Amid outstanding concerns over the controversial K4 billion allocated to MPs to facilitate development, Minister of Finance Goodall Gondwe on Friday proposed an increase of the fund to K6 billion in the 2018/19 National Budget.
In the new allocation, there is a shift in target as it is set to benefit 300 area development committees (ADCs) which will be responsible for implementation of projects instead of 86 constituencies.
But commentators have faulted the new arrangement, which is an extra funding window of local and rural development, saying it provides a fertile ground for misuse of public funds.
The analysts also wonder why Capital Hill is keen to have the funding in the face of public outrage in the manner the K4 billion was allocated.
Civil society organisations (SCOs), who in their nationwide protests over governance concerns last month included the K4 billion allocation in their petition, said the calls to have the fund cancelled stand regardless.
In announcing the increase to K6 billion and targeting ADCs as he presented the 2018/19 National Budget in Parliament last Friday, Gondwe said he was misunderstood on the issue of K4 billion.
“That is why Mr. Speaker, Sir, when asked where the K4 billion would come from, my answer could not be understood by the press. In exasperation, I ended by telling one of many journalists who interviewed me, that the K4 billion came about by magic because they could not understand what I was talking about. To my surprise, even some Honourable Members believed that this was a serious answer and a political capital of it,” he explained amid laughter from members of the House with some, especially from government benches, shouting the usual praise slogan Boma ilo in agreement.
Said the minister: “Mr. Speaker Sir, Government is proposing to commence another funding window for rural development that could service some 300 area
amount of K6.0 billion has been earmarked for this purpose”. development committees. In an a telephone interview yesterday, Gondwe confirmed that the amount was revised to K6 billion and that the change in target was meant to make the funding more effective.
He said the money will be channelled through the National Local Governance Committee and will be duly audited to avoid abuse.
Asked if the change of beneficiaries was out of public pressure and criticism, Gondwe insisted that there was nothing wrong with the earlier arrangement except that after consultation, government felt the funding could be better utilised through area development structures.
“It is a continuation of the K4 billion but it will not be in constituencies but in area development funds and there are about 300 of them across the country and they will be given about K10 million to K20 million each,” he explained.
Malawi Congress Party spokesperson on finance Kusamba Dzonzi, bashed the whole idea of introducing a new financing window specifically targeting ADCs.
He argued that the district development plan was all encompassing as it included development agenda for ADCs hence there was no need to have a new window of funding at ADC level in the presence of District Development Fund (DDF), Local Development Fund (LDF) and Constituency Development Fund (CDF).
Dzonzi further observed that there is likely to be high level abuse because of the direct involvement of chiefs in the running of ADCs.
He also wondered how government will ensure equity of allocations when some constituencies have no ADCs or have more than one ADC.
Lilongwe-based political and governance analyst Henry Chingaipe also questioned the rationale of introducing an extra window of funding when existing ones are continuously marred by maladministration.
He also pointed out that ADCs lack institutional capacity to manage funding and are more likely to abuse it due to their direct connection with chiefs.
Chingaipe said it would be important for government to work towards consolidating the many funding windows at district level instead of creating some more, arguing that this increases the operational cost and reduces their efficiency.
“It is a proposal and my prayer would be that Parliament rejects it. We have DDF, CDF we have LDF and we have already been saying the multiplicity of funding windows encourages waste and duplication of efforts and it is very inefficient. We are unable to track impact,” he argued.
Put to him that the funding to ADCs will be channelled through the National Local Government Finance Committee, Chingaipe said there is no guarantee that the ADCs would be effective as the committee had literally failed to handle mismanagement in available windows.
He said the new proposal is a political miscalculation taking into consideration the unsettled dust on the K4 billion saga.
Centre for Development of People (Cedep), one of the CSOs which petitioned government to cancel the controversial fund during the nationwide protests last month, said their concerns are still valid and they wait to hear from Mutharika on their 10-point petition.
In an interview, Cedep executive director Gift Trapence said the bringing back of the controversial fund in the budget is not a response but an outright open defiance to the citizen’s call.
He said the shift in terms of target—from MPs to ADCs is another way of abusing public funds which must not be condoned.
“The intention of the K4 billion was to steal from Malawians. What we raised in the petition was for the President to cancel the allocation altogether and that the minister of finance should resign because he has lost public confidence. And now he is bringing in another model of funding, which he questioned himself that he does not trust it because of corruption. When did he start trusting the ADC model that he is proposing today?” wondered Trapence.
Apart from the K6 billion channelled to ADCs, K20.7 billion has been proposed for rural development through CDF, DDF and LDF, and a further K7 billion that could be used on community projects has been included in the budget. This is more than 5 percent of the total Development Budget of the Central Government.
Our sister paper, Weekend Nation last year revealed that at least half of the projects implemented under LDF, CDF, DDF, are not completed yet money vanished due to “mal-administration and suspected fraud”.