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Putting CDF package increment in perspective

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Sosten Gwengwe

By Blessings Mbendera

There are indications that the 2022-23 National Budget which Finance Minister Sosten Gwengwe presented to Parliament two weeks ago is pro-poor.

For pointers, one has to think about the removal of Value Added Tax on essential commodities such as water and cooking oil.

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An icing on the cake is the proposed increment on Constituency Development Fund (CDF) package from the current K40 million to K100 million per constituency per fiscal year.

Gwengwe did not just announce the plans; he further indicated that CDF was a catalyst for sustainable national development.

This means the Central Government will set side about K19.3 billion for implementation of projects in 193 constituencies. The move can be described as a stitch in time since members of Parliament (MPs) have been agitating for this increment, citing the vastness of some constituencies as one of the factors justifying such a move.

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In line with decentralisation dictates, the proposed increment demonstrates the Central Government’s commitment towards meeting fiscal decentralisation goals, as enshrined in the 1998 Local Government Act and the Decentralisation Policy.

As such, putting K100 million on the table appears to be a reasonable gesture.

Not surprisingly, expectations are high that, once MPs pass the proposed national budget, all lawmakers will hit the ground running as they work towards meeting voters’ expectations.

On the flipside, increasing CDF allocation is one thing and ensuring that fruits of the increment trickle down to the common man or woman on the ground is quite another thing.

A critical retrospection of audit reports on CDF management since its inception in 2006 leaves a lot to be desired because, for the most part, public funds have been misused, meaning that there is little on the ground to show for the financial investment made over the years.

Reports, studies, audit reports by National Audit Office (Nao), public expenditure tracking interventions by non-State actors, as well as other investigative reports, have exposed shortcomings of CDF.

The first comprehensive audit report of CDF, which Nao did in 2011, exposed gross mismanagement of funds, so much so that K107 million could not be accounted for.

The report indicated that this was the case in such district councils as Salima, M’mbelwa , Karonga, Nkhata Bay, Mulanje and Phalombe.

This was the first red frag as far as mismanagement of CDF is concerned. Fast forward to 2017, when a Nao special audit report implicated 20 MPs in CDF abuse.

While reports of CDF mismanagement have been commonplace in councils, it appears that nobody cares to address identified problems.

This is despite that malpractices that have become entrenched in CDF management have been exposed, notably funds mismanagement by lawmakers, misappropriation of funds in local councils through unsanctioned transactions, poor workmanship, unfinished projects, limited local participation as well as political influence.

Minus positives in infrastructure development in some constituencies, one cannot talk of CDF without thinking about how some MPs have been bulldozing others during procurement processes. They, among other regrettable practices, impose their own preferred contractors and suppliers on council officials.

In fact, we cannot talk of CDF without recalling to mind issues such as poor workmanship and uncompleted small bridges and school blocks in our communities.

Indeed, a discussion on CDF cannot go without remembering how some council officials have used CDF allocations to finance chiefs’ installation ceremonies, for example.

Surely, a discussion on CDF cannot go without mentioning the issue of blame-games between MPs and local councils when reports of funds abuse emerge.

Then, there is the issue of dissatisfaction of Area Development Committee (ADC) members, who often cry foul over limited involvement in project conception and implementation stages.

The other worrisome issue is that of competition among people wherever parallel political structures are created as MPs and councillors eye the next election.

On paper, CDF is a good fiscal decentralisation opportunity for local people to benefit from the Central Government pulse but, practically, CDF can better be described as an alternative source of political financing for politicians, a tool that enables them to balance their competing political and development interests.

The only way to ensure that CDF becomes beneficial to the common man and woman is by addressing possible mismanagement concerns raised either by councils or MPs— who are key players in CDF management.

Increasing the CDF allocation can, if premised on good faith, be a welcome development, more so because countries such as Zambia, Kenya and the Philippines walked through the same path.

For this to happen, however, the role of MPs in managing CDF has to be reviewed. CDF guidelines are very clear on the oversight role of MPs in the overall management of CDF, yes; however, there is clear evidence that some lawmakers overstep their mandate by, among other things, shrinking the space of meaningful local participation by working with parallel political structures at the expense of legally recognised decentralised local governance structures, notably ADC members.

Some legislators have also been poking their noses into procurement processes, at times imposing local contractors and suppliers on council officials— leading to poor workmanship and the embezzlement of funds.

The recent case in Machinga South Constituency, where Lingoni Bridge in Traditional Authority Chamba collapsed even before its launch, is just a tip of the iceberg.

To make matters worse, district commissioners and chief executive officers— who are controlling officers— seem to be toothless in exercising their mandates against the interests of MPs.

Despite being accountable to Parliament and local votes, this vertical accountability mechanism seems to yield little fruits when it comes to MPs.

The situation is even more precarious at national level, where CDF has been used as a political tool for the appeasement of MPs who tow the government’s agenda. The 2006-07 national budget deliberations cannot be forgotten, where government used CDF as a bargaining tool for MPs to pass the budget.

Therefore, addressing CDF management anomalies requires steadfastness in balancing underlying vested interests of the governing party, which forms the government, MPs and ward councillors.

A call to revising CDF guidelines is good but not good enough. Experience has shown how ambitious and blessed the country is when it comes to crafting working documents, only for policymakers to fall by the wayside when it comes to implementation.

Since CDF is part of voted expenditure in the national budget, and is therefore regulated by Malawi Public Finance Management regulatory frameworks which include the Public Finance Management Act (2003), the Procurement Act (2003), the Audit Act (2003), and the Corrupt Practices Act (1995), it is imperative that, where the need arises, requisite laws be enforced.

That is to say bringing to book whosoever is implicated in CDF mismanagement would be a desirable path.

There is also a need to build the capacity of ADC members to address concerns that there is shrinking space for local participation in CDF management. This way, ADF members will fully understand their roles and responsibilities, thereby putting them in a position to provide checks and balances on council officials and MPs.

The other important area is to ensure that the Central Government lives up to its obligations, when it comes to funding Local Government institutions. It is unfortunate that, despite the requirement that the Central Government should be providing 5 percent to local councils, most councils receive no more than 2 percent, a self-defeating move BY the Central Government.

In the end, for the CDF allocation increment to work wonders, the Central Government must cede revenue from gambling, toll gates and many other income generating interventions that are still being controlled by its officials. It must also walk the talk on decentralisation and commit to provide councils with adequate resources and enhance their capacity for local revenue generation. If this is not done, CDF will continue to be abused and misused.

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