pkp2_understanding aid to ard and food security: malawi

Global Donor Platformfor Rural Development

WORKING PAPER

– MALAWI ––––––––––––

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The Global Donor Platform for Rural Development commissioned three comprehensive studies to capture Plat-form members’ knowledge on key issues affecting the delivery and impact of aid in ARD:

PKP 1 Policy coherence for agriculture and rural developmentPKP 2 Aid to agriculture, rural development and food security – Unpacking aid flows for enhanced

effectivenessPKP 3 The strategic role of the private sector in agriculture and rural development

The PKPs are the products of extensive surveys of Platform member head office and field staff, visits to countryoffices, workshops dedicated to sharing findings and refining messages, and successive rounds of comments ondrafts.

On the basis of each PKP, separate policy briefs will be published.

For more information on the PKPs visit donorplatform.org

This working paper is only available electronically and can be downloaded from the website of the Global Donor Platform for Rural Development at:www.donorplatform.org/resources/publications

Secretariat of the Global Donor Platform for Rural Development,Dahlmannstrasse 4, 53113 Bonn, GermanyEmail: [email protected]

The views expressed herein are those of the authors and do not necessarily represent those of individual Platform members.

All rights reserved. Reproduction and dissemination of material in this information product for educational or other non-commercial purposes isauthorised, without any prior written permission from the copyright holders, provided the source is fully acknowledged. Reproduction of material inthis information product for resale or other commercial purposes is prohibited without written permission of the copyright holders. Applications forsuch permission should be addressed to: Coordinator, Secretariat of the Global Donor Platform for Rural Development, Dahlmannstrasse 4, 53113Bonn, Germany, or via email to: [email protected].

© Global Donor Platform for Rural Development 2011

About thePlatform Knowledge Piece series

Prepared by:Platform Secretariat

Published by:Global Donor Platform for Rural Developmentc/o Federal Ministry for Economic Cooperation and Development (BMZ)Dahlmannstraße 4, 53113 Bonn, Germany

Study conducted by:Overseas Development Institute, London

Authors:Lídia CabralJohn HowellGeraldine Baudienville

Photo credits:www.istock.com/Günter Guni/skyhouse; www.fotolia.com/africa/Ivan Gulei/lulú;www,pixelio.de/hjördis Kozel/Rauner Sturm

August 2011

PKP2-COVER-RZ-INNEN-U2-U3_140911_PRINT:Layout 1 12.10.2011 10:54 Uhr Seite 1

Platform Knowledge Piece 2:

Aid to agriculture, rural development and food security: Malawi working paper 1

Contents

Contents .......................................................................................................................................................... 1

List of figures, boxes and tables ................................................................................................................... 3

Acknowledgements ........................................................................................................................................ 5

Acronyms and abbreviations ......................................................................................................................... 6

Executive summary ........................................................................................................................................ 9

Aid measurement and reporting systems and definition of aid to ARD&FS .......................................... 9

Composition and trends of aid to ARD&FS ............................................................................................. 10

Assessing the quality of aid measurement and reporting in the ARD&FS sector ............................... 10

Introduction .................................................................................................................................................... 1

Background to the study ............................................................................................................................ 1

The Malawian context ................................................................................................................................ 2

Aid measurement and reporting systems and definition of aid to ARD&FS ............................................... 5

GoM aid measurement and reporting systems ........................................................................................ 5

Aid Management Platform ..................................................................................................................... 5

Public Sector Investment Programme .................................................................................................. 7

............................................................ 8

Linkages between systems .................................................................................................................... 9

Dono ................................................................................... 11

Internal .................................................................................................................................................. 11

One UN .................................................................................................................................................. 11

Donor coordination on agriculture and food security) ....................................................................... 11

Climate Change, Environment and Agriculture Joint Resilience Unit .............................................. 11

Definition of the ARD&FS sector ............................................................................................................. 12

...................................................................................................... 12

............................................................................................................................... 21

Issues to be considered for definition and tracking of aid to ARD&FS ................................................. 24

Agriculture for economic growth......................................................................................................... 24

Governance and decentralisation ........................................................................................................ 24

Natural resource management and climate change ......................................................................... 24

Infrastructure for agricultural and rural development ...................................................................... 25

General budget support ....................................................................................................................... 25



Cross-cutting issues: gender, nutrition and HIV ................................................................................ 25

Comparison with ODI definition ........................................................................................................... 26

Overview of aid flows to ARD&FS ................................................................................................................ 27

Volumes of aid resources ........................................................................................................................ 27

Main sources of aid to ARD&FS .............................................................................................................. 37

Aid instruments and modalities .............................................................................................................. 37

Current and future trends in donor support .......................................................................................... 40

Assessment of the quality of aid information ............................................................................................. 41

Accessibility, accuracy and comprehensiveness of data on aid to ARD&FS ........................................ 41

........................................... 42

Mutual accountability and results focus ................................................................................................. 45

Alignment of data provision with government planning and accounting requirements...................... 47

Donor harmonisation ............................................................................................................................... 48

Examples of good practice .......................................................................................................................... 50

Conclusion .................................................................................................................................................... 52

References.................................................................................................................................................... 55

Annex 1: ARD&FS definitions used in this study ........................................................................................ 58

Annex 2: Sector profile matrix ..................................................................................................................... 64

...................................................................................... 64

Institutional structure of the ARD&FS sector ........................................................................................ 66

Ministry of Agriculture and Food Security .......................................................................................... 66

Other ministries and public institutions .............................................................................................. 67

Non-state actors ................................................................................................................................... 67

Public expenditures in ARD&FS .............................................................................................................. 69

Annex 3: Overview of ARD&FS policy framework over last 2 decades ..................................................... 72

Annex 4: Tables with detailed aid data........................................................................................................ 76

Annex 5: List of key informants interviewed .............................................................................................. 84

Annex 6: Format used to report to MoF on ODA (GoM, 2010b) .................................................................. 87

Annex 7: Templates used to register or update a project in the PSIP database ...................................... 93

Template to register project ................................................................................................................... 94

Template for finance and status update ................................................................................................. 95

Annex 8: Reporting format used to report to MoAFS database ................................................................. 97



List of figures, boxes and tables

Figure 1: Evolution of Ministries between 1990 and 2010 ......................................................................... 15

Figure 2: Aid flows to ARD&FS by type of sector definition (1990-2008) (in million USD) ....................... 30

Figure 3: Share of flows to ARD&FS in total aid flows (1990-2008) .......................................................... 31

Figure 4: Share of aid to ARD&FS in total donor-funded development budget (Part I) ........................... 32

Figure 5: Aid flows to ARD&FS by area of focus (1990-2008) (in million USD) ......................................... 33

Figure 6: Donor-funded development budget by Ministry (1990-2008) (yearly average, %) .................... 35

Figure 7: Main APPM categories in terms of aid flows (1990-2008) (in million USD) .............................. 34

Figure 8: Aid flows to main Rural Socio-Economic Development (1990-2008) (in million USD) ............. 36

Figure 9: Aid flows to main Emergency Relief and Welfare categories (1990-2008) (in million USD) .... 36

Figure 10: Main donors in the Agriculture sector ...................................................................................... 37

Figure 11: Use of Country Systems ............................................................................................................. 39

-2005) ...................... 64

Figure 13: Growth in Agricultural Exports, 1971 - 2007 ............................................................................ 66

Figure 14: Management Structure of the ASWAp ...................................................................................... 68

Figure 15: Trends in Agricultural Sector Expenditure 1980 2009 .......................................................... 69

Figure 16: Share of types of flows in total aid to ARD&FS over 1990-2008 (%)........................................ 80

Figure 17: Aid flows to ARD&FS from Germany, UK, US, World Bank (1990-2008) (in million USD) ..... 82

Box 1. Malawi Growth and Development Strategy. ...................................................................................... 3

Box 2. Development Assistance Strategy. .................................................................................................... 6

..................................................................................... 12

Box 4. Current ODA flows to Malawi. .......................................................................................................... 27

Table 1: Comparison of AMP, PSIP and MoAFS database ........................................................................... 9

Table 2: MoF Budget classification in Theme, Sub-Theme and Sub-Sub-Theme for relevant areas..... 13



Tab ............................................................................................. 17

Table 4: Classifications used by different systems and policies in ARD&FS sectors .............................. 20

Table 5: Key priorities of on-going support from main donors to the ARD&FS(*) sector ....................... 22

Table 6: Current volume of ARD&FS aid by sector definition and source of data (2008) ......................... 28

Table 7: .......................................................... 43

Table 8: Growth Trends in Agriculture Sector Output (1990-2009) ........................................................... 65

Table 9: Composition of Export Earnings by Main Commodity (percent), 1990 - 2009 ............................ 65

Table 10: Agriculture Sector Government Spending Trends, 1990 - 2009 ............................................... 70

Table 11: Agricultural budget by sub-sectors (1999/2000 to 2006/07) ..................................................... 70

Table 12: Annual programme spending (1999/00-2006/07) ...................................................................... 71

Table 13: Total aid to ARD&FS by sector definition in constant values (1990-2008) ................................ 76

Table 14: Aid to ARD&FS by areas in constant 2000 values (1990-2008) .................................................. 76

Table 15: Aid to ARD&FS by type of flow (1990-2008) ................................................................................ 79

Table 16: Main donors to ARD&FS (1990-2008) ......................................................................................... 81

Table 17: USAID Malawi commitment and disbursement data from 2001 to 2009 .................................. 83



Acknowledgements We would like to extend our gratitude to every donor, government and civil society representative for

the time they dedicated to this study, as well as the valuable information and insights they provided

during interviews and related email correspondence.

We would also like to thank Edwin Kanyoma and Sarah Tione from the Ministry of Agriculture and

Food Security for helping us to get a hold of several national and agricultural policy documents,

including those dating back to the 1990s. We are particularly grateful to Aaron Batten and Mark Miller

for going out of their way to provide us with data and clarify various budgeting and reporting

processes.

Finally, we greatly appreciate the constant backstopping and support received from Geraldine

Baudienville throughout the study, as well as the constructive comments received from her and Lidia

Cabral on an earlier draft.

Michelle Remme

Samuel Mingu



Acronyms and abbreviations ADD Agricultural Development Division

ADMARC Agricultural Development and Marketing Corporation

AfDB African Development Bank

AFF agriculture, forestry and fisheries (OECD-DAC)

ALDSAP Agricultural and Livestock Development Strategy and Action Plan

AMP Aid Management Platform

APPM agricultural production, processing and marketing

ARD&FS agriculture, rural development and food security

ASWAp agriculture sector-wide approach

BADEA Arab Bank for Economic Development in Africa

CAADP Comprehensive Africa Agriculture Development Programme

CDC Centers for Disease Control and Prevention

CIDA Canadian International Development Agency

CISANET Civil Society Agriculture Network

CPIA Country Policy and Institutional Assessments (IDA)

CPPR Country Portfolio Performance Rating (IDA)

CRS Creditor Reporting System (OECD)

DAC Development Assistance Committee (OECD)

DAD Debt and Aid Division (Ministry of Finance)

DAS Development Assistance Strategy

DCAFS Donor Coordination Group on Agriculture and Food Security

DEVPOL Second Statement of Development Policies

DFA data focal agent

DFID Department for International Development, United Kingdom

DP development partner

DRM disaster risk management

EDF European Development Fund

EPA extension planning area

EU European Union

FAO Food and Agriculture Organization of the United Nations

FICA Flemish International Cooperation Agency



FISP Farm Input Subsidy Programme

GBS general budget support

GDP gross domestic product

GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit (Germany)

GoM Government of Malawi

ICEIDA Icelandic International Development Agency

IDA International Development Association

IFMIS Integrated Financial Management Information System

IGA income-generating activity

ILO International Labour Organization

IMF International Monetary Fund

IRD integrated rural development

JICA Japanese International Cooperation Agency

JRU Climate Change, Environment and Agriculture Joint Resilience Unit

M&E monitoring and evaluation

MEJN Malawi Economic Justice Network

MGDS Malawi Growth and Development Strategy

MoAFS Ministry of Agriculture and Food Security

MoDPC Ministry of Development Planning and Cooperation

MoF Ministry of Finance

MoIWD Ministry of Irrigation and Water Development

MoIT Ministry of Industry and Trade

MoLGRD Ministry of Local Government and Rural Development

MoNREE Ministry of Natural Resources, Energy and Environment

MPRS Malawi Poverty Reduction Strategy

NGO non-governmental organisation

ODA official development assistance

ODI Overseas Development Institute

OECD Organisation for Economic Co-operation and Development

OPC Office of the President and Cabinet

PAF Performance Assessment Framework

PD Paris Declaration

PFM public financial management



PIU project implementation unit

PSD private sector development

PSIP public sector investment programme

SAP structural adjustment programme

SBS sector budget support

SWG sector working group

UN United Nations

UNDAF United Nations Development Assistance Framework

UNDP United Nations Development Programme

UNESCO United Nations Educational, Scientific and Cultural Organization

UNICEF

UNIDO United Nations Industrial Development Organization

UNFPA United Nations Population Fund

UNHCR United Nations High Commissioner for Refugees

USAID United States Agency for International Development

WFP World Food Programme

WHO World Health Organization



Executive summary The country studies are part of a larger study on understanding aid to agriculture, rural development

and food security (ARD&FS). Their main purposes are to assess the quality of aid data and identify best

practices in measuring and accounting for aid to ARD&FS. The quality of aid data is assessed against

the main purposes of aid measurement which include: (i) transparency and accountability (vis-à-vis

international, donor-country or recipient-country constituencies), (ii) internal management at the

donor-agency level, (iii) country planning and financial management and (iv) analytical purposes

(including assessing efficiency and effectiveness of aid).

This report presents the main findings of the case study on Malawi based on a review of the existing

documentation on ARD&FS, data on flows of official development assistance (ODA) to Malawi and

interviews conducted in Lilongwe between 4 and 15 April 2011. While key informants provided

invaluable qualitative information, quantitative data on ODA flows to ARD&FS over the 20-year period

under review were more difficult to gather, mainly due to time constraints, limited institutional

memory, the inadaptability of existing information systems to produce aggregate data and/or the weak

information management systems in place, particularly for data more than five years old.

l. Over the

past two decades, the country has experienced recurrent food crises and, despite recent

improvements, is still suffering from chronic malnutrition. In this context, the domain of ARD&FS has

received considerable attention from government, non-governmental organisations (NGOs) and

donors alike. With foreign aid representing 11% of gross domestic product, 30% of the national budget

and 60% of the development (capital) budget, Malawi can be considered an aid-dependent country.

Aid measurement and reporting systems and definition of aid to ARD&FS

In this context, the government and donors have recognised the critical need to manage and

coordinate foreign-aid resources more effectively. Malawi therefore initiated its own aid data

management systems in the mid-2000s, and these have already greatly facilitated tracking, budget

planning and coordination of aid in general and in the ARD&FS domain in particular.

The Aid Management Platform (AMP) was established in 2008 for tracking, reporting and

analysis of aid. Housed in the Debt and Aid Division of the Ministry of Finance (MoF), AMP

contains all programmes and projects funded by resident donor agencies, as well as their

monthly disbursements, annual projections, lead implementing agency and sector, type of

funding and alignment to country systems. The MoF produces annual Aid Atlas reports, which

include analyses of aid volumes, modalities, predictability and fragmentation, per donor and

per sector. All 28 resident donors are reporting to the MoF in a timely and accurate manner,

enabling the database to currently capture 837 programmes and projects across the 16

sectors, implemented by 109 implementing agencies.

The Public Sector Investment Programme (PSIP) is a tool to plan and manage the national

development (capital) budget, in line with the Malawi Growth and Development Strategy

(MGDS).

strategic directions and links them to available financing mechanisms. The PSIP database

consists of a list of investment programmes and projects funded by government-guaranteed

loans, grants and own resources, in the form of five-year rolling plans. It currently contains

233 projects, funded by 25 external donors and implemented by 32 public institutions.



The Ministry of Agriculture and Food Security (MoAFS) Technical Secretariat database was

developed in 2004, upon the request of the Food and Nutrition Security Joint Taskforce, in

order to track who was doing what in Malawi in the area of food security and nutrition at

project level. The purpose was for such a regularly updated database to serve as a basis for

coordination and harmonisation in the sector. It currently contains 193 projects, funded and

implemented by over 80 different donors and implementers.

Composition and trends of aid to ARD&FS

In order to assess the consistency between policies and aid allocations, the study used data on aid

collected internationally over the past 20 years to analyse trends. Overall, the volume of aid to

ARD&FS appears to have declined between the early 1990s and 2008, despite a slight upward trend

since the mid-2000s. In relative terms, the proportion of total aid going to ARD&FS has also

decreased, after a peak in 1992 (a year of severe drought in Malawi), but seems to be staging a slight

comeback since 2004/05, when Malawi experienced another alarming food crisis. The data further

reveal a heavy bias towards agricultural policy and administration and agricultural development, or

more likely a tendency to cluster agriculture-related support under these generic purpose codes. The

categories of emergency food aid, food security programmes and basic nutrition seem to explain most

of the recent increase in aid.

Other characteristics of aid, such as type of aid, aid modalities or aid recipients and implementers

(government, NGO, private sector), have been less well captured in the existing data at international

level. However, the data do illustrate the increasing importance of general budget support as a

contribution to

and the government of Malawi ( ) explicit prioritisation of agriculture for economic

development.

Assessing the quality of aid measurement and reporting in the ARD&FS sector

Several strengths have been observed in each system, such as the very good accessibility of aid data

(on line or upon request) and the accuracy of most of the disbursements and projections data

provided, especially to AMP. Donors appear to have aligned themselves to the aid-data requirements

of the GoM, providing monthly disbursements and annual projections, particularly for donors providing

general budget support and sector budget support. As a result of this very good collaboration, the aid

data in AMP are now being used for budget planning (including setting development budget ceilings)

and cash management. Moreover, PSIP data are being used to analyse the consistency between MGDS

priorities and development budget allocations (government- and donor-funded). Civil society has also

taken up a key role in budget analysis and tracking to hold government accountable for its use of tax

and donor resources.

Nevertheless, there are still a number of remaining challenges in terms of handling aid data in

general, and aid to ARD&FS in particular.

Different definitions: while AMP uses a narrow definition of the agriculture sector (excluding

land and natural resources, irrigation, integrated rural development, trade and nutrition), the

MoAFS has recently adopted the agriculture sector-wide approach (ASWAp) framework, which

embraces food security and nutrition, commercialisation and market development,

sustainable agricultural land and water management and agriculture-related gender, HIV and

climate-change issues. While donors in the agriculture sector are able to relate their internal



classification to the ASWAp definition, AMP remains the primary aid data management system

and aid-effectiveness monitoring tool.

Weak linkages between ministries and aid data management systems: as the three

systems were set up with different purposes, resources and institutional homes, there has

been a recognised lack of coordination. This has led to discrepancies between the National

Development Budget produced by the MoF and the Ministry of Development Planning and

PSIP, for example, which should be one and the same. Moreover, as similar

data are currently being requested from the MoF and the MoAFS for their databases, there is

a risk of a reduced response rate due to survey fatigue.

Tracking aid channelled through NGOs and the private sector: although donors have an

obvious incentive to fully report their aid disbursements to the sector, NGOs and the private

sector have less incentive to do so. As a result, aid being channelled outside the public sector

has proved extremely difficult to track reliably. The MoAFS database has succeeded in

providing government and NGOs with information that they are interested in on almost all

projects in the agriculture, food security, nutrition and natural resources domain. However,

specifics on quarterly or annual aid disbursements and modalities are not available through

this implementer-driven database.

Tracking expenditures: it is a major challenge to track expenditures, as most donors do not

receive reliable or timely expenditure data from their recipients. Efforts are now being made

to link all donor- Integrated Financial Management

Information System for such real time expenditure tracking.

Limited use of data produced for government and donor planning: as the guiding

investment framework for the sector, it is striking to note that the ASWAp only refers to PSIP-

listed projects in its analysis of ongoing investments in the sector and not to the Aid Atlas

analyses of aid effectiveness in the sector, nor its own sector-wide and more inclusive project

disbursements to the sector, but rather by their own priorities (or areas of comparative

advantage).

Limited analysis of aid data (inputs) against development outcomes: although the MGDS

Annual Reviews represent an attempt to link development inputs and outputs and thereby

assess the effectiveness of the development strategy, the weakness of the MGDS monitoring

and evaluation framework seems to be constraining these efforts. Furthermore, the focus in

terms of aid effectiveness per sector tends to be on Paris Declaration process indicators,

rather than on linking overall inputs to development outcomes and eventually impact.



Introduction

Background to the study

The second Platform Knowledge Piece (PKP II) is focused on aid to agriculture, rural development and

food security (ARD&FS). By analysing the past and present composition and trends in ARD&FS policy,

the study looks specifically at the quality of aid measurement and investigates the extent to which aid

data provide an accurate indication of policy priorities by donors and recipients and a useful basis for

planning, accountability and analysis. This study attempts more specifically to answer the following

questions:

Do available aid data tell us enough about the policy priorities of donors and recipients in

ARD&FS? Do they tell us enough about changing spending patterns within the sector?

Is there evidence of good practice in measuring, tracking and accounting for aid flows to

ARD&FS, in ways that strengthen coherence between policy, planning and resource

allocation, and, as a consequence, enhance development effectiveness?

