8 (2004) - Key findings: - Money supply growth rose from 29.3 percent in May 2003 to 35.7 percent in May 2004. - Primary causes: monetization of the budget deficit and mismatch between issues and maturities of OMO instruments leading to an expansionary monetary stance. - Constraints and challenges: - Lack of donor support. - Continuous speculative attacks on the Malawi Kwacha. - Excessive government domestic borrowing contributing to higher interest and inflation rates. ### Fiscal Policy - Core objective: reduce the deficit to a sustainably manageable level and align fiscal policy with public expenditure management. - Progress: Revenue- and expenditure-related policy measures were put in place (details in Appendix 2 of the source). - Constraints and challenges: - Cost recovery and cost sharing measures were not fully implemented. - Shortage of personnel to enforce surtax compliance. - Non-commitment by government to implement budget and PRGF programme led to temporary suspension of aid flows. - High interest rates exerted pressure on the budget, complicating implementation of contractionary fiscal policies. ### Public Expenditure Management (PEM) - Emphasis: link the strategy to the national budget via an output-based approach; ensure prudent fiscal policy and PEM for stable macroeconomic conditions and growth. - Planned PEM activities for 2003/2004: - Simplified and transparent budget structure. - Submission of quarterly expenditure reports to Cabinet Committees. - Strengthen PAC and BFC through technical support. - Training of Cabinet Ministers, MPs, and controlling officers on public finance. - Introduction of IFMS. - Reviewing/strengthening Credit Ceiling Authority (CCA) and Commitment Control system (CCS). - Public sector reform. - Progress: Implementation status presented in Appendix 3; financial performance for 2003/04 analyzed in terms of revenue, expenditure, sectoral budgets, and protected pro-poor activities. ### Revenue Performance - MPRS programmed total revenue including grants: 27.6 percent of GDP for 2003/04. - 2003/04 Approved budget expected revenue: 34.5 percent of GDP. - Actual outturn for revenue: 35.3 percent of GDP. - Drivers of higher-than-projected revenue: - Increased external assistance in the form of project grants. - Increased tax revenue performance due to improved administration efficiency and enforcement. - Comparative figures (in million Kwacha): - Total Revenue and Grants: 44,390.80 (MPRS Resource Envelop 2003/04); 59,973.00 (2003/04 Approved); 65,574.76 (2003/04 Revised) - Tax Revenue: 28,270.50 (MPRS); 31,140.00 (Approved); 36,901.77 (Revised) - Non-tax Revenue: 3,090.10 (MPRS); 4,874.00 (Approved); 5,675.22 (Revised) - Grants: 13,030.20 (MPRS); 23,959.00 (Approved); 22,997.77 (Revised) - Total Expenditure: 43,975.70 (MPRS); 56,789.50 (Approved); 78,471.41 (Revised) - Recurrent expenditure: 41,374.80 (Approved) - Development expenditure: 15,414.70 (Approved); 20,130.48 (Revised) - Deficit / Overall Deficit: 415.10 (MPRS); 3,183.50 (Approved); -12,896.65 (Revised) - Financing: 415.12 (MPRS); 3,183.50 (Approved); 13,511.15 (Revised) - Foreign Loans (net): 1,028.18 (MPRS); 8,808.00 (Approved); -932.43 (Revised) - Domestic Borrowing (net): 1,443.30 (MPRS); 1,991.50 (Approved); 14,443.58 (Revised) - GDP at Current Market Prices: 160,654.20 (MPRS); 173,551.85 (Approved); 185,865.90 (Revised) - Discrepancies: 0.02 (MPRS); 0.00 (Approved); 614.50 (Revised) - As a percentage of GDP: - Total Revenue: 27.6 (MPRS); 34.5 (Approved); 35.3 (Revised) - Total Grants: 8.1 (MPRS); 13.8 (Approved); 12.4 (Revised) - Total Expenditure: 27.3 (MPRS); 32.7 (Approved); 42.5 (Revised) - Deficit: 0.3 (MPRS); 1.8 (Approved); 7.2 (Revised) - Financing: 0.3 (MPRS); 1.8 (Approved); 7.2 (Revised) ### Government Expenditure - MPRS programmed total expenditure: 27.4 percent of GDP. - 2003/04 Approved budget projected expenditure: 32.7 percent of GDP. - Actual outturn: 42.2 percent of GDP. - Increase of 14.8 percentage points from MPRS target and 9.5 percentage points from budget target. - Increase mainly financed through domestic financing. - Strategy assumption: stable macroeconomic conditions would yield overall surplus of 0.3 percent of GDP. - Actual 2003/04 fiscal year outcome: deficit of 7.2 percent of GDP, financed largely through domestic borrowing. - Fiscal developments: - 2002/03 government incurred a fiscal deficit of 11.6 percent of GDP. - Challenge: non-compliance to spending within available resources and rising domestic public debt. - Resource Allocation (MK’bn and percent of total budget): - Total Budget: 43,975.70 (MPRS) 100.0%; 56,789.5 (Approved) 100.0%; 72,790.29 (Revised) 100.0% - Total (MPRS costing): 32,675.30 (74.3%); 31,943.4 (56.3%); 36,513.3 (50.2%) - PILLAR 1: 9,421.10 (21.4% MPRS); 9,852.3 (17.4% Approved); 9,363.6 (12.9% Revised) - PILLAR 2: 15,356.60 (34.9% MPRS); 14,501.7 (25.5% Approved); 18,605.8 (25.6% Revised) - PILLAR 3: 1,824.80 (4.1% MPRS); 4,753.3 (8.4% Approved); 5,066.1 (7.0% Revised) - PILLAR 4: 3,783.70 (8.6% MPRS); 2,836.2 (4.9% Approved); 3,477.7 (4.8% Revised) - Cross cutting: 2,010.60 (4.6% MPRS); 0 (Approved); 0 (Revised) - M & E: 278.60 (0.6% MPRS); 0 (Approved); 0 (Revised) - Statutory Expenditure: 9,023.70 (20.5% MPRS); 10,469.0 (18.4% Approved); 18,139.9 (24.9% Revised) - Statehood activities: 2,276.60 (5.2% MPRS); 14,377.1 (25.3% Approved); 18,135.6 (24.9% Revised) - Observation: Share of statehood activities increased from 5 percent (MPRS) to 25 percent (revised budget), undermining MPRS implementation. ### Analysis of Government Expenditure by Sector - Central government functional classification (MK’ mn): - General Administration: 15,084.02 (MPRS); 17,213.23 (Approved); 21,613.35 (Revised) - General Public Services: 12,858.42 (MPRS); 14,377.07 (Approved); 18,135.62 (Revised) - Other General Public Services (Defence and Public Order and Safety Affairs): 2,225.6 (MPRS); 2,836.16 (Approved); 3,477.73 (Revised) - Social and Community Services: 17,932.11 (MPRS); 19,363.84 (Approved); 23,832.26 (Revised) - Education Affairs and Services: 10,111.76 (MPRS); 8,834.89 (Approved); 9,485.49 (Revised) - Health Affairs and Services: 5,995.57 (MPRS); 5,579.40 (Approved); 9,040.49 (Revised) - Social Security and Welfare Affairs and Services: 546.92 (MPRS); 1,870.00 (Approved); 1,815.42 (Revised) - Other Social Services: 1,277.86 (MPRS); 3,079.55 (Approved); 3,490.86 (Revised) - Economic Services: 10,959.48 (MPRS); 9,743.47 (Approved); 14,885.89 (Revised) - Energy and Mining Services: 89.18 (MPRS); 135.53 (Approved); 108.63 (Revised) - Agriculture and Natural Resources: 3,231.49 (MPRS); 3,808.91 (Approved); 4,341.49 (Revised) - Tourism Affairs and Services: 187.51 (MPRS); 172.35 (Approved); 152.23 (Revised) - Other Economic Services: 7,451.31 (MPRS); 5,626.68 (Approved); 10,283.54 (Revised) - Debt Amortization: 10,468.96 (Approved); 18,139.91 (Revised) - Total Expenditure: 43,975.61 (MPRS); 56,789.50 (Approved); 78,471.41 (Revised) - GDP at Current Market Prices: 160,654.20 (MPRS); 173,551.85 (Approved); 185,865.90 (Revised) - As a percentage of Total Expenditure: - General Administration: 34.3 (MPRS); 30.3 (Approved); 27.5 (Revised) - Social and Community Services: 40.8 (MPRS); 34.1 (Approved); 30.4 (Revised) - Economic Services: 24.9 (MPRS); 17.2 (Approved); 19.0 (Revised) - Debt Amortization: 0.0 (MPRS); 18.4 (Approved); 23.1 (Revised) - Key findings: - Social and community services received 30.4 percent of total expenditure (actual), below MPRS planned 40.8 percent and 2003/04 budget target 34.1 percent. - General administration received 27.5 percent of total expenditure. - Debt repayment rose to 23.1 percent of total expenditure from a budgeted 18.4 percent. ### Protected Pro-poor Expenditures (PPEs) - MPRS and 2003/04 budget PPE projections: - MPRS projected PPEs at 25.2 percent of total expenditure. - 2003/04 budget projected PPEs at 20.5 percent of total expenditure. - Actual outturn for 2003/04 PPEs: - PPEs amounted to 16 percent of total expenditure. - Decline of 9.2 percent from MPRS projection and 4.5 percent from budget projection. - Distribution and sectoral notes: - Pillar 2 (education and health) received more funding relative to other pillars. - Education: 8.5 percent of total expenditure (of PPEs). - Health: 4 percent of total expenditure (of PPEs). - Education sector: teaching and learning materials for primary and secondary received over double amounts approved in the budget; teachers' salaries and training also received relatively more; tertiary education and teachers' houses were worse affected. - Health sector: increased funding for preventive health care, health workers’ training, curative services, technical services, and drugs; less for health infrastructure development and rehabilitation. - Pillar 1 PPEs: allocated 2 percent of total expenditure versus MPRS target 9 percent and budget target 2.8 percent; agriculture extension received 1.1 percent of total expenditure; food security initiatives, research, and borehole/dam construction or rehabilitation were not funded. - Pillar 3 PPEs: 0.7 percent of total expenditure. - Pillar 4 PPEs: 0.4 percent of total expenditure. - Observation: Some PPE activities were not funded for unclear reasons. ### Financing of the Deficit (Domestic Debt Stock) - Budget deficit financed from domestic borrowing during the review period. - Total domestic debt stock increased from MK54,907 (end Jun 03) to MK57,015 (end Dec 03) to MK67,741 (end June 04). - Stock of Domestic Debt, June 2003 – Dec 2004: - TBs (face): 39,612 (End Jun 03); 47,029 (End Dec 03); 51,986 (End June 04) - TBs (cost): 32,147 (End Jun 03); 31,147 (End Dec 03); 38,141 (End June 04) - LRS: 3,773 (End Jun 03); 3,752 (End Dec 03); 3,735 (End June 04) - RBM Bills: 9,212 (End Jun 03); 2,914 (End Dec 03); 5,199 (End June 04) - W/Means: 2,310 (End Jun 03); 3,320 (End Dec 03); 6,821 (End June 04) - TOTAL (includes TBs face value and interest charges): 54,907 (End Jun 03); 57,015 (End Dec 03); 67,741 (End June 04) - Key findings: - Rise in domestic debt attributable to increased government expenditure and non-disbursement of budgetary support by donors. - Current domestic debt stock poses risk of triggering a fiscal crisis if not reversed. - Constraints and challenges: - Lack of PRGF to support implementation. - Political interference derailing economic programmes and the budget. - Increase in stock of domestic debt. ### Public Sector Reform - Rationale: necessary for efficient and effective public sector service delivery; improve civil service competence for policy formulation, implementation, and monitoring. - Planned reform strategies: - Improve public sector conditions of service and work ethics. - Review the structure of the civil service. - Address capacity constraints across government. - Strengthen public policy via decentralization. - Improve effectiveness of parastatals. - Progress: Several activities carried out to improve parastatal performance, but most were not fully implemented; details in Appendix 4. ### Medium Term Macroeconomic Prospects 2005-2007 (Medium Term Macroeconomic Framework for 2005-07 Fiscal Year) - Summary table (selected variables): - Inflation Rate: 12.7 (2004/05); 11.4 (2005/06); 8.0 (2006/07); 7.3 (2007/08) - Real GDP growth Rate: 4.7 (2004/05); 5.1 (2005/06); 5.5 (2006/07); 5.8 (2007/08) - Overall Balance (% of GDP) incl. Grants: -4.1 (2004/05); -1.3 (2005/06); -2.1 (2006/07); -1.8 (2007/08) - Total Revenues & Grants (MK’ Mn): 76,703.0 (2004/05); 99,406.0 (2005/06); 109,463.0 (2006/07); 121,844.0 (2007/08) - Domestic Revenues (MK’ Mn): 51,491.0 (2004/05); 63,368.0 (2005/06); 72,463.0 (2006/07); 80,426.0 (2007/08) - Grants (MK’ Mn): 25,212.0 (2004/05); 36.0 (2005/06); 38.0 (2006/07); 37,000.0 (2007/08); 41,417.0 (note: source lists multiple grant entries across columns) - Expenditures (MK’ Mn): 85,600.3 (2004/05); 102,707.0 (2005/06); 115,584.0 (2006/07); 127,820.0 (2007/08) - Overall Balance: 8,897.3 (2004/05); 3,301.0 (2005/06); 6,121.0 (2006/07); 5,976.0 (2007/08) - Nominal GDP (MK’ Mn): 227,656.10 (2004/05); 255,457.0 (2005/06); 291,724.0 (2006/07); 330,174.0 (2007/08) - Growth and inflation outlook: - Average GDP growth for next three years expected at 5.5 percent. - Economy could grow beyond 6.5 percent per annum if government maintains fiscal discipline. - Agriculture expected to remain dominant sector influencing growth. - Inflation expectations: average 9.7 percent by end of 2006; annual average 7 percent by end of 2008 (assumptions: fiscal targets hold and prudent monetary policy pursued; exogenous shocks mitigated by crop irrigation). - Exchange rate assumption: - Exchange rate assumed to remain free of restrictions and multiple currency practices for current international transactions. - Overall balance and public debt implications: - Programme assumes average overall deficit including grants of 1.7 percent of GDP. - Target intended to reduce net domestic debt stock from 22.8 percent of GDP to around 17 percent of GDP by 2008. - Expected reduction in government borrowing would allow monetary authorities to cut lending rate to around 12 percent by 2008. - Resource envelope: - Revenue and grants projected at 38.9 percent of GDP against total expenditure of 40.2 percent of GDP in 2005/06 fiscal year. - Main programme risk: - Combination of current stock of domestic debt and high interest rates prevailing on the market. *Source: _cr05209 - 3.2 Macroeconomic Policies (Malawi), Malawi Authorities and IMF Staff* ### 37.5 percent of GDP against total expenditure of 39.6 percent of GDP. The decline in the ### _cr05209 - 37.5 percent of GDP against total expenditure of 39.6 percent of GDP. The decline in the ### Resource envelope and external assistance - Resource envelope for the unspecified baseline year: 37.5 percent of GDP against total expenditure of 39.6 percent of GDP. - Fiscal year 2007/08 projection: external assistance will further decline by 1.7 percent leaving a resource envelope of 36.9 percent against total expenditure of 38.7 percent of GDP. - Policy implication: increased external assistance is needed in order to reduce the interest rates and stimulate economic growth. ### Medium Term Indicative Sector Shares (3.3.6) - Past five years average share to social and community services: 30.8 percent of total resources. - Significant amounts went to education and health. - Medium-term assumption: social and community services share will remain at 30 percent of total expenditure. - General administration: - Past average: 27.4 percent of total expenditure. - Assumed share for next three years: 27 percent of total expenditure. - Debt service: - Bulk was domestic debt and constituted 20.6 percent of total expenditure (past period). - Assumption: tight fiscal policy will lower interest rates and reduce government debt service. - Assumed domestic debt service average for next three years: 16 percent or even less than 16 percent of total expenditure. - Resources released from lower debt service to be used to boost economic growth. - Unallocable services: - Assumption for medium term: zero percent of resources will trickle to this sector to encourage transparency. - Resources released from unallocable services and debt services to assist implementation in economic services. - Economic services: - Past five-year average: 13.7 percent of total expenditure. - Assumed share for next three years: 27 percent of the total budget. - Expected outcome: three-year expenditure framework will bring social and productive sectors into a balance. ### Table 3.9 — Share of Government Expenditure by Main Sector (2000/01–2007/08) — selected values preserved as in source - General Administrations (by year as shown): - 2000/01: 26.67 - 2001/02: 26.97 - 2002/03: 28.33 - 2003/04: 27.54 - 2004/05: 27.5 - 2005/06: 27.0 - 2006/07: 27.0 - 2007/08: 27.0 - Social and Community Services (by year as shown): - 2000/01: 24.54 - 2001/02: 36.91 - 2002/03: 31.72 - 2003/04: 30.37 - 2004/05: 30.4 - 2005/06: 30.0 - 2006/07: 30.0 - 2007/08: 30.0 - Economic Services (selected year values as shown): - 2000/01: 14.09 - 2001/02: 13.83 - 2002/03: 9.85 - 2003/04: 11.73 - 2004/05: 19.02 - 2005/06: 22 - 2006/07: 28 - 2007/08: 31 - Debt Amortization (by year as shown): - 2000/01: 19.82 - 2001/02: 8.72 - 2002/03: 28.18 - 2003/04: 23.12 - 2004/05: 23.12 - 2005/06: 21.0 - 2006/07: 15.0 - 2007/08: 12.0 - Unallocable Services (by year as shown): - 2000/01: 14.87 - 2001/02: 13.57 - 2002/03: 1.92 - 2003/04: 7.24 - 2004/05: 0.0 - 2005/06: 0.0 - 2006/07: 0.0 - 2007/08: 0.0 ### Process for the Development of the New Economic Strategy (3.3.7) - Lead agency: Ministry of Economic Planning and Development. - Core team for initial draft: - Ministry of Economic Planning and Developed - Ministry of Finance - Reserve Bank of Malawi - Consultation process: - Draft discussed by stakeholders via thematic working groups. - Second draft taken to districts for further consultations in line with "one village one product". - Timing and scope: - Final document expected to be launched towards the end of this year and will cover a five year medium term plan. - Linkages with other processes: - 2005/06 budget expected to be based on issues raised in Malawi Economic Growth Strategy and Malawi Poverty Reduction Strategy. - Comprehensive review of Malawi Poverty Reduction Strategy to link to Millennium Development Goals and Malawi’s Vision 2020. - Analytical process will commence with analysis of Integrated Household Survey 2004/05 (IHS) in April 2005. - Both processes to have close interface between government, development partners and civil society organizations. ### Analysis of 2004-05 Budget by Pillar (3.3.8) - Context: - 2004/05 budget is the first to be implemented by the new administration. - Prior budgets were characterized by unsatisfactory implementation of economic programmes. - Successful implementation for one full year is required to reach HIPC completion point. - Summary assumption: analysis assumes the economic programme will be on track and government will achieve its objectives for 2004/05; some targets will spill over to 2005/06. - Main concern: large share of resources locked in domestic debt service (statutory expenditure) rather than priority MPRS activities. ### Table 3.10 — Resource Allocation by Pillar for 2004/05 Budget (values preserved) - Totals: - MPRS Costings 2004/05 Total Budget: 50,269.6 MK’bn (100.0 percent) - Approved Budget 2004/05 Total Budget: 89,735.8 MK’bn (100.0 percent) - Total (MPRS Activities) MPRS Costings: 39,516.9 MK’bn (78.6 percent) - Total (MPRS Activities) Approved Budget: 54,359.7 MK’bn (60.6 percent) - Pillar allocations (MPRS Costings vs Approved Budget as shown): - PILLAR 1: 13,331.9 MK’bn (26.6 percent) vs 18,911.3 MK’bn (21.1 percent) - PILLAR 2: 17,188.3 MK’bn (34.2 percent) vs 27,989.2 MK’bn (31.2 percent) - PILLAR 3: 2,308.0 MK’bn (4.6 percent) vs 840.5 MK’bn (0.9 percent) - PILLAR 4: 3,952.8 MK’bn (7.9 percent) vs 5,647.8 MK’bn (6.3 percent) - Cross cutting: 2,465.8 MK’bn (4.9 percent) vs 970.9 MK’bn (1.1 percent) - M & E: 270.2 MK’bn (0.5 percent) vs 0 MK’bn (0 percent) - Statutory Expenditure: 8,516.2 MK’bn (16.9 percent) vs 22,994.2 MK’bn (25.6 percent) - Statehood activities: 2,236.6 MK’bn (4.4 percent) vs 12,382.2 MK’bn (13.8 percent) - Observation: share of total MPRS activities in the approved budget is less than the planned shares in the strategy by 18 percent; statutory expenditure (interest on domestic debt) drives the increase in expenditure. ### Analysis of Protected Pro-Poor Expenditure for 2004/05 Budget (3.3.9) - Protected priority sector shares as percent of total expenditure (Actual 2003/04 vs Approved 2004/05): - Youth, Sports and Culture: 0.04 vs 0.03 - Agriculture: 1.34 vs 1.56 - Water Development: 0.19 vs 0.05 - Education: 9.97 vs 10.23 - Health: 3.88 vs 3.94 - Gender, Child Welfare and Community Services: 0.15 vs 0.10 - Police: 0.57 vs 0.73 - Labour and Vocational Training: 0.26 vs 0.27 - Trade and Private Sector Development: 0.18 vs 0.08 - National Roads: 0.19 vs 0.17 - Natural Resources: 0.17 vs 0.12 - Tourism: 0.13 vs 0.15 - Total Share of Priority Expenditure to Total Budget: 17.05 (2003/04) vs 17.43 (2004/05) - Observations: - Education: 10.23 percent (2004/05) is the largest protected sector share, followed by Health at 3.94 percent and Agriculture at 1.56 percent. - No significant difference in overall shares between 2003/04 and 2004/05; 2004/05 replicates 2003/04 allocation patterns for priority activities. - Impact of singling out protected pro-poor activities to be assessed during comprehensive review of the strategy. ### Progress of Implementation by Pillars (Chapter 4.0 opening) - MPRS pillars: - Sustainable pro-poor growth - Human capital development - Improving the quality of life of the most vulnerable - Good governance - Recognized cross-cutting issues: gender, HIV/AIDS, science and technology, environment. *Source: _cr05209 - 37.5 percent of GDP against total expenditure of 39.6 percent of GDP. The decline in the* ### 4.1 Pillar 1: Sustainable Pro-Poor Growth ### 4.1 Pillar 1: Sustainable Pro-Poor Growth ### Overview - The private sector is recognised as the driving force for economic growth; Government, NGOs and donors are to facilitate growth by creating an enabling environment (roads, power, other amenities). - Agriculture is the key source of pro-poor economic growth; diversification efforts target manufacturing, tourism and small-scale mining, especially through Micro, Small and Medium Scale Enterprises (MSMEs). - This review analyses sector participation in achieving poverty reduction goals. ### 4.1.1 Agriculture — Context and Objectives - Agriculture contributes about 63.7 percent of total income of the rural poor. - The sector accounts for about 36 percent of GDP, 87 percent of total employment and supplies at least 65 percent of the manufacturing sector’s raw material requirements (MPRSP 2002). - MPRS eight main objectives for increasing agricultural incomes: - Expand and strengthen access to agricultural inputs - Improve agricultural production through improved research and extension services - Improve access to domestic, regional and international markets - Promote small scale irrigation schemes and drainage - Encourage production specific crops - Encourage production of livestock - Reduce land shortage and degradation - Promote and expand farm mechanization - Key limiting factors on productivity: - Declining soil fertility and soil degradation - Low access to credit - Weak extension systems - Low technology development - Over-dependence on rain-fed agriculture ### 4.1.1 Agriculture — Progress of Implementation and Achievements - General note: Since inception of the MPRS, a number of programmes and specific activities have been implemented with varying levels of success. 