Govt clings to K43.7bn Gesd purse

Ministry of Local Government and Rural Development has stuck to its decision to centralise procurement under the final cycle of the World Bank-funded Governance to Enable Service Delivery (Gesd) project worth $25 million (about K43.775 billion). Ministry officials met representatives of National Local Government Committee (NLGFC) and Malawi Local Government Association (Malga), an umbrella body for Local Government Authorities (LGAs), on Tuesday where the issue was discussed. The meeting followed a January 22 2026 circular addressed to all district councils in which the ministry ordered that funds under Performance-Based Grant (PBG) Cycle Four will not be disbursed directly to councils as procurement will now be handled centrally.

Ministry of Local Government and Rural Development spokesperson Chimwemwe Njoloma, in a written response yesterday, said the decision was arrived at based on the unutilised $25 million under Gesd 1.0 Performance Based Front Cycle Four. She said: “This money is supposed to be returned to the donor if not utilised. If it is sent back to the donor, it jeopardises Gesd 2.0 project, worth $80 million [about K140.080 billion].

“The decision was made to procure equipment to unlock this $80 million, but also to end the Gesd 1.0 project on a good note. The councils will take part in identifying the items to be procured and this will be based on their indicative planning figures for 2025/26 financial year.” Malga executive director Hadrod Mkandawire said at the time of the circular on January 22, eight councils had signed contracts and these will not be affected. Said Mkandawire: “So in this case, if we are to go by the circular, the centre will procure for 20 councils.

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It is regrettable that despite engaging the government on the matter, it seems the decision is being motivated by other incentives other than efficiency and effectiveness.” He observed that it has taken the same government over two years to conclude procurement and distribution of motorcycles to local authorities under the same Gesd. “We are, therefore, of the view that the centralisation of the utilisation of the funds is simply entrenching inefficiencies other than addressing the challenges. We, therefore, urge the Government to seriously reconsider its position,” said Mkandawire.

Citizen Engagement Committee under Gesd chairperson Willy Kambwandira said the ministry’s insistence raises serious eye brows and accountability questions, arguing it undermines the very logic of decentralisation. But Njoloma insisted that the central government stands a better chance to find forex for procurement of this Cycle Four, which ends in June 2026. “If procurement is to be done by councils it may take long as they are required to upload all items to be purchased in the Step [Systematic Tracking of Exchanges in Procurement)], which is a World Bank procurement system,” she said.

Gesd is a five-year performance-based programme launched in 2021 and valued at $100 million (about K173 billion). The final cycle, running to June 30, is valued at $19.6 million (about K32 billion), with about $12 million (K20 billion) earmarked for procurement of furniture, solar installations and medical equipment.

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