The country studies are part of this larger study and their main purposes are to assess the quality of

aid data and identify best practices in measuring and accounting for aid to ARD&FS. The quality of aid

data is assessed against the main purposes of aid measurement which include: (i) transparency and

accountability (vis-à-vis international, donor-country or recipient-country constituencies), (ii) internal

management at the donor-agency level, (iii) country planning and financial management and (iv)

analytical purposes (including assessing efficiency and effectiveness of aid). The studies have been

undertaken in three countries Malawi, Nicaragua and Vietnam selected for the significance of aid

allocated to ARD&FS and for the variety of accounts they are expected to provide on the theme at

hand. Additionally, four donor studies were conducted, reviewing in more detail the aid trends, policies

and practices of the United Kingdom, the United States, Germany and the World Bank.

This report presents the main findings of the case study on Malawi based on a review of

documentation on ARD&FS, data on official development assistance (ODA) flows to Malawi and

interviews conducted in Lilongwe between 4 and 15 April 20111 by Michelle Remme, Lead Researcher,

and Samuel Mingu, Research Assistant. While key informants provided invaluable qualitative

information, quantitative data on ODA flows to ARD&FS over the 20-year period under review were

more difficult to gather, mainly due to time constraints, the inadaptability of existing information

systems to produce aggregate data and/or the weak information management systems in place,

particularly for data more than five years old. In addition, the institutional memory regarding the last

two decades is wanting, both within donor institutions and government, due to high staff turnover. The

study comes at a time when Malawi and its donors are reviewing important national policy

frameworks and donor country assistance plans, meaning that some of the information related to

definitions could change in the near future.

1 See list of key informant interviews in Annex 4.



The paper is organised as follows:

This section sets out the rationale for the study and provides an introduction to the report and

the Malawian context.

Aid measurement and reporting systems and definition of aid to ARD&FS

describes existing systems and mechanisms in place for collecting and accounting for aid

data in Malawi and reviews more specifically the practices of the three selected donor

agencies for this study, namely the

Development (DFID), the United States Agency for International Development (USAID) and the

World Bank.2 This section goes on to present the definitions of aid to ARD&FS used by the

Government of Malawi (GoM) and its development partners.

Overview of aid flows to ARD&F presents an overview of aid flows to ARD&FS based on data

from the Creditor Reporting System (CRS) of the Development Assistance Committee (DAC) of

the Organisation for Economic Co-operation and Development (OECD) and GoM aid and

budget data, identifies trends and analyses the extent to which they are related to donor and

government policy priorities.

Assessment of the quality of aid informatio assesses the quality of aid information based on

its availability, comprehensiveness and accuracy; the extent to which it enables improved

management for results and aid effectiveness, notably through increased alignment of aid

flows with stated priorities and country systems; improved donor harmonisation and

strengthened mutual accountability between donors and the government, among donors and

between the government and its citizens.

Examples of good practic presents key lessons that can be learned from Malawi s

experience on aid management and the evolution of ARD&FS, in the context of an aid-

dependent low-income country.

The report concludes with a summary of key findings, successes and challenges derived from

the analysis of Malawi aid flows to ARD&FS.

The Malawian context

Malawi ranks among the world's least-developed countries, at 164 out of 177 on the Human

Development Index. About 40% of its population of 13.1 million live below the national poverty line.

Moreover, 85% of Malawians live in rural areas with poor access to basic health and education

services. Agricultural production is the mainstay of the economy and accounts for 39% of gross

domestic product (GDP), 80% of total employment and over 80% of foreign-exchange earnings. While

t crop, followed by tea and sugar, agricultural exports have

remained undiversified, with little value addition. Until very recently, Malawi was characterised by

chronic food insecurity and malnutrition, resulting from its dependence on rainfed agriculture, a

growing population, declining soil fertility, land degradation and a high HIV prevalence rate, among

others.

In order to guide national development efforts, the GoM formulated the Malawi Growth and

Development Strategy (MGDS) in 2006 (see Error! Reference source not found.), based on five

hematic areas and six priorities, all of which were related to ARD&FS. Indeed, since independence

2 Although Germany was the fourth donor identified for detailed analysis, the German Government requested that

the data collected in Malawi not be included in this study.



development resources, strategies and policies in Malawi have been heavily biased towards

agricultural development and the MGDS is no exception. Since 2005, Malawi has experienced a

considerable reduction in its poverty headcount, high real GDP growth rates (7.5% annually on

average) and bumper maize harvests. Moreover, macroeconomic performance has been strong,

largely due to sound economic policies and a good performance in the agricultural sector, as a result

of the widely acclaimed Farm Input Subsidy Programme (FISP) and favourable weather

conditions.

In its development efforts, Malawi relies considerably on foreign aid, which represents 11% of GDP,

30% of the national budget and 60% of the national development (capital) budget (GoM, 2011a). In the

agriculture sector more specifically, Malawi ranks fourth in terms of its agricultural aid dependency

ratio (9.7%), measured as the ratio of agricultural aid to agricultural value added. In the 2009/2010

financial year, donors reported total disbursements to agriculture alone to the tune of US$90.4

million, compared with a total national budget allocation to the Ministry of Agriculture and Food

Security (MoAFS) of US$235 million.

Box 1. Malawi Growth and Development Strategy.

The Malawi Growth and Development Strategy (2006 11) is the overarching operational medium-term

strategy for the transformation of the country from being predominantly an importing and consuming

economy to a manufacturing and exporting economy. It represents a policy shift from social

consumption to sustainable economic growth and infrastructure development.

Priorities:

(i) Agriculture and food security; (ii) Irrigation and water development; (iii) Transport and

infrastructure development; (iv) Energy generation and supply; (v) Integrated rural development; (vi)

Prevention and management of nutrition disorders and HIV/AIDS.

Themes:

(i) Sustainable economic growth; (ii) Social protection; (iii) Social development; (iv) Infrastructure

development; (v) Improving governance.

Priorities within priorities

(i) Agriculture and food security; (ii) Green-belt irrigation and water development; (iii) Transport,

infrastructure and Nsanje World Inland Port development; (iv) Energy, mining and industrial

development; (v) Integrated rural development; (vi) Public health, sanitation and HIV/AIDS

management; (vii) Youth development and empowerment; (viii) Climate change, natural resources and

environmental management; (ix) Education, science and technology.

Based on the interviews with donor representatives and the review of their country assistance plans,

the current areas of focus of the top donors in supporting the ARD&FS sector can be classified into

four main categories, which are fully aligned to the national agricultural strategy.



1. Agricultural productivity and diversification for household food security : in response to the

overall low agricultural productivity, overdependence on rainfed production, low crop and

livestock diversification and persistently high rates of malnutrition, donors are devoting their

resources to food- and income- FISP.

Moreover, agricultural production outcomes are increasingly being linked to nutritional outcomes,

requiring increased collaboration between the health and agriculture sectors, as well as various

thematic experts within donor agencies.

2. Agroprocessing, commercialisation and private-sector development: given that Malawi has

made great strides in sustaining national food security from its own maize production, renewed

attention is given to commercialisation and market linkages for economic growth and increased

household incomes from agriculture. The development of high-potential value chains and access

to finance are some of the approaches being adopted by donors.

3. Natural-resource management and climate-change adaptation: with increasing international

focus on climate change and persistent pockets of vulnerability to natural disasters (floods,

droughts), donors in Malawi are investing in conservation agriculture and soil-fertility research for

the purpose of mitigation.

4. Vulnerability and disaster risk management: related to the first and third focus areas, donors

are keen to address hunger and particular vulnerabilities through broad-based livelihoods, social-

protection and resilience interventions, such as social cash transfers.



Aid measurement and reporting systems

and definition of aid to ARD&FS There are two main categories of aid reporting systems: the first comprises the government systems,

which include both national and sector-

reporting systems, This section

focuses on the efforts that have been made to align various government and donor reporting systems,

as well as their key strengths and achievements to date.

GoM aid measurement and reporting systems

Malawi has dependence on

foreign aid, the government and development partners have recognised the critical need to manage

and coordinate these resources more effectively. Moreover, aid delivery is highly fragmented, with 28

bilateral and multilateral donors and a number of emerging donors (e.g. Arab donors, China and India)

who have only recently started providing aid for infrastructure-development projects in various

sectors (roads, public works and transport; water and irrigation; education; health; democratic

governance) (GoM, 2011b).

The GoM has established databases and mechanisms in order to improve aid measurement, link its

budget to the national development priorities and to map who is doing what and where for enhanced

coordination and impact at sector level.

Aid Management Platform

The Aid Management Platform (AMP) was introduced in Malawi in 2008, with assistance from the

United Nations Development Programme (UNDP) and the Development Gateway Foundation, to help

overarching Development Assistance Strategy (DAS), formulated in 2007 to increase the efficiency and

effectiveness of the mobilisation and utilisation of development aid for the achievement of the national

development strategy (see Box 2). In line with the Paris Declaration (PD) principle of managing for

results, the DAS stipulates the establishment of an aid management system as a major outcome to

manage inputs and outputs towards PD targets.

Prior to AMP, donors reported and updated planned and actual disbursements on a quarterly basis

through an Excel template developed in 2005 by the Ministry of Finance (MoF). Although the exchange

of data between the government and in-country donors was good, the Excel-based system had

reached its technical limits. Basically, the Debt and Aid Division (DAD) of the MoF collected

information in Excel templates on every single donor-funded project and every month these would be

aggregated into a sheet containing information from all donors. Analyses could then be run as needed,

pr International Monetary Fund (IMF) programme on a monthly basis.

Every six months, an analysis would be conducted on aid predictability, distribution, fragmentation etc.

and at the end of the year there would be a verification exercise and the production of an annual

report. T then be closed and a new one started for the next financial year.

There were three major constraints in the previous system that AMP would address. Firstly, all figures

had to be manually converted into Malawi Kwacha using the exchange rates for the month in which the



disbursement was made, before combining the data into the main sheet. Secondly, being Excel-based,

a single mistake somewhere had considerable knock on effects, which required a constant verification

of formulas. Thirdly, having to start a new sheet every year, it evidently became very time-consuming

and complicated to run detailed analyses over several years.

Box 2. Development Assistance Strategy.

The Malawi Development Assistance Strategy (2006 11) (DAS) sets out the policy and strategies for

increasing the efficiency and effectiveness in the mobilisation and utilisation of development aid for

the realisation of the Malawi Growth and Development Strategy (MGDS). The DAS represents the

localisation of the Paris Declaration on Aid Effectiveness and seeks to put into practice its five

principles, as follows:

OWNERSHIP

A. Resource requirements for implementing the

MGDS are calculated annually to inform budget

allocation and resource mobilisation

B. Sector strategies are in place and aligned to

the MGDS

C. The budget reflects the MGDS priorities

ALIGNMENT

D. Percentage of development partner (DP) funds

that are administered outside government

systems is reduced significantly

E. Project implementation units significantly

reduced

F. All country assistance strategies are aligned to

the MGDS

G. Funding gaps for MGDS priority 1 activities are

narrowed

H. Flexibility within DP funding cycles is

increased

I. Aid is more predictable

J. Increased proportion of aid is provided in the

form of sector budget support and general budget

support

K. Increasing proportion of project aid is untied

L. DPs annual work plans, monitoring and

evaluation (M&E) systems are aligned to MGDS

monitoring requirements and formats

M. Increased use of national systems for

procurement, accounting and auditing

N. Joint DP/government annual sector reviews

held to feed into the MGDS annual review process

O. Aid coordination mechanisms are used to

deepen dialogue and alignment to the MGDS and

sector strategies

HARMONISATION

P. Technical assistance is provided in a

coordinated manner, in line with government

needs

Q. MGDS annual review is held every year

R. Missions are jointly conducted between four or

more DPs

S. Annual development assistance coordination

calendar is formulated and DPs adhere to it

T. Common arrangements are increasingly used

by DPs for planning, funding, disbursement, M&E

and reporting to government

MANAGING FOR RESULTS

U. Effective monitoring indicators are in place V. An aid management system is in place,



monitoring inputs and outputs towards PD

targets

W. Annual reports on the implementation of the

DAS are made as part of the Annual Debt and Aid

Report

X. Relevant personnel in ministries are fully

competent in results-based planning and

management

MUTUAL ACCOUNTABILITY

Y. Independent monitoring group monitors the

implementation of the PD and DAS indicators

every three years

Z. MGDS review is held annually with specific

decisions for both DPs and government to act on

to further the realisation of the DAS and PD

principles

Building on the existing process, the MoF still requests this data from donors on a monthly basis, but

now inputs the data into the web-based AMP. Data is collected on each donor programme/project and

includes information such as the project title, implementing agency, sector, geographic location,

cumulative commitment, monthly disbursements, projected annual (and three-year) disbursements,

aid modality, type of assistance and the degree of alignment to country systems (see Annex 6). In the

near future, AMP will become available online to other government ministries and donors, enabling

them to access the system for data entry, as well as for aid tracking and analysis purposes.

AMP is managed by DAD and is perceived as a high priority by its management. Although the system

sector classifications and aid-data management requirements. Since 2008, DAD produces an annual

Aid Atlas report generated from AMP data, analysing aid flows by sector and donor, funding modality

and other key PD indicators. These reports have become instruments to hold donors accountable to

the aid effectiveness agenda through an effective name and shame approach.

The system is being further embedded in the institutional workflow of the GoM, as the projection data

collected have just been used as inputs into the 2011/12 budget process, in terms of determining the

recurrent and development budget ceilings per line ministry and department. Moreover, the

accessibility of this aid data through AMP allows off-budget donor funding to also be appreciated by

parliament, through an extra-budgetary addendum to the official budget documents (Batten, 2010).

Public Sector Investment Programme

There is a distinction in the national budget between the recurrent budget and the development (or

capital) budget. The latter is further disaggregated into a donor-funded part (Part I) and a

government-funded part (Part II). The Public Sector Investment Programme (PSIP) is intended to

manage the entire development budget. It serves as a development planning and development budget

management tool and is meant to guide public-sector investment, ensuring optimal allocation of

public resources for maximal development outcomes. It identifies programmes and projects that are

mechanisms. The PSIP database consists of a list of investment programmes and projects funded by

government-guaranteed loans, grants and own resources, in the form of five-year rolling plans. The

specific objectives of PSIP are to act as a database of past and projected levels of capital investments

by government and donors; ensure that sector strategies are translated into programmes and

projects; assist government in planning investments that are consistent with overall expenditure



ceilings and sectoral absorptive capacity; coordinate project preparation and implementation to

maximise complementarity; and to strengthen project design by providing a standardised framework

for all public sector projects (GoM and JICA, 2009).

PSIP is managed by a dedicated unit in the Ministry of Development Planning and Cooperation

(MoDPC), which is responsible for appraising and screening development programmes/projects to be

implemented through the public sector for their alignment to the MGDS, their viability and

effectiveness in delivering long-term impact. Based on the MoDPC guidance documents and indicative

budget ceilings, line ministries submit ongoing and new projects on an annual basis for screening.

Since its creation in the 1980s, PSIP was considered an important aspect of making the budget a

comprehensive reflection of actual government expenditure. Based on the assumption that the

Medium-Term Expenditure Framework process would suffice for this purpose, PSIP was allowed to

lapse from 1997 to 2004, which affected the budget process negatively as the government lost

oversight of donor-funded projects going through line ministries. Currently, PSIP aspires to contain

information on all donor-funded projects that are on-budget, with the exception of the (general and

sector) budget support that is considered recurrent and not investment.

Data concerning PSIP programmes and projects are managed through a web-based database that has

been accessible to line ministries and the MoDPC since 2009. The monitoring of project

implementation is conducted by means of annual financial and programmatic reports, compiled by the

implementing agency. Focal point officers within line ministries have access to the PSIP database to

update their programme financial details and achievements against their monitoring and

evaluation (M&E) indicators on an annual basis (see Annex 7). These reports are aggregated and fed

into the Annual MGDS reviews (covered in more detail under Mutual accountability and results

focus ).

The Joint Food and Nutrition Security Task Force,3 supported by its Technical Secretariat housed in

the MoAFS, facilitates policy dialogue and coordination on food-security issues among government

agencies, development partners, civil society organisations and the private sector. Staffed and funded

with support from the European Union (EU), the Technical Secretariat also plays a central role in

monitoring food-security indicators at both policy and project level. At national level, the Technical

Secretariat assists with tracking 57 indicators related to agriculture and food security to supplement

the four indicators monitored by the MGDS. Moreover, the Technical Secretariat has facilitated the

development of a standardised set of project-level indicators that are currently being used by the

majority of the agriculture, food security and natural resources projects in the country.

In addition, a project database was set up by the Technical Secretariat in 2004 to manage data on

agriculture-related projects being implemented in Malawi. All stakeholders that are known to be

active in the sector are requested by the MoAFS to provide and update this project information every

six months. The fields in the database include the project donor, implementing agency, total cost, total

disbursement to date, project funding type, geographic location, target groups, components,

3 The Task Force coordinates the implementation and monitoring of the Food Security Policy and Nutrition

Security Policy.



objectives, outputs and indicators. The Access-

website and currently contains information on 193 projects.4 Moreover, an initiative is currently being

undertaken by the MoF, in collaboration with the University of Texas, the Development Gateway

Foundation and AidData, to conduct mapping of each project at village level and produce aggregate

maps using a geographic information system. Although this is to be done for the entire AMP, the

MoAFS projects were selected for the pilot phase because of the existence of this sector-wide

database.

Linkages between systems

As can be seen in Table 1, the three aid information management systems of interest are housed in

different ministries and collect data from different sources. The fact that each system has a different

purpose affects its data coverage, content, frequency of updates and accessibility. While AMP was

initially set up to track and report on ODA, it is increasingly being used for recurrent- and

development-budget planning and cash management. The PSIP database was envisaged as the

planning tool for the entire national development budget, both the donor-funded part and the

government-funded part, which explains its annual data updates and limited online accessibility. The

MoAFS database, on the other hand, was established to provide an overview of which projects were

being implemented in which districts to enable synergies in implementation, a more equitable

distribution of interventions and reduced duplication. The financial data on total project costs and

disbursements to date are meant to be indicative, rather than form the basis of an aid-tracking or

reporting exercise. Because of this focus, the database is readily available online to anyone and data

are collected only twice a year in order to maximise response rates.

While AMP and PSIP target different providers of information, the MoAFS project database targets

both donor agencies and implementing agencies, in order to capture the totality of the picture and

ormation. In other words, donors

active in the agriculture and natural resources sector are asked to report to AMP on the one hand and

to the MoAFS on the other. Likewise, implementing line ministries report to both PSIP and the MoAFS

on the same projects. Although the data requested differ slightly, there is substantial overlap and

limited efforts have been made to link the databases and reduce the burden of data provision.

Table 1. Comparison of AMP, PSIP and MoAFS databases.

AMP PSIP MoAFS project database

Institutional

location

Debt and Aid Division,

Ministry of Finance

PSIP Unit,

Ministry of Development

Planning and

Cooperation

Technical Secretariat,

Department of Agricultural

Planning Services,

Ministry of Agriculture and Food

Security (MoAFS)

Source of

information

Resident donor agencies Government line

ministries or project

implementation units

Implementing agencies and

donor agencies

Intended

coverage

All aid flows from

resident donor agencies

All aid invested through

the public sector

All projects in the agriculture,

food security and natural

resources sectors

4 http://www.moafsmw.org/main.php?page_id=Information%20Archive&pars=Databases/Projects%20Database



Current data

coverage

837 programmes/projects

28 external donors

109 implementing

agencies

233 projects

25 external donors

32 implementing

institutions

193 projects

80+ external donors

80+ implementing agencies

Frequency

of updates

Monthly Annually Every six months

Content

(relevant)

Donor

Project title and location

Implementing agency

Sector

Aid modality

Cumulative commitment

Monthly disbursements

Annual projections

Donor

Project title

Line ministry

Malawi Growth and

Development Strategy

sector and priority

Development Assistance

Strategy sector

Total budget

Part I and II budget

Donor

Project title and location

Implementing agency

Total commitment

Disbursements to date

Project funding type

Period of

data

availability

Since 2007/08 financial

year

Since 2004/05 financial

year

Since 2004

Accessibility Accessible online to

registered users and

upon request

Accessible online to

registered users and

upon request

Freely accessible online

(MoAFS website)

Although all these systems address elements of aid-data management, none is entirely able to

measure all aid flows and link them to development outcomes in a comprehensive manner. The

strengths and weaknesses of each system are further discussed in

. However, it is fair to say that these aid data management systems are not yet adequately

linked to each other. Given the effort and time invested in each, there appears to be a certain

reluctance to harmonise them. Of late, however, there have been promising interactions between the

MoAFS Technical Secretariat, the PSIP Unit and DAD to share information. For the MoAFS, the main

interest of information exchange is to ensure that all donor projects reported in AMP are captured in

its database for completeness. For PSIP, there is a drive to reduce discrepancies between the

development budget and PSIP projects, which should actually be one and the same.