2003/04 activities are reviewed; annex contains performance vs. planned targets. - Targeted Inputs Program (TIP) - The 2003/04 Targeted Input Programme was designed to benefit 1.7 million vulnerable farm families. - Expanding, Strengthening and Increasing Access to Credit Through SACCOs and Village Banks - Target was to form 16 village banks; activity not conducted due to lack of technical expertise and coordination between implementing institutions (Ministry of Agriculture and Ministry of Commerce and Industry). - Only 11% of farmers had access to loans due to high interest rates, prohibitive repayment schedules and collateral requirements. - Twelve micro finance institutions were operating and disbursed loans to 285,074 clients. - Total portfolio disbursed was MK1.9 billion. - Technology Generation (Research) - Role: develop easily adoptable technologies with desirable characteristics. - Achievements (Text Box 2): - 10 problem diagnostic meetings and 8 Agriculture Research planning meetings were held - 100 experiments in crop breeding, soil fertility management, animal husbandry and regulatory services implemented - 40 technologies were approved by the Agricultural Technology Clearing Committee (ATCC) - Note: Most activities in this sub-programme were greatly affected because they were not considered as pro-poor as in 2002/03 review. - Extension Services - Planned target: 24,141 extension workers; trained: 4,683 (achievement ~20%). - Procured 2 yellow vans against planned 8. - 40 Agriculture Extension Development Officers (AEDOs) trained in participatory extension methods, HIV/AIDS prevention and mitigation, gender issues and business management. - New Extension Policy piloted in 4 districts. - Participatory extension processes implemented in all 28 districts. - 133 farmer cooperatives and 4 associations formed. - Crop production guide developed and awaiting publication; NASFAM drafting a cotton production manual. - Summary of achievements in extension services (Text Box 3): - Trained 4,683 extension workers - Procured 2 yellow vans out of 8 targeted - 40 AEDOs trained in participatory extension methods, HIV/AIDS prevention and mitigation, gender and business management - Piloted the New Extension Policy in 4 districts - Marketing - Objective: improve access to domestic and international marketing of Malawi farm produce via market information system, dissemination centers, commodity networks, trade fairs, cooperatives, ICT. - Ministry recruited 38 enumerators deployed in 38 major markets to collect market information (retail prices, horticultural prices, livestock surveys, input prices). - Two refresher courses conducted for enumerators and supervisors. - Equipment procured (weighing scales and bicycles). - Many marketing activities not successfully implemented due to low human and financial capacity and weak coordination. - Summary of achievements in marketing (Text Box 4): - 38 enumerators trained in market information collection methods - Conducted 2 refresher course for enumerators and their supervisors - 3 associations trained in marketing - 133 and 4 cooperatives were formed - Promotion of Small Scale Irrigation Schemes and Drainage - Major activities: awareness and installation of treadle pumps, procurement and distribution of treadle pumps on loans, river diversion irrigation, dam rehabilitation, staff reviews and recruitment, impact assessment of irrigation methodologies, testing new irrigation technologies. - Achievements (Text Box 5): - 32,463 treadle pumps were installed against the targeted 60,000 - 301 Km canals were excavated - 219 motorized pumps were distributed and maintained - 16 old sites of sprinkler irrigation rehabilitated - 8 dams were rehabilitated against a target of 60 - 1,740 extension workers were trained and 370 farmers went on study tours - Specific Crop and Livestock Production - Aim: encourage formation of livestock and crop production associations, provide start-up materials for key crops, establish secondary nurseries. - Achievements 2003/04: - 133 associations and 4 cooperatives formed against targets of 300 associations and 30 cooperatives respectively - Two cassava associations formed by IDEAA and Farmers Union of Malawi - NASFAM facilitated an association for aromatic Kilombero rice with NORAD support - 55,552 farmers trained in general principles of crop production against planned 950 farmers - Basic seed provision: 4.5 metric tonnes of beans, 9.9 metric tonnes of maize, 85.4 metric tonnes of groundnut and 1.8 metric tonnes pearl millet produced - Nurseries developed: 362 cassava nurseries on 161.2 hectares; 821 sweet potato nurseries covering 65.5 hectares; 30 banana sucker nurseries covering 5.45 hectare - Under livestock production: - 55 percent versus 80 percent of all feed manufacturing industries were inspected - 114 farmers trained in specific animal husbandry practices - 32 dip tanks out of 50 were operational - 60 farmers out of 200 were provided with veterinary services at cost sharing basis - Private sector animal breeding and health services monitored in 7 institutions - 25 members of staff trained in disease surveillance against a target of 411 - Monitoring of importation of livestock products done at 6 border posts (22 percent achievement) - Summary of achievements in crops and livestock (Text Box 6): - 360 new extension agents were recruited reducing farmer: extension ratio to 865:1 - 21 cassava associations and one Kilombero Rice association formed - 101.6 metric tones of basic seeds for beans, maize, groundnuts and pearl millet were distributed - Developed a cotton production guide - 55 percent of all feed manufacturing industries were inspected - 114 farmers were trained in specific animal husbandry practices - Decentralized the extension services to all the districts - Monitored 7 private institutions providing animal breeding and health services - 32 dip tanks were rehabilitated and dipping revived - 411 veterinary staff trained in disease surveillance - Reduce Land Shortage and Degradation - Ministry of Lands, Housing, Surveys and Physical Planning developed and approved new policy on land acquisition. - Project on consolidation of ownership and public acquisition/redistribution not launched. - Training on soil conservation and fertility management: 4,683 farmers trained against a target of 24,141; 223,023 farmers trained in low cost soil fertility improvement techniques and water conservation against original target of 183,330. - Promote and Expand Farm Mechanization - Program aimed to increase access to draught animals, animal-drawn equipment and tractor hire scheme. - Difficulties acquiring work oxen, ox-drawn equipment and tractors. - 588 hectares ploughed compared to target of 43,200 hectares. - Reduce Weakness in Institutional and Policy Framework - Core function analysis completed; report awaiting approval. - Intended actions: redefine core functions, privatize/contract out non-core functions, implement cost sharing/recovery, conduct civic education via extension workers. - Strengthening Sector Wide Policy Making and Co-ordination - Develop Malawi Agriculture Sector Investment Program (MASIP) for stakeholder coordination and decentralization. - National medium term investment plan developed under NEPAD; three projects formulated. - Ministry devolved functions to all District Assemblies. - Increase Gender Equity and Mitigate HIV/AIDS in the Agriculture Sector - Activities: extension strategic campaigns, mainstream gender and HIV/AIDS at village and workplace levels. - Achievements (Text Box 7): - Conducted 122 meetings in model villages and 43 meetings at work place on HIV/AIDS and gender - Conducted 105 diagnostic surveys related to HIV/AIDS in 14 model villages - Produced 2,000 booklets on HIV/AIDS policy - Conducted 2 national stakeholders meetings for NGOs and donors - Additional details: - Two cluster meetings and 54 staff attended orientation in HIV/AIDS and gender in agriculture and rural development - Situation analysis conducted in 112 out of 166 model villages - AGRESS unit developed 43 action plans for each cost center - No motorcycles procured due to lack of funds ### 4.1.1 Agriculture — Constraints and Challenges - Limited extension services inadequate to address declining soil fertility and degradation - Unpredictable global weather patterns causing poor onset and distribution of rains; country dependent on rain-fed agriculture - HIV/AIDS pandemic constraining human capacity and causing lost time due to opportunistic diseases - High staff vacancies due to high attrition rates - Low human capacity in irrigation sub-sector constraining expansion of irrigation development - Non-existence of an agricultural or land bank limiting loan volumes to service sector demands - Weak technology generation and extension delivery systems creating adoption bottlenecks - Reduced capacity of agricultural personnel due to reduced human development programs (including training of extension personnel) - Lack of commitment by implementers to translate MPRS strategies into activities ### 4.1.1 Agriculture — Recommendations - Give priority to programmes that enhance soil fertility and its management to improve productivity. - Government (Ministry of Agriculture) should strongly consider fertilizer subsidy to increase its use in various crop production. - Improve extension services by reducing extension to farmer ratio through retention of current staff and continued training and recruitment. - Improve technology generation and dissemination through provision of adequate financial resources. - Intensify multiplication programmes to support crop and livestock diversification initiatives. - Conduct periodic sector policy reviews to keep pace with the changing environment. - Implement the recommendations made in the Core Function Analysis report to streamline activities between public sector and private sector. - Improve marketing information system and dissemination. - Mainstream and mitigate HIV/AIDS activities in the sector by increasing awareness and encouraging VCT in the sector. - Increase the levels of financing for the irrigation sub-sector. ### 4.1.2 Natural Resources — Overview - Broader goal: encourage sustainable utilization of natural resources such as forestry, fisheries and wildlife. - Each sub-sector implemented a number of activities during the year. ### 4.1.2.1 Fisheries — Context and Key Statistics - Fish provides 60 percent to 70 percent of total animal protein and 4 percent to the Gross Domestic Product (GDP) in Malawi. - In 2003 total catch was 43,000 tonnes valued at MK2.15 billion. - The sector provides employment to 300,000 persons directly employed in the fisheries sector and other fishery related activities. - Fish production has declined by 20,000 tonnes/year from a peak in 1972; Chambo production down by 10,000 tonnes/year from over 14,000 tonnes in the early 1980s. - Lake Malombe production declined from 10,000 tonnes/year in the 1980s to 2,000-3,000 tonnes/year in the 1990s to date. - Surveys show a 30-35,000 tonnes/year potential to increase production from unexploited deep-water fish stocks. ### 4.1.2.1 Fisheries — Policy Objectives (2003/2004) - Increase sustainable utilization of the fishery resources - Strengthen legal and institutional framework - Strengthen user institution capacity for fisheries resources management - Facilitate identification, protection and management of key biodiversity, breeding sites, migratory routes and sanctuary sites - Ensure fisheries resources managed according to operational management procedures - Promote off-shore fishery of untapped stocks in Lake Malawi to provide affordable fish products - Promote fisheries enhancement technologies and fish farming in local communities - Promote establishment of better markets and marketing practices for fish - Create mass awareness of environment and natural resources management ### 4.1.2.1 Fisheries — Progress of Implementation and Achievements - Facilitation in identification, protection and management of key sites: - Achievements (Text Box 8): - 27 reports on district state of environment on fisheries were produced - 27 reports on district environmental action plans on fisheries were produced - One (1) report on management plan for the fishery resources in Lakes Malombe has been developed - A Fisheries Legal toolbox produced - A devolution plan for the Department of Fisheries developed - 24 Beach Village Committees sensitized on fisheries management - Guidelines on co-management produced - Seven (7) training sessions out of the planned 22 conducted (35% achievement) - Eight (8) appraisal meetings held; 8 priority areas for co-management identified - A consolidated report produced with recommendations for management guidelines and community based conservation plans - A Chambo Restoration Strategic Plan (CRSP) launched - A draft research project proposal for implementation of the CRSP developed - Three (3) management plans not produced - None of the three (3) planned management agreements produced - Policy review not done - Constraint: Inadequate funding crippled progress - Recommendations: - Provide training to enhance co-management of fishery resources - Focus on implementing priority activities considering low funding levels - Development of Chambo Restoration Project Proposal: - Project components: research on Chambo biology, testing enhancement technologies, restocking potential, socio-institutional issues governing compliance; establish management and institutional frameworks; revise and strengthen policy and legislation; increase conservation and management awareness - Law Enforcement: - Over 300 identity cards produced for all extension staff - Protective clothing procured (belts, sloth hats, haversacks, dustcoats, rain coats, gumboots, lather boots) - 12 motor vehicles and 18 motorbikes maintained for enforcement section - One (1) fisheries research vessel maintained - Procurement of spare parts for six patrol boats underway - Promotion of Offshore Fishery of Untapped Stocks: - About 40 percent of targeted communities earmarked to access loans/credit for fishing equipment were trained in credit management - Training in fish handling methods undertaken - Socio-economic baseline study conducted to establish current fisheries situation and consumption levels - Promotion of Fisheries Enhancement Technologies and Fish Farming: - Small-scale fish-farming program implemented in 21 districts - Common species stocked: Talapia rendalii, Oreochromis shirunus and Oreochromis karongae - Draft Standards and Procedures on fish farming produced (site selection; pond construction; live fish handling and transportation; fish seed production; fish culture systems; pond management; harvesting; integrated agriculture aquaculture; predation control) - Achievements (Text Box 9): - 507 fish farmers reached and assisted with fish farming inputs against a target of 500 (101% achievement) - 300 fish farmers trained, 105 were women - 60 extension staff trained in fish farming - 840 ponds constructed against a target of 1,000 ponds involving 1,9717 households (own 30% of the ponds are owned by women) - Out of the 840 ponds constructed, 528 have been stocked with 634,432 fingerlings - Constraint: Lack of fingerlings and adequate funds hampered stocking in some districts - Promotion of Establishment of Better Markets and Marketing Practices for Fish: - No activities implemented under this strategy due to unavailability of funds - Planned activities (Text Box 10) included provision of 7 cold rooms, construction of 21 fish landing and distribution points, establishing 32 fish economic landing centers, establishing a price monitoring system, training communities in fish handling, producing handbooks and manuals on fish processing - Mass Awareness: - Updating curriculum for Mpwepwe Fisheries College started with review and recommendations for affiliation to University of Malawi (UNIMA) - Production of a frame survey report, 1,000 leaflets and brochures - "Usodzi wa Lero" Program on participatory fisheries management aired on various radio stations ### 4.1.2.1 Fisheries — Constraints and Challenges - Some activities not satisfactorily implemented due to inadequate financial resources (stocking of ponds, monitoring, payment of laborers, delivery of equipment, procurement of harvesting nets and fertilizer) ### 4.1.2.1 Fisheries — Recommendations - Promote fingerling production among farmers so fingerlings are sourced from farmers themselves - Treasury should consider providing more funds to continue pond construction and meet targets - Support monitoring and supervision to capture production data from start and track pond production - Carry out beneficiary impact assessment study to ascertain benefits accrued - Develop an exit strategy through consultative process with farmers and stakeholders - Government should develop legislation to assist management of shared water resources and foster regional cooperation among Malawi, Mozambique and Tanzania - Develop management agreements for the Lake Malombe area ### 4.1.2.2 Forestry — Context and Key Points - Forestry resources are dwindling and being exploited unsustainably, resulting in land degradation, soil erosion and river sedimentation, contributing to food insecurity. - Forestry Sector contributes about 0.01 percent of GDP. - Government previously acted as direct manager and police of forest resources, leading to conflicts with communities. - Demand for wood outstrips production supply by 40 percent. - Sector activities focused on forestry development and management, training and education, research services, international/regional cooperation, community co-management of forest reserves and development of co-management plans aligned with the National Forestry Plan (NFP). - Forest Collaborative Management is a pro-poor approach aiming at rural empowerment and poverty reduction; Kasungu and Liwonde Forest Reserves demonstrate multiplicity of institutions for natural resource management. ### 4.1.2.2 Forestry — Major Activities and Progress - Privatization of Industrial Plantations to Supply the Demand for Timber: - With a 1.6 million sterling pound grant from the British Government, preparatory work towards privatization of industrial plantations advanced; initial activities completed (see Text Box 11). - Improve Forestry Curriculum at Malawi College of Forestry (Dedza) for Staff: - With funds from the Finnish Government through DIDC, the college reviewed certificate and diploma curriculum, conducted stakeholder and training needs analyses, compiled occupational profiles and drafted curriculum objectives and courses. - Implement National/Regional Protocols and Conventions: - Forestry sector participated in international meetings and conferences. - Forestry Department produced a national report on implementation of UNCCD activities and held two meetings attended by government officials and other stakeholders including NGOs. - Promotion of Mass Tree Planting Campaign as an Economic Benefit: - Forestry Department facilitated and encouraged local communities to plant indigenous and exotic species to improve forest cover and generate economic benefits. - Political support required to increase reforestation efforts. *Source: _cr05209 - 4.1 Pillar 1: Sustainable Pro-Poor Growth* ### Conclusions: ### Conclusions ### Forestry Sector — Findings and Implemented Activities - The Department failed to implement all MPRS strategies and activities planned; targeted beneficiaries did not take advantage of the activities. - The process of signing co-management agreements should have been substantiated with more poverty reduction related activities. - Summary of some implemented activities: - A total of eight (8) co-management agreements were signed with local institutions around reserves. - A privatization plan and approach was prepared. - Valuation and assessment of resources and assets was done in all industrial plantations. - The Forestry Department (FD) drafted a regulatory framework and code of practice. - A legal agreement document was prepared and a communication strategy was developed. - Various groups and individuals planted a total of 38 million seedlings out of a target of 50 million seedlings. - Despite tree planting, the department failed to achieve its target; tree planting at national level is currently less than the annual harvestable levels. Constraints and challenges - Inadequate financing to pay for improved forestry and livelihoods management, core functions. - Devolution of financial responsibility to local government has increased the workload of assemblies because of insufficient capacity. - Weak cross-sectoral policy coordination, synergies and implementation especially in the area of rural development. - HIV/AIDS is depleting the human resource base that is supposed to implement some of the programs. - Unstable policy direction on privatization has contributed to weak implementation of activities in forestry resources earmarked for privatization. - Government was unable to carry out basic plantation management operations including illegal