Government's Mismanagement of Public Contracts Costs Malawi K6 Trillion, Research Reveals

LILONGWE, Malawi - Malawian government criticized for poor public contract management, costing 6 trillion kwacha between 2012-2020, says research presented at ECAMA, Oxfam, and LUANAR symposium, writes Bridget Mwanoka.

Dr. Kennedy Machila, Associate Professor of Economics at LUANAR, presented the findings during the symposium held on Thursday, April 13, 2023, in Lilongwe.

Dr. Machila stated, "We have seen that for each and every contract that is being implemented, there is more or less a loss associated with it, be it that it has been completed on time, implying that the government is losing a lot in as far as how it is implementing various public contracts to support development initiatives."

ECAMA Secretary General Andrew Kumbatira echoed Dr. Machila's concerns, highlighting the gaps and weaknesses in the system that lead to the wastage of public resources.

"Basically, this research has tried to identify some of these weaknesses since it dug deep into public contract use, procurement, and management. It's sad to note that there are a lot of resources lost in the country due to mismanagement, we can talk of passport printing or even construction contracts, and there was this one contract whose initial price was K4 billion but the government paid K16 billion at its completion," he explained.

Alfred Nyasulu, Contract Management Advisor for the Government Contract Unit, applauded the findings, stating that they would help the government refocus on how to award and manage various contracts.

"The issues that are coming from this research are very vital, you can see that they have raised a number of issues that will make us rethink and refocus, for instance, they are raising the issue of regulating contract management in Malawi, and indeed they are raising the non-existence of a policy on contract management," he said.

The research findings also revealed that some public contracts suffer from abandonment due to the longevity of implementation arising from cash flow problems and non-committal disbursement of resources to support public contracts, thereby delaying the implementation of various projects and resulting in increasing project costs.

The consortium has recommended that the government consider reviewing local government policy and law, including guidelines to empower local council secretariats to effectively manage Local Development Fund (LDF) and CDF projects, as well as reviewing the least bidder evaluation approaches currently under implementation to select successful bidders.

The research symposium was part of the activities under a project called "Enhanced Evidence-Based Research to Inform Policy Decision Making in PFM," which is being implemented with support from the Delegation of the European Union to Malawi.