Additional efforts have been made to link AMP projections per project to PSIP Part I (donor-funded)

budget ceilings, which used to be different due to different budgeting calendars. While the PSIP Unit

was supposed to provide indicative budget ceilings in July for the financial year starting in July of the

following year, the MoF provided actual ceilings in January, as part of the budget guideline to line

ministries and departments. In order to align these processes, the MoF and the MoDPC are now trying

to have joint meetings to develop development budget ceilings in November and to conduct budget-

hearing meetings with line ministries in March (GoM and JICA, 2010). Moreover, since line ministries

have tended to sidestep PSIP and submit development budget projects directly to the MoF, the budget

division in the MoF is providing information to PSIP on all ongoing projects for the streamlining of

project names and other information in PSIP.



aid reporting and coordination systems

Internal

Donor agencies have different internal reporting requirements and systems between country

offices/missions and their headquarters. Although most programmes/projects require separate

reports, certain donors report on consolidated operational work plans that are developed before every

fiscal year. Interestingly, in certain donor agencies the reporting on financial expenditures for internal

purposes is done by a different office to the one responsible for reporting on disbursements to the

MoF (for e.g. USAID). Certain differences were noted in terms of aid data provided to government,

other donors and agencies headquarters related to the difference in donor and government

definitions of various sectors, in particular the ARD&FS sector (see Definition of the ARD&FS sector ).

One UN

An important harmonisation initiative is the One UN reform being undertaken by the United Nations

(UN) system in Malawi to deliver more coherently and effectively on its mandate for increased impact.

The so-called Delivering as One is built on the four ones : One Programme, One Budget, One Leader

and One Office. In practice, this has provided an impetus among UN agencies to engage in joint

programming, producing a four-year UN Development Assistance Framework (UNDAF), aligned to the

Annual work plans (including budgets) are formulated and subsequently monitored against a set of

output and outcome indicators, as well as against the funded budget.

sustainable economic growth and food security, most of which is related to the ARD&FS sector.

Cluster 1 brings together the principal UN agencies supporting this domain, including the Food and

Agriculture Organization (FAO), the International Labour Organization (ILO), the UN Industrial

Development Organization (UNIDO), UNDP and the World Food Programme (WFP).

Donor coordination on agriculture and food security)

Development partners (DPs) in the agriculture sector have created the Donor Coordination Group on

Agriculture and Food Security (DCAFS) as part of their efforts to harmonise their investments in the

sector. DCAFS meets on a monthly basis to discuss topical issues in the sector that are of interest or

concern to donors. In recent years, much of the focus has been on the FISP, as well as the finalisation

of the agriculture sector-wide approach (ASWAp), in line with the Comprehensive Africa Agriculture

Development Programme (CAADP) process. DCAFS is currently chaired by the Head of Mission of Irish

Aid and supported by a DCAFS coordinator. Additionally, DCAFS has put in place an interface

mechanism between donors and MoAFS through a troika-system, whereby three donors (currently

Irish Aid, the EU and the World Bank) are tasked to meet the Principal Secretary for Agriculture and

Food Security and his management team on a regular basis to voice the collective issues/concerns of

donors and feedback the issues raised by the Ministry.

Climate Change, Environment and Agriculture Joint Resilience Unit

A number of DCAFS members (Irish Aid, DFID, Norway, the Deutsche Gesellschaft für Internationale

Zusammenarbeit [GIZ], the Flemish International Cooperation Agency [FICA] and USAID) recently

formed the Climate Change, Environment and Agriculture Joint Resilience Unit (JRU) to coordinate

and integrate donor programming on climate change and disaster risk reduction. Neither DCAFS nor



JRU have established an information management system, as their primary purpose is to provide a

forum for donors to harmonise their assistance and coordinate their dialogue with the GoM.

Definition of the ARD&FS sector

In producing data on aid to ARD&FS, it appears that different definitions are being used in Malawi.

Within government, various sector demarcations are applied, while donors also have their own

internal classifications. This section documents these different definitions and relates them to the

ODI working definition of aid to ARD&FS (see Box 3).

Box 3. ODI working definition of aid to ARD&FS.

Working definition of aid to ARD&FS comprises all ODA flows falling under three policy domains:

1. Agricultural, forestry and fishing productive activities and supporting services : this includes all

aid flows provided directly to agricultural5 productive activities, recorded by the CRS purpose code as

sector-allocable aid to agriculture, forestry and fishing. This comprises aid to policy development and

regulation, research, extension and training, input production and distribution, crop production etc.

This policy domain also includes a relevant proportion of aid flows provided to areas supportive of

these productive activities although not directly imputable to the sector, such as: banking and financial

services, business support services and trade policy and facilitation. For the purpose of calculating the

volume of aid to these productive activities, a share of general budget support and NGO support is also

included under this policy domain.

2. Rural social-economic development: this includes rural development, non-agricultural

alternative development, women's equality organisations and institutions, and (developmental) food-

aid or food-security programmes. Aid to projects favouring the position of women in development is

particularly important as women play a central part in agricultural productive activities. Transport and

storage may also be brought into the definition, provided the donor studies demonstrate this to be an

important policy issue within the ARD&FS sphere.

3. Emergency relief and welfare: this includes emergency food aid and a share of material relief

attributable to the agricultural domain. It also includes social-welfare activities related to the

agricultural and food sector: basic nutrition and social mitigation of HIV/AIDS, an important

component given the devastating impact of the disease in this productive sector.

Government of Malawi definition

The national budget that is presented to parliament before every financial year presents budget

allocations by budget votes, which represent the line ministries and other government institutions that

will be spending the resources. For each vote, the allocation is further divided into a recurrent and a

capital budget. The recurrent budget consists of personal emoluments and other recurrent

transactions, while the capital (or development budget) includes the donor-funded part (Part I) and the

government-funded part (Part II).

5



Every decentralised local council has a budget vote for its annual recurrent allocation. Since the

2006/07 financial year, the recurrent budget allocated to the decentralised local councils has also

been disaggregated by sectors (or categories). There have been shifts and variations since then, but

the latest budget listed the following relevant sectors (cost centres) at district level:

Agriculture

Irrigation

Forestry

Fisheries

Trade

Environment

These votes and cost-centre codes have been the most consistent over the years. However, in addition

to these, the budget can be classified according to programme codes, which are meant to link the

budget (or inputs) to the MGDS and its programmatic outputs. These programme codes have been

evolving and changing. The latest classification for the ARD&FS-relevant output-based budget

themes, sub-themes and sub-sub-themes can be found in Table 2. Similarly, the budget lends itself to

a sector classification and a functional classification, which essentially group different votes and cost

c .

Table 2: MoF budget classification by theme, sub-theme and sub-sub-theme for relevant areas.

Theme Sub-theme Sub-sub-theme

Sustainable economic

growth

Agriculture and food security

Agricultural productivity

Agroprocessing

Potential growth sectors Manufacturing

Enabling environment for

private-sector development

Enabling environment for private-

sector development

Export-led growth Export-led growth

Conservation of natural

resources

Fisheries

Forestry

Environmental protection

Wildlife

Economic empowerment Increased employment

Increased productivity

Women, youth, disabled

Land and housing Land

Conservation of natural

resources

Climate change

Social protection Protecting the vulnerable Protecting the vulnerable

Disaster risk management Disaster risk management

Social development Prevention and management of

nutrition disorders and HIV/AIDS

Nutrition

Interaction of nutrition and

HIV/AIDS

Infrastructure

development

Integrated rural development Integrated rural development



Since 2008, the GoM through the MoF has been institutionalising the so-called sector working groups

(SWGs) as a means of implementing the DAS and thus the MGDS (see Table 3). These SWGs (also

referred to as DAS sectors) are expected to provide a forum at sector level for policy dialogue,

negotiation and agreement of plans between the government and its development partners. SWGs are

to identify, finance and implement a joint programme of work, as well as monitor sector performance

against a set of agreed milestones. According to the GoM, the advantages of this sector-based

approach include: (i) harmonising sector policy development, planning, budgeting, implementation

and M&E; (ii) increasing the efficiency of resource use through coordinated prioritisation of activities;

(iii) improving the visibility of marginalised (sub) sectors; and (iv) helping the government and its

development partners to agree on a better division of labour (GoM, 2008a).

quarterly basis to build mutual trust and strengthen mutual accountability. Each SWG is chaired by the

Principal Secretary of the lead line ministry and vice-chaired by a lead sector donor. Although the

initial aim was to rationalise the number of sectors with comprehensive yet manageable scopes, the

vested interest of each line ministry to have its own sector led to a compromise of 16 SWGs, grouped

under the five MGDS themes. Many in government and donor agencies still consider this number to be

too large. Of these 16 SWGs, the following have a direct bearing on ARD&FS, as defined by ODI:

Agriculture; Integrated Rural Development; Water, Sanitation and Irrigation; Environment, Lands and

Natural Resources; Trade, Industry and Private-Sector Development; and Vulnerability, Disaster and

Risk Management. Moreover, the areas of basic nutrition and HIV impact mitigation are currently

under the remit of the Health SWG,

captured under the Gender, Child and Youth Development SWG. Although the MoF recognises that

some of these SWGs contain subsectors, less attention has gone to establishing adequate linkages

between (sub)sectors and across SWG boundaries.

Given the largely ministry-based (or vote-based) definition of sectors, the evolution in the names of

relevant ministries over the past 20 years provides an indication of evolving sector boundaries. As can

be seen in Rural development was initially under the remit of the agriculture sector, as spelled out in

the Statement of Development Policies (1987 1996). However, with the decentralisation policy of the

late 1990s, rural development was eventually amalgamated with the local governance and

decentralisation agenda. In practice however, integrated rural development remains to be defined by

the GoM. The Ministry of Local Government and Rural Development (MoLGRD) is currently devising an

integrated rural development (IRD) strategy to provide this much-needed guidance and to serve as a

medium-term strategic plan for the IRD SWG.

, the MoAFS itself has been mostly marked by the inclusion and exclusion of the irrigation subsector.

The current institutional set-up joins irrigation with the water development subsector, based on their

joint mandate to establish and rehabilitate water-related infrastructure. This reveals a policy shift

within government, whereby the infrastructure and production components of irrigation are to be

dealt with separately. Another interesting change that does not come out in the name of the ministry is

the incorporation of the Department of Fisheries in the MoAFS since 2007. Before then, fisheries were

approached from a natural resource management perspective, whereas of late the subsector

role in promoting food security is being underscored; fish represent 70% of animal protein intake in

.



Figure 1. Evolution of ministries between 1990 and 2010.

Ministry of

Agriculture

Ministry of

Agriculture

and

Livestock

Development

Ministry of

Agriculture

and

Irrigation

Ministry of

Agriculture,

Irrigation and

Food Security

Ministry of Agriculture

and Food Security

Ministry of

Irrigation and

Water

Development

Ministry of Irrigation

and Water Development

Ministry of Local

Government

Ministry of

Local

Government

and Rural

Development

Ministry of District and

Local Government

Administration

Ministry of Local Government

and Rural Development

Ministry of Forestry

and Natural

Resources

Ministry of

Natural

Resources

Ministry of

Forestry,

Fisheries and

Environmental

Affairs

Ministry of

Mines,

Natural

Resources

and

Environment

Ministry

of

Energy

and

Mines

Ministry of

Natural

Resources,

Energy and

Environment

Ministry of

Lands and

Valuation

Ministry of

Lands,

Housing and

Physical

Planning

Ministry of Lands

and Natural

Resources

Ministry of Lands,

Housing and Urban

Development

Ministry

of Trade,

Industry

and

Tourism

Ministry

of Trade

and

Industry

Ministry of Commerce and Industry Ministry of

Industry,

Trade and

Private

Sector

Development

Ministry of

Industry and

Trade

The natural resources sector has also been marked by fluid boundaries and categorisations that seem

to characterise certain policy shifts. Besides the recent move of fisheries, natural resource

management has been alternately associated with environmental affairs and energy issues. The

short-lived nomenclature of the Ministry of Lands and Natural Resources can be disregarded, as the

key natural resources subsectors (forestry and fisheries) were not in that ministry, but rather in the ill

named Ministry of Energy and Mines. The recent nomenclature with energy or mines since early 2000s

was perceived by many as an unfortunate one, especially in a country with a 2.8% annual deforestation

1990 1995 2000 2010 2005



rate largely resulting from the charcoal industry. However, the current union of natural resources,

energy and environment appears topical. That being said, it is slightly misleading given that the overall

coordination of climate-change issues is housed within the MoDPC.



Table 3. sector working groups.6

Theme 1: Sustainable economic growth

1 Agriculture Ministry of Agriculture and Food Security Ireland, AfDB, EU, USAID, World Bank, Japan,

DFID, IFAD, Norway, FICA, FAO, ICEIDA, UNIDO,

UNDP

2 Integrated rural development Ministry of Local Government and Rural Development;

National Local Government Finance Committee

GIZ, AfDB, EU, Japan, IFAD, UNDP, FAO, UNFPA

3 Environment, lands and natural

resources

Ministry of Lands and Natural Resources Norway, Japan, EU, USAID, World Bank, UNDP,

UNESCO

4 Tourism, wildlife and culture Ministry of Tourism, Wildlife and Culture; National

Herbarium and Botanical Gardens

Norway, USAID, UNFPA

5 Water, sanitation and irrigation Ministry of Irrigation and Water Development AfDB, Arab donors, Japan, DFID, FICA, ICEIDA,

World Bank, USAID, UNICEF, GIZ, CIDA

6 Trade, industry and private-sector

development

Ministry of Labour; Ministry of Industry, Trade and Private

Sector Development; Development of Malawi Traders

Trust; Malawi Entrepreneurship Development; Small

Enterprise Development of Malawi

World Bank, USAID, UNIDO, UNDP, DFID, EU,

Japan

Theme 2: Social protection and disaster risk management

7 Vulnerability and disaster risk

management

Department of Disaster Management Affairs (Office of the

President and Cabinet); Ministry of Persons with

Disabilities and the Elderly; Malawi Council for the

DFID, EU, WFP, UNICEF, UNDP, Ireland, Japan,

USAID, FAO, WHO

6 Adapted from GoM (2008a) and development partners providing aid per sector from 2007/08 to 2009/10 according to GoM (2011).



Handicapped; National Youth Council

Theme 3: Social development

8 Health Ministry of Health; Department of Nutrition, HIV and AIDS

(Office of the President and Cabinet); National AIDS

Commission; Pharmacies, Medicines and Poisons Board;

Health Services Regulatory Authority; Kachele

Rehabilitation Centre

WHO, CDC, Japan, AfDB, EU, CIDA, DFID, GIZ,

FICA, Norway, Global Fund, UNICEF, World Bank,

UNFPA, UNHCR, USAID, FAO, ICEIDA, Ireland,

UNDP, UNAIDS

9 Education Ministry of Education, Science and Technology; University

of Malawi; Malawi Institute of Education; National Library

Services; National UNESCO Commission; Malawi National

Examination Board; Scholarships Fund; Malawi College of

Health Sciences; Mzuzu University; National Resources

College Trust; University Student Trust Fund; University of

Science and Technology

GIZ, AfDB, CIDA, DFID, Japan, UNICEF, USAID,

World Bank, EU, UNESCO, WFP, ICEIDA, Ireland,

UNFPA

10 Gender, youth development and

sports

Ministry of Youth Development and Sports; Ministry of

Gender and Child Development; National Sports Council

USAID, UNICEF, Norway, AfDB, CIDA, UNAIDS,

ICEIDA, UNDP

Theme 4: Infrastructure development

11 Roads, public works and transport Ministry of Transport, Public Works and Housing; Road

Fund Administration; Roads Authority

EU, AfDB, BADEA, Japan, Arab Donors, World

Bank, DFID

12 Information, communication and

technology and research and

development

Information and Civic Education; Malawi Broadcasting

House; Malawi Industrial Research and Technology

UNDP, World Bank

13 Energy and mining Ministry of Energy and Mines; Geological Surveys; Mines

Department

World Bank, Japan, UNIDO, UNDP

Theme 5: Improved governance

14 Economic governance National Audit Office; Directorate of Public Procurement; DFID, AfDB, CIDA, EU, GIZ, Ireland, Japan,



Ministry of Economic Planning and Development; National

Statistical Office; Ministry of Finance; Accountant General;

Malawi Revenue Authority

Norway, UNICEF, UNDP, World Bank

15 Democratic governance Judiciary; Ministry of Defence; Malawi Defence Force;

Financial Intelligence Unit; Ministry of Home Affairs and

Internal Security; Police; Prisons; Immigration; Ministry of

Justice; Director of Public Prosecution and State

Advocate; Registrar General; Administration General;

Legal Aid; Human Rights Commission; Electoral

Commission; Anti-Corruption Bureau; Office of

Ombudsman; Law Commission

DFID, CIDA, EU, GIZ, Ireland, Norway, UNDP,

UNHCR, USAID

16 Public administration Presidency; State Residences; Office of the President an

Cabinet; Human Resource Management and

Development; Public Service Commission; Office of the

Vice President; Ministry of Foreign Affairs

UNDP, CIDA



Rural development was initially under the remit of the agriculture sector, as spelled out in the

Statement of Development Policies (1987 1996). However, with the decentralisation policy of the late

1990s, rural development was eventually amalgamated with the local governance and

decentralisation agenda. In practice however, integrated rural development remains to be defined by

the GoM. The Ministry of Local Government and Rural Development (MoLGRD) is currently devising an

integrated rural development (IRD) strategy to provide this much-needed guidance and to serve as a

medium-term strategic plan for the IRD SWG.

In terms of aid-data management, the drive to institutionalise the defined SWGs implies that

government systems are supposed to be categorised along the lines of the five MGDS themes and the

16 SWGs. AMP uses this sector definition and PSIP has also started classifying projects accordingly,

in addition to its classification by MGDS priority area. However, MoAFS appears to be working with a

much broader definition of the agriculture sector, as can be noted in the project database, but also in

the ASWAp (see Table 4). The project database is adopting a classification of projects with 10

components, namely irrigation, finance, livestock, fisheries, marketing, income-generating activities

(IGAs), nutrition, water and sanitation (for nutrition), horticulture, forestry, research and other.

Although the database started off using DAC codes, this classification was dropped as it was found to

group too many components under one code, which was not considered useful in the Malawian

context.

Table 4. Classifications used by different systems and policies in ARD&FS sectors.

PSIP and MGDS AMP and SWGs ASWAp MoAFS

database

MGDS priority areas:

• Agriculture and food

security

• Integrated rural

development

• Climate change,

natural resources

and environmental

management

• Green-belt irrigation

and water

development

• MGDS Theme 1:

Sustainable

economic growth

• Agriculture

• Integrated rural

development

• Environment, lands

and natural

resources

• Water, sanitation

and irrigation

• Trade, industry and

private-sector

development

Focus areas:

• Food security and risk

management

• Commercial agriculture,

agroprocessing and

market development

• Sustainable agricultural

land and water

management

Key support services:

• Technology generation and

dissemination

• Institutional strengthening

and capacity building

• Horticulture

• Livestock

• Fisheries

• Irrigation

• Finance

• Marketing

• Income-

generating

activities

• Water

• Nutrition

• Forestry

• Research

• Other

MGDS focus areas:

• Social protection

• Gender

• Land and housing

MGDS Theme 2: Social

protection and disaster

risk management

• Vulnerability,

disaster and risk

management

Cross-cutting issues:

• Gender

• HIV/AIDS

Although not yet supported by an aid information management system, ASWAp represents a

prioritised and harmonised investment framework to advance the agricultural development agenda in



Malawi. As such, it provides a critical guiding definition of the sector and its boundaries. The

objectives of the programme are to achieve an annual agricultural growth rate of 6% by increasing

agricultural productivity; improving food security and nutrition at household level; increasing

agricultural incomes of the rural people; while conserving the natural resource base. ASWAp is built

upon three focus areas, two key support services and two cross-cutting issues. The focus areas are:

(i) food security and risk management, (ii) commercial agriculture, agroprocessing and market

development and (iii) sustainable agricultural land and water management. The key support services

are: (i) technology generation and dissemination and (ii) institutional strengthening and capacity

building. The cross-cutting issues are: gender equality; and HIV prevention and AIDS impact

mitigation.

The institutional framework of ASWAp invokes the involvement of various government ministries,

civil-society stakeholders, private-sector actors and development partners in the implementation of

this overarching sector programme. Indeed, the Ministry of Industry and Trade (MoIT) is expected to

play a central role under the second pillar of commercialisation and market linkages, while the

Ministry of Irrigation and Water Development (MoIWD) will be responsible for developing and

rehabilitating irrigation infrastructure for increased production. The Ministry of Natural Resources,

Energy and Environment (MoNREE) is to ensure the sustainable use of land and water resources

during implementation. The Ministry of Lands and Physical Planning assumes the lead on land issues

for agricultural production. MoLGRD is considered to be the engine of decentralised implementation

of the programme, as it is responsible for the local councils. Given the integration of a number of

multisectoral and cross-cutting issues, such as nutrition, gender, HIV and climate change, other

government institutions are also to be closely involved in ASWAp, such as certain departments within

the Office of the President and Cabinet (OPC).

In general terms, the key donors in Malawi have adopted a different definition of the ARD&FS sector

than that introduced by the GoM through its SWGs. Even between donors, the categorisation varies.

One of the approaches identified among a number of donors is that of an overarching economic

growth sector, much like the MGDS Theme 1, which contains an agriculture component, a natural

resource management component, a trade or private sector development component and a disaster

risk reduction or resilience component. This is the case with USAID, DFID, the UN family and Irish Aid

to a certain extent (see Table 5). A second approach is a more traditionally defined agriculture and

rural development sector that incorporates natural resource management, irrigation and rural

livelihoods. The multilaterals (AfDB, EU, World Bank) and the Japanese International Cooperation

Agency (JICA) have adopted the latter. Hence, the boundaries set by donors are much more in line

, which could suggest a strong donor influence in the

ASWAp design or a disconnect between MoAFS and MoF.