harvesting and fires. Recommendations - The Forestry Department should begin reorienting its activities towards addressing critical issues affecting the poor communities around the forest reserves. - The Department should actively involve communities in identification and implementation of small-scale projects in the sector. - Increase the funding levels to the sector or allow the Department to retain part of the revenue they collect. - Improve policy and program coordination at macro level to enhance efficient allocation and use of resources. ### Parks and Wildlife — Progress, Constraints, Recommendations Progress of Implementation - The Department of National Parks and Wildlife (DNPW) received about MK32 million of PPE funds in 2003/04 fiscal year; funds were used for administration and management activities, extension services, research and supervision, maintenance of vehicles, rehabilitation of Mwabvi and Majete staff houses, law enforcement and crop protection activities. - Funds were complemented by USAID under Nature Program coordinated by the DEA. - Outreach and sensitization meetings on Collaborative Management (CM) covered all Protected Areas (PAs); led to revamping of Community Based Organisations (CBOs), Village Trusts and Natural Resources Management Board in Nkhotakota. - Several trainings conducted covering conflict resolution, tourism enterprise development, financial management and project proposal development. - Schools outreach programme ongoing but limited by financial constraints; annual wildlife clubs’ workshops affected for southern and central regions. - Large amounts of research data were generated but not analysed or translated into user-friendly form due to financial constraints. - Public awareness campaigns on Gender and HIV/AIDS were carried out around Nkhotakota Wildlife Reserve and Kasungu National Park; work place clubs formed. - Amendments to the national Parks and Wildlife Act of 1992 were presented to parliament; rules and regulations revised to conform to CM strategy. - CM agreements between CBOs, Trusts and Associations and Department of National Parks were signed. - Encouraged wildlife farming (beekeeping and guinea fowl farming) in Lower Shire and areas around Nyika-Vwaza. - Of the planned 60km electric fence only 20km was covered in the western part of Liwonde; workshop held on chilli pepper to deter elephants; re-electrifying program started at Kasungu National Park with community sensitization and exchange visit to Liwonde. - Resource use programs established at KNP and Nyika-Vwaza; surveys to identify and quantify harvestable resources done in Liwonde and Lengwe National Parks. - Several meetings conducted on development of guidelines on revenue sharing scheme for the whole department; program to be extended to other PAs such as Lake Malawi and Liwonde National Parks. Constraints and Challenges - Wildlife resources continue to dwindle due to poaching in almost all protected areas mostly due to high population increase. - Encroachment accelerated by land shortage. - Increased human-animal conflict despite fencing. - Inadequate funding has slowed down departmental efforts to improve management of wildlife resources. - Staff housing and water facilities in camps are in very poor conditions. - Lack of proper gear to undertake patrol activities. Recommendations - The government should make an effort to provide more funding to wildlife activities to ensure that wildlife resources are properly conserved. - The government should endeavor to rehabilitate staff houses and ensure that camps have clean water supplies. ### Tourism Sector — Implementation, Constraints, Outcomes Planned and budgetary note - The MPRS activities: promote development and investment in diverse tourism products, develop and adopt an updated approach to tourism promotion and marketing and regulate tourism on the basis of defined standards. - The budget for the Department of Tourism was MK187 million but was revised downwards to MK42.8 million. Progress of Implementation - Developed community led cultural tourism; groundwork and community mobilization for Yao cultural village at Mpale in Mangochi district; pilot sites identified for Chewa, Ngoni and Tumbuka Cultural Villages in Kasungu, Mzimba and Rumphi respectively. - Preparatory work to identify sites for construction of curio stalls done. - Trained 62 managers (27 in Salima, 16 in Karonga and 19 in Nkhata Bay) as part of capacity building for Small and Medium Enterprises Managers for accommodation units; failed to train tour guides due to inadequate funding. - Inspection and classification of tourism accommodation units: out of targeted 1,200 units, only 521 units were classified countrywide. - Out of the classified accommodation units, 300 complied with published standards and were licensed. Constraints and Challenges - Funding of PPE activity under MPRS is erratic and incomplete. - Low funding on ORT indirectly affected implementation of PPE activities since some funds were diverted to settle ORT commitments such as water and telephone bills. - Lack of adequate capital equipment such as vehicles and computers affected implementation. - High staff turnover and frequent transfer of accounts staff leading to misplacement and loss of records. - Most projects were not completed due to funding problems, negating impact on the poor. - Lack of monitoring and evaluation system made it difficult to assess the impact of programmes. ### Mining Sector — Progress, Constraints, Recommendations Context and objectives - The Mining sector employs nearly 3,000 people; scope for formal employment projected to increase to 10,000 by 2004, while informal employment was expected to double within the same period by 40 percent. - MPRS focuses on small-scale mining: quarry stone, gemstones, pottery-ceramics, salt aggregate, limestone, sand and clay (pottery and brick moulding). - Key objectives: disseminate information on mineral availability; identify mineral resources suitable for small scale mining; encourage development of small–scale mineral based industries; provide technical and financial support; ensure appropriate mining legislation; improve understanding of value adding methods and promote marketing. Progress of Implementation - Funds spent on training and extension services to small-scale miners, dissemination of information, ensuring appropriate mining legislation, encouraging development of mineral-based small-scale industries, acquisition of laboratory equipment for value adding. - Small-scale miners trained in appropriate mining techniques and mineral processing including value adding. - Four (4) mining clubs established at Ngabu, Nchalo, Balaka and Mzimba; resulted in increased exports of gemstones. - Two projects implemented: construction of lime demonstration kiln at Balaka and resurrection of a salt making demonstration at Nchalo; relevant associations established; salt production increased. - Department of Mines drafted a Mines and Minerals policy for Malawi; a peer review of the document was completed in the same year. - Four (4) quarterly mining bulletins were prepared and widely circulated. - One set of lapidary equipment procured for training; awaiting two additional sets from JICA through commodity aid program. - Equipment worth about K5.0 million procured for the mineral-processing laboratory; JICA providing equipment worth about K20.0 million. - Six (6) women members of the Malawi Women in Mining Association (MAWIMA) were sent to Verona, Italy for an international gemstones fair. - Government loan facility executed by INDE Fund put in place; small-scale miners were able to access loans, encouraging opening of new small-scale mines and improved production. Constraints and Challenges - Inadequate funding affected implementation of activities including establishment of a formal channel for minerals marketing export and establishing a focal point. - Slow pace in filling technical posts affected implementation. Recommendations - The government should ensure that vacant positions are filled without delays. - The government should ensure that flow of funds should be consistent. ### Rural Infrastructure — Roads Sector MPRS activities - Periodic maintenance of roads; refilling of potholes; rehabilitation; construction and upgrading of new road from earth/gravel to a bitumen standard. Progress of Implementation — Key outputs (Text Box 13) - 350 km of road network was rehabilitated. - Construction and upgrading of 120 km of new road network were accomplished. - Out of a target of 713 km of urban roads to be maintained, 606 km urban road network were maintained. - Out of a target of 324 km of district road network to be maintained, 270 km of district road network was maintained. - Out of a target of 3761 km of paved road network to be maintained, 3306 km was actually maintained. - Out of a target of 3340 km of unpaved road network to be maintained, 2940 km was actually maintained. - Recommendation: It is recommended that the sector should prioritize all roads developments and be debated in Parliament. Avoid all political interferences. Selected project targets and achievements (Table 4.1) - Karonga-Songwe rehabilitation 45km — Not started - Strengthening Road Sector Framework 100 % — 80 % - Sector Institutional Development 100 % — 90 % - NRA Establishment (Human Capacity) 100 % — 95 % - Contractors and consultants training 100 % — 80 % - Equipment and Finances 100 % — 70 % - Training 100 % — 70 % - Chatoloma –Jenda resealing 42 km — 42 km - Chikangawa Mzuzu resealing 58 km — 58 km - Kasikizi river-Nkhata Bay 75 km — 55 km - Consulting services for KfW projects 100 % — 90 % - Technical Assistance 100 % — 65 % - Equipment procurement 100 % — 75 % - Nchalo- Bangula construction 82 km — 0 km - Masasa-Golomoti-Monkey Bay 88 km — 10 km - Dwambadzi Bridge 100 % — 100 % - Kalwe, Liwaladzi, Kasikizi, Lisasadzi, bridges 100 % — 5 % - Karonga –Chiweta 109 m — 109 km - Development of NCIC 100 % — 80 % - Procurement of vehicles and equipment 100 % — 90 % - Blantyre selected urban roads 16 km — 0 km - Lilongwe selected urban roads 14 km — 0 km - Mangochi –Monkey Bay 69 km — 0 km - Msulira –Nkhotakota 80 km — 80 km - Lufilya-Chitipa 58 km — 0 km - Bangula-Nsanje- Marka 98 km — 0 km - Naminga-Nselema-Chiponde 138 km — 138 km - Limbe – Thyolo-Muloza Road 104 km — 104 km - Dwangwa- Nkhata Bay 80 km — 80 km - Karonga-Lufilya and rural feeder roads 248 km — 0 km - Mponela –Ntchisi road 33.3 km — 0 km - Limbe – Chisitu road 48 km — 20 km - Nkhoma-Kamphata 16 km — 0 km - Bunda- Mitundu 5 km — 0 km - Nkhotakota Game Reserve 33 km — 33 km - Chingale turn off – Lirangwe 90 km — 0 km Constraints and Challenges - Lack of adequate resources to enforce and monitor road regulations and data collection. - The HIV/AIDS pandemic is depleting human resources in the sector. - Lack of skills and equipment. - Inability to find alternative sources of financing to supplement the fuel levy. Recommendations - Prioritize all road development and avoid political interference. - Intensify awareness campaigns on HIV/AIDS and give support to affected staff. - Provide more training to staff and equipment to improve sector performance. - Improve privatization of activities; avoid over-emphasis on road construction that leads to neglect of maintenance, M&E and data collection. ### Rural Infrastructure — Water and Sanitation Planned activities - Rehabilitation of existing water supply facilities, construction of water reservoirs, rehabilitation of water catchment areas, water resources development, monitoring and assessment of water resources, plan and develop new water supply and sanitation facilities, community mobilization and training, promotion of hand pumps and monitoring performance. Progress of Implementation — Water (Text Box 14) - Out of 2,642 boreholes earmarked for construction, 1,630 boreholes were constructed by the Ministry in the fiscal year 2003/04 countrywide. - 421 boreholes were rehabilitated against the planned 665 boreholes for the year. - Under rural gravity fed water supply schemes, 326 out of 508 taps were rehabilitated. - Two (2) catchment sites out of 5 planned were protected at the cost of MK 7,500,000 of which MK1.5 million was provided by the government while MK6 million was donor contribution. - Three (3) out of five (5) small community multi-purpose earth dams were constructed and rehabilitated. - 50 out of 60 hydrometric stations planned were rehabilitated. - A National Water Resources Policy was revised. - Five (5) out of eight (8) hand pumps (Pedaflo) were installed. - 100 out of 150 communities were mobilized and trained in environmental and water catchment protection. - 130 out of 200 communities were empowered to operate, manage and maintain their water supply systems. - 47 shallow wells and springs were constructed and protected representing 80% completion. - 656 extension workers and VHWCs were trained in PHAST and CBM. Progress of Implementation — Sanitation (Text Box 15) - 8,058 san plats/dome slabs planned for the year were installed at the cost of K27,227,982. - 196 VHWCs were trained in san plats/dome slab casting at the cost of K15,296,624. Constraints and Challenges - Adhoc monitoring and evaluation system resulted in improper documentation and under reporting of achievements. - Inadequate funding to carry out all planned activities. - Water and Sanitation sector lacks a consolidated database of water point allocations and Management Information Systems (MIS) leading to some areas being over-served. - Vandalism and theft of water supply and sanitation facilities widespread; long-term effect on MDGs attainment. - More emphasis placed on construction of water points and little effort on rehabilitation and sustainability. - Coordination of water resources management is a problem due to multi-sectoral nature. Recommendations - Establish a functional M&E system and strengthen capacity of staff involved in M&E. - Develop a database of all water points allocations to equitably distribute facilities. - Develop a strategy to ensure constructed water points serve intended purposes and backup facilities are available. - Treasury should ensure that funds flow consistently throughout the financial year. - Strengthen Community Based Management (CBM) of water supply and sanitation facilities. - Provide technical capacity by increasing the number of water monitoring assistants in all districts of Malawi. ### Rural Infrastructure — Energy Sector Planned activities - Expansion of network to rural growth centres; encourage use of charcoal and other wood stoves; provision of credit for production of stoves; use of biogas plants; provision of photovoltaic revolving fund; develop market for photovoltaic at household level; rationalize fuel distribution margins; promote low cost electrification technologies; improve efficiency in production of electricity; engage in interconnection with Mozambique and rehabilitation of existing power generating infrastructure. Progress of Implementation (Text Box 16) - Out of the annual target of 55 rural trading centres, 41 were provided with new installation of electricity at a cost of about K435 million. The government contributed K120, million and the rest came from development partners. - Out of 7,000 stoves, the sector produced 6,000 stoves. - 30 artisans were identified to produce stoves in 2003/04 but there was no credit facility in place. Constraints - Lack of credit facilities, low capacity to generate and distribute electricity, high rates of attrition due to HIV/AIDS. Recommendations - Department of Energy in collaboration with MEPD should carry out a comprehensive study to assess impact of rural electrification and sector performance to lobby more donor support. - Link the sector to financial institutions to enable local artisans access credit. - ESCOM should improve generation and distribution through interconnections with neighbouring countries. - ESCOM should improve financial performance, rehabilitation of power transmission and distribution systems, diversification of power generation beyond hydropower from Shire, and promotion of low cost electrification techniques. - Reform to ESCOM’s maximum demand tariff should be considered as the current system acts as a disincentive to investment in energy intensive industries. ### Rural Infrastructure — Telecommunications Sector Planned activities - Encourage private sector provision of telecommunications services (rural cellular based bureaux), encourage network companies to expand coverage, encourage demand for telecommunications by providing training opportunities and rehabilitation of existing networks. Progress and achievements (Text Box 17) - Due to lack of funds, the government was unable to encourage private sector provision of rural cellular based bureaux. - Network companies extended coverage: Ntanja area completed and Nkopola area installation work underway. Total cost K126,500,000.00. - Installation and commissioning of concentrators in Nselema and Mwalasi to a tune of K3,000,000.00. - New exchanges redeployed at Kasungu, Nkula, Madisi and Raiply; new buildings erected at Songwe and Mtakisi to a tune of K4,000,000.00. - Expansion of Mzimba, Rumphi and Chitipa exchanges from 256 lines to 512 lines to a tune of K200,000.00; capacity after expansion enough to meet demand. - Kasungu-Nthunthama exchange system installed and commissioned to tune K490,000.00. - Upgrading of Lilongwe-Mchinji Transmission link started 2003/04 but could not progress due to lack of funds. Constraints and Challenges - Vandalism of telecommunication equipment. - Lack of capacity and mechanism for debt collection. - Non-payment of outstanding bills by major creditors including government institutions. Recommendations - Consider information and communication (radio, internet, television, postal services and computing) as essential infrastructure. - Develop an indicator that would measure penetration rate (e.g., total area covered by existing network to total land area). - MTL should conduct awareness campaigns to educate the public on protecting telecommunication facilities. - Develop mechanisms to improve debt collection. - Encourage community protection/policing systems under traditional leaders to curb vandalism. ### Commerce and Industry — Progress, Constraints, Recommendations Objectives and context - Aim: create conducive environment for private sector including Micro, Small and Medium Enterprises (MSMEs) to invest; improve access to domestic and international markets; support MSMEs; improve institutional coordination and support; broaden industrial base; strengthen institutional framework for credit and micro-finance; reduce high default rates; expand competition and coverage of MFIs. - Weakness noted in MPRSP: limited focus on trade and private sector development as key drivers of growth. - Ministry took steps under the Integrated Framework (IF) and launched Diagnostic Trade Integration Study (DTIS) in September 2003 with DTIS “Action Matrix”. Progress of Implementation (Text Box 18) - 30 extension workers were trained in formation of farmers clubs associations and cooperative societies. - 2,500 members were trained in business and association management. - 3 agro-processing cooperative societies were linked to markets. - 40 bee-keepers accessed simple technology. - Design for 2 factory shells were completed. - 150 members trained in agro processing technologies. - 6 meetings of micro-finance networks conducted. Additional achievements and notes - 2,500 trained group members registered into cooperative societies. - Linked 3 agro-processing cooperative societies to markets via trade fairs. - Support provided to a fruit juice processing industry; no support to Soya processing groups as planned. - Preparatory work completed on construction of production facility for testing, marketing and waste disposal for MSMEs; failed to develop a database of MSMEs. - New markets identified and developed; farmers linked to chain stores. - 40 beekeepers out of planned 100 managed to access technologies; groups of five provided beehives in Machinga District by ETETA. - Completed design of 2 factory shells awaiting construction. - 150 entrepreneurs trained by MIRTDC and DEMATT. - Organized six (6) meetings of the micro-finance Network; network membership 12; number of people accessing loans has increased. Constraints - Ministry lacks capacity to coordinate outlined activities. - Lack of human capacity evidenced by high numbers of unfilled posts. Recommendations - Fill vacant positions. - Build capacity through provision of training. - Ensure enough resources are available to carry out activities. - Clearly provide mandates of the two Ministries, Trade and Private Sector Development; Ministry of Industry, Science and Technology (formerly Ministry of Commerce and Trade) to ensure all activities are implemented. - Continue mainstreaming trade and private sector development issues across government under the Integrated Framework and ensure activities listed under the DTIS Action Matrix are implemented fully. *Conclusions: _cr05209 - Conclusions_* ### 4.2 Pillar 2: Human Capital Development ### _cr05209 - 4.2 Pillar 2: Human Capital Development ### Education: overall objective and sub-sectors - MPRS recognizes that an educated and healthy nation leads to increased productivity, better income and generally improved standard of living. The MPRS is addressing these problems through formal and technical education, health and nutrition programmes. - Overall goal in education sector: improve quality, access and relevance of education, and equity in boys and girls. - Sub-sectors: basic education (early childhood development, primary, adult), secondary education, higher education and technical and vocational entrepreneur training. ### 4.2.1.1 Basic Education: aim and focal areas - Aim: improve quality of education for every child in an effective manner in partnership with relevant stakeholders. - Specific areas of focus: - improving the quality and relevance of primary education, - improving access and equity at the primary level, - focusing on special needs education and girls, - increasing and improving functional adult literacy and numeric, - providing education to the out of school youth, - expanding pre-school education or Early Childhood Development (ECD), - responding urgently to problems created by the HIV and AIDS epidemic, - decentralizing administrative and planning responsibilities. ### Early Childhood Development (ECD): programme design and implementation - Programme aims: provide synergy of care, protection, early learning and stimulation, and participation of young children (0-8 years) for their health, nutrition, and cognitive and emotional development. - National Policy on ECD: provide guidelines and support and to enhance coordination and investment in Early Childhood Development Programmes in Malawi. - Implemented through three projects: - Household and Community Child care (H/CCC), targeting children 0-3 years; - Pre-school and Community based childcare (P/CBCC), targeting children 4-8 year; - Parent Education and Support, targeting children of 0-8 years. Progress of Implementation in ECD Programmes: - The ECD policy was launched and several supporting documents have been produced. - District trainers for care givers and parents were trained. - 387 caregivers were trained at Chancellor College and 735 ECD centers were opened. - Of the 45 Social Welfare Assistants that were initially enrolled, 38 successfully graduated from Magomero College. Text Box 19: Summary of achievements in ECD programmes - The ECD Policy was launched in February 2004 - 387 Caregivers were trained at Chancellor College - 40 Districts trainers for care givers and parents were trained - Community gardens were opened in some ECD centers ### Primary Education: aim, focus, and MPRS activities - Aim: provide quality and equitable free primary education to all children. - Main focuses: access, quality, equity, relevance and HIV/AIDS. - Rationale: government needs to invest more in primary education where social returns are more compared to other sub-sectors. - MPRS activities to be undertaken: - provision of teaching and learning materials, - improve teachers salaries, - provision of primary teacher education, - construction of teachers’ houses. Text Box 20: Summary of achievements in primary education - 150 teachers’ houses out of the targeted 800 were completed and in use while 149 houses were still under construction - 5,800 teachers trained through revised MIITEP starting with COHORT 7 and 8 out of 6,000 - 24 tutors were trained to Masters degrees (Primary Education in 2003/04) - 6 teachers on PhD (Primary Education) to finish by 2005 - 30 primary teachers are pursuing BEd program - Drafted National Strategy for Teacher Education Development (NSTED) - Drafted guidelines on recruitment and deployment of teachers for even distribution in urban and rural areas is almost completed - Distributed Grant Support to Education Sector 1 (GSESI) pupil text books and teachers guides on 1:1 pupil to text book ratio - A draft policy on special needs Education is almost completed. Special needs teachers are being regularly trained. 