The United Nations Development Programme (UNDP) has described as “a game changer” the Government of Malawi Payments Roadmap launched on Friday, observing that it will improve transparency and accountability.
The payments road map is a five-year plan to help government shift from cash to digital payments to meet commitments made under the Better Than Cash Alliance.
The initiative is set to run from 2017 to 2021and is expected to reduce cases of fraud which have been rampant in the government payments system, leading to losses of billions of kwacha.
Speaking in Lilongwe during the launch yesterday, UNDP deputy resident coordinator Claire Medina said development partners, including the UN, are happy to see Malawi moving away from cash transactions.
She said: “Why is this road map important to us as the UN as development partners? Well, digital payments help reduce costs, increase efficiency and improve transparency and accountability.
“They can help advance financial inclusion and help meet Sustainable Development Goal number one which aims at ending poverty in all its forms. Just as an example, it is estimated that the Indian government has saved $2 billion by digitising its fuel subsidy programme.”
According to Medina, digital payments can be a key factor in strengthening public finance management which is good for people and good governance.
In his remarks, United States Agency for International Development (USAid) deputy mission director Peter Trenchard said there is need to resolve crucial challenges facing digital financial services through public private partnerships if the road map is to succeed.
Accountant General William Matambo said digitisation of government payments will result in significant cost savings through elimination of inefficiencies associated with cash payments.
According to the UN, in just four years, the percentage of the Malawi adult population actively accessing financial services digitally has increased from less than one percent to approximately 15 percent. Implementation of the Roadmap aims to increase that access to 55 percent.
The digital payment system comes against the background of government losing an estimated K236 billion between 2009 and December 2014 due to dubious payments and abuse of its payment platform, the Integrated Financial Management and Information System (Ifmis).