Donors have expressed concerns with the excessive number of SWGs, which is exacerbated by the

weak interministerial collaboration. Moreover, this divergence in definitions has led to challenges in

implementation. For example, due to internal AfDB requirements, the lead implementing agency for

an irrigation project being funding by AfDB must be MoAFS, meaning that funds will be channelled

through that ministry to the Department of Irrigation in MoIWD. While donor focus areas and technical

expertise are defined differently, the new institutional set-up could result in the suboptimal

representation of technical experts in various SWGs. Finally, donors could be wrongly depicted in the



aid effectiveness monitoring as providing fragmented aid based on MoF

seemingly fragmented support could be very coherent within their own sector definition and the

ASWAp definition.

Table 5. Key priorities of ongoing support from main donors to the ARD&FS sector. Components of

ARD&FS are marked with an asterisk (*).

Donor Current strategic

priorities in Malawi7

Ongoing ARD&FS-labelled

programmes

Comments on ARD&FS scope

World

Bank

• Agriculture and

rural development*

• Human

development

• Infrastructure

• Private sector

development (PSD)

• Agriculture Development

Programme Special Project

• Irrigation, Rural livelihoods

and Agricultural Development

Project

• Community-based Rural Land

Development Project

Broader scope could also include

the Business Environment

Strengthening Technical

Assistance Project being

implemented through the

Ministry of Industry and Trade

with support from

team.

DFID • Growth and

resilience*

• Health

• Education

• Good governance

• Agriculture project focusing on

FISP conservation agriculture

• Community resilience

programme

• Access to finance programme

• Private sector development

• Humanitarian support

The programmatic areas under

the growth and resilience team

are very much in line with the ODI

definition, as they capture more

including

material and welfare aid (under

humanitarian support) and

business and financial support.

USAID • Economic growth*

• Health

• Democratic

governance

• Agricultural productivity

• Natural resources

management and climate

change adaptation

• Market linkages, private sector

growth and trade

• Disaster risk reduction and

humanitarian assistance

The Feed the Future

implementation plan emphasises

women as targeted agricultural

producers to be engaged in

market-oriented growth.

Nutrition projects are housed in

the Health Office, but close

collaboration with the economic

growth team on agriculture.

GIZ8 • Decentralisation*

• Health

• Basic education

• Promotion of democratic

decentralisation

GIZ also has a multi-country

project that is of relevance to the

ARD&FS domain, namely a

programme for advising on

community dry forest

management.

EU • Rural development,

agriculture, food

security and

natural resources*

• Transport and

infrastructure

• Farm Income Diversification

Programme

• Forestry Programme

• Rural Infrastructure

Development Programme

• Income Generating Public

Works Programme

Interestingly, rural infrastructure

projects are being funding

through MoLGRD, not the

Ministry of Transport and Public

Infrastructure.

7 As indicated during personal communications or as defined in country assistance strategies/plans. 8 Source: http://www.gtz.de/en/weltweit/afrika/588.htm






programmes


• ASWAp

• Green Belt Initiative

• Farm Input Subsidy

Programme

AfDB • Agriculture and

rural development

• Water and

sanitation

• Infrastructure

• Trade

• Education

• Health

• Agriculture Infrastructure

Support Project

• Strengthening Institutions for

the Risk Management of

Transboundary Animal

Diseases in the SADC Region

• Lake Malawi Artisanal

Fisheries Development project

• Support to Local Economic

Development

Through its trade arm, AfDB

supports the private sector

through a local economic

development programme, of

which one component

concentrates on agricultural

value chain development.

Norway • Climate change*

• Health

• Economic

governance

• Agriculture Development

Programme Special Project

• FISP

• Livelihood programmes and

biodiversity

• Climate change adaptation

through conservation

agriculture

Norway classifies its supports to

the agriculture sector under its

climate-change mitigation and

adaptation.

Japan • Agriculture and

rural development

• Infrastructure

• Health

• Education

• Water and

sanitation

• Farmer Artificial Insemination

Technician Foster Project

• One Village One Product

• Sustainable Land Management

• Community Vitalization and

Afforestation in Middle Shire

and Forest Conservation

• Development of irrigation

schemes and sector

harmonisation

• Capacity to cope with climate-

change-related natural

disasters

The rural electrification

programme is under their

infrastructure arm and

implemented through MoNREE.

Irish

Aid

• Agriculture and

food security*

• Resilience*

• Good governance

• Agricultural productivity and

diversification

• Soil fertility management

through conservation

agriculture

• Nutrition

• Disaster risk reduction

• Social protection

Nutrition is mainstreamed within

the agriculture and the resilience

focus areas.

Agriculture and disaster risk

reduction are approached from

the angle of climate-change

mitigation.

One

UN

• Sustainable

economic growth

and food security*

• Social development

• HIV/AIDS

• Good governance

• Agricultural productivity for

food and nutrition security

• Private sector development,

employment and income

generation

• Natural resource, climate

In the new UNDAF (2012 16)

disaster risk reduction and

resilience of the most vulnerable

groups have been incorporated in

the economic-growth cluster.

Most of the nutrition activities






programmes


change and disaster risk

management

captured in the DAC classification

(minus household food security)

are under the remit of the social

development cluster.

Issues to be considered for definition and tracking of aid to ARD&FS

Since independence, the government has always promoted agriculture as the motor of economic

growth and aid flows in support of economic development have largely been agricultural in nature.

Moreover, 85% of the population lives in rural areas, further exacerbating the challenge of

demarcating boundaries for ARD&FS.

Agriculture for economic growth

While donors and the GoM distinguish between the agriculture sector and the trade, industry and

private sector development sector, most of the activities implemented in the latter have a direct

bearing on agricultural development. ASWAp has recognised this interdependence and embraced

agriculture-based trade and industry under its commercialisation and market development pillar.

While ODI allocations of business/financial services and trade to agriculture are 10% and 20%,

respectively, the case can easily be made for these to be considerably higher in the Malawian context.

Following the share of agriculture in national GDP, 39% of aid for business and bank/financial

services should be allocated to agriculture, while 90% of aid for trade can reasonably be attributed to

the sector in accordance with the share of agriculture in foreign exchange earnings.

Governance and decentralisation

Donor assistance to local governance and decentralisation is likely to be classified differently in the

GoM books and in the international-level donor books. While the CRS purpose code for rural

development includes the promotion of decentralised and multisectoral competence for planning,

coordination and management, it is reasonable to suspect that these flows are more likely to be

reported under the overall governance umbrella, rather than the rural development one. Likewise,

MoLGRD, while there is another

SWG that deals with democratic governance.

The CRS rural development purpose code also absorbs land-use planning and land (re-)settlement

interventions. In Malawi, however, these issues are dealt with under the Ministry of Lands, Housing

and Urban Development, which falls under the Environment, Lands and Natural Resources SWG. The

two World Bank grants for land resettlement in the Southern Region are currently captured in that

SWG and not under the Integrated Rural Development SWG.

Natural resource management and climate change

Natural resource management is receiving increasing attention in the context of climate-change

adaptation and mitigation. In Malawi, most of these efforts are agriculture- and forestry-based, but

they are increasingly being repackaged into climate-change adaptation interventions to attract more

funding. It is therefore possible that such aid-funded agriculture, forestry or rural development

activities could start being labelled as environment and/or climate change.



Infrastructure for agricultural and rural development

Many of the large donor-funded infrastructure projects are related to irrigation, rural feeder roads

and public-works programmes, thereby contributing quite directly to ARD&FS. Yet the current

definitions in use by donors and the GoM exclude most of these contributions from aid to the sector.

This probably has the effect of minimising the contribution of emerging donors to this domain.

Irrigation is in a particularly awkward position, as it has been split from its agricultural home on the

one hand to be married to the water and sanitation sector, while donors and ASWAp still consider it to

be part and parcel of the agriculture sector.

General budget support

The ODI definition of aid to the sector tentatively assumed that 10% of general budget support (GBS)

could be allocable to ARD&FS. Based on the average proportion of the national budget being

allocated to MoAFS from 2005/06 to 2009/10, a more adequate proportion would be 14%. This remains

relatively conservative, given the high political profile of the sector and specifically its capital-

intensive FISP, which is funded through the recurrent budget and directly consumes about 70% of the

m total budget. In terms of aid contributions to FISP, they are in the form of both GBS and

sector budget support (SBS) (pooled and discrete).

Cross-cutting issues: gender, nutrition and HIV

It is worth noting that the areas categorised as cross-cutting are generally quite well mainstreamed

within aid to the sector. In other words, donor-funded activities for nutrition, gender and HIV that are

meant to be implemented by agricultural institutions tend to be labelled as agriculture. However, it is

fair to assume that several of these activities implemented outside the realm of agriculture are often

directly related to the sector, such as agriculture-based economic empowerment interventions for

women.

Ministry of Gender, Children and Community Development or NGOs that are associated with this

sector and therefore likely to be classified as such. An additional issue to be considered is the

growing attention to the economic empowerment of youth, which again tends to rely on agricultural

resources, but is captured under the Gender, Child and Youth Development SWG. Allocating 50% of

aid to gender-

pointing out that much of the resources that have been channelled through this sector recently were

.

Moreover, as nutrition is indivisible from food security, it becomes vital to capture all flows going to

basic nutrition interventions. In Malawi, where nutrition is explicitly viewed as cross-cutting to

agriculture, health and social welfare, this means pulling out nutrition programmes/projects from the

health sector (therapeutic feeding, surveillance), the education sector (school feeding, nutrition

education) and the gender and community development sector (community-based nutrition

education).

Since a fair proportion of HIV/AIDS social impact mitigation interventions are related to strengthening

livelihoods and promoting IGAs for affected households, it is entirely justified to allocate part of the

aid in this area to agriculture and rural development. Most of it is channelled through community-

based organisations though, making it rather difficult to analyse in more detail.



Comparison with ODI definition

The methodology developed by ODI to calculate ODA flows to ARD&FS provides a broader definition of

ARD&FS that covers activities that are particularly relevant in the context of Malawi and support

provided by donors. Indeed, while the CRS definition covers the main areas receiving aid (agricultural

development, rural development and natural resources management), the ODI definition captures

certain a shift towards integrated nutrition and

food-security interventions; value-chain approaches to increase value added and competitiveness of

agricultural production; and a branching off towards complementary social protection/welfare

interventions to ensure food security for the most vulnerable. However, this definition fails to

integrate other key elements of donors support to ARD&FS, and in particular: (i) development of

basic infrastructures in rural areas (for e.g. rural feeder roads); (ii) disaster risk reduction (through

afforestation for example); (iii) climate-change adaptation; and (iv) the full scope of social protection

for enhanced resilience, although certain donors, such as DFID and Irish Aid, are explicitly

approaching hunger from a social protection angle.



Overview of aid flows to ARD&FS This section is based on data from the AidData system,9 the Malawi Aid Management Platform and the

GoM annual budget statements.10

Box 4. Current ODA flows to Malawi.

The Ministry of Finance produces an annual Malawi Aid Atlas since 2008. The 2009/10 Atlas reported

US$792 million in donor disbursements, a marginal 1% decline from the 2008/09 financial year. The

EU made the largest overall contribution (US$155 million), followed by the World Bank (US$139

million) and DFID (US$108 million). Aid continues to be concentrated in certain sectors, with the

economic governance, health, agriculture, education and water and sanitation sectors accounting for

82% of total aid.

There has been a recent shift from pooled/sector budget support to general budget support, which

currently represents 30% of total aid. Direct project support remains the preferred disbursement

modality for donors (55%). Moreover, 24% of total aid flows are being disbursed through NGOs and 48

project implementation units from 12 donors are operating in parallel to country systems.

Fragmentation remains high in priority sectors, such as the agriculture sector with its 14 donors and

72 projects.

Volumes of aid resources

The total volume of aid being allocated to ARD&FS in Malawi varies with the definition used. For the

sake of further comparing aid data collected internationally and data contained in AMP, Table 6

presents both sets of data for the only overlapping year (2008). According to the international AidData

system, in 2008 Malawi received a total of US$919 million (in constant 2008 dollar values), of which

US$81 million was invested in the traditional agriculture, forestry and fisheries sector (AFF), US$148

million if the rural development, food security and emergency food aid categories are included and

US$254 million using the broader ODI definition. By relating the aid disbursements from the Malawi

, it seems as if these data are quite

similar in terms of volume. In fact, even the classifications of the CRS purpose codes and the relevant

Malawi SWGs can be reconciled to a certain extent.

Most of the discrepancies between the data in AidData and AMP can be reasonably explained. Indeed,

the low figure for irrigation in AidData could suggest that irrigation flows are not classified by donors

as agricultural water resources or reflect the fact that they are only reported as commitments in the

year when an agreement is signed, which might not have been the case in 2008. Secondly, most of the

food-security programmes under the ODI-defined rural socio-economic development category are

or to the

vulnerability, disaster and risk-management sector, which deals with social cash transfers and

9 www.aiddata.org, developed by Brigham Young University, College of William and Mary and Development

Gateway. 10 Source: GoM budget statements from 1990/91 to 2010/11, produced by MoF.

http://www.aiddata.org/



project food assistance. Indeed, vulnerability and disaster risk management (DRM) is a growing focus

area, but the ODI definition includes only emergency food aid, while in Malawi the scope has expanded

to broader social protection interventions and disaster preparedness.

The remaining disparities

context. As discussed in the previous section, the allocations of trade and business/financial services

to agriculture should be 90% and 39%, respectively, while 17% of GBS was allocable to agriculture in

2008.

All projects in AMP that were related to nutrition and feeding (school, therapeutic) were included in

Table 6. Although the definition of basic nutrition in the CRS purpose code includes projects related to

feeding, they appear to be significantly underreported in AidData. This is probably due to their primary

homes being in the education and health sectors for most donors.

Table 6. Current volume of ARD&FS aid by sector definition and source of data, 2008 (million US$).11

AidData AMP sectors AidData 2008

(million US$

200812)

GoM AMP

2008/09

(million

US$)

1. AFF minus13 1. Agriculture 65.2 66.9

2. Agricultural land resources

and forestry development

2. Environment, land and natural

resources

15.2 18.6

3. Agricultural water resources 3. Water, sanitation and irrigation

(only irrigation included)

0.4 18.7

4. AFF14 (1+2+3) 80.7 104.2

5. Rural development and food-

aid/food-security programmes

5. Integrated rural development 64.9 20.6

6. Emergency food aid 6. Vulnerability, disaster and risk

Management

2.2 31.5

7. AFF+15 (4+5+6) 147.8 156.2

8. Agro-industries, forest

industries, banking and financial

services, business support

services and institutions & trade

facilitation

8. Trade, industry and private

sector development

1.1 6.9

9. General budget support 9. General budget support (14%) 20.8 23.0

10. n.a. 10. Gender, child and youth

development

- 5.9

11. Basic nutrition 11. Nutrition extras (health and 3.8 19.8

11

12 DAC deflator for 2000 to 2008 = 99.09/80.07=1.23. 13

resources and the forestry-related codes (forestry policy and administrative management, forestry development,

fuelwood/charcoal, forestry education/training, forestry research and forestry services). 14 OECD-DAC narrow definition of agricultural aid, corresponding to sectoral allocable aid to agriculture, forestry

and fishing. 15 OECD-DAC wider definition, which adds rural development, development food aid and emergency food aid to

the narrow definition.



education)

12. Support NGOs, Material relief,

Social mitigation of HIV/AIDS

12. n.a. 1.3 -

13. ARD&FS16 (7+8+9+10+11+12) 255.4 211.8

14. Total aid to Malawi 918.8 803.5

15. Share of aid to ARD&FS (13/14) 28% 26%

Other specific areas that were added in the ODI definition were difficult to disaggregate from their

sector totals or from project titles, such as material relief from the vulnerability and DRM sector, as

well as social impact mitigation for HIV/AIDS from the HIV/AIDS-labelled flows within the health

sector. Moreover, including 10% of total support to NGOs would have been a duplication of many flows

already registered under relevant sectors in AMP.

In terms of aid trends to ARD&FS over the past two decades,

Figure 2 illustrates a decline in the 1990s and early 2000s, followed by a relative increase since

2003/2004. Although the expanded definitions of the sector reveal higher volumes of aid going to the

sector, they do not tell a different story (possibly because the non-AFF categories are being

underestimated). The peaks in 1991/92, 2002/03 and 2004/05 show

since 1990. The variance in the volumes for the

different sector definitions suggests relatively holistic approaches to the crises, where emergency

food aid was accompanied by developmental food security, rural development and agricultural

productivity programmes. For example, USAID supported expanded credit programmes in 1993 to

provide seed and fertiliser packs to jump-start food production for those most severely affected by

the drought. However, the tendency of all flows to drop significantly after the crises indicates that

these efforts continued to lack long-term investments in productive capacities and mitigation

measures.

16 ODI-proposed definition, which adds additional purpose codes to the DAC definition. See Annex 1.



Figure 2. Aid flows to ARD&FS by type of sector definition, 1990 2008 (million US$).

.

Source: AidData

The 1992 peak reflects a major International Development Association (IDA) (World Bank) emergency

recovery grant of US$120 million (thus US$147 million in 2000 US$) in response to the alarming

drought and resulting food insecurity. This grant was classified as a food-security programme, rather

than emergency food aid, even though its proceeds had been used for food purchases (World Bank,

2007a).

It is important to note that AidData relies on commitments, which can vary considerably from

disbursements and even more from expenditures. The data contained in the MoAFS project database

reveals that disbursements to date represent about 53% of total project commitments. However,

0

50

100

150

200

250

1990 1995 2000 2005

PC ARD&FS CConst DAC AFF+ Cconst DAC AFF Cconst



these are all ongoing projects, making it difficult to interpret this average proportion with varying

remaining project lives. The data provided by USAID17 on its commitments and disbursements to the

areas of agriculture, private sector and trade, environment and disaster preparedness between 2001

and 2009 (see Annex 4) allow for more meaningful analysis. While disbursements represented close

to 100% of commitments until about 2006, this proportion fell to as low as 49% in the agriculture

sector (2008) and 0% in the area of private sector and trade (2009). Although USAID works primarily

through non-governmental implementing partners that are expected to have more absorptive

capacity, problems with low burn rates have surfaced, especially among local organisations.

The current share of total aid invested in ARD&FS is 19% according to the most recent complete

AidData figures (2008). The 2009/10 Malawi AMP indicates that agriculture (11%), environment (6%),

IRD (3%) and irrigation (5%) received 25% of the total aid recorded. Moreover, the donor-funded part

represented 13% of total government spending through this ministry. According to

AidData, this relative weight has dropped significantly since the early 1990s (see Figure 3). The figures

-funded development budget (known as Part I)18 confirm this trend, albeit with a

slight lag (see Figure 4), which could be an illustration of the lag between funds being committed and

reported internationally to when they are actually allocated and disbursed at country level, or

changes in the channel of aid delivery used for ARD&FS interventions (government or NGOs).

Figure 3. Share of flows to ARD&FS in total aid flows, 1990 2008.

Source: AidData.

17 USAID was the only one of the four donors to be studied in more detail that provided this data. 18 The share of ARD&FS in the total Part I budget is the share going to MoFS, MoLGRD, MoNREE (and

Departments of Forestry and Fisheries where reported separately), MoIT and MoIWD when irrigation was out of

MoAFS.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

1990 1995 2000 2005



Figure 4. Share of aid to ARD&FS19 in total donor-funded development budget (Part I) (%).

Source: GoM annual budget statements.

Looking at the trends in the composition of aid flows to ARD&FS (see Figure 5), AidData shows an

irregular pattern, with a dip between the mid-1990s and the mid-2000s, followed by a recent upward

slope, especially for the agricultural production, processing and marketing (APPM) component.

According to several key informants, there was an overall decline in aid receipts during this period

due to donor concerns related to governance. Also, with the structural adjustment programmes

(SAPs) there was a reduction in public-sector financing and thus government-service provision, which

fuelled the perception that any single donor investment would have low expected returns.

19 Includes allocations to MoAFS, MoLGRD, MoNREE, MoIT and MoIWD.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

1990 1995 2000 2005



Figure 5. Aid flows to ARD&FS by area of focus (1990 2008) (in million US$).

Source: AidData.

The largest aid recipients within APPM were by far agricultural development and agricultural policy

and administration (see Figure 6). From 1998 onwards, the GBS effect also became more pronounced.

Otherwise, natural resource management (land and water) and forestry have remained quite stable

recipients of aid. Their inverse relationship seems to indicate a certain degree of substitution between

these areas, which might reflect a fine line between sustainable forestry, land and water

management interventions leading them to be classified differently between years. According to

discussions with the Department of Forestry, aid to the subsector has mainly focused on policy and

legislative processes, as well as restructuring in line with the wave of liberalisation and deregulation

that accompanied the SAP of the early 1990s. Considerably less aid has gone to direct implementation

of conservation activities and the sustainable management of forestry resources at community-level.

Moreover, this type of support was mostly channelled through NGOs.