300 primary school teachers and 100 PEAs have been sensitized in Special Needs Education in 2003/04 - About 60% teachers have been upgraded from JCE to MSCE which is being facilitated by Teachers’ Union of Malawi (TUM) - 24 Core trainers, 350 PEAs and 6,300 senior school staff have been trained under TDC (NSET) training - National strategy for community participation in primary school management (NSCPISM) has been approved - Teacher to Pupil ratio is at 1:72 for 2003/04 - Classroom to Pupil ratio is at 1:107 for temporary, semi permanent and permanent classrooms for 2003/04. An average of 1,000 classrooms are being rehabilitated and constructed each year - Primary curriculum and Assessment Reform (PCAR) is now at syllabi phase and what remains is the writing of instructional materials ### Functional Adult Literacy: aims, activities, and outcomes - Aim: increase levels of literacy among men and women to make them self-reliant and participate fully in the national development. - Main activities in the year under review (carry over from previous year): recruitment and training of instructors, provision of teaching and learning materials and supervision. Progress of Implementation: - At the beginning of the year under review, about 3,500 classes were opened in the country many of which were in the Southern Region. - The learning cycle registered over sixty thousand learners with women comprising ninety percent of the total. - Learner numbers dwindled in January and February due to engagements with farming activities. - In the 10 impact districts of the Skills Development and Income Generation (SDIG) Project, 400 classes were operational, registering 10,991 learners (9771 females). These 10 districts were Chitipa, Karonga, Dowa, Ntchisi, Salima, Ntcheu, Balaka, Machinga, Chikwawa and Mwanza. - To ease low staffing levels, an additional 1000 instructors were recruited but 499 of them dropped out mainly because of delays in payment of their honoraria. - The process of printing primers was completed in May 2004 and these were distributed to all districts together with other teaching and learning materials. Text Box 21: Summary of achievements in functional adult literacy - Staffing levels increased to 3,501 instructors by the end of the learning cycle - 150,000 primers were produced and distributed - Assessment revealed that pass rate had increased to 60% from 55.8%. - Recommendations: The MoG should review the Adult Literacy Policy and repair the printing Machine at NALC as a matter of urgency. *Source: _cr05209 - 4.2 Pillar 2: Human Capital Development* ### 2003. However, the process of printing primers was expensive because the printing ### _cr05209 - 2003. However, the process of printing primers was expensive because the printing ### Secondary Education — objectives and progress - Objectives identified by the MPRS: - Increase access and equity; improve quality and relevance of secondary education to address problems from introduction of free primary education. - Activities: construct new classrooms to increase access to public secondary schools; increase number of girls accessing secondary education; review and reform curriculum; ensure effective supervision of schools; recruit and retain adequate number of secondary school teachers; increase teaching and learning materials; increase access and improve equity in teacher recruitment and training. - Progress of implementation: - New secondary schools constructed in rural and urban centers by government and development partners. - Established an Education Management Information System (EMIS) in 2003/04 with plans to extend to divisions and districts when structures are in place. - Open Learning Centers established in most Conventional Secondary Schools (CSSs) and some Community Day Secondary Schools (CDSSs). - About MK9 million set-aside in 2003/04 for bursary purposes targeting girls and orphans. - HIV/AIDS strategic plan approved. - Textbook revolving fund (TRF) not successfully implemented because funds generated were remitted to the general government account, restricting Ministry access for textbook procurement. - Text Box 22: Summary of achievements in Secondary Education - 22 new secondary schools opened in 2003/04 - Established an Education Management Information System (EMIS) - Established Open Learning Centers in all CSSs and some CDSSs. - HIV/AIDS strategic plan approved - Private Schools Association of Malawi (PRISAM) is in place - 300 teachers were trained under SSTEP in 2003/04 - 550 teachers graduated from Universities in 2003/04 ### Higher Education — progress, challenges, and recommendations - Objectives pursued by the University of Malawi: increase access and equity; improve quality and relevance; reduce reliance on subventions. - Progress of implementation: - Structures to provide user-friendly environment for disabled put in place. - Modalities developed to assist needy students to benefit from the Government Students Loan Trust Fund; discussions underway to establish a Public Universities Students Loan Trust Fund to benefit only the very needy. - Collaboration agreement signed with the Central University of Technology (South Africa). - Plans to introduce university-wide HIV/AIDS generic courses by January 2005. - Gender Studies and Outreach Unit established at Chancellor College to increase female participation. - Salaries revised for teaching, research and support staff; Colleges did not increase Administration and Technical Staff establishments but broadened job descriptions of existing staff. - Text Box 23: Summary of achievements in higher education - Increased intake in the Faculty of Education by 15%; - Finalized the Education Act draft; - Increased intake for girls by 30%; - Challenges and constraints: - High staff turnover especially lecturers - Lack of incentives - Lack of teaching and learning materials - Obsolete equipment - Recommendations: - Introduce more incentives to retain staff - Ensure that there adequate and modern equipment and learning materials ### Malawi Institute of Education (MIE) — activities - Oriented all Education Divisions on the New Secondary School curriculum; plans to incorporate population, Gender, Civics and HIV/AIDS issues. - Designed new syllabi and printed them. - Evaluated tenders for textbooks. - Commercialized services: catering, hostelling, printing audiovisual and metal wood. - Conducted INSET course design and delivery; proposal writing, dissemination and publishing of education research conducted. ### Malawi National Examination Board (MANEB) - Maintained number of subjects examined at MSCE level. - Plans to replace JCE exam with continuous assessments failed to be implemented; will be reassessed by Education Review Conference. - Rehabilitated newly acquired buildings. - Consultations to improve management and efficiency ongoing. ### Education — constraints and recommended actions - Constraints identified: - High dropout rates in schools especially for girls - Declining quality of education due to low and poor inputs, liberalization, poor supervision, and inadequate number of qualified teachers - High HIV/AIDS incidences reducing number of teachers and increasing pupil absenteeism - Decentralization process not fully implemented - Failure to finalize some policies such as the EFA action plan; poor dissemination of existing policies - Deployment of teachers favors urban schools at expense of rural schools - Lack of personnel and capacity to manage the EMIS at all levels - Poor management of funds for supervision and advisory services - Recommendations: - Disseminate and implement policies formulated to benefit intended beneficiaries - Provide adequate teaching and learning materials and distribute them equally to all schools in good time - Devolve Ministry functions to District Assemblies in line with decentralization policy - Enhance capacity in EMIS management for MOE officials at all levels - Review deployment policy for equal distribution of teachers in urban and rural areas for male and female teachers - Improve management of funds for supervision and advisory services - Improve incentives for teachers - Improve access and dissemination of information to other stakeholders in the sector - Create conducive learning environment (provision of desks, sanitary facilities etc) to curb school dropout and absenteeism ### Health — context and overall strategy - Health status linked to labor force productivity and economic/social well-being. - Key health system problems: absence of qualified and adequately compensated personnel (especially rural), unavailability of essential drugs, low budgetary allocations and distribution problems including pilferage, acute shortage of clinical and technical support services (laboratory, radiology, pharmacy) due to low investment at district hospitals and health centres. - Sector strategy: design and implement an Essential Health Care Package (EHP) addressing major causes of morbidity and mortality, focusing on conditions and service gaps that disproportionately affect the rural poor and guaranteeing minimum standard of health care for everyone. ### Improving Quality of Essential Care — human resources, drugs, clinical support - Human resources and training: - K140.9 million allocated in the 2003/04 budget for ongoing training of health cadres; estimated financial requirements for current students approximately K200 million. - Implementation of accelerated training programme: 809 health workers trained in 2003/04. - Short-term measures: engagement of foreign volunteer health workers sponsored by development partners (UNDP and JICA). - Study on health worker retention conducted (with DFID support); proposes strategies for increasing compensation and retention over a six-year period; consultations ongoing before implementation. - Drugs and medical supplies: - MPRS minimum annual drug expenditure set at equivalent of US$1.25 per capita. - Approved budgetary provision for drugs in the year under review was K1.2 billion, which translates to approximately US$0.96 per capita. - Reform of Central Medical Stores (CMS) continued: revision of Essential Drug List finalized; CMS rolled out direct delivery from Regional Medical Stores to health centres; quantification exercise for drugs embarked on. - Clinical support services: - Laboratory equipment purchased for all four Central Hospitals and for Mchinji, Ntchisi, Salima and Nkhotakota District Hospitals in 2003/04. - Having procured 66 ambulances in 2002/03, the Ministry initiated procurement of more ambulances scheduled for delivery in 2004/05 financial year. - Text Box 25: Summary of achievements in quality of essential care - 30 tutors and clinical instructors graduated from Mzuzu University - 385 graduates in various health fields graduated from Malawi College of Health Sciences - 27 anaesthesia clinical officers produced - 321 laboratory technicians graduated from CHAM institutions. - 40 Nursing degree graduates produced at KCN - 6 Environmental Health graduates produced at Polytechnic - 9 Volunteer doctors in various specialties arrived, based in Central Hospitals. (Sponsored by UNDP) - 16 JICA volunteer health workers in various fields arrived, working in Districts - Study on health worker retention conducted - Laboratory equipment for 4 Central Hospitals and 4 District Hospitals procured - System of delivery of drugs directly to Health Centres rolled out - Constraints: - Under-provision of the training budget - Static remuneration package for health workers - Recommendations: - Allocate adequate resources to finance health worker training - Speedy implementation of health worker incentive package - Donor partners should consider supporting the drug budget to achieve the recommended minimum dollar equivalent ### Improving Access to and Equity of Health Care — facilities and infrastructure - Inventory survey in 2002 found only 54 health facilities countrywide had all prerequisites for delivering EHP services in full. - Health facility improvement programme in place to increase number capable of delivering EHP. - Health facility progress: - Health facility Improvement Plans for Mangochi and Salima districts developed. - Rehabilitation and construction activity summary (Text Box 26): - Health facility Improvement Plans for 2 districts formulated - 9 Health Centres Rehabilitated in Chitipa, Dedza, Mchinji and Nkhata-bay - Rehabilitation of 20 Health Centres commenced in Nkhotakota, Salima, Ntchisi, Mchinji and Phalombe. - Construction of Thyolo and Chiradzulu District Hospitals completed and construction of district Hospitals in Chitipa and Nkhotakota progressed. - Constraints: - Few health facilities capable of delivering EHP - Health facility improvement programme too slow due to resource constraints - Recommendation: - Allocation of more resources to infrastructure development to accelerate health facility improvement ### Strengthening Management and Financing of Essential Health Care - Management resource development: short courses in management and finance conducted. - Text Box 27: Summary of achievements in management and financing of essential health care - Management course for 19 junior doctors held - Accounting courses for 24 accounts staff held - Financial and Project Management courses for 27 officers conducted - CHAM User Fee Exemption Policy finalized - Hospital Autonomy draft Policy and Legislation produced - Constraint: - Progress of the SWAp unsatisfactory hence locking up substantial financial resources - Recommendation: - Malawi Government and donor partners to urgently resolve outstanding issue on SWAp to speed up the process - Financing actions and SWAp: - Development of an integrated financing strategy for EHP put on hold; to be implemented as part of six-year SWAp Programme of Work. - Consultations on Memorandum of Understanding for sector partners took longer than expected due to lack of consensus on financial management and procurement; target implementation date of July 2004 not achieved, affecting donor disbursements. - Decentralization and autonomy: - Sensitization of assembly staff and elected members on health issues undertaken. - Guidelines developed for district health staff and local assemblies on management of district health services. - Draft Hospital Autonomy Policy finalized and consultations conducted; document awaits Cabinet consideration. Draft Hospital Autonomy legislation produced; internal consultations ongoing. ### HIV/AIDS — clinical response and scale-up plans - Ministry established a Unit to deal with clinical aspects of HIV/AIDS: scaling up anti-retroviral therapy (ART), HIV Counseling and Testing, and management of HIV-related diseases. - ART scale-up plan finalized; intention to provide free ART in a total of 54 health facilities countrywide in the period July to December 2004. - Planning activities: - Survey of HIV/AIDS services nationwide to determine gaps for scale-up. - Estimates of persons to start ART and procurement planning undertaken. - Training of service providers at identified facilities conducted. - Counseling and testing scale-up: - Plan finalized to test a total of 750,000 clients at various sites in the years 2004 and 2005. - Activities: certification of counseling and testing sites; procurement and distribution of HIV test kits; development of social mobilization and education materials; development of guidelines for management of HIV-related diseases; drug quantification for HIV-related diseases. ### Promotion of Good Nutrition — objectives and progress - Major causes of malnutrition identified: inadequate dietary intake exacerbated by household food insecurity, poor child feeding and care practices, inadequate education and knowledge in nutrition, improper intra-household food allocations, frequent infections (malaria, diarrhea, acute respiratory infections) and opportunistic infections of HIV/AIDS. - Three major objectives pursued: - Improvement in infant and young child feeding - Diversification and modification of diets - Strengthening institutions (Ministries of Agriculture, Health, Education and Gender; NGOs and civil society) #### Improving Infant and Young Child Feeding and Breastfeeding - Achievements (Text Box 28): - 7 new baby friendly hospitals established to provide breastfeeding and appropriate complementary feeding. - Developed a national code of marketing and use of BMS - 23 trainers of trainers of Code monitors trained and 20 monitors trained in Lilongwe. - Conducted one integrated Child Health Day campaign during which BFW celebrations were incorporated. - 202 out of the planned 500 planned model villages were provided with minimum nutrition packages. - 5 nutrition sentinel surveillance data collection sites were established. - 4 IEC materials on prevention and control of malnutrition were developed and 6 radio slots were aired. - 9 community awareness campaigns were conducted in 8 ADDs. - 3 short courses on prevention and control of malnutrition for extension workers in all districts were conducted. - Additional activities: - Two documentaries on infant feeding and HIV/AIDS aired on TVM and MBC radio one. - Establishment and training of community support systems for infant feeding. #### Diversification and Modification of Diets - Support for Minimum Nutrition Package: - Support provided to model villages; package included water and sanitation, land husbandry, food production, processing and storage, and nutrition knowledge. - Research of food and nutrition: - Not carried out in 2003/04 due to unavailability of funds; carried over to 2004/05 financial year. - Monitoring of fortified foods: - Nutrition sections in Ministries of Agriculture and Health, with World Vision International, monitored project activities including MICAH; monitoring done on food fortification at hammer mills and salt iodination in select sites. - Nutrition sentinel surveillance: - 5 sentinel surveillance sites established in health centers during the period; 12 districts providing nutrition information to the system; process to establish more sites ongoing. #### Strengthen Institutional Capacity - IEC materials: - Four (4) IEC materials produced on prevention and control of malnutrition; few printed and distributed due to lack of funds; 6 radio slots aired. - Dissemination workshop for stakeholders: - Not implemented due to lack of financial resources; to be carried over to 2004/05. - Community awareness campaigns: - 9 campaigns carried out in all ADDs to promote dietary diversification. - Ministry of Gender produced and printed Nutrition Reference Books and Training Manuals; distributed to all districts via Regional Community Development Offices. - Training and orientation: - 30 extension workers trained in community nutrition. - 260 health workers oriented in general breastfeeding and lactation management. - Training on Vitamin A supplementation and promotion involved 300 volunteers. - Nutrition curricula review: - Ministry of Education finalized reviewing and incorporating nutrition in curricula currently in use for primary and secondary teachers. Nothing yet done for health extension agents. - Food and Nutrition Council and policy review: - Food and Nutrition Council not established; Department of Nutrition, HIV and AIDS under the Office of President and Cabinet recognized to replace the council. - Draft Food Security and Nutrition policy produced during the year but not presented to stakeholders and Principal Secretaries; finalization far behind schedule. - HIV/AIDS and nutrition campaigns: - Four (4) advocacy campaigns undertaken with donors, youth and community. - Over 15,000 people who qualified for ARVs were placed on therapeutic and supplementary feeding. - Over 5,000 children rehabilitated at nutrition units across the country. - Training on prevention and control of malnutrition for extension workers: - Three (3) courses conducted for AEDOS and Food and Nutrition Officers at district level. - Natural Resources College trained 195 students; Bunda College trained 250 students in nutrition respectively. - Constraints: - Delays in reviewing the Food and Nutrition Security Policy - Inadequate funding making it impossible to carry out planned activities - Lack of adequate and trained staff to deliver nutrition services - Recommendations: - Finalize the Food and Nutrition Security Policy to standardize and guide stakeholder actions - Ensure adequate and timely allocation of resources to nutrition activities - Enhance coordination among nutrition players to avoid duplication of efforts ### Technical, Entrepreneurial, Vocational Education and Training (TEVET) — progress - Overall goal: offer practical and usable skills to youth, emphasize self-employment through skills and entrepreneurial development. - Strategies: promote self-employment through skills development, improve quality and relevance of TEVET, rehabilitate infrastructure and equipment, strengthen management and financing of TEVET; implement through MEDI, TEVETA, Malawi Entrepreneurial Development Institute (MEDI) and private institutions. - Progress of implementation in the year under review: - Ministry of Labour completed rehabilitating 90 buildings (including workshops, hostels, classrooms and kitchens) in the 7 colleges throughout the country. - Increase in number of non-apprenticeship full-time students to 880. - Overall total number of apprentices in the colleges increased to 2,030. *Source: _cr05209 - 2003 (excerpt).