Examination of Witnesses (Question Numbers
120-139)
DEPARTMENT FOR
INTERNATIONAL DEVELOPMENT
30 NOVEMBER 2009
Q120 Chairman: It alarmed me, Dr
Shafik, that when Mr Davidson asked you to list examples of waste
you could only give one example which we have already read about
in the Report. I would have thought when we are talking about
what has been historically one of the worst-run countries in the
world you could have listed a whole series of examples. Are you
on top of this?
Dr Shafik: We have already talked
about the agricultural inputs subsidy.
Q121 Chairman: We talked about fertiliser
and we have given you that and I am going to ask about this cancer
thing in a moment, but I would expect you to have been able to
give a bit more of a list.
Dr Shafik: This is a country which
does not have vast resources so it is not like one can give a
huge long list of all the ways that money is wasted. We have looked
at things like civil service reform and found some evidence of
problems with payrolls in some government departments and we are
working with them on that.
Q122 Chairman: You had better put
your thinking cap on and write us a note.[2]
Let us look at this cancer thing that Geraldine Smith asked about.
In 2004, to reiterate, the Malawi government spent US$1.2 million
on treatment abroad for 15 patients, equivalent to the current
budget of a full health district or some US$79,000 per case. Were
any of these people related to any members of the Malawian elite?
Dr Shafik: As I said, we cannot
identify them. We do not know the names of the individuals. We
checked what income quintile they came from to see whether they
tended to be from richer families or not and there was no evidence
of bias.
Q123 Chairman: All right. Education—I
think this is always a theme that Mr Davidson is interested in.
Just as a matter of interest, it is not in the Report but I am
curious to know, is this rather ridiculous school which Hastings
Banda set up in Malawi, which he modelled on an English public
school where he was devoting a huge proportion of the national
budget to one school for the elite, still going?
Dr Shafik: Yes.
Q124 Chairman: So what are you saying
about that?
Ms Hines: That is the Kamuzu Academy
which is to all intents and purposes a private school which is
still used by the elite and that is not something that we as DFID
are funding. As I say, we are very much focused on the government
system.
Q125 Chairman: How much of Malawian
government expenditure goes on that school; any?
Ms Hines: I do not have a figure
to hand but I would be very happy to provide one.[3]
Q126 Chairman: I would suggest to
you that quite a lot goes on it. Tell me—you must know about
this—you are working there. This is a big issue.
Dr Shafik: It is not something
we fund so it is not something that we would devote lots of resources
to finding out.
Q127 Chairman: But you do fund education
and if you are funding a government which is wasting a significant
proportion of its tiny educational resources on one public school
for the elite, I would like to know about it. I would like you
to tell me now rather than just promising me a note. You are living
there, you must know what is going on; tell us.
Ms Hines: As I say, it is not
information I have to hand. I will be happy to provide it. I can
tell you that when we do regular budget scrutiny, which we do
at least every six months as part of the budget support reviews,
it is not a significant enough item to appear in the headline
budget, but I would be very happy to look at it.[4]
Q128 Mr Carswell: I have one follow-up
question, Ms Hines. You talked about a government decision to
over-procure fertiliser. Those are the words you used. It was
a pretty large-scale over-procurement. Did anyone in government
benefit? Was there an ulterior motive? Was anyone connected in
any way to government benefiting from it in any way?
Ms Hines: What we did last year
is the same as we are doing this year: we funded civil society
to look into the monitoring of the programme and they went to
a selection of villages across the country. They looked at the
sum total of the fertiliser that went out through last year's
programme. As I say, the bulk of it that was over-procured was
held back for this year's programme. When they looked at last
year's programme, despite it being election year, they found that
it was no more politicised than in previous years.
Q129 Mr Carswell: So no-one in government
was basically benefiting from this vast misallocation of resources?
Ms Hines: I fail to see how they
would benefit from it because the fertiliser that was bought goes
out to people in the villages through this slightly complicated
process I have explained which is designed to ensure it gets to
the right people.
Q130 Mr Carswell: Excuse my ignorance
but who is the fertiliser bought off?
Dr Shafik: It is bought on the
international market.
Q131 Mr Carswell: And it is supplied
via middle men?
Ms Hines: It is done through an
open tender process to private sector fertiliser companies.
Q132 Mr Carswell: And no-one in government
had any connection with any of those companies?
Ms Hines: Malawi is a small country
so to that extent there are links between private sector entities
and the Malawi government in the same way as there are between
a lot of people within Malawi.
Q133 Mr Carswell: So there could
be scope for ulterior motives and corruption?
Dr Shafik: We have no evidence
of that and we need evidence before we can make these sorts of
accusations.
Mr Carswell: Thank you.
Q134 Mr Curry: Tobacco and maize
are both hugely impoverishing crops for the ground and they depend
on fertiliser. The word "malawi" in Malawian means "lake".
What evidence is there of nitrogen run-off into the lake? Is this
a possible danger in the future? What can one do so that Malawi
does not become a Bassin D'Arachon where maize is grown year upon
year upon year and begins to destroy the environment?
Dr Shafik: It is part of the conversation
we have started to have with the Ministry of Agriculture to look
at diversifying the crops that are grown in Malawi because, as
you say, part of the reason that fertiliser is so essential is
because the soils have been depleted. Gwen, do you want to say
something about the issue of run-off?
Ms Hines: Just to add first of
all in terms of the crops, whilst this subsidy is largely about
maize it does also support other legumes, so various other kinds
of crops, and people are being encouraged increasingly to grow
them together.
Q135 Mr Curry: Legumes put nitrogen
back into the soil?
Ms Hines: Absolutely so that helps
from that perspective.
Q136 Mr Curry: Beans are very good!
Dr Shafik: Maybe for many reasons.
Ms Hines: The issue of run-off
is not something I have looked at specifically in terms of that,
but we are working with other donors increasingly on environmental
issues, partly as part of our scale-up on climate change. We are
looking generally for Malawi as a whole at what are the most serious
environmental issues, and this could well be part of it.
Q137 Chairman: A last question from
me. You mentioned that you fund the Malawian NAO. Do you have
any assurance over the 20% of expenditure not subject to annual
audit by the Malawian NAO?
Dr Shafik: No, but we have the
wider measures of public expenditure.
Q138 Chairman: How wide are these
wider measures?
Dr Shafik: They cover the entire
system. Sam, do you want to explain how PEFA works and what the
21 indicators are? You do not need to list all 21.
Mr Sharpe: I will not list all
28 PEFA indicators but they cover the setting of the budget, the
accounting for the budget and the external scrutiny and the auditing
for the budget, so we do have that assurance about the overall
improvement in the system.
Q139 Chairman: Improvement overall.
This is incredible. 20% of expenditure is not subject to annual
audit. This is a country to which we have provided £312 million
of aid.
Dr Shafik: These overall measures
cover 100% of the budget and the issue is the NAO's review of
public expenditure covers 80% but there are these other measures—does
the Malawi government budget properly, do actuals match budgeted
amounts.
2 Ev 18-19 Back
3
Ev 19 Back
4
Ev 19 Back
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