The aid trends towards agricultural production inputs masks the actual donor involvement in

subsidised agricultural inputs, particularly fertiliser. Although Malawi had a long history of

government subsidisation of agricultural inputs, the SAPs brought along a wave of reforms, which

were mostly directed at agriculture as the mainstay of the economy. The Fertilizer Farm Feeds and

Remedies Act was repealed to facilitate private-sector participation in input marketing, and fertilizer

subsidies were completely removed in 1995. Until recently, donors were very reluctant to support

input subsidies and actively discouraged the GoM from using its own resources to do so as they

argued that fertilizer subsidies were not sustainable and did not create a conducive environment for

private-sector-led growth (Kumwenda and Phiri, 2010). In fact, in 1985 the World Bank made the

removal of subsidies a precondition for further funding. However, since 2005, the GoM has proactively

implemented the successful FISP, with increasing support from donors (DFID, EU, Irish Aid, Norway,

World Bank). FISP has been praised for its contribution to five consecutive bumper harvests and a

remarkable 7.4% annual growth rate in GDP in 2009.

0

50

100

150

200

250

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

APPM Rural socio-economic development Emergency & welfare



Figure 6. Main APPM categories in terms of aid flows (1990 2008) (in million US$).

Source: AidData.

Aid to irrigation seems to have been increasing since 2005. Although AidData aggregates irrigation

n combines it with water and sanitation,

the positive trend in both Figure 7 and Figure 6 was corroborated by interviews and AMP data over the

past three years. AfDB, JICA, World Bank and EU are investing heavily in this area, which has

registered a 124% increase in disbursements between 2007/08 and 2009/10.

prioritisation of irrigation in the MGDS and more recently with plans for a national irrigation

programme known as the Green Belt Initiative, aimed at expanding commercial and smallholder

es for national food security and export-oriented production.

0

20

40

60

80

100

120

140

160

180

200

1990-1994 1995-1999 2000-2004 2005-2008

Agricultural development

Agricultural policy and administration

GBS

Natural Resource Management

Agricultural research, plant & animal health

Forestry

Fisheries

Agricultural production inputs

Agricultural extension & training



Figure 7. Donor-funded development budget by ministry (1990 2008) (yearly average, %).

Source: GoM Annual Budget Statements.

Extension, research and regulatory services have been largely undermined, with very limited aid

investments since the 1990s. This is largely due to the policy shift that came with the SAPs, whereby

the lack

of resources), while a pluralistic approach to service provision was promoted and often integrated in

holistic rural livelihoods programmes.

Most of the aid to rural socio-economic development has been channelled through food-security

programmes (see Figure 8). The slight increase in the total and relative allocation to rural

development from 2000 to 2004 could reflect increased support to local governance and

decentralisation, after the GoM launched its decentralisation policy in 1999.

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

1990-1994 1995-1999 2000-2004 2005-2009

Agriculture

Local Government & RuralDevelopment

Irrigation & Water

Natural Resources

Industry & Trade



Figure 8. Aid flows to main rural socio-economic development categories (1990 2008) (in million

US$).

Source: AidData.

The emergency relief and welfare component has been dominated by emergency food aid since the

1990s, with peaks during aforementioned food crises. However, the trends noted in Figure 9 point to

an encouraging shift towards the prevention of malnutrition through food-based approaches. In

Malawi, these interventions tend to be combined with social impact mitigation of HIV/AIDS, given the

strong interactions between nutrition and HIV. From an institutional and policy perspective, nutrition

and HIV have been jointly highlighted and loudly advocated for. In fact, in the MGDS, the prevention

and management of nutrition disorders and HIV/AIDS was the only socially-oriented priority of six.

Moreover, the fact that these cross-cutting issues have since been housed in a high-profile

institutional position in the OPC demonstrates further the growing attention they are receiving from

government and development partners alike.

Figure 9. Aid flows to main emergency relief and welfare categories (1990 2008) (in million US$).

Source: AidData.

0

20

40

60

80

100

120

140

160

180

200

1990-1994 1995-1999 2000-2004 2005-2008

Rural development

Food security

0

5

10

15

20

25

30

1990-1994 1995-1999 2000-2004 2005-2008

Basic nutrition

Material relief

Food aid

Social impact mitigationHIV/AIDS



Main sources of aid to ARD&FS

According to the Malawi Aid Atlas 2009/10 (GoM, 2011b), there are 14 donors in the agriculture sector

(SWG definition), with the EU providing almost half of the total aid (see Figure 10). Ireland (12%), DFID

(8%) and Norway (8%) follow at a distance. However, based on the broader definition of ARD&FS, we

find that the World Bank dominates the IRD sector (64%), the trade sector (69%) and the water and

irrigation sector (43%), while Japanese aid accounts for 70% of the total disbursements in the

environment, lands and natural resources sector. If we consider only the irrigation projects in the

water and irrigation sector, USAID disbursed the most (US$22.4 million), followed by AfDB (US$12.3

million), the World Bank (US$7.2 million) and Japan (US$2.6 million).

Figure 10. Main donors in the agriculture sector.

Source: Malawi Aid Atlas 2009/10 (GoM, 2011b).

Aid instruments and modalities

In its DAS, the GoM clearly spells out its commitment to the Paris Declaration and articulates its

vision for aid flowing to Malawi. Although it recognises that its public financial management (PFM)

system may not yet be mature enough, it requires that development partners channel at least 70% of

their aid through its two preferred aid modalities, namely GBS and sector basket funding. According

to the last Aid Atlas, there appears to be a shift from pooled SBS to GBS, which now accounts for 30%

of total aid receipts. Although the DAS target for GBS has been met (30%), only 17% of total aid is

AfDB5%

DfID8%

EU45%

FICA3%

FAO4%

ICEIDA<1%

IFAD2%

Ireland12%

Japan1%

Norway8%

UNDP1%

UNIDO<1%

USAID5%

World Bank6%



received through SBS. This trend is confirmed by the largest donors in the AFD&FS sector, who

channel a significant proportion of their aid through GBS.20

Progress has been made in the use of government systems (see Figure 11), with a marked increase in

total aid disbursed through GBS or SBS from 33% in 2007/08 to 45% in 2009/10. Nevertheless, 55% of

reported aid is still delivered through direct project support and therefore outside of government

structures. Although AMP recorded that 24% of total aid disbursement in 2009/10 went to NGOs, this

is likely to be a gross underrepresentation of the aid flows to Malawi being channelled through NGOs.

In the sectors considered ARD&FS-related in this study, most of the aid was delivered through direct

project support, with the notable exception of the agriculture sector (SWG definition), where 38% of

aid was disbursed through SBS to the FISP. While 26% was deposited into a pooled Food Security

Account in the Reserve Bank of Malawi, 12% was considered discrete funding and typically involved

donors purchasing seed and fertiliser on behalf of the GoM. An additional 24% of the total aid to the

sector was received as budget support from the EU Food Facility, and therefore considered allocable

to this sector. Nevertheless, aid fragmentation remains quite high with 72 projects reported in the Aid

Atlas for agriculture alone.

20 In 2009/2010, donors signed up to the Common Approach to Budget Support disbursed the following share of

their reported aid through GBS: Norway 19%; DFID 29%; AfDB 33%; World Bank 38%; GIZ 48%; and EU

71%.



Figure 11. Use of country systems.

Source: Malawi Aid Atlas 2009/10 (GoM, 2011b).

The Aid Atlas presents a summary table of aid fragmentation by donor and by sector. The agriculture

sector is the most fragmented, with 72 projects, second only to the health sector. The IRD sector is

less fragmented, with 13 projects and an average disbursement of US$3.4 million per project in

2009/10, indicating larger individual projects with more critical mass. The fact that the MoAFS

database of projects in agriculture, natural resources and food security contains 193 ongoing projects

corroborates the perceived fragmentation, especially when more NGO-implemented projects are

accounted for.



Current and future trends in donor support

Recent donor-country strategic plans confirm the upward trend of aid to ARD&FS, which is expected

to be sustained in the coming years, due to both the renewed international attention to agriculture

a .

In 2010, the United States government introduced the Global Hunger and Food Security Initiative, also

known as Feed the Future, with a pledged US$3.5 billion over three years for sustainable and

innovative investments in food security and rural development, as a strategic lever for the

achievement of the first Millennium Development Goal. At country-level, USAID has devoted

significant efforts to formulating its implementation plan, which will concentrate on high-impact

nutrition interventions; the development of high-potential value chains for legumes (pigeon pea,

groundnut, soybean) and dairy; and improving the policy environment with an expected US$12 15

million annual investment.

1990s, it

experienced a sharp decline to less than a fifth, due to the unsatisfactory experience with the

agricultural support programme in the 1990s. However, the Bank has returned to the sector and is

expecting to allocate between 40 and 50% of its new Country Assistance Strategy investments to

agriculture.

Although DFID intends to maintain its support to FISP, it does not plan to increase its aid to

agriculture directly. Rather, the new country assistance strategy proposes complementary support

through enhanced access to finance, resilience, private-sector development and investments in rural

roads.

The EU has staged a major comeback in agriculture and rural development, with commitments

doubling between the ninth European Development Fund (EDF) th

million). Norway expects to further increase its relative contribution to agriculture (through climate

change) over the coming years, based on its global policy to focus on a limited number of focus areas.

Irish Aid just officially opened its development portfolio in 2010, with the overall aim of ensuring that

households are better nourished, food secure and less vulnerable to poverty. Evidently, agriculture,

food security and resilience (welfare and nutrition measures) occupy a central place in this strategy

.



Assessment of the quality of aid

information

Accessibility, accuracy and comprehensiveness of data on aid to ARD&FS

Information on aid to ARD&FS is quite easily accessible as the key databases (AMP, PSIP and MoAFS

Technical Secretariat) are or will soon be available online. The MoAFS Technical Secretariat database

can be freely downloaded from the MoAFS website. Although PSIP and AMP (will) only allow

registered users to access the databases, the data are made available upon request. Moreover, the

annual reports produced by PSIP and DAD are distributed widely, especially the Aid Atlas, which is

sent around to all government institutions and donors. Indeed, DAD is particularly dedicated to full

transparency. However, even though recent data for the past four or five years are readily available,

comprehensive aid data before 2007 are difficult to access in a user-friendly manner. The aid data

captured in the national development budget (Part I), although not representative of total aid flows,

are .

AMP is a reliable source of aid data since 2007/08 and the reliability of the data is continuously

improving over the years as more donors report in a timely and accurate fashion. For this purpose,

data focal agents (DFAs) were established and trained in each resident donor agency to submit aid

flow data. In 2009/10, all 28 bilateral and multilateral donors in Malawi reported to the MoF, which is

quite a feat for aid transparency. DAD indicated that the accuracy of the reported data varies by donor,

rather than by sector.

That being said, AMP data have certain weaknesses related to the fact that only disbursements are

recorded, for lack of reliable expenditure data; only flows from resident donor agencies are captured,

while a considerable amount of aid passes through other donors or other levels (headquarters,

regional offices, NGOs);

internal definitions, leading to certain discrepancies when it comes to the aid-

fragmentation analysis.

exemplifies an integrated rural development programme. This is principally implemented by the

MoAFS, and is classified by AMP in four separate projects under the agriculture and IRD sectors.

Also, the fact that AMP automatically allocates each project to a sector, depending on its

implementing line ministry, has led to a Norwegian project supporting Bunda College of Agriculture

on conservation agriculture initially being classified as an education-sector project. Although such

details are modified on a case-by-case basis, it is likely to affect the ARD&FS sector more than

others, given the many grey areas and arguable sector boundaries. Another limitation in terms of

accessibility to comprehensive ARD&FS data is that AMP data do not allow for an easy disaggregation

of aid to irrigation from the total aid to the water, sanitation and irrigation sector, just as nutrition

projects cannot be easily disentangled from aid to the health sector.

Although PSIP serves as a vital instrument for managing the development budget, certain challenges

undermine its accuracy and credibility. Most importantly, PSIP tells only part of the story when it

comes to the national development budget. A recent study found that the PSIP budget was

consistently different from the total development budget between 2004/05 and 2009/10. For most of



the years, except the last, the PSIP budget exceeded the development budget by up to 31%. AMP has

further highlighted the gaps in the PSIP and development budgets. The major reasons for these

discrepancies were found to lie in the use of different programme classifications and cost centres,

and in differences in timing of the budgetary and PSIP processes leading to the use of indicative

ceilings in the former and actual ceilings in the latter. More generally, the study observed a serious

lack of coordination between the MoDPC and the MoF, as well as between MoDPC and line ministries.

In order to address these issues, JICA is supporting the Capacity Enhancement in Public Sector

Investment Programming project to harmonise the data contained in PSIP, the national development

budget and AMP.

The MoAFS Technical Secretariat database is the only database that has managed to capture a

representative number of projects in the sector, including those implemented by NGOs. Despite

repeated requests, the Technical Secretariat has not been able to elicit data on projects being

supported by research institutions, regional donors, non-resident donors or donor headquarters.

Moreover, when it comes to aid flows, the database captures only overall project commitments, but

does not contain annual disbursements or expenditures. Currently, the database cannot be easily

used to analyse the total number of donors or implementing agencies in the sector due to the lack of

a coding system. Moreover, as projects have not yet been coded by thematic component, it does not

lend itself to an analysis of projects, investments, donors or implementers by component. It would

appear to be the only database with this potential however, as AMP and PSIP maintain higher-level

classifications (be it SWGs or MGDS priority areas). Although its purpose was more geared towards

harmonisation and coordination, this database could be built on within the context of ASWAp to

provide clear sector-wide data on who is doing what where, and also how much is being invested in

what focus areas.

The recurrent challenge of collecting aid disbursements from NGOs undermines the aid management

systems in terms of their comprehensiveness. The MoDPC did attempt to create a database of NGO-

implemented projects, but after investing considerable human and financial resources in this effort,

the high rate of non-response from seemingly sceptical NGOs led to the abandonment of the initiative.

Although this is perceived as a major gap in the data, it is also considered a diversion from the

core functions, especially in light of their limited resources.

Consistency of aid trends with stated g

Another quality dimension of aid data is whether they tell the same story as the policies do. It is

therefore worth analysing the trends in committed aid flows to ARD&FS depicted in Overview of aid

flows to ARD&FS against the broad evolution of GoM policy and strategies, as well as donor priorities.

Agriculture has been a priority sector since independence and was always perceived as the engine of

economic development. Large investments in state-managed agricultural development and

marketing were curtailed in the 1980s, as part of the SAPs, promoting the liberalisation of the sector,

price decontrol, the reform of parastatal entities (such as the Agricultural Development and

Marketing Corporation [ADMARC]21 and forestry plantations), privatisation, trade liberalisation,

21 ADMARC is a government-owned marketing board for agricultural produce.



financial-sector reform, exchange-rate and interest-rate liberalisation and the rationalisation of the

budget. This overall deregulation of the sector

should be led by the private sector explains the negative trend in aid to ARD&FS in the 1990s,

especially looking at the DAC AFF sector definition. This was coupled with an increase in relative

government and aid allocations to the social sectors (health and education).

As part of this restructuring of the gove

government was largely concentrated on liberalisation policy and legislative processes. For example,

USAID provided support to a divestiture programme to reduce the control and inefficient activities of

ADMARC and played a lead role in advocating for the removal of restrictions preventing smallholder

farmers from engaging in the production and marketing of export-oriented cash crops, such as burley

tobacco. Further, development aid was increasingly channelled through NGOs as donors adopted and

(2000) and forestry policy (1996) confirm this shift towards a greater recognition of non-state actors

and service providers, as well as the role of communities themselves in the uptake of technologies

and the sustainable management of natural resources. Although this might not be directly visible in

the available aid data, it could be inferred from the increasing aid being channelled to food security

programmes (under RSED) and emergency and welfare programmes for nutrition, which have tended

to be dominated by non-governmental providers.

Table 7. ARD&FS strategy.

Period Key policy documents Strategic focus

1987 95 Statement of Development

Policies (1987 1996)

• Liberalisation of the agricultural sector,

parastatal sector reform, privatisation, reduced

government intervention and service provision,

deregulation, trade liberalisation, financial-

sector reform, exchange-rate liberalisation,

interest-rate liberalisation and rationalisation of

the budget

• Targeted middle-income smallholder group

1995 2000 Agricultural and Livestock

Development Strategy and Action

Plan since 1995

Vision 2020 since 2000

Malawi Poverty Reduction

Strategy (2002 05)

• Shift of focus from estate development and

middle-income farmers to addressing the needs

of resource poor and marginalised smallholders

• Stronger rural livelihoods emphasis

• Recognition of role of non-state actors and

communities in service provision and natural

resource management

• Decentralisation and local governance

2004 11 Malawi Economic Growth

Strategy (2004 06)

Malawi Growth and Development

Strategy (2006 11)

Agriculture Sector-Wide

Approach (ASWAp 2010 14)

• Shift from social consumption to sustainable

economic growth and infrastructure

development

• Re-prioritisation of agriculture and food security

through maize self-sufficiency and government

intervention

• Key role for private sector in economic growth



The Agricultural and Livestock Development Strategy and Action Plan (ALDSAP), launched in 1995,

marked a shift from a focus on estate development to tailored interventions addressing smallholder

the Second Statement of Development Policies (DEVPOL) targeted the middle-

income smallholder group to strengthen the institutional capacity to deliver technical services,

ALDSAP was more encompassing of resource-poor and marginalised farmers, including women. The

change in focus areas from livestock and fisheries production in DEVPOL to an emphasis on crop

production and soil-fertility improvement and enhancement is not reflected in the aid trends. This

might be due to the fact that detailed coding is rare, as most donors lump their agriculture projects

under the agricultural development DAC purpose code. However, smallholder cash cropping received

support under the USAID Agricultural Sector Assistance Programme and the Af Macadamia

Project and from Germany. At the end of the 1990s, there was still no evidence of significant

reductions in rural poverty, leading to a donor focus on resource-poor farmers and income- and

productivity-enhancement measures (Charman, 2004). This could partially explain the increase in aid

allocated to rural development programmes between 2000 and 2004. Another likely reason would be

the response of donors to the national decentralisation policy of 1998, which required support in

terms of institutional strengthening and capacity building at local-government level.

Overall, during the late 1990s and early 2000s, GoM

cushioning the negative effects of market reforms and underperformance, as the structural

adjustments did not reduce poverty or enable economic growth. Having experienced the limitations

and inadequacy of the SAPs, the GoM devised its Vision 2020 at the turn of the century, followed by the

Malawi Poverty Reduction Strategy (MPRS) and the MGDS in which agriculture and food security

became key public concerns requiring ongoing public intervention. The MPRS strategies went beyond

addressing the supply side (production support and market access) and included the human capital

components of rural poverty (health, welfare support and empowerment). While neither DEVPOL nor

ALDSAP had explicitly articulated the need for long-term investment in safety nets, the MPRS fully

recognised the need for safety nets to deal with chronic food insecurity and minimise food aid

receipts. Since then, a series of agriculture-based safety-net programmes were introduced, such as

the small-scale starter packs, the World Bank-funded Agricultural Productivity Improvement

Programme and the Target Input Programme (1998 2001), with some donor support. However,

donors generally considered subsidies to be unsustainable and were therefore reluctant to invest in

them. With two alarming food crises in 2001/02 and 2004/5 and strong government commitment,

-intensive FISP since

2005/06, as well as its larger agricultural investment initiatives, such as in irrigation. This is

confirmed by AMP data, with aid disbursements to agriculture increasing from US$51.2 million in

2007/08 to US$90.4 million in 2009/10. GBS also increased from US$94 million to US$209 million in

the same period, translating donors .

While smallholder agriculture was central to the MPRS, large farmers and private businesses have

taken centre stage in the Malawi Economic Growth Strategy and the MGDS. In practice, however, the

GoM is investing heavily in smallholder food security through FISP, which consumes the bulk of the

government agricultural budget and a significant share of total donor support. According to AMP, in

2009/10 US$34 million out of US$90.4 million total aid to agriculture was directly allocated to FISP,

representing about 40%.



Another important policy shift was a realisation in 2005 that efforts had been locked up in dealing with

food crises, while there was an urgent need to take a medium- to long-term perspective (Kumwenda,

2010). The absence of a comprehensive and prioritised investment framework in the agricultural

sector was thought to have contributed to limited donor buy-in. While efforts began in the late 1990s

to establish such a framework through the Malawi Agricultural Sector Investment Programme, the

process was endlessly delayed, to only materialise in the last few years with the official endorsement

of ASWAp in 2010. Donors were intensely involved in this process and have pledged their commitment

to ASWAp objectives and priority areas, as part of the CAADP process. This renewed commitment and

confidence in the agriculture sector is likely to be visible in the aid volume over the next few years,

but it could also be captured by current country-level systems as a shift in aid modalities used.

Currently, several donors in the agriculture sector (including EU, FICA and Norway) have plans to

channel part of their support through a multi-donor trust fund, administered by the World Bank, in

support of an expanded version of the ASWAp-Support Project, which was initiated in 2008 to build

capacity for and kick-start ASWAp implementation.

Mutual accountability and results focus

In the context of aid effectiveness, there are two main avenues for mutual accountability between the

GoM and its development partners, namely MGDS annual reviews and CABS reviews. The

accountability of government and donors to the ultimate aid beneficiaries has less clearly defined

mechanisms, although it is starting to be taken into consideration by Malawian civil society in its

budget analysis and advocacy efforts.

Building on the six priority areas and five themes, the MGDS includes an M&E framework to assess

progress towards the achievement of its national goals. For the past three years, the MoDPC has led

MGDS annual reviews to monitor the performance of all economic and social programmes to enhance

management for results and accountability. The consolidated annual review report is based on

sector-specific reviews that provide a forum for policy dialogue, coordination and joint assessments

between the government and its development partners. These reviews consider results performance

per sector, budget performance and aid-effectiveness performance. PSIP data feed directly into this

process, as each sector assesses its development projects output performance against project

targets. AMP data are used to assess the degree of donor harmonisation and alignment to

government procedures in each sector, based on 11 PD indicators.

