Blended investment financing lacking accountability
A study report by Oxfam has found that blended financing comprising public and private donor support in agricultural development is hampered by poor quality, lack of consistency and accountability.
This is contained in the recent Oxfam report titled Accountability Deficit Finance Blending in Agriculture that assessed the effectiveness of private finance blending in ensuring that small-scale farmers are not left behind.
The report states that to boost agricultural productivity in developing countries, donors are increasingly resorting to blended finance which is the combination of public development funds with private resources.
The report relates to Malawi’s scenario where donors stopped direct budget support and resorted to channeling their resources through private firms and oftentimes government contributes financing as part of ownership.
However, progress reports are mostly not published as the private firms report directly to the external financiers compared to the government whose project documents are often made public.
The report says the blended finance fails to account how the investment is used and what its impacts are on the ground.
It stated that donors and private partners do not systematically report on results of blending programme as a result, there is no accountability.
The report indicated there is oftentimes a lack of evaluation of how smallholder farmers benefit from such schemes and its impact on poverty reduction, environmental sustainability and gender equality.
Reads the report in part: “At present, judgements on the usefulness of blended finance in development are severely hampered by the poor quality and lack of consistency of the data available on such investments, including on how investment is being used and what its impacts are.”
Treasury could not comment on the matter as efforts to speak to Secretary to Treasury proved futile.
However, economist Dalitso Kubalasa, who is southern Africa regional director for IM Swedish Development Partner said in a written questionnaire response, the findings confirm what has been said before that Malawi is not progressing as expected.
“There is no comprehensive data on the public capital investments along with their returns on ivestments, if any, to help guide and enable better oversight through stronger monitoring and evaluation systems.
“The opportunity costs are already quite huge, at least going by the poor results, mediocre infrastructure, foregone benefits, returns on investments among others, against what was expected. The cost overruns and missed opportunities of fully galvanizing the economy and all its key drivers of the economy into action are massive,” he said.
Kubalasa proposed a review of how the blended investments are initiated to ensure accountability and expected impact on the ground for socio-economic development.
