STATUS OF DEVELOPMENT FINANCE ASSESSMENT (DFA) IN MALAWI
Ladies and Gentlemen, let me take this opportunity to brief you on where Malawi is in undertaking the Development Finance Assessment (DFA). Malawi is still at the initial stages of conducting the DFA. As you may be aware, DFAs assist governments to establish Integrated National Financing Frameworks for the achievement of their development priorities and results. As such, the DFA is a useful tool for governments to identify opportunities and gaps towards establishing Integrated National Financing Frameworks (INFFS).
Currently, Malawi is in the process of developing the national development strategy (the Malawi growth and Development Strategy – MGDS III) after the previous plan – MGDS II expired in June 2016. So far, the first draft has been produced and circulated to different stakeholders including Government Ministries, Departments and Agencies (MDAs); the academia and research institutions; Civil Society Organisations (CSOs); the private sector; Parliament and Political Parties. Within this week, the Team that is drafting the next development strategy is incorporating comments from these stakeholders and next week we will be holding validation meetings to ensure that the views of our various stakeholders are taken on board in the MGDS III.
You may wish to know that the MGDS III has domesticated various global, continental and regional development frameworks to which Malawi is party to. These include the 2030 Agenda on Sustainable Development Goals (SDGs), the African Union (AU) Agenda 2063, the Istanbul Programme of Action (IPoA), the Vienna Programme of Action (VPoA), the SADC Regional Indicative Strategic Development Plan (RISDP) as well as the COMESA Treaty.
All these development frameworks have been domesticated to ensure that they become part and parcel of the Malawi national development agenda so that implementation is simplified. Malawi is aware that there are no special funds for implementing these agreed framework. As such, the national budget as well as other existing financing systems will be used to implement the global, continental and regional development frameworks. In this regard, the MGDS III has identified the development priority areas that Malawi will focus on in the next five years (2017-2022).
Malawi considers the DFA as an important process in realising the development potential of the country. In this regard, Malawi will have to make a decision on the type of investment that will have to be made in the identified priority areas of (i) Agriculture and Climate Change Management; (ii) Energy, Industrial Development and Tourism, (iii) Education and Skills Development, (iv) Transport and ICT Infrastructure Development, and (v) Health and Population Management. In this regard, the DFA will assist Malawi to map the sources of financing for the flagship projects that have been identified under the mentioned priority areas. Malawi realises that it requires investments in different areas if it is to graduate from the LDC status but requires a systematic approach to development financing hence the need to undertake Development Finance Assessments.
As I am speaking at this meeting, the Team that is drafting the country’s national development strategy is costing the interventions that will be implemented in the medium term. These costs will be very important in determining the financial outlay that will have to be sourced to adequately finance implementation of the strategy. Malawi is aware that implementation of the national development strategy is the responsibility of different stakeholders including Government MDAs, CSOs, Private Sector, Academia, and Development Partners. In this regard, after the costing, the DFA willbe used to map sources of development finance both domestic and external including aid to Malawi, assess and analyse policies, institutional arrangements, technical systems and tools, and human resource capacity to mobilise, manage, deliver, monitor and report on existing and future flows available for effective implementation of the NDS .
Ladies and Gentlemen, let me indicate that the NEPAD Secretariat under the African Union is the institution that is providing the technical support to Malawi to undertake the DFA. So far, Malawi is in the process of developing the Country Action Plan which is aimed at enhancing the use of the Country Results Frameworks. After developing the Action Plan, the country will proceed with the otherprocesses in undertaking the Development Finance Assessment (DFA).
You may wish to know that currently Malawi is using the Development Cooperation Strategy (DCS) to track Development Assistance. This DCS was developed for the period 2014-2018 (DCS) under the theme: "Making Development Cooperation Work for Results". This strategy is meant to guide development cooperation in Malawi and contains commitments by different stakeholders including the Government, development partners, civil society, academia, and private sector. The DCS aims at improving the quality and effectiveness of development cooperation and ensuring that it is well coordinated, aligned to the national development priorities, predictable, accounted for, and focused on results.
The DCS advocates for inclusive partnerships, government leadership, country ownership of national development agenda, alignment with
the country systems and strategies, strong focus on development results, mutual and domestic accountability, transparent and responsible cooperation, harmonized efforts and mobilization of resources for development. Under the DCS, the Government accepts all forms of financing for development but prefers general budget support, programme based support and basket funds. The government also embraces new forms of development financing such as Public Private Partnerships (PPPs) as long as they are aligned to the national development strategy.
To augment these effort, in 2008, the Government established the Aid Management Platform (AMP); a tool for recording and reporting development cooperation. The system is available online through a public portal malawiaid.finance.gov.mw. The aim of the AMP is to enhance transparency and accountability for results. It is also useful for facilitating Division of Labor among development partners and supporting government planning and budgeting processes.
In conclusion, Ladies and Gentlemen, let me indicate that Malawi is committed to implementing the Istanbul Programme of Action within the framework of the Sustainable Development Goals (SDGs). Malawi is aware that development financing should be done systematically hence the need for undertaking the Development Finance Assessment which will guide the country in identifying the potential sources of financing for the country’s development.