House of Commons - The Development Situation in Malawi - International Development Committee

The Development Situation in Malawi - International Development Committee Contents

4 The future: choice of sectors

30. The following table gives an overview of DFID Malawi's current programmes. (A more detailed version of this table appears in DFID's written evidence, published as an annex to this report.)

Table 1: DFID Malawi's programmes

Pillar Programme name and description Cost Period

Governance Justice for Vulnerable Groups (JVG) £16m 2011-2016

Building Empowerment and Accountability in Malawi (BEAM) £19m 2009-2018

Improved Electoral Environment Programme £6.5m 2012-2015

Growth Energy Efficient Light Bulbs £3m 2012-2013

Rural Roads tbc In Design

Private Sector Development tbc In Design

Access to Finance tbc In Design

Resilience Enhancing Community Resilience Programme (ECRP)

£16m 2011-2016

Water, Sanitation, Hygiene Promotion and Capacity Building programme £0.95m 2010-2012

Water, Sanitation and Hygiene Programme £19.4m 2012-2015

Agriculture Sector Support £35m 2012-2016

Human Development Keeping Girls in School programme

£37.5m 2012-2016

DFID's Education Sector Reform Programme

£50m 2012-2013

Malawi Health Sector Programme £110m 2011-2016

Family Planning programme £25m 2012-2018

Emergency Drug project

£13.5m 2011-2012

HIV & AIDS programme tbc In Design

Source: Ev 30-1

Social protection

31. Following the devaluation of the Malawian kwacha on 7 May 2012,[42] the price of most commodities has increased by between 30% and 65%. Fuel prices have increased by 30% and electricity prices have increased by 63%.[43] We anticipate that price rises will have less effect on the rural poor, since the rural economy is largely subsistence-based. The urban poor, however, will be badly affected, and an increase in social protection programmes is likely to be needed. In their recent supplementary written evidence, DFID tells us that "donors are working on a rapid scale-up of existing social protection programmes,"[44] but the Committee does not yet know what this will entail.

32. One of the most effective forms of social protection is cash transfers—small cash payments given directly to the poorest. A number of donors are supporting cash transfer programmes in Malawi, but DFID is not currently doing so. During our visit we were told that the current programme of conditional cash transfers (CCTs) is funded jointly by UNICEF, Germany and the EU. Launched 4-5 years ago in one specific district, it has now been scaled up to cover seven districts, with cash transfers provided to the poorest 10% of the population in each participating district. In her recent State of the Nation address, President Banda stated that in 2011-12, this programme had benefitted over 100,000 people (of whom 64% were children), in 27,925 ultra-poor and labour-constrained households.[45]

33. We are surprised that—whilst DFID Malawi is willing to spend £3 million on energy—efficient light bulbs—it has as yet been unwilling to support cash transfers. DFID Malawi's lack of involvement in cash transfers stands in stark contrast to DFID policy in neighbouring countries: during our recent visit to Zambia, we were told that DFID has made a long-term commitment to supporting cash transfers. The Secretary of State told us that cash transfers was one of the options his Department was considering, but he was unable to make any specific commitment.[46]

34. Cash transfer programmes can make an important contribution to poverty reduction. Given its enthusiastic support for such programmes in other countries such as Zambia, DFID clearly recognises this. Its current lack of support for cash transfers in Malawi—particularly given the levels of poverty which exist there—is difficult to understand. We recommend that DFID join UNICEF, Germany and the EU in supporting cash transfers in Malawi.

