Edward Leigh MP, Chairman of the Committee of Public Accounts, said:
"It is difficult to judge whether the Department for International Development has spent UK public money efficiently in Malawi.
"The Department doesn’t have the reliable and up-to-date information, together with robust targets, needed to assess the performance of its aid programmes and to find out how they could be improved.
"The money being spent on alleviating poverty in this poorest of nations is no doubt having some good effect but that is to say nothing about whether key programmes are achieving value for money. A better structure for monitoring results and measuring efficiency is badly needed.
"Action by DFID must also include working to improve the quality of Malawian governance and audit, a central issue given that much of the aid programme is provided in the form of budget support to the country’s government systems.
"It must make greater use of the influence it has with the Malawian government, given the large contributions it makes, to challenge policies or practices which are not cost-effective. And, where the Malawian government breaches agreements on the delivery of aid, DFID cannot risk weakening its influence by a dilatory response.
"The Department should also work with the Government of Malawi on a strategy for an exit from providing subsidies to local farmers, in favour of finding long-term, sustainable solutions to food insufficiency."
Mr Leigh was speaking as the Committee published its 8th Report of this Session which examines whether the Department for International Development (the Department) has made good choices in Malawi, whether it has the information it needs to improve implementation of the programmes it helps to fund, and whether it is driving improved outcomes.
The overall aim of the Department is to reduce poverty in poorer countries. Malawi is one of the poorest countries in the world. The Department provided £312 million to Malawi between 2003–04 and 2007–08, rising to a planned £80 million by 2010–11.
The PAC report added Department has contributed to progress in Malawi’s development since 2003, such as reduced hunger and substantially improved capacity in the health system. And its programme complies with many internationally-agreed good practices. But the Department needs better measures to assess its contribution to Malawi’s progress, and evidence of the value for money of its spending in Malawi is hard to find.
Much of the Department’s programme is routed through the Government of Malawi’s systems. The Department funds governance and scrutiny processes, but these are not yet fit for purpose. The Department needs to do more to strengthen governance in Malawi if it is to continue support through Government systems, the report said.
The PAC added that the Department’s ability to drive improvement in the programmes it funds is limited by weaknesses in the information it has on their implementation and results, and not helped by a weak set of targets for its own performance. The Department has invested in improved data in Malawi, but data on the results or the efficiency of many of the programmes it funds remain weak.
There are opportunities for the Department to drive improved value for money from the services it helps to fund in Malawi through quicker and more robust responses to emerging issues and results, the report adds.
Across its network since 2004 the Department has faced the challenge of disbursing steeply rising amounts of aid with fewer staff to oversee it, as a result of cuts in its administration budget set by the Treasury. The Department has cut staff numbers in Malawi, and we question whether current staffing is sufficient.
Areas where the Department needs to raise its game to demonstrate cost-effective aid management require more work at the sharp end, not less, the report concludes.