* ### introduction of evening/parallel ### introduction of evening/parallel ### TEVET / Training and Capacity Building — Achievements - Evening/parallel programmes enrolled 1,150 students compared with 880 students in the normal system. - Ministry planned 30 village polytechnics (one per district); 5 sites identified: Kasungu, Mulanje, Thyolo and Mangochi. - 51 technical instructors pursuing degree programmes at the Universities of Malawi and Mzuzu. - 53 instructors attended short courses within the country and in South Africa. - TEVETA in collaboration with MASAF implemented on-job-training programmes for 401 youths. - 270 graduates trained in skills development for self-employment. - Developed curricula for 8 trades (TEVETA). - Technical Qualifications Framework (TQF) submitted to parliament for gazetting. Text Box 29: Summary of achievements in TEVET - 7 public colleges buildings rehabilitated; - 6,400 students out of 7,000 trained in both private and public institutions; - 5 sites identified for potential village polytechnics (MoLVT); - Trained 104 lecturers out of 360 (MoLVT), 22 technical teachers out of 20 (TEVETA), and 30 trade testing assessors out of 35 (MoLVT & TEVETA); - 120 participants (32 men and 88 women) trained in cookery, bakery and tailoring (MEDI &TEVETA); - 60 needy students out of 100 provided with bursaries (TEVETA-DANIDA); - Developed curricula for 8 trades (TEVETA); - 270 out of 300 trainees graduated in skills development initiatives (TEVETA and MASAF); ### TEVET — Shortfalls, Constraints and Recommendations - Only 2 training programmes were carried out out of 36 planned. - Only 120 participants trained against the target of 800 participants. - Fewer tools purchased due to lack of knowledge in tendering procedures. - Failure to purchase 6,160 teaching and learning books for the public colleges. Constraints and Challenges - Inadequate funding both on PPE and ORT - Lack of knowledge in procurement procedures - Lack of a proper monitoring and evaluation of the activities - Unclear demarcations between PPEs and ORT - Unfair downward revision of ORT - Lack of training for the accounts and finance personnel - Lack of training and monitoring and evaluation Recommendations - Ensure that there is adequate funding at all times - Conduct training for staff responsible for procurement - Increase collaboration between implementing institutions with planning and financing Ministries - Ensure availability of funds and that staff are properly trained ### Pillar 3: Improving the Quality of Life of the Most Vulnerable — Overview - Main goal: improve and maintain the quality of life of the most vulnerable through social safety nets delivered as productivity enhancing interventions, welfare support interventions and improving disaster management. - Prior to MPRS, government safety nets included price controls, subsidies, minimum wages, nutrition supplements, free food distribution, free input distribution, and food or inputs for work programmes. - 2002-03 VAC report identified food-short districts: Nsanje, Phalombe, Machinga, Zomba and Karonga. ### Productivity Enhancing Interventions — Targeted Input Programme (TIP) - Government TIP package: 5 kilogram of Urea and 5 kg of 23:21:0, 2 kg of open pollinated varieties (OPV) of maize and 1 kg of grain legume seed. - Total cost of government TIP: MK1.394 billion. - DfID and government contributed approximately MK1.286 billion and MK108 million respectively; government’s contribution was carryover fertilizer from previous year’s TIP. - NGO TIP examples: AAH distributed to 2,000 beneficiaries one watering cane, one hoe blade, one packet of 200 gm vegetable seed, 25 kg of urea fertilizer, 25 kg of compound fertilizer and 5 kg beans; 500 beneficiary households received chicken for rearing; other inputs included groundnuts, cassava and sweet potatoes planting materials. Text Box 30: Summary of achievements in TIP - 1.702 million farm families received inputs under TIP (1.7 million government TIP beneficiaries and 2000 AAH TIP beneficiaries) - 500 households received chicken for commercial purposes ### Productivity Enhancing Interventions — Public Work Programs (PWP) - Three types implemented: food for work, cash for work and input for work programs. - MASAF II concluded during 2003-04; MASAF implemented PWP through Local Authority Managed Projects (LAMPS) funded by World Bank and DfID. - MASAF II Improved Livelihood Through Public Works Program (ILTPWP) and Relief Cash for Work Programme (RCWP) implemented. - EU-GoM cash for work implemented by Ministry of Local Government and Rural Development and District Assemblies; activities included awareness of rural travel and transport, grading/rehabilitation/construction of rural feeder roads, construction of culverts/bridges/waterways. Text Box 31: Summary of achievements PWP - 224 PWP were implemented by MASAF (27 North, 76 Center and 121 South) under Emergency Drought Recovery Project (EDRP) - 92,005 people benefited from the PWP (22,005 MASAF and 70,000 NGO consortium) - MK765 million cash transferred to 259,901 beneficiaries through RCWP (males: 144,099, females: 115,802 & 31,201 out of 115,802 were female headed households) - 12,899 Km of roads rehabilitated/constructed (MASAF II – LAMP and Africare) - 108 km road under rehabilitation (Africare) - 4685.31 ha was put under afforestation programme (MASAF - 13,000 sq m dams constructed/rehabilitated - 37 ha planted to cassava (Africare) - 139,721 faidhebia abida transplanted to 28 ha (Africare) - 42,790 blue gum and pine trees planted (Africare) - 3 ponds constructed and stocked with fish - 78 sq m of manure produced (Africare) Table 4.2: Progress of 2003/04 GoM/EU PWP Activities (selected) - Rural Feeder Roads Grading: 2004 Target 1,673 km; Implementation Progress 1,243 km (74%); Budget Provision 73,200; Expenditure 44,243 (60%) - Rehabilitation of rural feeder roads: 2004 Target 1,278 km; Implementation Progress 555 km; Budget Provision 63,880; Expenditure 38,706 (61%) - Construction of Infrastructure: 2004 Target 790 km; Implementation Progress 874 km (111%); Budget Provision 60,194; Expenditure 51,400 (EU) 61,561 (102%) 32,945 (64%) (EU) Overall (85%) - Figures in brackets are indicative of level of implementation versus target and amount spent versus the budget. Other GoM/EU PWP and NGO Consortium Activities - GoM/EU PWP labour intensive food security projects: 11,329 men and 9,269 women involved in Lilongwe, Dowa, Ntchisi, Salima and Nkhotakota; approximately MK77.5 was spent on the programme. - GoM/EU PWP communal woodlots project (April 2001 to March 2004): 31,533 beneficiaries; supported 1,275 villages to plant 24 million trees; assisted farmers with treadle pumps and 470 stream diversions. - NGO consortium (CARE, Afri-care, Emmanuel International and Save the Children US) targeted marginalized farmers with 50 kg urea and 10 kg maize seed distributed; 10 districts benefited including Mzimba, Lilongwe, Dowa, Ntcheu, Mangochi, Balaka, Machinga and Zomba. Text Box 32: Summary of achievements in food for work - 9,265 beneficiaries engaged in food for work got 2,469 tons cereals and 247.3 tons pulses (Africare) - JEFAP distributed in total 2,470 metric tons of maize and 247 metric tons of pulses. Challenges and Constraints for PWP - Work overload of District Assemblies due to proliferation of PWPs by various players - Targeting problems of exclusion and inclusion; community targeting with NGO verification sometimes used - Slow progress of sub-projects due to May 2004 general election activities and inadequate staff at MASAF Zones ### Welfare Enhancing Interventions — Targeted Nutrition Programs - No famine in 2003-04; no widespread food distribution exercise; NGOs distributed food to vulnerable community members (children, pregnant and lactating mothers, the sick). - WFP provided food through nutrition rehabilitation centers, NGOs and hospitals. - Ministry of Health reached children and/or malnourished, caretakers, and lactating and (text cut off in source). Text Box 33: Summary of achievements in Targeted Nutrition Programs (partial) - 37,823 beneficiaries received 719.69 tonnes of maize meal, 146.15 tonnes of pulses, 370.37 tons of cooking oil, 1,946.40 tonnes of corn-soy blend, 79.91 tonnes of sugar, *Source: _cr05209 - introduction of evening/parallel* ### 80.60 tonnes of DSM at cost of ### _cr05209 - 80.60 tonnes of DSM at cost of ### Nutrition and Food Aid Distribution - 80.60 tonnes of DSM at cost of - MK2,532,597.21 (MoH) - 19,806 beneficiaries received: - 545.35 tonnes of cereal - 58.79 tonnes of pulses - 152.02 tons of corn-soy blend - 69.55 maize meal - 55.22 tonnes of vegetable oil (COGUARD Consortium) - 465 MoH staff and 400 community volunteers trained on screening beneficiaries (COGUARD Consortium) - 67 pregnant mothers with Supplementary and Therapeutic Feeding - Consortium chaired by Africare conducted activities under COGUARD (Cooperatively Guarding Nutrition Status of Pregnant and Children in Emergency through Supplementary Feeding); some NGOs distributed rations to ill patients (i.e. TB patients as part of medication), households keeping orphans, child headed and elderly headed households ### Direct Welfare Transfers - Responsibility: Ministry of Gender, Child Welfare and Community Services - Assistance mainly from donor organizations channeled through the Ministry - 2003-04 direct transfers included school fees assistance and distribution of food items for relief - In the central region, 156 students were given school fees assistance worth K572, 385 - School fees provided by Red Cross, Lions Club-Lilongwe, and HIPC funds ### Capacity Building Programs (Safety Nets) - Aim: increase community capacity to assist vulnerable households through formation of committees and community-based organizations (parent committees, home based care committees, community support groups, caregivers, support groups, people living with HIV/AIDS (PLWA) and orphan committees) - Major donor for 2003-04: UNICEF; other donors: DfID, World Vision International, National AIDS Commissions, Malawi Red Cross, OXFAM-Malawi, Southern Africa Aid Trust and Actionaid - 2,956 people trained in various programs (orphan care, care giving for HIV/IDS, community based management and community support groups) - Total amount spent on these trainings: K17, 578,145 ### Constraints and Challenges (Welfare and Capacity Building) - Targeting remained a potential problem as a majority of the people was recovering from the 2001/02 famine; TB patients, lactating mothers, pregnant mothers and malnourished children were targeted - A number of organizations duplicated HIV/AIDS activities, leading to over-servicing some areas and under-servicing others ### Recommendations (Welfare and Capacity Building) - The MoLGRD should set up community structures within the district assembly framework to ensure effective targeting given a set of criteria - NGOs should synchronize their programs at district level to avoid duplication and rationalize capacity building programs ### Disaster Management: Objectives and Planned Actions - Plan: improve disaster preparedness, prevention, mitigation, relief and rehabilitation programmes - Department planned to work with various NGOs and development partners using district assembly structures ### Progress of Implementation (2003-04) - Implemented disaster preparedness and mitigation programs; provision of food and non-food items to disaster victims; rehabilitation and reconstruction; monitoring and evaluation - Implementing disaster preparedness and mitigation programs: - Developed four flood contingency plans for Salima, Karonga, Machinga and Phalombe districts - Completed the National Disaster Management Plan - Conducted five flood moderation and drought mitigation courses for officials from Chikwawa, Nsanje, Zomba, Phalombe, Machinga, Mangochi, Karonga, Chitipa, Salima and Nkhotakota - Conducted two vulnerability assessments and mapping as part of Vulnerability Assessment Committee activities - Assisted District Commissioners in identifying mitigation projects through capacity building for civil protection committees at district and area levels - Supported the activities of 26 District Humanitarian Affairs Officers in the district assemblies - Provision of food and non-food items to disaster victims: - Provided food and non-food relief items (maize, beans, rice, salt, plastic kitchen utensils, blankets and plastic sheets) worth K95, 146,750 to disaster victims and vulnerable groups - 1,225 flood victims in Zomba and Phalombe were supplied with food and non-food items - Relief provided by government, donors and NGOs for flood victims and vulnerable groups - Rehabilitation and Reconstruction: - Responsibility shared among district assemblies, line ministries, National Roads Authority, NGOs, donor partners and private sector - Ministry of Agriculture promoted winter cropping of maize to ensure food security - Monitoring and Evaluation: - Conducted by District Humanitarian Affairs Officers (DHAOs) sponsored by the UNDP through monthly reports on humanitarian situations in districts - Main players: Department of Poverty and Disaster Management Affairs, District Assemblies, Ministry of Economic Planning and Development, Ministry of Local Government and Rural Development, line ministries, the WFP and NGOs ### Constraints and Challenges (Disaster Management) - Poor coordination among stakeholders resulting in duplication of efforts - Untimely and inadequate funding hampering preparedness and mitigation activities - The UNDP Flood Disaster project supporting DHAOs at district assembly level expires in December 2004; timely reports on humanitarian situations may not be forthcoming thereafter ### Recommendations (Disaster Management) - Improve coordination among stakeholders in disaster management at district level by strengthening the district assembly structures - Government should institutionalize the office of the District Humanitarian Affairs Officers within its structures at the district assembly level - Government should allocate more funds for disaster management to enable implementation of preparedness and mitigation activities - Districts should develop District Disaster Management Plans based on the disasters they face, despite the existence of a National Disaster Management Plan ### Good Governance (Pillar 4) - Good governance considered a factor affecting economic growth and development; constitution promotes establishment of democratic institutions and bill of rights - MPRS objective for good governance: ensure public institutions and systems protect and benefit the poor and vulnerable groups, be transparent and held accountable, ensure responsiveness to needs of the poor and broad based participation of civil society in budgetary management - Laws enacted during the year to ensure transparency and accountability: Public Audit Act 2003, Public Finance Management Act 2003 and the Public Procurement Act *Source: _cr05209 - 80.60 tonnes of DSM at cost of (PDF chapter/section)* ### 2003. These three laws establish a basis for an efficient system of financial management ### 2003. These three laws establish a basis for an efficient system of financial management and proper utilization of all resources in an attempt to curtail fraud. ### Political Will and Mindset - Government commitment: zero tolerance for corruption; measures include: - Establish clear “performance criteria” and “benchmarks” audited regularly and validated by independent auditors. - Design an efficient system of financial management and monitor allocation and utilization of all resources to detect fraud during the project/programme cycle. - Ensure swift investigations, prosecution and punishment of public officers found guilty of corruption, theft, mismanagement and abuse of power. - Strengthen offices of the Accountant General, Auditor General, Public Accounts Committee and the ACB to ensure transparency in utilization, reporting and accountability of public funds. - Respect of the rule of law. - Progress highlights: - Change of leadership; launch of a presidential Road Map in May, 2004 to transform Malawi from a poor country to a middle income country. - Government measures: shift official presidency residence from Blantyre to Lilongwe; reduce cabinet from 58 to 28; intensify anti-corruption; appointments based on merit. - Constraints: - Inadequate commitment to support the vision. - Inadequate resources and lack of a clear strategy to address mindset. - Recommendations: - Introduce development studies in all institutions of high learning for cadreship development. - Organize special orientation courses on political-economy targeting heads/directors of departments and above. - Conduct a mass political education campaign to the citizenry. - Strengthen governance institutions and civil society organizations. ### Improved Safety, Security and Access to Justice #### Judiciary - MPRS objectives for the Judiciary: - Improve access to and delivery of effective and efficient justice. - Ensure respect of the rule of law. - Identified activities: - Construction of more court rooms in all districts. - Ensure adequate judicial staff and support. - Awareness campaigns on judicial independence for political leaders and the public. - Design and implement separate funding system for Judiciary. - Encourage and sustain community service for petty offences. - Sensitise public on constitutional rights and access to justice. - Progress and achievements: - November 2003: Malawi Judiciary launched a five-year Strategic Plan and Development Programme. - Introduction of alternative dispute resolution in form of Mediation and mediation rules. - Text Box 34 achievements: - 60 magistrates and 16 Judges were trained in mediation. - Mediators appointed and gazetted from fields of Bankers, Doctors, Insurers, Accountants Commerce, and Engineers. - Law clerks from magistrate courts, Industrial Relations Courts and the High Court were trained in mediation. - Constraints: - Reviewed and approved conditions of service have not been fully implemented. - Financial constraints prevented completion/expansion of Blantyre Magistrate court complex, Lilongwe Magistrate Court and High Court expansion, relocation of High Court at Chichiri to old Parliament Building in Zomba, and construction of district court rooms. - Increase of accused escaping from custody whilst in court. - Recommendations: - Increase funding to the Judiciary to meet MPRS mandates. - Provide adequate resources to ensure criminal matters are dealt with; give similar attention to Judiciary. Courts availability and caseloads - Magistrate courts: congestion; where six courts should function only three are functioning on average. - High Court and Supreme Court of Appeal: - Courts Act amended to allow a minimum of three judges for constitutional interpretation matters. - Study on Homicide matters: many murder cases could have been pre-empted as civil land disputes had the High Court gone on circuit. - Constraints: - Lack of finances and motor vehicles to ferry judges on circuit. - Supreme Court and High Court share court room space causing delays and confusion. - Recommendations: - Provide financial resources for High Court circuits. - Provide