Agriculture

35. Malawi is densely populated, and has only one harvest season per year. Yet in spite of these challenges, it has enjoyed a maize surplus. [47]This success has been widely attributed to the Malawian Government's Farm Input Subsidy Programme (FISP), which DFID supports.[48] The Mutharika administration, despite its shortcomings in other areas, should be credited for developing this programme. In 2011-12, its seventh year of operation, the programme delivered 140,000 tonnes of fertiliser, 7,000 tonnes of improved maize seed and 2,800 tonnes of legume seed at heavily subsidised prices, to a total of 1.4 million resource-poor smallholders. The cost to smallholders was 500 kwacha (£1.95 at March 2012 prices[49]) for a 50kg bag of fertiliser and improved maize and legume seed.[50]

36. In their written evidence to us, Andrew Dorward and Ephraim Chirwa—academic experts in this field—report that there is "widespread agreement" that FISP has been successful. In addition to its positive impacts in terms of food security, there is also evidence that the rural poor have enjoyed real-terms wage increases as a result of FISP[51]—a consequence of smallholders selling their produce for cash.

37. During our visit to Malawi, we met with some smallholders who had benefitted from FISP. We were told that the programme had been of particular benefit to poor female-headed households, orphans, and older people.

38. Despite these successes, FISP has not been entirely without problems. In 2010-11 and—especially—2011-12, shortages of fuel and foreign exchange led to difficulties in the distribution. Additionally, anecdotal evidence suggests that some inputs (seeds / fertiliser) have failed to reach their intended beneficiaries.[52]

39. Whilst subsidised seed is distributed via local retailers, the Committee is concerned that—since 2009—subsidised fertiliser has not been. The Malawian Government's medium-term plan recognises the need to re-engage with local retailers on fertiliser distribution.[53]

40. The Malawian Government's Farm Input Subsidy Programme (FISP)—which DFID has supported—has been a great success. The programme provided subsidised seed and fertiliser to 1.4 million beneficiaries in 2011-12, and the Committee saw for itself the benefits of this support.

41. Given the present concern about the non-involvement of local retailers in distributing FISP fertiliser, we urge DFID to support the Malawian Government in its attempts to resolve this. Local retailers are already involved in the distribution of FISP seeds, and indeed were involved with FISP fertiliser as recently as 2009. Bringing local retailers on board can only be a good thing, particularly in view of DFID's commitment to developing the private sector.

Other sectors

WEALTH CREATION

42. Supporting wealth creation has been an increasingly high priority for DFID in recent years, and the recent Operational Plan makes clear DFID Malawi's intention to support private sector development.[54] Since taking office, President Banda has made it clear that this is an equally high priority for her Government.[55]The precise policies to be adopted in pursuit of wealth creation are a matter for the Malawian Government to determine. However, it will be particularly crucial to encourage economic diversification:the current focus on tobacco[56] is unlikely to be sustainable in view of declining demand.

43. It will be equally critical to make Malawi's exports more competitive.[57] Moreover, as a small landlocked country, regional infrastructure (for example, transport links with neighbouring countries) will also be of great importance to Malawi's long-term economic development. In her recent State of the Nation address, President Banda announced that VALE Logistics, the Brazilian mining company, intended to fund the construction of a railway from Chapananga to Nkaya (to connect with the existing rail network), as well as restoring the existing line between Liwonde and Nkaya.[58]

44. DFID can itself support wealth creation in Malawi in a number of ways. Speaking at Chatham House in June 2012, President Banda's special adviser stated that the Malawian Government would welcome DFID's assistance in identifying 'strategic partners' in the UK and/or Europe—organisations that would be willing to work in partnership with the Malawian private sector, and—by so doing—build the capacity of the latter.[59] UK-based management training institutions might be one example.[60]

45. The UK could also support wealth creation in Malawi via CDC. Diana Noble, its CEO, told us that CDC would be focusing more heavily on "the poorest countries in Africa and South Asia[61]." We understand, both from the evidence we received[62] and from our own visit to Malawi, that industries such as agri-processing have considerable potential in Malawi. Malawi Mangoes—one enterprise we visited—appeared to have particular potential.

46. Improving Malawi's power generation capacity will also be fundamental: this sector might benefit from DFID support. It has also been highlighted to us that the poor quality of management information within the Ministry of Finance and Planning has undermined Malawi's economic development:[63] there may be a possibility for DFID to provide technical assistance in this area.

