We on the streets have received the news that the Local Development Fund (LDF) will be disbanded with absolute joy.
The fund, which was established as a nationwide, standardised and transparent development financing mechanism for local governments and part of the inter-government fiscal transfer system, has lately been dogged by many challenges, including high level fraud.
The LDF was a good idea. But this is Malawi, where politics dominates everything and corruption goes unpunished.
As a backgrounder, the establishment of the LDF followed a study commissioned by government and its cooperating partners on the review and improvement of Local Government Financing Mechanisms in 2005.
Those in the know say the establishment of the LDF was in tandem with the Paris Declaration on Aid Effectiveness. The term aid effectiveness simply means the effectiveness of development aid in achieving economic or human development (or development targets).
Aid agencies all over the world are always looking for new ways to improve aid effectiveness, including conditionality, capacity building and support for improved governance.
For many years, government has been providing resources for local development through sector ministries. Similarly, there are several government projects that have been contributing to local service delivery funded by development partners.
However, the implementation of these projects and programmes faced challenges that limited their effectiveness in contributing towards improved service delivery. LDF was a timely solution.
Government and aid agencies or development partners as they are called hoped LDF would be a vehicle where aid could be used effectively. They hoped the fund would promote harmonisation and achieve fiscal discipline, improve pro-poor resource allocation, implement development as prioritised in the district/urban development plans including strengthening budget execution and public accountability.
How wrong they were. The LDF—which on average sends around K20 billion to councils every year—has turned out to be the most abused public purse. According to audit findings millions of kwacha have gone unaccounted for in almost all district councils.
The audits reveal that politicians, especially members of Parliament (MPs) and councillors are among those that have been helping themselves illegally from the money by hijacking the responsibility over all processes related to implementation of the programme.
“Attempts by council staff to provide technical advice and monitor project progress are being frustrated,” one report reads.
In September this year, this paper (Weekend Nation, September 23) carried an expose which revealed that at least half of the projects implemented under the LDF, the Constituency Development Fund (CDF) and the District Development Fund (DDF)—are not completed yet money has vanished due to “mal-administration and suspected fraud”.
The paper quoted one study—published in August 2016—that researchers Andrew Mpesi, Roy Hauya and Kalako Mondiwa carried out for DanChurchAid in seven selected district councils. The report revealed that 55 percent of sampled LDF projects in the seven districts were not completed due to “mal-administration and suspected fraud”.
A similar activity—a public expenditure tracking report by Karonga CCJP and Development Communication Trust (DCT) with support from Oxfam under Tilitonse Fund—also found suspected fraud and mismanagement of LDF funds.
Apart from those challenges, most of the waste in LDF was due to poor workmanship, political interference, dubious procurement, project abandonment after budget busts, discarding of set guidelines and outright theft.
In LDF “there are a lot of ghost companies, ghost trees and ghost workers,” as one DC said in an interview with this paper.
Word on the street is that, LDF was a waste of public money and this must be stopped before the looting gets worse. It is high time government and its development partners reviewed the functions of LDF and plugged the holes that have left the fund defenseless from plunderers.
LDF had become the biggest fraud in the country’s history. It must go!
Merry Christmas dear reader
Thank you for a great year!
We have experienced some good moments and some not so good moments this year. Our worst experience this year has been persistent power blackouts.
Word on the street has been praised, loathed and attacked, but together we soldier on.
Let’s continue to be kind to one another this festive season.