The annual reviews provide the opportunity to analyse the link between resource inputs and intended

development outcomes and results. It is in principle possible to compare budget utilisation rates to

weighted performance on sector output indicators, but given the generally weak M&E framework it

might not be a very meaningful exercise. The MGDS review per sector is currently the best attempt at

sector-wide M&E and accountability given that government, NGO and development-partner projects

are all considered, if voluntarily reported. While the reviews often provide useful recommendations

per MGDS priority area and theme, there is limited follow-up from one year to the next. Furthermore,

the fact that MGDS is owned by the MoDPC, while DAS is owned by the MoF partly contributes to the

current disconnect between development inputs and the analysis of results.

In the 2008/2009 agriculture sector review, three out of the 11 PD indicators were considered

unsatisfactory, i.e. the use of country procurement systems, avoiding parallel PIUs and the use of

common arrangements and procedures. One of the key recommendations by the sector was to



redefine the agriculture sector to include irrigation, forestry and fisheries and agricultural education

and training. A call was also made to non-state actors (NGOs and private sector) to submit their

performance reports as part of these sector-wide reviews as their contribution to the sector cannot

be ignored. In the IRD sector, six PD indicators were rated unsatisfactory and one was very

unsatisfactory (use of country procurement systems). Indeed, this sector lacks an operational sector

strategy and results framework, contributing to a high degree of parallel PIUs and off-budget donor-

funded projects.

To increase aid effectiveness through timely project implementation, DAD also conducts quarterly

monitoring visits to externally-funded projects and produces quarterly reports. The ultimate goal of

these monitoring exercises is to improve the Country Portfolio Performance Rating (CPPR)22 and

thereby the Resource Allocation Index23 for future funding cycles, by reducing the number of over-

aged and non-performing projects. Delayed project implementation increases commitment charges

for aid, bloats operational costs and ultimately diverts resources from other priority areas. Projects

are assessed mainly against input and output indicators and corrective measures are identified to

address bottlenecks. This exercise is limited to 30 sampled on-budget projects with large budgets

(more than US$10 million), delays in implementation and low disbursement rates (less than 30%).

GBS and pooled funding are also analysed as part of this process based on AMP data and reporting

functions.

The CABS group, currently comprised of DFID, the World Bank, EU, Norway, GIZ and AfDB, has been

providing GBS to the GoM since 1999. A joint framework for budget support cooperation between the

government and the CABS group was signed in 2005, building upon the MGDS. The CABS group

conducts bi -agreed Performance

Assessment Framework (PAF) targets, as the basis for future disbursements. These reviews also

allow for a joint assessment of how CABS funds have been utilised. The current PAF has 25 indicators

with 42 targets covering PFM (9 indicators), alignment and mutual accountability (1), economic growth

(3), social sectors (7), and governance (5). The following three indicators are related to economic

growth: (i) improved business environment (contract enforcement and business licensing); (ii)

improved function of agriculture output markets; and (iii) improved functioning of agricultural input

markets.24 The achievement of PAF targets triggers the disbursement of aid, while their non-

achievement has caused delays or freezes.

The Parliamentary Committee on Agriculture and Natural Resources fulfils an oversight and

monitoring role of government allocations to MoAFS, MoIWD, MoNREE and the Ministry of Lands,

Housing and Urban Planning. Interestingly, MoLGRD is under the remit of the Parliamentary

Committee on Social Welfare. Although the committee assumes these roles, it does not feel that it

has adequate oversight of aid flows to agriculture and natural resources, other than the totals of the

development budget per part. Moreover, budget documents are not received before the parliamentary

22

Bank-financed portfolio in client countries. 23

Institutional Assessments (CPIA) exercise that covers the IDA-eligible countries. The CPIA rates countries

against a set of 16 criteria grouped in four clusters: (a) economic management; (b) structural policies; (c) policies

for social inclusion and equity; and (d) public sector management and institutions. 24 The targets related to the latter two indicators were not met in the past year.



sitting to allow for adequate time, reflection and discussion among committee members. Although

the MoF has made ad hoc presentations of the Aid Atlas to members of parliament, this does not

appear to have been institutionalised and few have had access to the Aid Atlas reports or AMP data.

The Malawi Economic Justice Network (MEJN ) mandate includes analysing the national budget to

ensure that it is consistent with national priorities and is geared towards financing pro-poor activities.

MEJN therefore tracks all ODA disbursed as budget support, as well as aid disbursed outside the

budget through service delivery surveys and other social accountability approaches. The thrust is to

ensure that resources are used for their intended purposes and in a transparent manner. For ODA

disbursed through the national budget, MEJN conducts budget analysis soon after presentation in

parliament, analysing Part I allocations to the various sectors, as well as the conditions attached to

aid. Despite these efforts, official mechanisms for civil-society involvement in aid effectiveness

accountability forums remains ad hoc and mostly take the form of meetings where civil-society

organisations are invited as and when government and/or donors deem it necessary. However, in the

past three years, there has been an increased recognition of civil society involvement in CABS

reviews, which has provided space for civil-society input into aid discussions. With the view of

strengthening this engagement, MEJN has received support from the EU to devise mechanisms for

piloting a systematic dialogue on aid between civil society, the government and the EU. Guidelines

have been developed for this envisaged engagement, but they are yet to be endorsed.

The Civil Society Agriculture Network (CISANET) engages in similar budget analysis and advocacy,

with a particular focus on agriculture, irrigation and agricultural marketing. Once the budget is

presented to parliament (incorporating [part of] AMP and PSIP data)

these components and discusses its concerns with the Minister of Agriculture and Food Security or

the Minister of Irrigation and Water Development. Until two years ago, CISANET also used to conduct

public expenditure tracking surveys and community development satisfaction surveys at the level of

extension planning areas (EPAs) to track whether funds were disbursed as planned by the

decentralised authorities and to assess community satisfaction.

Alignment of data provision with government planning and accounting requirements

Aid predictability is a fundamental objective of the aid-effectiveness agenda, as it is central to

effective medium-term planning and budgeting. Donors are therefore expected to provide indicative

multi-annual commitments in the context of national medium-term expenditure frameworks. The

timely disbursement of aid is now one of the indicators donors are measured against in the Malawi

Aid Atlas. The GoM is particularly interested in increasing the predictability of GBS and SBS, given

their direct bearing Overall, the predictability of GBS was quite high

in 2009/10, as the underfunding of AfDB and DFID (respectively 82% and 86% of original

commitments) was compensated by the overfunding from the World Bank and the EU (30% and 25%

respectively). In SBS to ARD&FS, Norway did not disburse its commitment to FISP due to delays in

finalising the audit report for the programme from previous years, while Irish Aid provided 260% of its

commitment. Although improvements have been made, many donors have internal constraints

preventing them from providing official commitments for the coming fiscal year, let alone the

upcoming three years, as required for forward budgeting. The different fiscal years used by donors

and the GoM partly accounts for the delays in providing commitments. However, government and

donors have found ways to accommodate each other, with different donors disbursing their budget



support during different previously-agreed quarters. For projects, it has been relatively more

straightforward to collect annual commitments.

The monthly data collected by the MoF for AMP allow DAD to provide weekly reports to the

Acco for cash-management purposes. The fact that AMP generates

a full list of donor-funded projects by sector is also proving useful for sectors in their planning efforts.

Indeed, DAD receives demands on an ad hoc basis from sectors for their AMP data.

While AMP has been successful in collecting data on aid disbursements, expenditure data are less

easily accessible. The MoF uses the computerised Integrated Financial Management Information

System (IFMIS) to monitor expenditure, linking the Treasury with the Reserve Bank of Malawi and line

ministries to ensure timely reconciliation of accounts. The Budget Division and DAD are engaged in an

effort to integrate donor-funded projects into the IFMIS, which would allow the

expenditures under all donor-funded projects to be tracked in the same way as government

expenditures. Until then, the MoF still relies on its quarterly M&E exercises to monitor project

expenditure rates. However, these exercises are being undermined by a high rate of non-response

from development partners and project managers, which might again be a result of the fragmentation

and lack of coordination between MoF and MoDPC, as well as line ministries (e.g. MoAFS Technical

Secretariat) causing a questionnaire/survey fatigue.

Donor harmonisation

Although all donors indicated that AMP data and Aid Atlas reports are a very welcome development

and a good starting point for discussions amongst donors, in reality few reported using the data for

planning purposes. However, country strategic plans all include some analysis of the development-

aid context and the major donors per sector. In fact, in its country plan for 1995 2000, USAID analysed

past aid commitments from multilateral and bilateral donors, based on da

development cooperation report and from the UNDP management information system Donor Aid

Classified by Grant and Loan. Before AMP, most donors used aggregate aid data from the MoF, as

well as information collected bilaterally amongst themselves. Country strategic plans included a

section on aid effectiveness and donor harmonisation, including an overview of which donors were in

which sectors and what their future plans were. Most of this data had to be sourced separately by

each donor, but more recent country assistance plans, such as the one of Irish Aid, refer to AMP data

and Aid Atlas analyses.

Interestingly, even the analysis of major ongoing investments in the agriculture sector in the ASWAp

document does not make use of the data contained in project database. Only

PSIP projects appear to have been listed in this category, even though the framework is supposed to

go beyond the public sector and be an instrument for harmonisation.

Generally, donors are very aware of which other donors are active in the sectors they work in and

which are relatively larger in terms of aid volume. More relevant information for planning within a

sector is the details of aid per thematic component and implementing partner. In the agriculture

sector, DCAFS has recently commissioned a study to document individual donor funding plans and

explore mechanisms for accelerating donor harmonisation in the sector. The report is yet to be

released, but it definitely went beyond AMP data.



More broadly, given the high degree of donor concentration in a few sectors, it is clear that donors are

not guided by the overall picture of darling and orphan sectors. In fact, there tends to be a crowd in

certain sectors, such as agriculture. Moreover, donors tend to have their own globally determined

sectors of comparative advantage, but will be willing to harmonise and coordinate support within a

sector to avoid duplication. Certain donors and NGOs have found the MoAFS project database to be

particularly useful for this purpose.



Examples of good practice Clearly, AMP represents a good practice on several fronts, starting with effectively collecting and

tracking information on aid flows. Indeed, AMP allows for regular aid tracking and reporting, which

serves the public financial management, while

also serving the external reporting and transparency. Set up in 2008, AMP builds

on earlier efforts, while having several additional benefits:

A project is entered once, then updated with disbursements (monthly) and projections (at the

start of each financial year)

Specific reports can easily be produced over several years with the latest data and ad hoc

reports can be produced upon request

Reserve Bank of Malawi exchange rates are automatically plugged into the system

Manual error is significantly reduced.

Essentially, AMP dramatically reduced the time burden for aid-data analysis and management, and

made it simpler to respond to data requests, thereby increasing the accessibility and usability of the

data. Indeed, DAD in the MoF, MoDPC and MoAFS have adopted a transparent attitude to the data they

manage and are very open to sharing the data upon request. Additionally, the MoAFS project

database is entirely accessible online to the public.

Another good practice is that of aid-data accuracy, thanks to a very good cooperation between

donors and the MoF. Indeed, at the moment all 28 resident donors report their disbursements in a

timely manner to the GoM. This is partly a result of the name-and-shame approach adopted in the Aid

Atlas reports, with the very first table presenting reporting behaviour by donor. In addition, the

accuracy of the data reported has been further enhanced by the prior training provided for DFAs in

each resident donor agency.

In the 2011/12 budgeting cycle, AMP data have also started playing a critical role in public financial

management, as AMP aid projections are now used to determine budget ceilings for line ministries

and departments both in terms of the development budget Part 1 funding (on-budget project aid), as

well as the recurrent budget and the development budget Part 2 funding (through GBS and SBS).

That being said, AMP has done less well in terms of capturing the cross-sectoral nature of

agricultural policy. To be fair, AMP simply follows the sector classification determined by the MoF in

the context of its DAS. Due to the vested interests of each line ministry, the consensus reached was to

have 16 SWGs, although this appears excessive. As a result, the ARD&FS domain has been spread

across at least five SWGs, rendering an analysis of aid flows to this domain particularly difficult.

Although this would not be an issue if in line with the national policy framework, the agriculture

sector has defined its boundaries much more broadly in its ASWAp, taking into account food

security, agricultural risk management, sustainable agricultural land and water management

(including irrigation and agroforestry), commercialisation and market development, agricultural

extension and research, institutional strengthening and agriculture-related gender and HIV/AIDS

issues. However, in the absence of an aid data management system in line with the ASWAp, it is

unclear whether this comprehensive definition will be used in tracking and analysing aid flows against

ARD&FS policies and outcomes.



A good practice worth mentioning in the neglected area of accountability between recipient

governments and their citizens, is the increasing role of civil society in budget analysis and tracking

(including on-budget aid). In the agriculture sector more specifically, the overarching role played by

the MEJN in budget analysis is further reinforced by the efforts and advocacy of CISANET.



Conclusion Agriculture is the mainstay of economy and about 85% of the population is rural. Over the

past two decades, the country has been plagued by food crises and, despite recent improvements, the

people of Malawi are still suffering from chronic malnutrition. In this context, the domain of

agriculture, rural development and food security (ARD&FS) has received considerable attention from

government, NGOs and donors alike. With foreign aid representing 11% of GDP, Malawi is an aid-

dependent country. This country study has sought to assess the quality of aid data and identify best

practices in measuring and accounting for aid to this broad domain.

In order to assess the consistency between policies and aid allocations, the study used data on aid

collected internationally over the past 20 years to analyse trends. Overall, the volume of aid to

agriculture, rural development and food security appears to have declined between the early 1990s

and 2008, despite a slight upward trend since the mid-2000s. In relative terms, the proportion of total

aid going to ARD&FS has also decreased, after a peak in 1992 (severe drought), but seems to be

staging a slight comeback since 2004/05, when Malawi experienced another alarming food crisis. The

data further reveal a heavy bias towards agricultural policy and administration and agricultural

development, or more likely a tendency to cluster agriculture-related support under these generic

purpose codes. The categories of emergency food aid, food-security programmes and basic nutrition

seem to explain most of the recent increase in aid.

As for aid characteristics beyond volume, such as type of aid, aid modalities or aid recipients and

implementers (government, NGO, private sector), these have been less well captured in the existing

data at international level. However, the data do illustrate the increasing importance of GBS as a

contribution to this sector.

Ministry of Finance (MoF) and the explicit prioritisation of agriculture for economic

development.

Although these time-series trends could only be analysed with data at the international level, Malawi

initiated its own aid data management systems in the mid-2000s, and these have already greatly

facilitated aid tracking, budget planning and coordination in general and in the ARD&FS domain in

particular.

The Aid Management Platform (AMP) was established in 2008 for aid tracking, reporting and

analysis. Housed in the Debt and Aid Division of the MoF, AMP contains all programmes and

projects funded by resident donor agencies, as well as their monthly disbursements, annual

projections, lead implementing agency and sector, type of funding and alignment to country

systems. The MoF produces annual Aid Atlas reports, which include analyses of aid volumes,

modalities, predictability and fragmentation, by donor and by sector. All 28 resident donors

are reporting to the MoF in a timely and accurate manner, enabling the database to currently

capture 837 programmes and projects across the 16 sectors, implemented by 109

implementing agencies.

The Public Sector Investment Programme (PSIP) is a tool to plan and manage the national

development (capital) budget, in line with the national development strategy (the MGDS). It

directions and links them to available financing mechanisms. The PSIP database consists of a



list of investment programmes and projects funded by government-guaranteed loans, grants

and own resources, in the form of five-year rolling plans. It currently contains 233 projects,

funded by 25 external donors and implemented by 32 public institutions.

The Ministry of Agriculture and Food Security (MoAFS) Technical Secretariat database

was developed in 2004, upon the request of the Food and Nutrition Security Joint Taskforce, in

order to track who was doing what in Malawi in the area of food security and nutrition at

project level. The purpose was for such a regularly updated database to serve as a basis for

coordination and harmonisation in the sector. It currently contains 193 projects, funded and

implemented by over 80 different donors and implementers.

Several strengths have been observed in each system, such as the very good accessibility of aid data

(on line or upon request) and the accuracy of most of the disbursement and projection data provided,

especially to AMP. Donors appear to have aligned themselves to the aid-data requirements of the

government, providing monthly disbursements and annual projections, particularly for donors

providing general budget support and sector budget support. As a result of this very good

collaboration, the aid data in AMP are now being used for budget planning (including setting

development budget ceilings) and cash management. Moreover, PSIP data are being used to analyse

the consistency between government (MGDS) priorities and development budget allocations

(government and donor-funded). Civil society has also taken up a key role in budget analysis and

tracking to hold government accountable for its use of tax and donor resources.

Nevertheless, there are still a number of remaining challenges in terms of handling aid data in

general, and aid to ARD&FS in particular.

Different definitions: while AMP uses a narrow definition of the agriculture sector (excluding

land and natural resources, irrigation, integrated rural development, trade and nutrition), the

MoAFS has recently adopted the agriculture sector-wide approach (ASWAp) framework,

which embraces food security and nutrition, commercialisation and market development,

sustainable agricultural land and water management and agriculture-related gender, HIV

and climate-change issues. While donors in the agriculture sector are able to relate their

internal classification to the ASWAp definition, AMP remains the primary aid data

management system and aid effectiveness monitoring tool.

Weak linkages between ministries and aid data management systems: as the three

systems were set up with different purposes, resources and institutional homes, there has

been a recognised lack of coordination. This has led to discrepancies between the national

development budget produced by the MoF and the

PSIP, for example, which should be one and the same. Moreover, as similar data are

currently being requested from the MoF and the MoAFS for their databases, there is a risk of

a reduced response rate due to survey fatigue.

Tracking aid channelled through NGOs and the private sector: although donors have an

obvious incentive to fully report their aid disbursements to the sector, NGOs and the private

sector have less incentive to do so. As a result, aid being channelled outside the public sector

has proved extremely difficult to track reliably. The MoAFS database has succeeded in

providing government and NGOs with information that they are interested in on almost all

projects in the agriculture, food security, nutrition and natural resources domain. However,



specifics on quarterly or annual aid disbursements and modalities are not available through

this implementer-driven database.

Tracking expenditures: It is a major challenge to track expenditures, as most donors do not

receive reliable or timely expenditure data from their recipients. Efforts are now being made

to link all donor- Integrated Financial Management

Information System for such real-time expenditure tracking.

Limited use of data produced for government and donor planning: as the guiding

investment framework for the sector, it is striking to note that the ASWAp only refers to PSIP-

listed projects in its analysis of ongoing investments in the sector and not to the Aid Atlas

analyses of aid effectiveness in the sector, nor its own sector-wide and more inclusive project

database.

disbursements to the sector, but rather by their own priorities (or areas of comparative

advantage).

Limited analysis of aid data (inputs) against development outcomes: although the MGDS

annual reviews represent an attempt to link development inputs and outputs and thereby

assess the effectiveness of the development strategy, the weakness of the MGDS monitoring

and evaluation framework seems to be constraining these efforts. Furthermore, the focus in

terms of aid effectiveness per sector tends to be on Paris Declaration process indicators,

rather than on linking overall inputs to development outcomes and eventually impact.



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Annex 1: ARD&FS definitions used in this

study

OECD-DAC purpose code Clarification on coverage AFF AFF+ ODI

12140: Basic nutrition Direct feeding programmes (maternal

feeding, breastfeeding and weaning foods,

child feeding, school feeding);

determination of micronutrient

deficiencies; provision of vitamin A, iodine,

iron etc.; monitoring of nutritional status;

nutrition and food hygiene education;

household food security.

100%

15170: Women's equality

organisations and

institutions

50%

16020: Employment policy

and administrative

management

Employment policy and planning; labour

law; labour unions; institution capacity

building and advice; support programmes

for unemployed; employment creation

and income generation programmes;

occupational safety and health; combating

child labour.

16050: Multisector aid for

basic social services

Basic social services are defined to

include basic education, basic health,

basic nutrition, population/reproductive

health and basic drinking water supply

and basic sanitation.

16064: Social mitigation of

HIV/AIDS

Special programmes to address the

consequences of HIV/AIDS, e.g. social,

legal and economic assistance to people

living with HIV/AIDS including food

security and employment; support to

vulnerable groups and children orphaned

by HIV/AIDS; human rights of HIV/AIDS-

affected people.

50%

24010: Financial policy and

administrative management

Finance sector policy, planning and

programmes; institution capacity building

and advice; financial markets and

systems.

10%

24030: Formal sector

financial intermediaries

All formal sector financial intermediaries;

credit lines; insurance, leasing, venture

10%




capital etc. (except when focused on only

one sector).

24040: Informal/semi-formal

financial intermediaries

Microcredit, savings and credit

cooperatives etc.

10%

25010: Business support

services and institutions

Support to trade and business

associations, chambers of commerce;

legal and regulatory reform aimed at

improving business and investment

climate; private sector institution capacity

building and advice; trade information;

public/private sector networking including

trade fairs; e-commerce. Where sector

cannot be specified: general support to

private sector enterprises (in particular,

use code 32130 for enterprises in the

industrial sector).

10%

31110: Agricultural policy

and administrative

management

Agricultural sector policy, planning and

programmes; aid to agricultural

ministries; institution capacity building

and advice; unspecified agriculture.