four-wheel drive motor vehicles for circuit work. - Review procedural rules relating to Constitutional Interpretation. - Geographical distancing of the Supreme Court from the High Court. Industrial Relations Court - Registered 1720 employment dispute cases countrywide; concluded 45 percent. - Constraints: insufficient personnel, inadequate financial allocation, inadequate capital assets. Capacity and work ethics - Government reviewed support staff salaries and conducted HIV/AIDS sensitization. - Two of the Judges appointed to the High Court Bench are women. Decongesting prisons - High Court disposed of 270 Homicide cases involving 376 defendants through homicide trials. - 5,346 offenders served sentences through community services to institutions (hospitals, schools, training centres, market places, City and Town Assemblies). - Constraints: increased defaulters among offenders especially in urban areas; inadequate funding; failure to effect establishment warrant creating a directorate of Community Service. - Recommendations: - Incorporate officers working on Community Services. - Intensify sensitization on advantages of non-custodial sentences. - Change public mindset to accept non-custodial sentences where appropriate. Malawi Law Reports and donor support - Produced five volumes of Malawi Law Reports (judgments from 1990 to 1993) with EU (Rule of Law Programme) support. - Donors: DFID (MASSAJ), European Union (Rule of Law programme) and Inter-ministerial Committee on Human Rights and democracy. - Recommendations: - De-link Judiciary funding from Treasury. - Build courts. - Recruit more professional magistrates and provide incentives. - Provide District Magistrates and Judges means of transport for satellite courts. #### Justice (Ministry of Justice / DPP / Legal Aid) - Ministry finalized draft Strategic Plan to guide MPRS activities. - Recruitment and training: - All the 3 State Advocates recruited for DPP and three of the five recruited for Department of Legal Aid resigned. - Six State Advocates attended short-term legal courses at International Law Institute in Kampala, Uganda. - One State Advocate pursued an LLM in Melbourne, Australia. - Two Principal State Advocates attended courses on money laundering and terrorism in Lusaka, Zambia. - Legal aid: - Regional office identified in Mzuzu but not operational due to staffing, material and financial constraints. - Civic education: - 20 civic education workshops on access to justice using EU Rule of Law Programme funds. - 3,000 leaflets printed of which 1,500 were distributed to districts. - Prosecution of corruption/fraud: - Police and DPP’s office handled at least 105 cases. - DPP granted control for prosecution of 27 Investigation Diaries received from the Anti-corruption bureau. - Constraints: - Lack of resources (lawyers, funds, vehicles) against huge backlog. - Little appreciation for independence of DPP’s office. - Inadequate budget allocations; resignations of state lawyers seeking better opportunities. - Recommendations: - Increase funding allocation to Judiciary, ACB, Police and DPP’s office. - Provide resources for training programmes. - Put in place deliberate policy and review conditions of service for lawyers and paralegals. - DPP’s office should be held accountable to the Legal Affairs Committee for decisions made. #### Malawi Police Services (MPS) - Activities and achievements (Text Box 36 summary): - 1492 constables recruited, of which 435 were ladies, in Police Training Institutions of Mlangeni, Mtakataka and Limbe. - MPS trained 87 community Policing coordinators in motorcycle riding. - 100 trained detectives posted to all the 32 police formations throughout the country. - Performance Management Training for 30 officers at Malawi Institute of Management. - HIV/AIDS responses: - VCT Centres opened at National Police headquarters and Zomba approved as ARV centres. - Sensitization of 32 Officer-In-Charge stations on Impact of AIDS on Human Resources. - Training in communication and behavioral change for Senior Officers (Regional Aids Training Network – Kenya). - Development of HIV/AIDS curriculum for Police Training Institutions at SARPCCO regional level. - Provision of condoms, awareness messages, treatment, care and support; peer educators trained; home based care training at Lilongwe Police Station. - Human resource systems: - A Human Resource Management Database installed at National Police Headquarters and is functional. - Civilian staff recruited in Finance Management; drafted Civilian Management Policy awaiting approval. - Rapid response and crime control: - 997 Rapid Response Board established; vehicles purchased though not yet delivered; pilot in Blantyre and Lilongwe planned. - 100 trained detectives posted to 32 police stations; arrest of 84 notorious criminals and recovery of property worth over MK6 million. - Firearms and vehicle theft: - Computerized Arms Registry established; intensified firearms inspection. - INTERPOL Mhakure Phase III operation recovered 39 vehicles stolen from neighboring countries. - Evidence gathering (Text Box 37 achievements): - Training of 20 fingerprint officers in Forensic Sciences. - 1500 Investigative Interview Handbooks purchased. - 78 community policing coordinators trained. - Table 4.3 selected entries: - Increase Police Presence: 40 motorcycles purchased but no officer identified for training. - Improve Police Response (Marine): Purchased 7 new boats and rehabilitated fibre-glass ones currently functional. - Establish anti-livestock theft units: Anti-Livestock pilot units established in Karonga. - Civic Education on Crime Prevention: 10,000 Community Policing posters printed and distributed. - Develop Counseling Methods: Training at MIM for 32 officer-in-charge stations. - Safeguarding rights: 94 Victim Support Unit coordinators trained and distributed across 32 stations. - Community involvement: 23,263 crime prevention panels (CPPs) formed. - Constraints: - HIV/AIDS losses among officers. - Inadequate funding; limited forensic capacity; limited community understanding of community policing; limited accommodation, classrooms, equipment; lack of incentives; shortage of professional and technical personnel; poor housing and dilapidated offices. - Recommendations: - Intensify workplace HIV/AIDS programs: Prevention and advocacy; Treatment, care and support; Impact mitigation; Capacity building and mainstreaming and networking/partnership. - Ensure adequate year-round funding. - Recruit specialized staff for specialized posts. - Increase capacity building in forensic science and evidence preservation. - Improve welfare: construct more houses and offices. - Improve infrastructure in police training institutions and provide adequate teaching and learning materials. - Improve packages and incentives to retain specialized staff. - Increase community policing awareness among communities and police staff. ### Fraud and Corruption - MPRS objectives: improve prevention, increase detection and protection, and ensure speedy processing of corruption and fraud cases. - Identified activities: - Create new Malawi Procurement Authority (MPA) to oversee decentralized procurement. - Design and enforce clear and strict procurement guidelines through MPA. - Conduct and encourage corruption campaigns. - Review legal framework and relationships between ACB, DPP, Judiciary, NAO and Parliamentary Public Accounts Committee. - Build capacity to improve coverage and timing of audits. - Build capacity for investigations and prosecution. - ACB prevention activities and achievements (Text Box 38): - Public Audit Act 2003 enacted. - Public Finance Management Act 2003 enacted. - Public Procurement Act 2003 enacted. - Corrupt Practices Act (Amendment) 2004 done. - 6 sensitisation workshops for court clerks held. - 3 sensitisation workshops for Magistrates held. - 1 sensitisation workshop for Judges held. - 1 sensitisation workshop for the Public Accounts Committee held. - Anti-corruption newsletters for two quarters produced. - Support to Anti-Corruption Clubs of Universities; posters and T-shirts produced; public awareness campaigns via radio and talk shows. - Detection and prosecution: - Law Commission reviewed legal framework and relationship between ACB and DPP; Parliament amended Corrupt Practices Act. - Amendment: Director of ACB empowered to instruct any Legal Practitioner to provide legal advice and act on behalf of the Director in civil proceedings; Director still required to seek consent of DPP for prosecution but DPP must account to Parliament if withholding consent. - ACB worked closely with NAO, MRA and Public Accounts Committee; information sharing occurred. - ACB achievements in detection (Text Box 39): - 3 specialised investigations units established. - 15 officers trained in procurement processes, procedures, and banking. - 5 legal firms engaged in prosecution. - Corruption Prevention and Public Education Division established. - Constraints: - Staffing levels too low; organization bottom heavy with wide gap between high-level managers and officers. - Lack of incentives causing high turnover, especially prosecutors. - Over reliance on external lawyers affecting prosecution speed. - Lack of qualified lawyers due to poor remuneration. - Lack of purpose-built office accommodation, especially Head Office. - Recommendations: - Recruit more lawyers and ensure competitive remuneration. - Provide adequate incentives to retain staff. - Fill vacant positions, especially middle manager posts. - Construct purpose-built office accommodation. - Intensify public awareness campaigns on dangers of corruption and fraud. ### Decentralization - MPRS decentralization objectives: - Develop institutional capacity for local governance. - Transfer functions, resources and planning to districts. - Key activities: - Computerize financial management systems; build assembly personnel capacity. - Introduce activity based budgeting aligned with MPRS. - Develop human resource capacity for assemblies and below. - Strengthen national coordination of decentralization. - Develop phased implementation for intergovernmental transfer. - Strengthen revenue collection and management in assemblies; train finance committees. - Facilitate sector devolution plans; integrate local planning into MPRS; review policies and by-laws; conduct civic education; support media, traditional leaders and civil society. - Progress and achievements: - Institutional capacity: - Developed appropriate accounting and financial management systems. - Seven district assemblies completed computerizing accounting systems (out of planned 12). - Activity based budgeting introduced and reflected in 2004/05 budget. - 1,854 staff participated in training programmes; 17 trained externally. - Taskforce (MoLGRD, Health, Education, Finance, Office of the President and Cabinet) established; met quarterly (4 times). - Transfer of functions and planning: - Study completed on improving revenue mobilization (property rates and business licensing); assemblies in process of adopting report. - Facilitated preparation and implementation of 9 sector devolution plans (environment and natural resources, water development, commerce and industry, gender and community services, agriculture, education, housing, health, transport and public works). Four out of nine sectors have devolved or partially devolved. - Study on linking district planning to national planning completed and ready for adoption. - Recruited and trained DPDs; district development committees oriented. - Local Government Act of 1998 reviewed and amendments prepared for Parliament; one by-law on marketing reviewed. - Public awareness: production/distribution of T-shirts, Caps, posters, radio/TV programmes, giggles; oriented church leaders and civil society; established district IEC teams in all districts; trained reporters. - Text Box 40 achievements: - 7 District Assemblies computerized financial management systems. - Trained all Directors of Finance and 28 finance committees. - 23 DCs and 20 DPDs inducted. - Task force established. - Text Box 41 achievements in transfer: - Conducted study on improving revenue mobilization. - Facilitated devolution plans for 9 sectors out of planned 10. - Conducted study on linking local development planning and central government budgeting. - Recruited 20 DPDs and trained them in Planning System. - 28 Development Committees oriented on planning system. - Reviewed 1998 Local Government Act; one by-law reviewed. - Produced 4,000 T-shirts, 1,000 Caps, 4,000 posters on decentralization. - 27 episodes and 6 panel discussions aired on TVM and radio. - Oriented church leaders in all three regions and 30 officers from civil society. - 10 giggles produced and aired. - 28 district IEC teams established. - Trained 51 reporters on decentralization. - Constraints: - Lack of capacity at district level to take over devolved functions. - Delays in devolution by some sectors. - Limited donor support to decentralization. - Low financial base for assemblies. - Limited beneficiary knowledge on decentralization. - Weak civil society participation in local government institutions. - Recommendations: - Build capacity at district level including sector staff. - Ensure sectors that have not devolved keep pace. - Ensure district assemblies adopt report on improving revenue collection for sustainable financial base. ### Democratization - MPRS activities to strengthen formal and informal governance: - Strengthen capacity and awareness for law informant related to elections. - Strengthen capacity of Electoral Commission. - Civic education to increase voter turn-out and awareness of MPs’ roles. - Review electoral system for inclusivity and cost effectiveness. - Civic education in vernacular languages. - Institutionalize national forum for dialogue linked to MPS review. - Support parliamentary committees; train parliamentarians; strengthen political parties. - Enforce regulatory framework for media and ensure objectivity. - Establish and support institutions under NGO law. - Elections (20th May 2004): - Third Multi-party Elections held on 20th May 2004. - Out of about 5.6 million registered voters, slightly over 3 million actually voted. - Observations: poorly managed by MEC due to late funding and incompetence; lack of adherence to electoral laws; unlevel playing field in use of public media and resources; voter apathy noted. - Political parties: - Proliferation of parties compared to 1999; internal democracy issues and imposition of candidates noted. - For the first time, more than three parties represented in parliament. - Public media: - MBC and TVM failed to provide balanced coverage; dedicated more time to ruling party and ignored opposition contrary to section 63 of PPE Act. - Civic education and monitoring (Text Box 43 achievements): - 70,000 stickers produced. - 18 drama groups engaged. - Numerous Jingles. - 20 radio cassettes and 17,000 audio cassettes distributed in prisons. - 11,430 monitors trained and deployed by CSOs and MHRC. - Civic education challenges: late and inadequate donor funding; organizations used community structures (funerals, weddings, churches) to disseminate information. - Conflict resolution: MEC established NECOF and multi-party liaison committees; Forum for Peace and Dialogue trained in conflict management with GTZ-Democracy support. - Constraints: - Lack of seriousness and commitment to free and fair elections. - Lack of independence of the Commission. - Lack of adherence to electoral laws by Commission and political parties. - Poor preparedness and training of electoral polling staff. - Poor registration and verification of voters’ roll. - Inadequate and delayed funding. - Ineffective management of electoral complaints. - Voter apathy; unpredictability of electoral calendar. - Recommendations: - Finalize and periodically update computerization of Voters’ Roll. - MEC to give comprehensive training to polling personnel. - MEC to ensure timely and adequate provision of polling materials and equipment. - MEC to revisit and adhere to mandate on electoral disputes and complaints; all contesting parties must adhere to Code of Conduct. - Civic education should be ongoing rather than event-driven. Parliament responsiveness and committees - Bills and participation: - 35 bills were passed during the period under review; only 6 of the bills had incorporated citizen inputs (17% of passed bills incorporated civic group/accountability agency views). - 7 parliamentary motions responded to input from civic groups and accountability agencies. - Four constitutional elections-related bills due to insufficient support. - 33,500 citizens participated in CAFs workshops and 73 aspiring candidates participated. - Compliance: - 31.7 percent of bills complied with the 28-day rule. - Four of 13 bills tabled were directly related to consolidation of democracy (Corrupt Practices Amendment, Parliamentary and Presidential Elections Amendment, Local Government Elections Amendment, Electoral Commission Amendment). - Parliamentary committees: - Outreach to civil society through committee hearings, open meetings and field trips. - Civil society networks (MEJN, CISANET, MHEN, CSCQBE) collaborated on budget processes and popularization of PRSP and Budget. - National Assembly published Guide to Practice and Procedure Manual for committees and established a new record keeping system. - Constraints: - Shortage of staff (Hansard Section), reliance on untrained staff, inadequate and obsolete equipment, inadequate funds, implementation of unplanned/unbudgeted activities. - Recommendations: - Fill vacant positions and provide staff training. - Acquire modern equipment. - Control expenditures through adherence to planned activities. ### Human Rights - MPRS core objective: develop capacity of human rights institutions and raise awareness of constitutional rights and obligations. - Identified activities: - Human rights training for public servants (police, army). - Review roles and functions of human rights institutions. - Intensify human rights awareness and sensitization campaigns. - Raise awareness of negative cultural practices that violate human rights. - Progress and achievements (Text Box 45): - Trained 2,000 civil leaders on cultural practices. - Conducted 11 workshops on women and children rights relating to water and sanitation. - Produced and disseminated 2,000 Human Rights newsletters, brochures and various materials. - Sensitised 150 District Assembly members and DCT members on international humanitarian law in Mulanje, Mwanza, and Kasungu. - Produced and disseminated 20,000 posters and 15,000 leaflets. - A total of 50 radio programs aired. - A total of 54 community radio debates conducted. - Activities and outputs: - Human rights awareness campaigns in almost all districts by HRCC, CHRR, faith-based organizations using drama, dances, debates, radio and TV. - Increased reporting of human rights cases to MHRC, Ombudsman and Legal Aid. - CAMA and MEJN campaigned on economic rights as part of content-based elections through dissemination of Civil Society Manifesto. - Training for civil leaders in Karonga and Chitipa on negative cultural practices affecting women and girl child. - Juvenile justice sensitization workshops for magistrates, prison officials and NGOs in Dedza. - MHRC finalized production of National Plan Action as a guide for protection and promotion of human rights. - MHRC carried out investigations and public hearings on human rights violations; Ombudsman intervened on maladministration. - Church and Society, Livingstonia Synod, assessed performance and roles of state human rights institutions; networking initiatives supported by Danish Institute for Human Rights. - Constraints: - Communities largely ignorant of the constitution and their rights. - Legal redress institutions not easily accessible, especially in rural areas. - Inability to produce state party reports to UN treaty bodies and African Commission. - Inadequate financial support, communications, mobility and equipment. - Inadequate trained personnel for specialized areas. - Increased number of human rights violation cases. - Recommendations: - Build community capacity to mobilize in cases of abuse. - Put mechanisms in place for easy access to human rights redress institutions. - Intensify training of the criminal justice system. - Ensure state party reports are written and submitted to treaty bodies in time. - Increase human rights education and awareness in all public institutions and at all society levels. - Human rights institutions should ensure Malawians are fully aware of their rights and obligations. - Create a conducive environment for promotion and protection of human rights and rule of law. *Italic: Source — _cr05209 - 2003. These three laws establish a basis for an efficient system of financial management and proper utilization of all resources in an attempt to curtail fraud* ### Chapter 5.0: Cross Cutting Issues ### Chapter 5.0: Cross Cutting Issues ### 5.1 Gender and Empowerment - Context and objectives - Poverty has a gender dimension and is experienced differently by different gender groups. Access to social and economic resources is biased against women, the elderly and the disabled. - Ministry of Gender, Child Welfare and Community Services planned activities in five major areas as enshrined in the national gender policy: strengthening capacity to implement the National Gender Policy; engendering sectoral budgets; promotion of a gender sensitive legal environment; eradication of gender-based violence; and enhance women participation in decision-making. - Progress of implementation - Gender focal points established in various Ministries, Faith and Community Based Organizations. - National Action Plan produced in collaboration with the Centre for Social Research (CSR) and UNDP to operationalise the National Gender Policy. - Tools for monitoring and evaluation have been developed but more work need