Findings of a new study have pointed to the K5 billion Constituency Development Fund (CDF) allocation negatively impacting budget implementation and debt situation due to accountability challenges in local councils. Published by academic researcher Brian Kampanje, the research paper titled ‘Foresight of the impact of CDF on the Malawi’s sovereign debt and country’s development agenda’, the paper noted that K5 billion to each of 229 constituencies represents K1.145 trillion allocation which requires strong oversight. It says increasing allocation from K220 million or K42 billion to K5 billion or K1.145 trillion is a very delicate matter which must be evaluated with the impartiality it deserves as its impact on the sovereign debt and budget deficit can send more people into poverty through elevated inflation.
Reads part of the report: “The total CDF appropriation would only be the second biggest fiscal budget line after the public debt charges and would surpass the individual budgets of agriculture and food security, health and education. “This would require substantial motivation to the donors and development partners as why CDF should gain such prominence when there are a lot of negative records regarding the abuse, the corruption and wastages synonymous with the fund which the legislators are supposed to oversee but end up managing it.” The report which stressed that the proposed CDF can substantially harm the economy through the adverse impact on the national budget, sovereign debt and the budget deficit has since recommended the proposal to be deferred until further analysis. In a separate interview, Mzuzu University economics lecturer Christopher Mbukwa concurred with the study findings saying the existing technical gaps in local councils show that it is risky to allocate such huge sums of money.
He said: “The local councils have huge capacity gaps both in terms of numbers and expertise. There are high vacancy rates in most councils, and other posts are manned in acting capacities. “I would recommend that to enhance the efficiency and effectiveness of the programmes under the K5 billion CDF, there should be corresponding programmes to develop the capacity of councils in terms of training and recruitment of key positions such as procurement officers and engineers to supervise construction projects.
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“As regards to accountability, there are reports of fraud and corruption reported in most councils, more especially on CDF. We can’t afford to allocate such huge amounts to the programme and not close all the holes through which resources are wasted.” Meanwhile, Edward Leman, a University of Malawi economics lecturer said the fear is based on realistic concern but stating with certainty that the economy will be negatively affected solely on the basis of accountability challenges would be too radical. He said: “While the concerns being raised are valid, the situation can also be leveraged in a way that benefits the economy.
Managing resources at lower levels, if done properly, can actually enhance monitoring and evaluation and represents a step towards deepening decentralisation. “Beyond accountability challenges, the presence of appropriate incentives can significantly improve the management of these resources and lead to positive economic outcomes.” However in an interview, Malawi Local Government Association executive director Hadrod Zeru Mkandawire said although there are gaps in local councils they can easily be sealed and enhance their capacity to implement the CDF budget.
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