100% 100% 100%

31120: Agricultural

development

Integrated projects; farm development. 100% 100% 100%

31130: Agricultural land

resources

Including soil degradation control; soil

improvement; drainage of waterlogged

areas; soil desalination; agricultural land

surveys; land reclamation; erosion

control, desertification control.

100% 100% 100%

31140: Agricultural water

resources

Irrigation, reservoirs, hydraulic

structures, groundwater exploitation for

agricultural use.

100% 100% 100%

31150: Agricultural inputs Supply of seeds, fertilizers, agricultural

machinery/equipment.

100% 100% 100%

31161: Food crop production Including grains (wheat, rice, barley,

maize, rye, oats, millet, sorghum);

horticulture; vegetables; fruit and berries;

other annual and perennial crops. [Use

code 32161 for agro-industries.]

100% 100% 100%

31162: Industrial

crops/export crops

Including sugar; coffee, cocoa, tea; oil

seeds, nuts, kernels; fibre crops; tobacco;

rubber. [Use code 32161 for agro-

industries.]

100% 100% 100%

31163: Livestock Animal husbandry; animal feed aid. 100% 100% 100%

31164: Agrarian reform Including agricultural sector adjustment. 100% 100% 100%




31165: Agricultural

alternative development

Projects to reduce illicit drug cultivation

through other agricultural marketing and

production opportunities. (See code 43050

for non-agricultural alternative

development.)

100% 100% 100%

31166: Agricultural

extension

Non-formal training in agriculture. 100% 100% 100%

31181: Agricultural

education/training

100% 100% 100%

31182: Agricultural research Plant breeding, physiology, genetic

resources, ecology, taxonomy, disease

control, agricultural biotechnology;

including livestock research (animal

health, breeding and genetics, nutrition,

physiology).

100% 100% 100%

31191: Agricultural services Marketing policies and organisation;

storage and transportation, creation of

strategic reserves.

100% 100% 100%

31192: Plant and post-

harvest protection and pest

control

Including integrated plant protection,

biological plant protection activities,

supply and management of

agrochemicals, supply of pesticides, plant

protection policy and legislation.

100% 100% 100%

31193: Agricultural financial

services

Financial intermediaries for the

agricultural sector including credit

schemes; crop insurance.

100% 100% 100%

31194: Agricultural

cooperatives

100% 100% 100%

31195: Livestock/veterinary

services

Animal health and management, genetic

resources, feed resources.

100% 100% 100%

31210: Forestry policy and


Forestry sector policy, planning and


and advice; forest surveys; unspecified

forestry and agroforestry activities.

100% 100% 100%

31220: Forestry development Afforestation for industrial and rural

consumption; exploitation and utilisation;

erosion control, desertification control;

integrated forestry projects.

100% 100% 100%

31261: Fuelwood/charcoal Forestry development whose primary

purpose is production of fuelwood and

charcoal.

100% 100% 100%

31281: Forestry

education/training

100% 100% 100%




31282: Forestry research Including artificial regeneration, genetic

improvement, production methods,

fertilizer, harvesting.

100% 100% 100%

31291: Forestry services Forestry sector policy, planning and


and advice; forest surveys; unspecified

forestry and agroforestry activities.

100% 100% 100%

31310: Fishing policy and


Fishing sector policy, planning and


and advice; ocean and coastal fishing;

marine and freshwater fish surveys and

prospecting; fishing boats/equipment;

unspecified fishing activities.

100% 100% 100%

31320: Fishery development Exploitation and utilisation of fisheries;

fish stock protection; aquaculture;

integrated fishery projects.

100% 100% 100%

31381: Fishery

education/training

100% 100% 100%

31382: Fishery research Pilot fish culture; marine/freshwater

biological research.

100% 100% 100%

31391: Fishery services Fishing harbours; fish markets; fishery

transport and cold storage.

100% 100% 100%

32161: Agro-industries Staple food processing, dairy products,

slaughter houses and equipment, meat

and fish processing and preserving,

oils/fats, sugar refineries,

beverages/tobacco, animal feeds

production.

100%

32162: Forest industries Wood production, pulp/paper production. 100%

32163: Textiles, leather and

substitutes

Including knitting factories. 50%

33110: Trade policy and


Trade policy and planning; support to

ministries and departments responsible

for trade policy; trade-related legislation

and regulatory reforms; analysis and

implementation of multilateral trade

agreements, e.g. technical barriers to

trade and sanitary and phytosanitary

measures (TBT/SPS); mainstreaming

trade in national development strategies

(e.g. poverty reduction strategy papers);

wholesale/retail trade; unspecified trade

and trade promotion activities.

20%




33120: Trade facilitation Simplification and harmonisation of

international import and export

procedures (e.g. customs valuation,

licensing procedures, transport

formalities, payments, insurance);

support to customs departments; tariff

reforms.

20%

43040: Rural development Integrated rural development projects;

e.g. regional development planning;

promotion of decentralized and

multisectoral competence for planning,

coordination and management;

implementation of regional development

and measures (including natural reserve

management); land management; land-

use planning; land settlement and

resettlement activities [excluding

resettlement of refugees and internally

displaced persons (72030)]; functional

integration of rural and urban areas;

geographical information systems.

100% 100%

43050: Non-agricultural


Projects to reduce illicit drug cultivation

through, for example, non-agricultural

income opportunities, social and physical

infrastructure (see code 31165 for

agricultural alternative development).

100%

51010: General budget

support

Unearmarked contributions to the

government budget; support for the

implementation of macroeconomic

reforms (structural adjustment

programmes, poverty reduction

strategies); transfers for the stabilisation

of the balance-of-payments (e.g. STABEX,

exchange rate guarantee schemes);

general programme assistance (when not

allocable by sector).

10%

52010: Food aid/food-

security programmes

Supply of edible human food under

national or international programmes

including transport costs; cash payments

made for food supplies; project food aid

and food aid for market sales when

benefiting sector not specified; excluding

emergency food aid.

100% 100%

71010: Material relief Shelter, water, sanitation and health 10%




assistance and services services, supply of medicines and other

non-food relief items; assistance to

refugees and internally displaced people

in developing countries other than for

food (72040) or protection (72050).

72040: Emergency food aid Food aid normally for general free

distribution or special supplementary

feeding programmes; short-term relief to

targeted population groups affected by

emergency situations. Excludes non-

emergency food security assistance

programmes/food aid (52010).

100% 100%

92010: Support to national

NGOs

In the donor country. 10%

92020: Support to

international NGOs

10%

92030: Support to local and

regional NGOs

In the recipient country or region. 10%



Annex 2: Sector profile matrix

Contribution of ARD&FS to Malawi 25

Agriculture is the most important sector of the Malawian economy, employing about 80% of the total

workforce (formal and informal), contributing over 80% to foreign-exchange earnings and accounting

for 39% of gross domestic product (GDP). Moreover, the sector supplies more than 65% of the

manufacturing sect of the total income of the rural people.26

About 85% of the population lives in rural areas, the majority of whom are smallholder farmers who

cultivate less than one hectare of land and rely on a single harvest of maize for food. The agricultural

sector has two main subsectors: the smallholder subsector, which contributes more than 70% of

output, and the estate subsector, which contributes less than 30% to agricultural GDP. Smallholders

cultivate mainly food crops while estates focus on high-value cash crops for export such as tobacco,

tea, sugar, coffee and macadamia.

Figure 12. ARD&FS as a xports and workforce (1990 2005).

Between 1990 and 2005, economic growth in general and agricultural growth in particular has been

elusive. The growth rates in GDP per capita and agricultural GDP per capita were generally negative

during the 1980s and early 1990s, with some improvements in the late 1990s. The high growth rate in

agricultural GDP in the 1995 99 period is partly attributed to a reported (but probably overstated)

increase in production of root crops such as cassava and sweet potatoes. Since 2006, Malawi has

experienced positive agricultural growth, largely due to the successful implementation of the Farm

Input Subsidy Programme (FISP) and favourable weather patterns.

25 Source: GoM (2010a). 26 Source: World Bank (2007b).

0

10

20

30

40

50

60

70

80

1990-1994 1995-1999 2000-2005

Share of total GDP

Share of total formalemployment

Share of total earnings



Table 8. Change in agricultural sector output, 1990 2009 (%).

Indicator 1990 94 1995 99 2000 05 2006 09

GDP 0.61 6.4 1.55 7.28

Agricultural GDP 2.15 15.06 2.16 3.63

GDP per capita -2.66 3.17 -0.28 13.63

Agricultural GDP per

capita

-1.19 11.55 0.36 4.99

Maize plays a predominant role in food security in Malawi as it occupies about 70% of cultivable land in

ort cash crop, accounting for 65% of export

earnings, followed by tea and sugar. Tobacco production grew significantly in the 1990s when it was

liberalised for smallholder production (now 70% of the total), but has declined in recent years due to

poor weather and reduced auction prices, both of which have affected economic growth and

disposable income.

Table 9. Composition of export earnings by main commodity, 1990 2009 (%).

Commodity 1990 94 1995 99 2000 05 2006 09

Tobacco 69.9 70.5 54.6 65.06

Tea 9.7 9 8.8 6.27

Sugar 6.7 7 11.4 6.66

Cotton 1.1 1.7 2.1 2.32

Other (non-agric) 9.5 6.6 19.4 19.7

Source: GoM (2010a).

The trends in export composition also show that the post-reform period is associated with the

emergence of new export crops such as coffee, pulses and rice, the re-emergence of the nuts

(groundnut, cashew and macadamia) market and the increase in the share of non-agricultural

exports.



Figure 13. Growth in agricultural exports (tonnes), 1971 2007.

Institutional structure of the ARD&FS sector

Institutional arrangements for implementation of agricultural programmes and delivery of related

services involve both state and non-state actors at central and district level. At the central level,

emphasis has to date been on the formulation and implementation of sector policies, strategies,

projects and programmes and this has largely entailed a top-down approach. However, with the

-state institutions

at district level, which now have a greatly increased role in planning and implementation of

programmes and projects as well as in the delivery of services.

Ministry of Agriculture and Food Security

The technical structure of the Ministry of Agriculture and Food Security (MoAFS) comprises six

departments responsible for the following programmatic areas: Agricultural Research Services;

Animal Health and Livestock Development; Crop Production; Agricultural Extension Services; and

Land Resources Conservation.

The ministry is further divided both administratively and technically into eight Agricultural

Development Divisions (ADDs), which represent agroecological zones in the Northern Region (Mzuzu,

Karonga), the Central Region (Lilongwe, Salima, Kasungu) and the Southern Region (Shire Valley,

Blantyre, Machinga). There are research establishments in all ADDs which are responsible for

technology generation and assist in technology transfer. Service delivery at village level is

decentralised through 28 District Offices, 180 Extension Planning Areas and Sections, which cover

over 400 villages. In line with the decentralisation programme, the District Agricultural Development

Office reports to the District Commissioner .

The sector also includes the following government owned companies (parastatals): the Agricultural

Development and Marketing Corporation, National Food Reserve Agency, Smallholder Farmer

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

19

70

19

72

19

74

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

Exp

ort

s (t

on

ne

s)

Years

Sugar Tea Tobacco



Fertilizer Revolving Fund of Malawi, the Tobacco Control Commission and the Pesticides Control

Board.

Other ministries and public institutions

In recognition of the scope of the sector, several other national institutions are considered part of the

onal framework, as depicted in the agriculture sector-wide approach (ASWAp)

management structure (see Figure 14). The Ministries of Irrigation and Water Development, Trade and

Industry, Local Government and Rural Development, and Development Planning and Cooperation, the

Office of the President and Cabinet, Department of Nutrition, HIV and AIDS, and Department of Public

Procurement are key public actors in the sector.

Non-state actors

The principal non-state actors are the farmers themselves who are the main beneficiaries of

agricultural programmes, but they are highly unorganised, with very few cooperatives and

associations. As a result, smallholder farmers tend to have no or very little influence on policy

developments and project activities that influence their environment. In addition, most of the farmers

are illiterate or semi-literate, which results in difficulties in adopting new technologies and their

understanding of farming as a business activity.

Private firms working in agriculture and agribusiness are also key stakeholders. There have been very

few linkages between farmers and private firms that provide various services to the agricultural

sector. For instance, contract farming exists only in a few sectors and covers an insignificant

proportion of smallholder farmers.

Additionally, there are many strong faith communities and groups (as well as schools) that have

significant capacity to play a more substantive role in fostering agricultural change in Malawi. These

groups and communities often include local leaders who are influential in advising and guiding grass-

roots development.

There are however unclear roles and responsibilities, weak implementation arrangements, and other

rigidities amongst these stakeholders, pointing to the need for enhanced coordination mechanisms.

There are currently various ongoing institutional reforms within the sector that entail changing roles,

especially between central and district-level institutions on one hand and between state and non-state

actors on the other. A core function analysis initiative by the MoAFS has been ongoing and aims at

defining the roles of state and non-

the course of doing so, it will identify which functions the public sector should retain, which could be

subcontracted and which should be privatised.



Figure 14. Management structure of the ASWAp.

MoAFS MoTID MoIWD MoLGRD

District

DEC

Directorate

Ag, NR, Irrig.

Directorate

Planning& Dev

Directorate

Trade &Ind

Other

Directorates

District Partnership

Forum on Agriculture

NGOs, Donors, farmers,

private sector, parastatals,

Directorates concerned.

CENTRAL

LEVEL

PS Agriculture

Executive Management

Committee

PS of the MoAFS, MoIWD,

MoLGRD, MoTID, OPC (Nutrition,

HIV/AIDS), MOF, MOEPD

ASWAp Secretariat Technical Working Group

Sustainable Nat. Res. Mgt

Technical Working Group

Food security & risk mgmt

Technical Working Group

Commercial Agri& market

DISTRICT

LEVEL

Management

Calls and chairs Technical support Convenes Advise &/ or consultations

Sector Working

Group (SWG)



Public expenditures in ARD&FS27

Detailed reviews of public expenditure in agriculture, irrigation, forestry and fisheries were conducted

in 2001 by the Ministry of Finance and Economic Planning and in 2008 by the Regional Strategic

Analysis and Knowledge Support System. As the largest sector in Malawi, agriculture has enjoyed a

substantial share of the national budget. Trends in the budget allocation to agriculture since 1980 are

presented in Figure 15, against the Maputo target of 10%. Although the 1990s were characterised by

an erratic allocation to the sector, there was an overall reduction of resources going to the sector,

with an all-time low from 2000 to 2005 (see Table 10). Since 2005/06, there has been a significant

increase in the prioritisation of the sector according to its budgetary allocation, representing 16% of

the total budget between 2006 and 2009.

Figure 15. Trends in agricultural sector expenditure, 1980 2009 (%).

The national budget is divided in two broad categories, i.e. the recurrent budget and the development

budget. The recurrent account of the agriculture sector saw a progressive decline from 1990 to 2005,

followed by a sharp increase in the 2006 09 period when the budget jumped to US$188.6 million from

US$22.2 million. After a similar decline, the development budget started increasing during the 2000

05 period, possibly as a consequence of the depreciation of the Kwacha in 1998 and investments in

safety-net programmes, but subsequently tripled during the 2006 09 period. This striking increase in

agricultural spending since 2005/06 is largely attributable to FISP, which is currently classified under

the recurrent account.

27 Sources: GoM (2001) and Njiwa et al (2008).

0

2

4

6

8

10

12

14

16

18

20

Pe

rce

nta

ge s

har

e o

f b

ud

get

Years

Agriculture share % AU NEPAD Target



Table 10. Agricultural sector government spending trends, 1990 2009.

Indicators 1990 94 1995 99 2000 05 2006 09

Agriculture share in budget (%) 11 9 6 16

Agriculture budget ($m) 41.9 36.1 37.5 233.1

Recurrent budget ($m) 30.6 26.6 22.2 188.6

Development budget ($m) 11.3 9.5 15.3 44.5

Agriculture spending/capita ($) 4.8 3.5 3.2 16.3

From 1999/2000 to 2006/07 the government was responsible for at least 70% of total spending on

agriculture, leaving donors with less than 30% largely supporting the development budget.

Table 11. Agricultural budget by subsector, 1999/2000 to 2006/07.

99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07

Development budget

(government)

Agriculture 95

17 87 42 328 266 1,010

Forestry 3 1 3

41 40 50 37

Fisheries 9 2 2 49 20 35 4 16

Total 107 3 23 136 103 403 320 1,063

Development budget (donor)

Agriculture 479 360 159 687 547 244 2,089 4,805

Forestry 38 100 50 1 101 802

Fisheries 46 69 114 84 134 175 178 257

Total 563 529 323 772 781 1,221 2,267 5,062

Development budget (total

agriculture, forestry, fisheries) 670 532 346 908 885 1,624 2,587 6,125

Recurrent spending

Agriculture 482 568 937 1,679 1,482 4,345 15,247 15,230

Forestry 33 45 50 106 62 100 119 142

Fisheries 183 227 273 336 381 441 557 526

Total 697 840 1,259 2,121 1,924 4,886 15,923 15,897

Total development budget (real) 1,278 778 403 908 810 1,322 1,824 3,782

Total recurrent spending (real) 1,331 1,228 1,469 2,121 1,762 3,976 11,230 9,815

Exchange rate (MK:US$1.00) 44.1 59.6 72.2 76.7 97.4 109.0 118.5 136.0

Deflators 544.8 711.2 891.7 1,039.8 1,135.9 1,277.9 1,474.4 1,684.1



Agriculture (crops/livestock) accounts for the largest share of total spending for the sector. The

crops/livestock function includes administrative and support services; extension and extension-

management services; nutrition and food security, including subsidies; land and water management

services, including irrigation; and research and technology generation and development. This is a

major area of spending on agriculture, with an average of 79% of total spending from 1999/00 to

2006/07 in cash terms and up to an average of 87% in real terms.

Table 12. Annual programme spending, 1999/2000 2006/07.

Annual spending Real growth rates

99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 99/00

03/04

03/04

06/07

Administration and

support

756.8 678.3 477.1 922.7 671.6 603.5 1,125.5 4,971.6 -19.20 150.00

Agricultural extension 174.9 158.5 255.1 563.4 634.3 797.0 907.8 2,239.6 14.80 46.00

Nutrition and food

security

52.1 2,877.6 13,099.0 22,841.0 84.00

Land and water

management

31.4 44.7 267.7 721.2 566.4 407.1 2,134.5 482.1 71.50 -5.20

Research and

technology

92.5 46.5 112.2 245.4 146.0 232.2 335.0 510.1 -6.70 29.10



Annex 3: Overview of ARD&FS policy framework over last 2

decades National development policies/strategies ARD&FS policies/strategies Key policy actions28

1987 94 After experiencing a major economic crisis at the end of the 1970s, Malawi embarked on a series of structural adjustment programmes (SAPs),

under the auspices of the International Monetary Fund (IMF) and the World Bank. The required structural reforms included the liberalisation of

the agricultural sector, price decontrol, parastatal sector reform, privatisation, trade liberalisation, financial-sector reform, exchange-rate

liberalisation, interest-rate liberalisation and the rationalisation of the budget. The direct government involvement in agricultural development

since independence was called into question and systematically reversed during this period.

Second Statement of Development Policies (DEVPOL) (1987 96) Government set out a blueprint to revive

agricultural growth through investment,

extend services to smallholder growers and

make the agricultural sector more resilient

to external shocks.

Building upon the National Rural Development

Programme, but taking into account the structural

adjustment measures, DEVPOL spelt out the

downscaling and ultimate removal of farm-input

subsidies, as well as the liberalisation of input and

output markets to allow the private sector a role

alongside

Marketing Corporation (ADMARC).

The government also planned to double access to

seasonal credit for smallholder farmers through the

Administration

(SACA) service, later the Malawi Rural Finance

Company (MRFC), which built a link between credit

service and technical extension.

• Removal of preferential lending to the agricultural

sector (1990)

• Liberalisation of agricultural marketing services

(output 1987, input 1990)

• Liberalisation of the prices of some agricultural

produce (1988)

• Creation of the Smallholder Farmer Fertiliser

Revolving Fund of Malawi (SFFRFM) in 1988

• Removal of fertiliser subsidy (1991)

28 Adapted from Chirwa et al. (2008).



National development policies/strategies ARD&FS policies/strategies Key policy actions28

1995 2004 This period was marked by the advent of multiparty democracy in Malawi. It was also essentially the aftermath of the structural adjustment

period, as most major reforms in the economic sectors had been completed by then. The shared realisation of the failures of these reforms

eventually led to a renewed focus on poverty alleviation and social safety nets.

Poverty Framework for the Poverty Alleviation Programme (PAP) was

instituted in 1994 as the main strategy for

addressing poverty in Malawi. PAP

emphasised the need to raise national

productivity through sustainable broad-

based economic growth and sociocultural

development. Some of the notable projects

under PAP included: Free Primary

Education, Malawi Social Action Fund

(MASAF) funded Community Projects,

European Union (EU) Micro-Projects and a

presidential Health Initiative.

Vision 2020

democratically-mature, environmentally

sustainable, self-reliant with equal

opportunities for and active participation by

all, having social services, vibrant cultural

and religious values and a technologically-

driven middle- .