to be done before they are fully adopted and institutionalized. - A Documentation Centre established at the Ministry’s headquarters to serve as a resource center for gender related literature. - In 2003/04 financial year, efforts were made to mainstream gender in the budget cycle; a training session was held to equip officers from Planning and Budgeting units to engender sectoral budgets. - By end of 2003/04 fiscal year, draft acts and reviewed laws submitted to parliament; Domestic Violence Bill remains in draft form. - 80 Community Action Groups were established to curb gender-based violence; arbitration with the Police is yet to take root. - Training sessions for women parliamentary aspirants conducted; proportion of women parliamentarians increased to 14% from 8.8%. - Key achievements (Text Box 46) - 60 focal points established against a target of 20 - 80 out of the 270 targeted Community Action Groups were established - Submitted a draft Wills and Inheritance Act and a reviewed Family Law to Parliament - Produced and launched a training manual for National Action Plan - A Gender Affairs Unit has been established at Chancellor College - Proportion of women parliamentarians has increased to 14% from 8.8% - Recommendation - More training has to be carried out to fully equip all Planning officers the skills of engendering budgets. ### 5.2 HIV/AIDS - Context and objectives - Malawi has one of the highest HIV infection rates of 15% especially in younger age groups. - MPRS strategies: reduce incidence of new infections; improve quality of life of those infected with HIV/AIDS; mitigate economic and social impacts of HIV/AIDS. - Progress of implementation and key achievements (Text Box 47) - 50 youth groups were supported with the funds amounting to MK 11,486,000 to promote youth participation in coordinating HIV/AIDS activities; - 2 radio phone in programs, 2 radio and 2 television panel discussions on equity and targeting of ARVs were conducted at cost of MK 5,842,000; - 7,000 standard four teachers were trained in life-skills based HIV/AIDS education to strengthen their role in providing guidance to pupils; - An HIV/AIDS policy was approved and launched at a cost of MK 10,701,000; - 9,000 people were put on free ARVs and 450 health workers were trained in ARV management; - 54 facilitators in ARV management were put in place and 100 community-based organisations were financed directly. Also 6 government sectors were funded. - 6 advocacy meetings were held to promote VCT utilization at cost of MK 4,653,800; - 2 advocacy meetings held to promote access to male and female condoms at a cost of MK 333,300; - Out of 210 counselors, 204 were trained in VCT and WBRT at a cost of MK 25,427,000; - The policy on injection safety and health care waste management was finalized at a cost of MK 685,400 but dissemination was not done; - NAC financial management system was computerized at a cost of MK 2,037,400. - Major highlights - Official launching of the national HIV/AIDS policy. - Government developed an implementation plan for ARVs programme. - Recommendations - Translate HIV/AIDS policy into local languages; and - Ensure adherence to standards and regulations on the management of ARVs. ### 5.3 Science and Technology - Context and objectives - MPRS emphasizes mainstreaming science and technology; correlation between level of technology and economic growth. - Progress of implementation and key achievements (Text Box 48) - GWAN extended to Parliament; - 15 officers trained in??? at a cost of US$ 200,200; - GWAN maintained at Capital Hill, City Centre and DISTMS head office at a cost of US$ 149,000; - Civil service electronic information security enhanced at a cost of US$ 112,000; - 11 officers trained in IFMIS maintenance at a cost of US$ 145,000; - PPPAI maintained at Capital Hill and City Centre at a cost of US$ 148,000; - HRMIS user needs analysed; - National Commission for Science and Technology bill passed; - 16 studies in appropriate technology funded to the tune of MK4, 393,286.00 - National HIV/AIDS Research Strategy was formulated - A Biotechnology and Biosafety framework was developed - Developed a website for NRCM - Organized an Intellectual Property Sensitization workshop with financial support from ARIPO - Strengthened NRCM’s coordinating role by revitalizing technical committees - Additional activities - DISTMISI drafted the National ICT policy to coordinate utilization and development of information and communication technology. - Maintained the Health Management Information System but failed to computerize Education, Health, Gender and Labor sectors. - Awareness programs on Information and Communication Technologies carried out. - NRCM funded studies in appropriate technologies across socio-economic issues, agriculture and natural resources, mining, health and HIV/AIDS, applied engineering, and science competitions in secondary schools. - Proposal on Public Understanding of Science, Engineering and Technology submitted to UNESCO Commission. - Constraints and challenges - Inadequate funding; - Lack of scientific and technical human resources. - Recommendations - Increase investment in S&T research; - Promote and transfer discovered technologies; - Recruit and train more scientists; - The need for inter-ministerial collaboration to cover all aspects of Science and Technology; - Sectors should mainstream ICT in their activities. ### 5.4 Environment - Mandate and approach - Department of Environmental Affairs mandated to facilitate and coordinate environmental issues implemented by other Ministries and private institutions. Environmental issues are crosscutting and need streamlining across pillars. - Progress of implementation - Reviewed and approved several Environmental Impact Assessments (EIAs), Environmental Audits and project briefs by the Technical Committee on Environment covering education, health, industrial and estate development sectors; some projects proceeded without conducting EIAs due to ignorance and defiance of the law. - Conducted environmental inspections and monitoring in Zomba, Mzuzu and Lilongwe; visited sites including Kanengo Sewerage Treatment Works in Kanengo, Lilongwe. - Facilitated a ‘Clean Up Campaign’ for the City of Lilongwe; participated in inspections in Mzuzu, Dedza, Balaka, Zomba and Blantyre. - Observed illegal mining near African Bible College (ABC); agreed to remove miners and relocate to alternative sand-mining site. - Issued Pollution abatement advice and Environmental Protection Orders to ministries/departments found indiscriminately dumping waste; some positive responses received. - Finalized and signed a Memorandum of with the Malawi Bureau of Standards (MBS) for development of environmental standards; MBS started developing environmental standards for water, air, soil and noise with Department’s financial assistance. - Initiated consultancy process to prepare Sector-Specific Guidelines for EIA, Environmental Management Systems (EMS) and Environmental Auditing Guidelines covering Tourism, Land development, housing and human settlements, Water and Transport sectors. - Consultative meetings on 11th June 2004 in Blantyre to discuss national strategy and legal framework for management of plastic bags; special taskforce selected to develop action plan for plastics management. - Participated in training of Engineers and Contractors in the Roads Sector on EIA and environmental issues; four training sessions conducted (1 in Blantyre, 1 in Mzuzu and 2 in Lilongwe). - Held a workshop for Environmental District Officers to raise awareness on EIA and district-level roles. - Recommendations from plastics consultative meeting - Development of regulations on Waste Management including plastic material waste; - Revision of the Environment Management Act to include development of said regulations; - Development of environmental standards for plastics specifications and Code of Practice under the NATURE Programme; EAD subcontracted MBS to develop environmental standards for noise and sound; soil and solid waste; air and emissions; and water and wastewater. - Constraints and challenges - Need to ensure all agencies with mandate to grant development licenses and permits commit to EIA process and enforce EMA requirements; some developers do not comply due to inadequate EIA awareness and lack of referral to EAD by licensing authorities. - Need to develop public awareness about environmental protection and benefits of healthy environment; improved involvement by Government and NGOs and increased media exposure recommended. ### Chapter 6.0: Monitoring Evaluation (summary of material present) - Mandate and institutional arrangements - Monitoring and evaluation essential to determine progress of implementation; Ministry of Economic Planning and Development (MEPD) mandated to coordinate MPRS M&E. - Progress of implementation - MEPD completed ‘Design for a District based performance monitoring and evaluation system’ in November 2003; report contained ten recommendations but none were implemented due to bureaucratic procedures. - MEPD produced the MPRS Monitoring and Evaluation Master Plan during the year and was waiting to be launched. - A database on project monitoring was acquired during the review period. - Civil society M&E activities - MEJN conducted a survey on service delivery satisfaction; found high demand for public services but low satisfaction with service delivery. - CISANET monitored budget performance in agriculture; MHEN in health; CSCQBE in education. Their findings informed the MPRS review. - Constraints and challenges - Lack of M&E systems in most institutions frustrated timing of review process; comprehensive review hindered by absence of usable management information. - Low and declining M&E capacity at sector line-ministries, inertia in establishing devolved M&E at Districts, and lack of regular information flow between operational levels and central government. - Lack of coordination between government, donors and other stakeholders. - Lack of harmonization of indicators partly due to late completion and launching of MPRS ‘M&E Master Plan’. - Recommendations - Develop management information systems in sectors through M&E to monitor complex and national programmes such as the MPRS. - M&E systems should include indicators of inputs, outputs and outcomes as well as longer-term impacts. - Strengthen coordination and capacity in districts, sectors, central ministries and civil society organizations. - M&E Division of MEPD should initiate a coordinated effort with donors, sectors and local government to establish a sustainable monitoring and evaluation system. *Source: _cr05209 - Chapter 5.0: Cross Cutting Issues* ### Chapter 7.0: Emerging Issues ### Chapter 7.0: Emerging Issues ### 7.1 Lands and Housing — situation and context - Government recognized poor access to land as a major cause of low agricultural productivity among smallholder farmers and saw a well-developed housing sector as promoting economic growth and satisfying social needs. - 1998 Malawi Population and Housing Census classifications and national shares: - Permanent structure (iron sheet roofed, concrete floor and burnt brick-walls): 15.8% - Semi-permanent structure (sun dried bricks and iron sheet roofed or burnt brick walls with thatched roofs): 18.4% - Traditional structure (thatched roof with mud walls, or walls made of mud and wattle): 65.8% ### Progress of implementation (lands, housing, and related activities) - Ministry sensitized the general public on Land Policy and distributed Land Reform Programme documents. - Opened up land for development in Area 43 and Namiwawa in Lilongwe and Blantyre Cities respectively. - Carried out plot identification in Blantyre, Mzuzu and Municipality of Zomba. - Purchased estate land in Chiradzulu, Dedza, Mangochi, Machinga, Mulanje, Salima and Thyolo for redistribution to the landless. - Processed land transactions such as consents, searches, filing of instruments, issuance of land certificates and certificates of leases, and certifying land documents. - Collaborated with Zambia and Tanzania on border identification and location of international boundaries. - Conducted hydrographic surveys on Lake Malawi to provide hydrographic information for fishing and safe navigation. - Devolved some rural housing programme, estate management and valuation and buildings activities to District Assemblies in line with decentralization policy. - Prepared an action plan for HIV/AIDS activities. - Spearheaded preparation of the Land Reform Programme Implementation Strategy and established a Law Commission on Land Reform using EU funds. - Text Box 43: Summary of achievements in lands and housing (reported items) - 26 Land Clerks were trained and posted to District Assemblies; - 13 Land Technicians were trained out of 50; - 13 estates were purchased for re-distribution to the land constrained households; - 450 families were resettled at Makande Estate in Thyolo District; - 200 km of the Malawi –Zambia border was marked and approved by the two Governments; - Produced 3 hydrographic charts for Southern arms of Lake Malawi and Makanjira at a cost of MK4,000,000; - Completed urban structure plans for Phalombe, Balaka, Liwonde and Karonga; - Continued provision of advisory services on planning issues to District, Town and City Assemblies; - 400 plots were demarcated in Area 43 and are ready for allocation; and - 16 houses and offices for chiefs were constructed out of targeted 19; - Spearheaded the preparation of the Land Reform Programme Implementation Strategy; - Established a Law Commission on Land Reform using EU funds ### Constraints and challenges identified (Lands and Housing) - Shortage of Professional and Technical personnel at different levels; - Inadequate vehicles for effective monitoring and supervision; - Shortage of reliable office equipment such as computers and printers and lack of modern Surveying and Mapping equipment; - Inadequate financial resources for maintenance of equipment, Government buildings and purchase of Surveying and Mapping materials; - Inadequate and erratic funding to implement some essential services such as paying utilities and provision of other technical services; - Lack of an effective Housing Policy and legal framework; - Exclusion of Lands and Housing issues in the MPRSP as a national priority; - Inadequate capacity to effectively devolve some of the Ministry's activities to District Assemblies. ### Recommendations (Lands and Housing) - Treasury to increase funding to cater for necessary equipment like vehicles, surveying and mapping equipment, computers; - DHRMD to facilitate recruitment and training of staff; - The Ministry should be allowed to retain a good proportion of the revenue collected, so that the exercise can be done on a sustainable manner; - The Ministry should intensify dialogue with Development Partners to fund various components of the Land Reform Implementation Strategy; - The Government should include housing issues in the National Development Plans. ### Broader emerging issues and implications for the MPRS (from Chapter 8 material included in the unit) - Overall macroeconomic performance remained far from achieving macroeconomic stability targeted in the MPRS, with manifestations including high inflation rate, sluggish GDP growth, increased domestic debt and continued depreciation of the Malawi Kwacha. - The 2003/04 budget for the MPRS as a percentage of total expenditure was less than programmed in the MPRS and budget, indicating government increased spending without proportionally corresponding increase in MPRS activities. - Economy failed to achieve the sustainable annual economic growth of 6 percent required to have an impact in poverty reduction. - Lead institutions in MPRS implementation faced critical challenges: lack of resources (financial and human), HIV/AIDS, non-prioritization of activities, and non-functional monitoring and evaluation systems at sector level. ### Cross-cutting challenges and recommended actions (from Chapter 8) - Inadequate Funding - Most sectors reported constraints in funding levels and timing; planned activities do not match disbursed funds and inconsistent flow of funds hinders completion of targeted activities. - Proposed approach: channel limited funds (prioritize) towards activities that have direct impact in stimulating economic growth and poverty reduction. - Human Resources and HIV/AIDS - HIV/AIDS continues to undermine human capacity across sectors, creating critical shortages of skills needed for implementation. - Institutions have not made full use of the directive to use 2 percent of their budget for HIV and AIDS activities. - Recommended that HIV/AIDS activities be integrated into all sector programs and that institutions be encouraged to mainstream HIV and AIDS; proper guidelines should be drawn and distributed to institutions. - Involvement of the poor and decentralization - Implementation should actively involve poor communities so they can take charge of their own development; decentralization provides an opportunity but implementation is slow. - Recommendations for district-level empowerment: - Income generating activities; - Training in project proposal writing (with support from extension workers); - Capacity building in project identification, implementation and management, especially for pro-poor activities in agriculture, natural resources, energy, water and mining. - After two years of implementation, impact assessments are recommended (sector-specific) to determine the extent to which MPRS implementation has reduced poverty and to inform reformulation of the second phase of the strategy. *Source: _cr05209 - Chapter 7.0: Emerging Issues* ### Appendix 3: Progress of Implementation in Public Expenditure Management ### Appendix 3: Progress of Implementation in Public Expenditure Management ### Simplified budget structure - Status: Not yet simplified. - Government action: Implemented an electronic budget system to ensure transparency. - Recommendation: - By the year 2005/06 financial year the simplified version should be in place. - Implement fully in the year 2006/07 financial year. ### Submission of quarterly expenditure reports to Cabinet Committee - Status: Quarterly expenditure reports were submitted to cabinet committee. - Observations: No action was taken on the overspending Ministries. - Recommendations: - Tough measures should be taken to all overspending ministries as outlined in Public Finance Management Act starting from the year 2004/05 financial year to all controlling officers. - Government embarked on posting quarterly public expenditure reports on the government’s website and PPEs in print media to ensure accountability, transparency and public awareness. - Quarterly meetings should be called to discuss these quarterly numbers in line with the status of implementation of core activities of the budget starting from third quarter of 2004/05 fiscal year. ### Strengthen PAC and BFC through technical support - Status: Planned training of cabinet ministers on public finance and links between PEM, macroeconomic stability, economic growth and poverty reduction was not carried out. - Recommendation: - Carry out this activity in the next three years working with other stakeholders such as civil society organizations (CSO). ### Training of Cabinet Ministers and Members of Parliament and controlling officers on public finance - Status: Activity was not accomplished. - Recommendation: - This activity should be carried out every year. - Short courses should be mounted to every member of parliament to enhance parliamentary debates on budget. ### Introduction of IFMIS - Status: Introduced to a few ministries due to lack of adequate resources and equipment. - Recommendation: - All activities leading to implementation and usage of IFMIS should be completed by the end of fiscal year 2004/05. - Input and output information on the budget should be ready in the fiscal year 2005/06 on the basis of IFMIS. ### Reviewing and strengthening of Credit Ceiling Authority (CCA) and Commitment Control system (CCS) - Status: Partially done; process still on-going. In the year under review, CCA system was simplified and capacities of line ministries and other stakeholders were improved. - Recommendation: - Full implementation of this activity in the fiscal year 2005/06. ### Public sector reform - Status: Progress reported together with Public Sector Review section. - Instruction: Refer the reader to public sector review section. ### Draft treasury instructions - Status: Government through the Ministry of Finance drafted new treasury instructions in line with the Public Finance and Management Act; submitted to PSs for further consultations before presenting to parliament. - Recommendation: - Government should follow procedures as outlined in the treasury instruction. ### Improve funding to high priority areas - Status: Government maintained steady funding to high priority poverty-reducing activities through adherence to cash flows. - Recommendation: - Improve whole budgetary process management by adopting and implementing medium term expenditure framework (MTEF). ### Improve coordination of donor inflows - Status: Plans carried out by the Debt and Aid Division in the Ministry of Finance. - Recommendation: - Annual reviews and recommendations in relation to common approach to budgetary support (CABS) should be implemented in context of MTEF. *Source: _cr05209 - Appendix 3: Progress of Implementation in Public Expenditure Management* --- ### Appendix 4: Progress in Public Sector Review 2003/04 ### Review and establish realistic and equitable remuneration - Status: - Public Service Remuneration Board established during the year. - Remunerative allowances consolidated into the salary structure. - Consultant in pay policy engaged to devise and implement a medium term wage policy. - New salary and grading structure implemented and contracts for senior civil