47. We welcome DFID's intention to support private sector development in Malawi. In support of this, we recommend that DFID assist the Government of Malawi to identify 'strategic partners'—organisations that would be willing to work in partnership with the Malawian private sector. DFID should also consider what other ways it can support wealth creation in Malawi, such as by supporting power generation or providing technical assistance. CDC should also be encouraged to invest in Malawi.

HEALTH

48. During our visit, we were told that both primary healthcare (treatment at clinics) and secondary healthcare (hospital treatment) were available for free in Malawi. However, we received evidence which highlighted serious staff shortages across the health sector.[64] In his recent evidence to another inquiry being undertaken by this Committee, the Parliamentary Under-Secretary of State for International Development, Mr Stephen O'Brien MP, said that he intended to encourage UK-based medical professionals to spend three or six months working in a developing country, as a standard part of their professional development.

49. We are concerned about the shortage of adequately-qualified health professionals in Malawi. We welcome the Parliamentary Under-Secretary of State's enthusiasm for encouraging UK-based medical professionals to undertake secondments in developing countries, as this may be of significant benefit to Malawi.

50. One of the key health issues is maternal health and family planning. While in Malawi we were told that the fertility rate has shown only a very small decline in recent years (from 6.2 children per woman in 2000, to 5.7 in 2011). This reflected the low take-up of contraception, and lapses in its use.

51. Whilst in Malawi we met with staff of Banja la Mtsogolo, an NGO established by Marie Stopes. Banja la Mtsogolo is currently promoting long-term methods of contraception, especially implants, in Malawi. We also received written evidence which suggests that injectable contraceptives were particularly popular with Malawian women.[65]

52. Empowering women to choose how many children to have, and allowing them to space births as they choose, will be critical to Malawi's long-term development. We commend DFID for its longstanding commitment to addressing these challenges. In view of evidence which suggests injectable contraceptives are particularly popular with Malawian women, we urge DFID to focus more on this particular method.

EDUCATION

53. In Malawi, since the introduction of free primary education in 1994, enrolment has increased significantly.[66] However, at secondary and tertiary level there has been less progress. During our visit we were told that secondary and tertiary education were subject to user fees, and until recently there had been only two public universities in the whole of Malawi, with only a few thousand places available.[67] Currently only 15% of primary school leavers attend secondary school, and only 3% of secondary school leavers obtain a public university place.[68]

54. For students unable to gain a place at a public university in Malawi, the private university sector represents an alternative. There are currently around six private universities operating in the country, but fees are very high.[69] The new Malawian Government has indicated its intention to support private universities through public-private partnerships.[70]

55. Historically, the problem of access to tertiary education in Malawi has been compounded by the presence of regional quotas, with a certain number of places reserved for students from each region, irrespective of the qualifications of the students concerned.[71]The new Malawian Government has indicated its intention to abolish these quotas.[72]

56. Poor levels of education constitute a major constraint on Malawi's development. In particular, public university places in Malawi are extremely limited. The private university sector represents an alternative, and we welcome the new Malawian Government's intention to support the private university sector by means of public-private partnerships. However, tuition fees are often prohibitively high, putting a university education beyond the reach of most Malawians. We therefore urge DFID to consider funding scholarships.

42 Ev 28 Back

43 Ev w18 Back

44 Ev 28 Back

45 State of the Nation address by Her Excellency Mrs Joyce Banda, President of the Republic of Malawi, 18 May 2012 Back

46 Q 36 Back

47 State of the Nation address by Her Excellency Mrs Joyce Banda, President of the Republic of Malawi, 18 May 2012 Back

48 Ev w66-68 Back

49 Using HMRC exchange rates Back

50 State of the Nation address by Her Excellency Mrs Joyce Banda, President of the Republic of Malawi, 18 May 2012 Back

51 Ev w1; Ev w2 Back

52 Ev w2 Back

53 Ev w3 Back