Pillars: (i) good governance; (ii) sustainable

economic growth and development; (iii)

vibrant culture; (iv) economic

infrastructure; (v) social sector

development; (vi) science and technology-

Agricultural and Livestock Development Strategy and Action Plan (ALDSAP 1995) aimed at

• accelerating a broad-based agricultural and rural

development programme to reduce poverty and food

insecurity among the poor and vulnerable groups

• expanding and diversifying agricultural and livestock

product exports and raising farm incomes

• promoting growth and sustainable utilisation of natural

resources

Under ,

the specific strategic areas include: (i) Increasing food crop

production; (ii) developing the livestock subsector; (iii)

irrigation development; (iv) improving market efficiency; (v)

improving land utilisation and management; (vi) reducing

post-harvest losses; (vii) improving disaster management;

(viii) promoting off-farm income-generating activities; (ix)

economic empowerment of vulnerable groups; (x)

improving policy analysis.

Under

Environmental Management Pillar, the specific strategic

areas include: (i) controlling land degradation; (ii) arresting

• Removal of restrictions preventing

smallholder farmers from producing and

marketing high-value export crops, in

particular burley tobacco (1995)

• Privatisation of state-owned enterprises since

1996

• Liberalisation of all crop prices, except maize,

and introduction of maize price band (1996),

which was then eliminated in 2000

• Creation of independent National Food

Reserve Agency (NFRA) to oversee strategic

grain management (1999)

• Malawi Social Action Fund (MASAF) initiated a

public works programme (cash-for-work) in

food insecure areas as a safety net

• Agricultural input support programmes for

smallholder farmers

- Starter pack provided free inputs to

resource poor farmers from 1998 to 2000

- Agricultural Productivity Improvement

Programme provided inputs on credit to

farmers (1998)

- Targeted Input Programme (2000) provided

free inputs (fertiliser, cereal and legume

seeds) to targeted resource-poor farmers,

namely elderly, widows/widowers and

households supporting orphans




led development; (vii) fair and equitable

distribution of income and wealth; (viii) food

and nutrition security; and (ix) sustainable

natural resource and environmental

management

Malawi Poverty Reduction Strategy (MPRS 2002 05) aimed to provide an

overarching strategy for multi-sector

interventions towards the common aim of

reducing poverty through socio-economic

empowerment.

Pillars: (i) sustainable pro-poor growth; (ii)

human capital development; (iii) improving

the quality of life of the most vulnerable;

(iv) good governance.

Cross-cutting issues: HIV/AIDS, gender and

empowerment; environment; science and

technology.

deforestation; (iii) controlling and preventing depletion of

water resources; (iv) developing fisheries; (v) developing the

wildlife sector; (vi) restoring and conserving biodiversity;

(vii) developing human settlements; (viii) climate and

pollution; (ix) poverty and population; and (x) political

advocacy and natural resources.

Under the MPRS Sustainable Pro-poor Growth pillar,

there are the following ARD&FS-related objectives and

strategies:

Increase agricultural incomes

(i) Expand and strengthen access to agricultural inputs; (ii)

improved agricultural production through improved

agricultural research and extension services; (iii) improved

access to domestic, regional and international markets; (iv)

promote small-scale irrigation schemes and drainage; (v)

encourage production specific crops; (vi) encourage

production of livestock; (vii) reduce land shortage and

degradation; (ix) promote and expand farmer

mechanisation; (x) reduce weaknesses in institutional and

policy framework; and (xi) reduce gender disparities,

HIV/AIDS infections and effects in the agriculture sector.

Encourage the sustainable utilisation of natural resources, namely (i) fisheries resources; (ii) forestry

resources; and (iii) wildlife resources.

2005 10 This period builds on the poverty reduction approach, but represents a shift from social consumption to sustainable economic growth and

infrastructure development. There is a pronounced re-prioritisation of agriculture and food security through maize self-sufficiency and

government intervention, as well as key role for private sector in economic growth.

Malawi Economic Growth Strategy (2004 06) to

create an overall macroeconomic environment

A New Agricultural Policy (2005): sought to fulfil

the mandate of the Ministry of Agriculture and Food

• Farm Input Subsidy Programme (FISP)

introduced since the 2005/06 season as a




conducive to broad based GDP growth of at least

6% per annum that is sustained over a long term,

through stimulation of investment in the five high-

growth subsectors (agroprocessing; mining;

cotton; textile/garments; tourism) while

concentrating on certain core subsectors (tobacco,

sugar, cotton, tea, maize and cassava) coupled with

a focus on facilitating domestic and international

trade.

Malawi Growth and Development Strategy (2006 11) is the overarching operational medium-

term strategy for the transformation of the country

from being predominantly importing and

consuming to a manufacturing and exporting

economy.

Priorities: (i) Agriculture and food security; (ii) irrigation and

water development; (iii) transport and

infrastructure development; (iv) energy generation

and supply; (v) integrated rural development; and

(vi) prevention and management of nutrition

disorders and HIV/AIDS.

Themes: (i) Sustainable economic growth; (ii) social

protection; (iii) social development; (iv)

infrastructure development; and (v) improving

governance.

Security, namely to promote and facilitate

agricultural productivity so as to ensure food

security, increase incomes and create employment

opportunities through the sustainable management

and utilization of natural resources, adaptive

research and effective extension delivery system,

promotion of value-addition and agribusiness and

irrigation development.

Immediate objective: ensure that the country has

adequate maize within the next two years. Agricultural Development Programme (2008 11), now Agriculture Sector Wide Approach (2010 14) is

framework aimed at achieving an annual agricultural

growth rate of 6%.

Focus areas:

(i) Food security and risk management; (ii)

commercial agriculture, agroprocessing and market

development; and (iii) sustainable agricultural land

and water management

Key support services: (i) Technology generation and dissemination; and (ii)

Institutional strengthening and capacity building.

Cross-cutting issues: (i) Gender equality and (ii) HIV prevention and AIDS

impact mitigation.

nation-wide fertiliser and seed subsidy

scheme, targeting between 1.6 and 2.8

million farmers per year through a voucher-

based system



Annex 4: Tables with detailed aid data29

Table 13. Total aid to ARD&FS by sector definition in constant 2000 US$, 1990 2008 (million US$).

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total

DAC AFF const 116 102 52 132 35 18 22 42 68 35 41 10 22 20 43 80 48 41 66 994

DAC AFF+ const 126 110 216 164 48 57 59 52 105 70 68 50 66 63 104 158 106 85 120 1,827

ARD&FS const

value

133 104 219 171 63 72 74 55 132 76 81 52 68 64 111 189 117 95 142 2,018

Table 14. Aid to ARD&FS by area in constant 2000 US$, 1990 2008 (million US$).

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total

Agricultural production, processing and marketing

Agricultural policy,

administration and

development (incl.

agrarian reform and

alternative development)

104 67 27 128 9 9 9 19 45 23 9 8 10 3 24 63 30 6 42 635

Agricultural extension and

training

0 1 10 0 0 3 0 1 15

Agricultural marketing,

storage and transportation

0 0 7 0 8

29 This annex is based on data extracted from AidData (http://www.aiddata.org/home/index) in March 2010.

http://www.aiddata.org/home/index



1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total

Agricultural production

inputs

0 4 0 15 5 4 4 2 5 4 0 0 0 1 2 3 50

Agricultural research and

plant and animal health

8 8 2 0 1 2 1 0 1 1 0 5 0 2 0 31

Banking and financial

services

1 0 1 3 0 0 0 0 0 0 0 0 0 0 0 7

Business support services 2 1 0 0 0 2 0 0 0 0 0 1 13 0 20

Fishing policy,

development,

education/training,

research and services

2 3 2 1 0 7 1 0 0 14 1 5 1 0 0 37

Food crop production 0 0 2 0 0 4 0 0 0 1 5 0 13

Forestry policy,

development,

education/training,

research and services

3 12 12 1 0 6 1 2 2 7 0 8 1 11 0 0 0 1 67

General budget support 5 1 1 4 10 12 15 3 26 6 20 1 1 6 18 8 7 17 159

Industrial and export

commodities

2 2 3 1 0 0 0 0 0 0 1 7 6 23

Natural resource

management (land and

water)

3 7 3 0 3 17 10 0 0 0 2 7 4 12 1 12 82

Support to NGOs 0 0 0 0 0 0 0 0 0 1

Trade policy and

facilitation

0 0 0 0 0 0 0 0 0 0 0 0 0 0 1

Rural socio-economic development

Rural development 1 2 30 1 1 23 2 4 2 1 18 8 10 25 19 2 12 0 162

Food-security

programmes

2 7 159 2 11 38 14 7 30 32 25 22 22 29 36 44 49 26 52 606



1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total

Non-agricultural


0 0

Emergency relief and welfare

Basic nutrition 2 0 0 1 0 0 0 8 1 1 3 17

Emergency food aid 7 1 3 2 1 0 2 0 0 1 14 3 0 14 7 6 2 64

Material relief assistance

and services (agricultural

share)

1 2 2 1 1 1 0 0 0 0 0 0 1 1 0 4 0 0 0 16

Social mitigation of

HIV/AIDS

1 2 0 1 4

Total 133 104 219 171 63 72 74 55 132 76 81 52 68 64 111 189 117 95 142 2018



Table 15. Aid to ARD&FS by type of flow in constant 2000 US$, 1990 2008 (million US$).

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total

Grant 34 74 63 29 52 68 68 44 75 63 74 38 66 53 82 138 97 85 114 1,317

Loan 3 0 17 8 5 13 13 0 7 7 0 75

OOF 2 0 2

Equity 0 0 0 0 0 0 1

Blank 96 30 156 125 2 4 1 11 44 13 7 0 0 11 29 44 19 3 28 624

Other 0 0 0 0 0

Total 133 104 219 171 63 72 74 55 132 76 81 52 68 64 111 189 117 95 142 2,018



Figure 16. Share of types of flows in total aid to ARD&FS, 1990 2008 (%).

65%

31%

4%

0% 0%

0%

Grant

BLANK

Loan

OOF

Equity

Other



Table 16. Main donors to ARD&FS, 1990 2008 (million US$).

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total

1 World Bank (IDA &

IFC)

92 7 147 84 1 0 1 1 10 0 0 0 0 0 29 38 0 1 26 436

2 European

Commission

4 7 1 9 11 28 41 7 15 34 19 18 16 0 48 55 31 18 16 379

3 United States 1 34 1 7 15 9 10 9 11 11 18 8 23 13 10 17 20 26 21 265

4 United Kingdom 4 16 18 3 9 16 4 1 20 7 14 5 17 27 16 25 16 10 34 264

5 African Development

Fund

4 20 8 41 0 10 34 13 1 0 0 11 0 0 19 2 0 163

6 Japan 14 5 14 10 17 10 9 21 12 2 4 0 0 7 4 5 11 6 8 160

7 Norway 1 8 0 0 0 0 0 1 1 1 3 3 4 2 1 20 9 14 14 81

8 IFAD 17 13 13 7 7 57

9 Germany 7 18 0 0 1 2 1 5 5 1 2 2 1 1 3 2 1 2 51

10 Canada 0 0 4 0 6 0 1 2 5 1 12 0 0 0 0 0 0 0 1 33

Top 10 donors 127 98 211 171 59 64 67 53 126 73 73 50 63 62 109 172 109 85 120 1,890

Grand total 133 104 219 171 63 72 74 55 132 76 81 52 68 64 111 189 117 95 142 2,018



Figure 17. Aid flows to ARD&FS from Germany, the United Kingdom, the United States and the World Bank, 1990 2008 (million US$).

0

20

40

60

80

100

120

140

160

180

200

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

World Bank

US

UK

Germany



Table 17. USAID Malawi commitment and disbursement data, 2001 to 2009 (US$).

Agriculture

sector and

enabling

environment

Private

sector and

trade

Environmen

t

Disaster

readiness

Total economic

growth

2001

Commitment 6,733,038 1,775,751 1,600,000 10,108,789

Disbursement 6,726,075 1,751,767 1,600,000 10,077,842

Balance 6,962 23,985 30,947

2002

Commitment 6,189,070 3,659,925 4,528,000 14,376,995

Disbursement 6,189,070 3,659,848 4,528,000 14,376,918

Balance 77 77

2003

Commitment 5,543,373 972,000 5,305,260 11,820,633

Disbursement 5,538,893 972,000 5,302,519 11,813,412

Balance 4,480 2,740 7,220

2004

Commitment 5,266,032 6,063,358 2,223,635

1,604,132

15,157,158

Disbursement 5,266,032 6,063,356 2,112,981

1,517,952

14,960,321

Balance 2 110,654 86,181 196,837

2005

Commitment 5,379,682 3,691,573 5,159,526 451,992 14,682,773

Disbursement 5,379,364 3,675,146 5,038,055 451,992 14,544,557

Balance 318 16,427 121,471 138,216

2006

Commitment 4,270,414 1,696,823 5,214,924

1,212,388

12,394,549

Disbursement 4,099,187 1,681,799 4,932,051

1,195,061

11,908,099

Balance 171,226 15,024 282,873 17,327 486,450

2007

Commitment 3,359,661 1,354,087 1,709,087 398,000 6,820,835

Disbursement 2,050,127 1,316,704 1,691,371 327,921 5,386,123

Balance 1,309,534 37,383 17,716 70,079 1,434,712

2008

Commitment 2,884,000 1,435,000 3,155,000 7,474,000

Disbursement 1,408,428 783,629 2,731,504 4,923,561

Balance 1,475,572 651,371 423,496 2,550,439

2009

Commitment 3,144,000 1,697,000 3,324,000 80,000 8,245,000

Disbursement 1,901,483 2,027,925 80,000 4,009,408

Balance 1,242,517 1,697,000 1,296,076 4,235,592



Annex 5: List of key informants interviewed Name Organization/ministry/department Position/title

Cybill Sigler USAID Team Leader for Economic Growth

USAID Budget Specialist, Programme Office

Chinkunda Archangel USAID M&E Specialist, Programme Office

Sarah Hennell DFID Team Leader for Growth and Resilience

Blessings Botha Irish Aid Agriculture & Food Security Advisor

Anne Conroy Irish Aid DCAFS Coordinator

Neil Orchardson Joint Food and Nutrition Security Taskforce Technical Secretariat

Genschers Chisanga Joint Food and Nutrition Security Taskforce Technical Secretariat

Pinit Korsieporn FAO FAO Resident Representative

Alick Nkhoma FAO Assistant Representative

Rosebell Mbamba FAO Food Security Coordinator

Ali Twaibu Debt and Aid Management Division, MoF Assistant Director

Aaron Batten Debt and Aid Management Division, MoF Economist

Nations Msowoya Debt and Aid Management Division, MoF Assistant Director

Mark Miller Budget Division, MoF Economist

Tithokoze Samuel Budget Division, MoF Economist

Zex Kalipalire PSIP Unit, MoDPC Economist and Desk officer for Agriculture

Edwin Kanyoma Planning Department, MoAFS Principal Economist

Sarah Tione Planning Department, MoAFS Economist

Uta Borges GIZ Country Director

George Mwepa Department of Irrigation, MoIWD Deputy Director



Name Organization/ministry/department Position/title

Tamani Nkhono-Mvula Civil Society Agriculture Network Policy Analyst and Acting National Coordinator

Marita Sorheim-Rensvik Norwegian Embassy First Secretary, Agriculture and Environment Attaché

Francis Sakala Ministry of Local Government and Rural Development Chief Rural Development Officer

Walusungu Kayira Ministry of Local Government and Rural Development Economist

Alfred Nyasulu IFAD National Coordinator

Hardwick Tchale World Bank Senior Agricultural Economist

Toshihide Yoshikura JICA Project Formulation Advisor (Agriculture and Rural

Development)

Vincent Mkandawire JICA Aid Coordinator (Agriculture)

Reinford M. Manda JICA Programme Officer

John Phiri M&E Unit, MoDPC Chief Economist

S. Mulungu M&E Unit, MoDPC

Felix Pensulo Phiri OPC, Department of Nutrition, HIV and AIDS Deputy Director for Nutrition, HIV and AIDS

Humphrey A.J. Mdyetseni OPC, Department of Nutrition, HIV and AIDS Deputy Director of Planning, Research and Evaluation

Enrica Pellacani Delegation of the European Union Counsellor Head of Section, Rural Development and Food

Security

Vinda H.L. Kisyombe African Development Bank Agricultural Economist

Abdi Edriss Bunda College of Agriculture Lecturer

Ian Kumwenda Agriculture and Natural Resources Management

Consortium (ANARMAC)

Senior Consultant

(Former Director of Planning at the MoAFS)

John Ngalande Department of Forestry, MoNREE Deputy Director

Nyuma Mughogho Department of Forestry, MoNREE Assistant Director

Francis Chilimampunga Department of Forestry, MoNREE Assistant Director

Ernest Misomali UNDP Assistant Resident Representative for Capacity Development

Peter Kulemeka UNDP Programme Analyst, M&E



Name Organization/ministry/department Position/title

Clement Phangaphanga Ministry of Industry and Trade Deputy Director of Industry

Christina Zakeyo Chatima Ministry of Industry and Trade Deputy Director of Trade

Alla J. Chiyembekeza National Assembly Member of Parliament (Thyolo South West) and Chair of

Parliamentary Committee on Agriculture and Natural Resources

Richard Chiputula Malawi Economic Justice Network Director of Programmes

Ranil Dissanayake Formerly with Debt and Aid Division, MoF Economist

Mwendo Phiri World Vision International Senior Agricultural Officer



Annex 6: Format used to report to MoF on ODA (GoM, 2010b) Please read explanatory notes BEFORE completing this template

Donor / Multilateral Partner

Name:

Currency:

All completed projects for which the final disbursement has been made and reported to Ministry of Finance should be removed from the template.

Aid Category / Project Name

Primary

Location

(List all

relevant

Districts)

Donor

Project

Code

Total

Donor

Fundin

g

Project Period Project

Status Date

Agreemen

t Signed

Date of

Project

Effectivenes

s

Date of Original

Planned

Completion

Date of

Revised

Planned

Completio

n

Date of

Actual

Completio

n

1) Budgetary Support (BOP)

General Budget Support

Sector Budget Support

2) Pooled Funds

3) Project / Programme specific

funding



Total Grants

Total Loans

Total Disbursements (1+2+3)

4) Pipeline projects

Aid Category / Project

Name

Terms of

funding

(Loan or

Grant)

Included in

2009/10

Budget?

Implementi

ng Agency Sector

Name of Non-

Governmental

Implementing

Agency (if

applicable)

Are

Governmen

t PFM

Systems

Used?

Are

Government

Procurement

Systems

Used?

Is the Funding

Administered

by a PIU?

1) Budgetary Support

(BOP)



2) Pooled Funds

3) Project / Programme

specific funding

Total Grants



Total Loans

Total Disbursements

(1+2+3)





Name

Actual

Disbursement

s Prior to June

2008 (for

active

projects)

Total Actual

Disbursements

2008/09 (for active

projects)

Projected disbursements 2009/10 Quarterly Actual disbursements Q1 of 2009/10

Q1 Q2 Q3 Q4 July August

Septembe

r

Q1


(BOP)



2) Pooled Funds


specific funding

Total Grants

Total Loans

Total Disbursements

(1+2+3)




Aid Category / Project Name

Actual disbursements Q2 of

2009/10


2009/10


2009/10

Projected

disbursements 2010/11

Quarterly

Oct Nov Dec Q2 Jan Feb Mar Q3

April May

June Q4 Q1 Q2 Q3 Q4

1) Budgetary Support (BOP)



2) Pooled Funds


specific funding

Total Grants

Total Loans

Total Disbursements (1+2+3)





Name

Actual disbursements Q1

of 2010/11

Actual disbursements

Q2 of 2010/11

Actual disbursements Q3

of 2010/11 Total

Disbursed

from

Inception to

Date

Projected

Expenditu

re

2010/11

Projected

Expenditur

e 2011/12 Jul

Aug

Se

p Q1 Oct Nov Dec Q2 Jan

Feb

March Q3


(BOP)



2) Pooled Funds


specific funding

Total Grants

Total Loans

Total Disbursements

(1+2+3)




Annex 7: Templates used to register or

update a project in the PSIP database30

30 GoM (2010c).



Template to register project



Template for finance and status update



Annex 8: Reporting format used to report

to MoAFS database FIELDS IN THE DATABASE

** Sector Code

Project Title

Donor/Lender

Partner

Total Cost

Currency used (Euro, Pound Sterling, Canadian Dollar,

US Dollar, Australian Dollar, Malawi Kwacha, Swedish

Krona)

Total disbursement to date

Approval Date

Project funding type (Loan/ Grant/Co-funding)

www address for Implementing Agency

Name of Implementing Agency

Telephone for Implementing Agency

Fax for the Implementing Agency

Project Email

Project Address

District and Traditional Authority Coverage (e.g.

Lilongwe, TA Chadza; Nsanje, TA Malemia)

Targeted Beneficiaries (Households e.g. male headed,

female headed & child headed households)

Targeted individuals (e.g. no of male, no of females, no

of children)

Targeted Group (e.g. Rural Farmers, Smallholder

farmers, Women, Orphans etc)

Components

Objectives

Planned Project Outputs

Indicators

Start Date

Completion Date

Prepared by:Platform Secretariat

Published by:Global Donor Platform for Rural Developmentc/o Federal Ministry for Economic Cooperation and Development (BMZ)Dahlmannstraße 4, 53113 Bonn, Germany

Study conducted by:Overseas Development Institute, London

Authors:Michelle Remme

Photo credits:www.istock.com/Günter Guni/skyhouse; www.fotolia.com/africa/Ivan Gulei/lulú;www,pixelio.de/hjördis Kozel/Rauner Sturm

August 2011

pkp2_understanding aid to ard and food security: malawi

Documents