servants removed. - Recommendation: - Wage policy should be addressed in context of entire civil service reform. - Government should introduce one structure of wages and salaries for the entire civil services. - Government should harmonise the salary structure of the parastatals. ### Improve accountability of civil servants - Status: Advertisements to engage a consultant to review the performance contract scheme were made; selection process ongoing. - Recommendation: - By 2005/06 fiscal year the contract performance scheme should be linked to the civil service reform. ### Enforce standards for civil service - Status: - Draft code of conduct for public officials produced and awaiting adoption by government. - Draft performance management handbook produced and awaiting consultations. - Public service act submitted to parliament. - Recommendation: - By the year 2005/06 the conduct should be implemented and enforced. ### Review pensions system - Status: Limited action—steering committee and technical committee established. - Recommendation: - Government should establish a contributory pension fund in line with other public sector reforms. - The pension fund should be operational by the year 2005/06. ### Revisit functional review process - Status: - Department of Human Resource failed to rationalize functions of Ministries and staffing on the basis of MPRS activities and decentralization due to lack of funds. - Rationalizing decentralization undertaken at district assemblies only. - Recommendation: - Functional review process should take into account other external scan mechanisms of the ministries and department. - The structure of the ministry or department should respond to the expected output of the ministry or department. ### Increase the number of qualified personnel in key posts - Status: Not done. - Recommendation: - Department of Human Resource should come up with comprehensive training needs of the entire civil service by 2005/06. - Actual implementation should start immediately once approved by the government. ### Mitigate against the impact of HIV/AIDS - Status: HIV/AIDS policy for the public service developed and awaiting cabinet approval. - Recommendation: - ARVs should be available to the civil servants with the Ministry of HIV/AIDS by the year 2005/06. ### Address gender imbalances in civil service - Status: Gender mainstreaming guidelines produced and currently being revised. - Recommendation: - Recruitment of staff should take into account gender issues (ongoing policy). ### Improve performance of parastatals - Status: Partially implemented in line with public sector reforms. - Recommendation: - Develop a code of conduct for all parastatals and ensure transparency. ### Decentralisation Process - Status: Not much done in sector and fiscal devolution. - Recommendations: - Human capacity building should precede actual sector and fiscal devolution. - Devolution should be phased starting with key ministries such as education, agriculture and health. - Fiscal devolution should link Ministry of Finance and District Assemblies. - Role of National Local Government Finance Committee should be reviewed as it may not fit in fiscal Decentralisation concept. - All decentralisation activities should be done by the year 2005/06. - The 2006/07 budget should be based on devolved arrangement. *Source: Appendix 4: Progress in Public Sector Review 2003/04 (from the provided content)* --- ### Appendix 5 a–c: Central Government Operations, 2002/03–2008/09 (Selected figures and ratios) ### Key nominal aggregates (levels) - Total Revenue and Grants: - 2002/03 Actual: 42,685 - 2003/04 Actual: 65,368 - 2004/05 Proj.: 87,730 - 2005/06 Proj.: 99,406 - 2006/07 Proj.: 109,463 - 2007/08 Proj.: 121,844 - 2008/09 Proj.: 134,049 - Revenue: - 2002/03: 32,009 - 2003/04: 42,754 - 2004/05: 53,676 - 2005/06: 63,368 - 2006/07: 72,463 - 2007/08: 80,426 - 2008/09: 90,401 - Grants: - 2002/03: 10,675 - 2003/04: 22,614 - 2004/05: 34,053 - 2005/06: 36,038 - 2006/07: 37,000 - 2007/08: 41,417 - 2008/09: 43,648 - Total Expenditure: - 2002/03: 61,322 - 2003/04: 78,598 - 2004/05: 96,839 - 2005/06: 102,707 - 2006/07: 115,584 - 2007/08: 127,820 - 2008/09: 142,393 - Overall Balance (including grants): - 2002/03: -18,637 - 2003/04: -14,719 - 2004/05: -9,109 - 2005/06: -3,301 - 2006/07: -6,212 - 2007/08: -5,977 - 2008/09: -8,344 - Nominal Gross Domestic Product: - 2002/03: 160,137 - 2003/04: 188,279 - 2004/05: 221,137 - 2005/06: 255,457 - 2006/07: 291,724 - 2007/08: 330,174 - 2008/09: 372,634 ### Selected current expenditure components (levels) - Wages and Salaries: - 2002/03: 10,930 - 2003/04: 12,302 - 2004/05: 17,369 - 2005/06: 21,765 - 2006/07: 26,413 - 2007/08: 29,678 - 2008/09: 33,288 - Interest Payments: - 2002/03: 10,985 - 2003/04: 20,024 - 2004/05: 18,753 - 2005/06: 17,406 - 2006/07: 17,180 - 2007/08: 17,387 - 2008/09: 18,055 - Domestic interest: - 2002/03: 8,871 - 2003/04: 17,253 - 2004/05: 15,980 - 2005/06: 14,412 - 2006/07: 13,772 - 2007/08: 13,879 - 2008/09: 14,446 - Foreign interest: - 2002/03: 2,114 - 2003/04: 2,771 - 2004/05: 2,774 - 2005/06: 2,994 - 2006/07: 3,408 - 2007/08: 3,507 - 2008/09: 3,610 - Other Current Expenditure: - 2002/03: 27,559 - 2003/04: 25,761 - 2004/05: 32,743 - 2005/06: 36,084 - 2006/07: 39,093 - 2007/08: 43,964 - 2008/09: 50,874 - Other purchases of goods and services: - 2002/03: 20,127 - 2003/04: 16,615 - 2004/05: 19,487 - 2005/06: 22,751 - 2006/07: 23,413 - 2007/08: 26,923 - 2008/09: 33,298 - Subsidies and other current transfers: - 2002/03: 7,431 - 2003/04: 7,796 - 2004/05: 13,256 - 2005/06: 12,333 - 2006/07: 14,680 - 2007/08: 16,041 - 2008/09: 17,576 - Pensions and Gratuities: - 2002/03: 1,431 - 2003/04: 1,950 - 2004/05: 2,379 - 2005/06: 3,598 - 2006/07: 3,133 - 2007/08: 3,541 - 2008/09: 3,995 - TIP and Fertilizer subsidy: - 2002/03: 0 - 2003/04: 0 - 2004/05: 3,202 - 2005/06: 3,500 - 2006/07: 3,500 - 2007/08: 3,500 - 2008/09: 3,500 - Other subsidies and transfers: - 2002/03: 6,000 - 2003/04: 5,846 - 2004/05: 7,674 - 2005/06: 5,235 - 2006/07: 8,047 - 2007/08: 9,000 - 2008/09: 10,081 - Arrears: - 2002/03: 0 - 2003/04: 1,349 - 2004/05: 0 - 2005/06: 1,000 - 2006/07: 1,000 - 2007/08: 1,000 - 2008/09: 0 ### Development Expenditure and Financing (levels) - Development Expenditure: - 2002/03: 11,787 - 2003/04: 20,512 - 2004/05: 27,974 - 2005/06: 27,452 - 2006/07: 28,608 - 2007/08: 31,293 - 2008/09: 32,789 - Total Financing Net: - 2002/03: 18,099 - 2003/04: 14,938 - 2004/05: 9,109 - 2005/06: 3,301 - 2006/07: 6,121 - 2007/08: 5,977 - 2008/09: 8,344 - Foreign net: - 2002/03: -730 - 2003/04: 425 - 2004/05: 5,793 - 2005/06: 2,322 - 2006/07: 6,888 - 2007/08: 6,182 - 2008/09: 8,715 - Borrowing (foreign gross): - 2002/03: 4,917 - 2003/04: 7,185 - 2004/05: 10,600 - 2005/06: 10,578 - 2006/07: 16,989 - 2007/08: 16,690 - 2008/09: 19,567 - Amortization: - 2002/03: -5,448 - 2003/04: -7,577 - 2004/05: -7,158 - 2005/06: -8,667 - 2006/07: -10,101 - 2007/08: -10,508 - 2008/09: -10,852 - Net Domestic debt: - 2002/03: 32,654 - 2003/04: 47,104 - 2004/05: 50,420 - 2005/06: 51,399 - 2006/07: 56,016 - 2007/08: 58.979 - 2008/09: 60,983 ### Key ratios (percent of GDP) - Total Revenue and Grants as % of GDP: - 2002/03: 26.7 - 2003/04: 34.9 - 2004/05: 39.7 - 2005/06: 38.9 - 2006/07: 37.5 - 2007/08: 33.9 - 2008/09: 36.0 - Revenue as % of GDP: - 2002/03: 20.0 - 2003/04: 22.8 - 2004/05: 24.3 - 2005/06: 24.9 - 2006/07: 24.7 - 2007/08: 24.4 - 2008/09: 24.3 - Total Expenditure as % of GDP: - 2002/03: 38.3 - 2003/04: 41.9 - 2004/05: 43.8 - 2005/06: 40.2 - 2006/07: 39.6 - 2007/08: 38.7 - 2008/09: 38.2 - Overall Balance (including grants) as % of GDP: - 2002/03: -11.6 - 2003/04: -7.1 - 2004/05: -4.1 - 2005/06: -1.3 - 2006/07: -2.1 - 2007/08: -1.8 - 2008/09: -2.2 - Net Domestic debt as % of GDP: - 2002/03: 20.4 - 2003/04: 25.1 - 2004/05: 23.3 - 2005/06: 22.1 - 2006/07: 19.4 - 2007/08: 18.1 - 2008/09: 16.6 *Source: Appendix 5 a–c: Central Government Operations, 2002/03-2008/09 (selected figures reproduced exactly from the provided content)* --- ### Appendix 5 c: Central Government Operations — Pro-Poor Activities (2003/04) ### Aggregated PPE totals - Total PPE: - 2003/04 MPRS Budget: 11,088.76 - 2003/04 Approved Budget: 11,621.36 - 2003/04 Revised Budget: 12,522.67 - MPRS budget as % of Expenditure: 25.22 - Approved budget as % of Expenditure: 20.5 - Revised budget as % of Expenditure: 16.0 ### Pillar 1: Pro-poor Growth (selected activities) - Pillar allocation: - 2003/04 MPRS Budget: 3,963.62 - 2003/04 Approved Budget: 1,571.36 - 2003/04 Revised Budget: 1,558.82 - MPRS budget as % of Expenditure: 9.01 - Approved budget as % of Expenditure: 2.8 - Revised budget as % of Expenditure: 2.0 - Agriculture Extension: - 2003/04 MPRS Budget: 745.99 - 2003/04 Approved Budget: 606.65 - 2003/04 Revised Budget: 824.59 - MPRS budget as % of Expenditure: 1.70 - Approved budget as % of Expenditure: 1.1 - Revised budget as % of Expenditure: 1.1 - Small Scale Irrigation: - 2003/04 MPRS Budget: 214.04 - 2003/04 Approved Budget: 197.51 - 2003/04 Revised Budget: 192.84 - MPRS budget as % of Expenditure: 0.49 - Approved budget as % of Expenditure: 0.3 - Revised budget as % of Expenditure: 0.2 - Rural Water Supplies: - 2003/04 MPRS Budget: 1,067.64 - 2003/04 Approved Budget: 30.22 - 2003/04 Revised Budget: 28.19 - MPRS budget as % of Expenditure: 2.43 - Approved budget as % of Expenditure: 0.1 - Revised budget as % of Expenditure: 0.0 - National roads Authority Rural Feeder Roads: - 2003/04 MPRS Budget: 1,168.11 - 2003/04 Approved Budget: 200.00 - 2003/04 Revised Budget: 78.00 - MPRS budget as % of Expenditure: 2.66 - Approved budget as % of Expenditure: 0.4 - Revised budget as % of Expenditure: 0.1 ### Pillar 2: Human Capital Development (selected activities) - Pillar allocation: - 2003/04 MPRS Budget: 5,937.17 - 2003/04 Approved Budget: 9,127.88 - 2003/04 Revised Budget: 10,140.14 - MPRS budget as % of Expenditure: 13.50 - Approved budget as % of Expenditure: 16.1 - Revised budget as % of Expenditure: 12.9 - Primary education (Teacher's Salaries): - 2003/04 Approved Budget: 3,691.23 - 2003/04 Revised Budget: 3,815.59 - Approved budget as % of Expenditure: 6.5 - Revised budget as % of Expenditure: 4.9 - Preventive Health Care: - 2003/04 MPRS Budget: 4,720.67 - 2003/04 Approved Budget: 686.54 - 2003/04 Revised Budget: 709.38 - MPRS budget as % of Expenditure: 10.73 - Approved budget as % of Expenditure: 1.2 - Revised budget as % of Expenditure: 0.9 - Drugs: - 2003/04 Approved Budget: 1,260.08 - 2003/04 Revised Budget: 1,260.08 - Approved budget as % of Expenditure: 2.2 - Revised budget as % of Expenditure: 1.6 ### Pillar 3: Improving the Quality of Life for the most Vulnerable - Pillar allocation: - 2003/04 MPRS Budget: 1,187.97 - 2003/04 Approved Budget: 510.60 - 2003/04 Revised Budget: 540.17 - MPRS budget as % of Expenditure: 2.70 - Approved budget as % of Expenditure: 0.9 - Revised budget as % of Expenditure: 0.7 - Targeted Inputs Programme: - 2003/04 MPRS Budget: 675.84 - 2003/04 Approved Budget: 46.60 - 2003/04 Revised Budget: 540.17 - MPRS budget as % of Expenditure: 1.54 - Approved budget as % of Expenditure: 0.1 - Revised budget as % of Expenditure: 0.7 - Safety Nets- MASAF: - 2003/04 MPRS Budget: 512.13 - 2003/04 Approved Budget: 464.00 - MPRS budget as % of Expenditure: 1.16 - Approved budget as % of Expenditure: 0.8 ### Pillar 4: Good Governance (selected activities) - Pillar allocation: - 2003/04 Approved Budget: 411.52 - 2003/04 Revised Budget: 283.55 - Approved budget as % of Expenditure: 0.7 - Revised budget as % of Expenditure: 0.4 - Community Policing: - 2003/04 Approved Budget: 192.43 - 2003/04 Revised Budget: 175.33 - Approved budget as % of Expenditure: 0.3 - Revised budget as % of Expenditure: 0.2 - Police Officers Training: - 2003/04 Approved Budget: 219.09 - 2003/04 Revised Budget: 108.22 - Approved budget as % of Expenditure: 0.4 - Revised budget as % of Expenditure: 0.1 *Source: Appendix 5 c: Central Government Operations, Pro-Poor Activities (2003/04) — figures and percentages reproduced exactly from the provided content* ### Appendix 5d: Protected Expenditures as a share of Total ### Appendix 5d: Protected Expenditures as a share of Total Expenditure 2003/2004-2004/2005 ### Protected Expenditure by Ministry/Activity (Actual 2003/04 — Approved 2004/05) - Youth, Sports and Culture: 28,534,000 — 29,373,000 - Youth Development Services: 28,534,000 — 29,373,000 - Agriculture: 1,032,241,000 — 1,401,681,000 - Food Security Initiatives: 824,592,000 — 278,915,000 - Agriculture Extension: 160,290,000 — 741,745,000 - Technology Generation and Technical Services: 47,359,000 — 381,021,000 - Water Development: 142,996,000 — 49,337,000 - Rural Water Supply: 28,194,000 — 34,786,000 - Borehole and Dam Construction/Rehabilitation: 114,802,000 — 14,551,000 - Education: 7,697,348,000 — 9,177,566,000 - Primary Education: 4,663,510,000 — 6,174,332,000 - Teaching and Learning Materials: 576,961,000 — 372,000,000 - Secondary Education: 1,690,946,000 — 1,996,537,000 - Teaching and Learning Materials: 424,442,000 — 243,091,000 - Teacher Education: 295,620,000 — 389,606,000 - Teachers' Houses: 45,869,000 — 2,000,000 - Health: 2,995,086,000 — 3,531,609,000 - Health Workers' Training: 709,376,000 — 256,000,000 - Curative Health Services: 906,715,000 — 905,749,000 - Infrastructure Development, Rehabilitation and Maintenance: 148,785,000 — 125,697,000 - Clinical Services: 104,825,000 — 9,079,000 - Preventive Health Services: 21,877,000 — 122,695,000 - Health Technical Services: 26,058,000 — 612,389,000 - Drugs: 1,077,450,000 — 1,500,000,000 - Gender, Child Welfare and Community Services: 112,475,000 — 91,024,000 - Adult Literacy: 55,293,000 — 60,110,000 - Family Welfare and Gender Services: 9,883,000 — 22,581,000 - Child Care Services: 47,299,000 — 8,333,000 - Police: 442,551,000 — 653,093,000 - Crime Prevention and Investigation: 175,330,000 — 282,832,000 - Community Policing: 108,218,000 — 152,367,000 - Police Officer Training: 159,003,000 — 217,894,000 - Labour and Vocational Training: 198,514,000 — 243,166,000 - Technical and Vocational Training: 198,514,000 — 243,166,000 - Trade and Private Sector Development: 135,753,000 — 70,760,000 - Industrial Development: 80,911,000 — 16,024,000 - Enterprises Development and Promotion: 31,355,000 — 29,145,000 - Cooperatives Development: 23,487,000 — 25,591,000 - National Roads: 150,000,000 — 150,000,000 - Rural Feeder Roads: 150,000,000 — 150,000,000 - Natural Resources: 128,362,000 — 110,381,000 - Small Scale Fishing Farming: 92,934,000 — 66,045,000 - Small Scale Mining: 35,428,000 — 44,336,000 - Tourism: 100,264,000 — 130,674,000 - Tourism Services: 42,869,000 — 46,376,000 - Conservation and Protection of Wildlife: 57,395,000 — 84,298,000 ### Aggregate Figures - Total Priority Expenditure: 13,164,124,000 — 15,638,664,000 - Total Government Expenditure: 77,186,606,897 — 89,735,793,930 ### Observations within the protected expenditures table - Largest single sector allocations (Actual 2003/04): Education 7,697,348,000; Health 2,995,086,000; Agriculture 1,032,241,000. - Largest approved increases (2004/05 approved vs 2003/04 actual) include Education (to 9,177,566,000) and Agriculture (to 1,401,681,000). - Specific program shifts: - Agriculture: Food Security Initiatives falls from 824,592,000 to 278,915,000 while Agriculture Extension rises from 160,290,000 to 741,745,000 and Technology Generation rises from 47,359,000 to 381,021,000. - Health: Drugs increases from 1,077,450,000 to 1,500,000,000; Health Technical Services increases from 26,058,000 to 612,389,000; Health Workers' Training decreases from 709,376,000 to 256,000,000. - Education: Primary Education teaching and learning materials declines from 576,961,000 to 372,000,000; Primary Education overall increases from 4,663,510,000 to 6,174,332,000. --- ### Appendix 6: Some Sectoral Recommendations ### Financial / Monetary - Key issue: - The monetary policy was undermined by loose fiscal policy. - Recommendations: - Government Departments should instill fiscal discipline as Bank rate usually responds to developments in the fiscal sector. - The Bank rate is still too high and needs to be reduced further. ### Agriculture - Key issues: - Implementation of Technological advancement in the sector still remain limited yet necessary for improved production. - Activities to address the HIV/AIDS pandemic remain inadequate. - Recommendations: - Improve technology generation and dissemination through provision of adequate financial resources. - Give priority to programs that enhance soil fertility and its management to improve productivity. - Give priority to increasing the levels of financing for the irrigation sub-sector. - Mainstream HIV/AIDS activities in the main programs of agricultural sector. ### Fisheries - Key issues: - Government bears all costs in all activities meant to assist farmers. As a result, when funds are inadequate diversions are made from other activities. - Recommendations: - Create cost sharing mechanisms to enhance sustainability of community-based fisheries. - Train personnel working with grassroots organizations in funding proposal writing in order to source finances from various donors. ### Education - Key issues: - Low and poor inputs, liberalization of the education sector, poor supervision, and inadequate number of qualified teachers. - High HIV/AIDS incidences reducing the number of teachers. - Devolution of financial responsibility to local government without sufficient capacity has increased their workload. - Recommendations: - Continue upgrading and in-service training of teachers. - Recruit more teachers. - Integrate HIV/AIDS in the key programs of the education sector. - Improve capacity in financial management by either providing the necessary training to existing personnel or recruit more. ### Forestry - Key issues: - HIV/AIDS depleting the human resource base that is supposed to implement some of the programs. - Inadequate funding tends to hold down the departments' effort. - Recommendations: - Mainstream HIV/AIDS in forestry programs. - Recruit personnel where necessary. - Train personnel working with grassroots organizations on funding proposal writing in order to source finances from various donors. ### Parks and Wildlife - Key issues: - Increase in human animal conflict despite fencing. - Inadequate funding leads to unfinished planned work. - Recommendations: - Conduct a study to understand the relationships between land use change and ecological dynamics of key species causing problems around national parks. - Train personnel working with grassroots organizations on funding proposal writing in order to source finances from various donors. ### Mining - Key issue: - There is limited number of vehicles to support the department in successful implementation of its activities. - Recommendation: - The department should address the problem through channeling the problem to the right authority. ### Health - Key issues: - Limited resources including human and financial, and irregularities in funding constrained progress. - Recommendations: - Recruit trained and/or train more personnel in nutrition services. - Treasury should ensure timely disbursement of funds to the sector. ### Targeted Input Program - Key issue: - Various organizations in this area are working in isolation. - Recommendations: - District Assemblies need to act as coordinating units to synchronize their programs at district level to avoid duplication and rationalize capacity building programs. - Community structures within the district assembly framework should be set up to ensure effective targeting for given a set of criteria. ### Human Rights - Key issue: - The issues of Human Rights are still alien in our society, such that cases of human rights violation continue dominating as key issues to be addressed. - Recommendation: - Human Rights organizations should increase awareness campaigns on human rights to the communities at large. ### Energy - Key issue: - Limited financial resources retarded the process of implementing key activities. - Recommendation: - Create linkages of the sector to financial institutions to enable local artisans access credit to promote adoption of energy serving technologies. --- ### Appendix 7: Key Policy Matrix ### Real Sector - Key issue: - Sluggish economic growth. - Recommendation: - Reduce interest rate to stimulate private investment in the economy. - Key issue: - Alternative sources of growth. - Recommendation: - Set up clear diversification policy and implement it. ### Monetary Sector - Key issues: - Independence of Reserve Bank. - Growth of Money. - Recommendations: - The Reserve Bank will need to contain M2 growth and mop up excess liquidity. - The authority will continue to pursue market determined exchange rate. ### External Sector / Trade - Policy stance: - Government will continue to pursue no restrictions on tradables. ### Fiscal Sector - Key issues: - Loose fiscal policies; Uncontrolled government spending. - Unsustainable domestic debt situation. - Recommendations: - Respect the budget as passed by parliament. - Government should develop domestic debt policy. - Formulate ways of reducing current debt stock. ### Structural Issues - Privatisation: - Recommendation: Comprehensive review of the performance of the privatised companies. - Civil Service Reform: - Recommendation: Comprehensive review of the structure of civil service is required. Capacity and training needs assessment be conducted. --- ### Appendix 8: Drafting Team - Ben Botolo Coordinator - Mr. T. Fatchi - Ms Emily Zita - Ms Rhoda Eliasi - Dr. Patrick Kambewa - Mr. J. Kazembe - Mr. L. Kutha - Mr. P. Mwase - Mr. W. Mwafulirwa - Mrs. I. Kamanga - Mr. D. Chunga - Mr. A.R. Mwenda - Mr. Khozi - Mr. D. Kubalasa - Mr. O.T. Manda - Mr. H. Sapuwa - Mr. E. Katayika - Mr. Nthengwe *Content derived from Appendix 5d, Appendix 6, Appendix 7, and Appendix 8 of the provided source document.* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05209.pdf_