Department for International Development: Aid to Malawi - Public Accounts Committee Contents

3  Whether the Department is driving improved outcomes from the services it helps to fund

13.  We pressed the Department on its ability to influence the Government of Malawi to pursue policies and actions that are sensible, and to spend UK money wisely.[41] The Department argued that providing Budget Support gives it leverage to shape what the Government is doing. For example, the Department contributed only 5% of the cost of the agricultural subsidy in 2008-09 through direct funding and through Budget Support, but still has been able to help shape this programme.[42]

14.  Malawi is a sovereign government and there are limits to what the Department can do.[43] The Department cited relatively few examples of occasions when they had disagreed with and challenged the Government of Malawi on its actions, and where that challenge had been both timely and evidently successful.[44]

15.  In 2007-08 and 2008-09 the Government of Malawi exceeded limits it had formally agreed with the Department over the amount of fertiliser it would buy for its agricultural subsidy. It takes between two and three months to get fertiliser into Malawi. Evidently the Government was concerned in December 2008 that there was not going to be enough fertiliser for the programme, and bought stocks from people who already had it in-country. In the event purchases of excess fertiliser at unexplained high prices cost US$35 million in 2008-09. The Department became aware too late to prevent this over-procurement; instead it obtained the Government's agreement to store the surplus for use in the next year's programme. Given that storage costs money, and that such stocks are vulnerable to pilferage or decay, this appears to be making the best of a bad situation.[45] Malawi is a small country with links between government and private entities. The Department has no evidence of ulterior motives or corruption involving the fertiliser suppliers,[46] although it had not received a full explanation from the Government of why it procured extra fertiliser at such high prices.[47] In 2008-09 this additional procurement threatened macro-economic stability.[48]

16.  The Government of Malawi's agricultural subsidy was not designed to directly benefit the poorest, although they were expected to benefit indirectly from lower food prices.[49] High food prices reflect Government of Malawi decisions on grain storage, markets and exports, besides high international food prices. The Department argued that increased rural wages have mitigated the effect of high food prices. However, this will not assist those who are unable to work.[50] We asked the Department about the environmental risks of Malawi's over-dependence on maize, including fertiliser run-off into the water supply. The Department has started a conversation with the Ministry of Agriculture to look at diversifying crops because soils have been depleted by dependence on Maize. It has not looked specifically at run-off, but it is working with other donors to look at Malawi's most serious environmental issues.[51]

17.  There are acute disparities in the provision of doctors and nurses across Malawi (Figure 2), affecting efficiency as well as equity. By the end of 2007 one-third of districts for nurses and two-thirds of districts for doctors remained behind the 2005 national average baseline, let alone targets for subsequent improvement. Conversely other districts, mainly those with urban centres, had already approached or surpassed targets for 2011.[52] We questioned why more progress had not been made in Malawi to address such disparities. The Department committed to consider tailoring its salary top-up so as to incentivise doctors and nurses to work in under-served rural areas. The Government of Malawi is also looking at other approaches.[53]

Figure 2: Ratios of nurses to population vary by district

Source: Q14; C&AG's Report, Figure 6

18.  The Government of Malawi spent some US$1.2 million mainly on cancer treatment abroad for 15 patients, equivalent to the recurrent health budget of an entire district. The Department appear not to have been aware of these practices at the time, but were subsequently assured by Malawi's Ministry of Health that the unidentified patients were not drawn from the wealthy, and that decisions had been made on clinical criteria. At the same time the Department conceded that diverting scarce resources to cancer treatment overseas, away from areas like high maternal mortality which would save as many lives as possible, would not have been their choice.[54] And it appears still open to question whether any of these people were related to members of the Malawian elite.[55]

41   Qq 17, 18 and 116-118 Back

42   Q 17 Back

43   Q 116 Back

44   Qq 116-118 Back

45   Qq 105, 108, 109 and 110 Back

46   Qq 128-133 Back

47   C&AG's Report, para 3.9 Back

48   C&AG's Report, para 1.9 Back

49   Q 47; C&AG's Report, para 3.11 and 3.12 Back

50   Q 47; C&AG's Report, para 3.11 Back

51   Qq 134-136 Back

52   C&AG's Report, para 2.16 Back

53   Qq 48-52 Back

54   Qq 18, 72, 73 and 122 Back

55   Q 122 Back

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