World Bank faults Tonse’s fertiliser subsidy in Malawi Economic Monitor: Calls for AIP review
World Bank has expressed reservations with the Tonse Alliance administration’s K60 billion Affordable Inputs Programme (AIP) , saying the flagship programme is not sustainable and advised the Malawi authorities to review it.
Tonse Alliance administration targets 4.2 million smallholder farming households will each access two bags of fertiliser weighing 50 kilogramme (kg) each at K4 495 per bag and five kg certified seed at K2 000 per pack.
In the K2.2 trillion National Budget, AIP is allocated K160 billion of the K245 billion allocation for the mainstay agriculture sector, representing a 78 percent increase from the K36 billion allocation in the terminated Fisp [Farm Input Subsidy Programme] .
But it its 12th edition of the biannual publication on Malawi, the Malawi Economic Monitor (MEM) which was virtually launched on Tuesday, the World Bank pointed out that the huge monetary costs “make it impossible” for government to sustain the subsidy programme amid limited resources.
Unlike Fisp which was using funds from donors to subsidise legumes’ prices, in the AIP arrangement government decided to focus much on cereals due to financial constraints.
The programme is leaning heavily on maize because it was Malawi’s staple grain.
“AIP has two important positive aspects, the use of an electronic system and the engagement of the private sector in marketing activities.
“However, the huge financial costs make it impossible for the government to maintain the scheme in future,” reads the World Bank report titled ‘Doing more with less; improving service delivery in energy and water states.’
The World Bank report comes following queries from the donor committee on agriculture over the efficiency of AIP.
In its latest Rapid Credit Facility (RCF) Report on Malawi, the International Monetary Fund ( IMF ) proposed reforms to enhance the programme’s efficiency and effectiveness.
national Association of Smallholder Farmers in Malawi (Nasfam) chief executive officer Betty
Chinyamunyamu on is on record saying, her association appreciated that for this year, there was not enough time or extensive consultations to ensure robust planning for AIP.
But she expressed hope that government will start engaging various stakeholders to address critical issues such as crop choices, insurance for the programme, registration of beneficiaries and implementation.
Recently, Nasfam, through its consultants, recommended to Capital Hill to consider re-allocating resources from low impact programmes within the agriculture sector such as the AIP, to other high impact programmes which are underfunded such as livestock, research and extension services.
President Lazarus Chakwera said when he launched the AIP that the scheme is an injection that would drive and transform the country’s economy.
Former president Bingu wa Mutharika, whose government initiated Fisp in 2005, faced similar reservations and criticism from the IMF and the World Bank when he rolled out the programme to boost food security. However, he defied them and proceeded to implement the programme
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World Bank calm down. They have increased cooking oil and fuel prices and probably many more issues are coming. This will fund all subsidies. My Malawi my painful testicles
The function of World Bank is to assist in financing at a fee (interest) the projects that a government sees fit for its development agenda. And therefore has no mandate to advise government otherwise as it would be questionquestioning a government policy which would have been taken after consideration of all related issues.
About implementation, it was all logistical in appropriateness use of IT system which unfortunately has received praise from the Bank. The use of IT system that depends on Internet connectivity does not make sensense considering the connectivity status of Malawi
Ooh…..By the way, about 50% AIP contractors were sub-contractors (amateurs) with poor capacity and too naive to handle such huge task. Lesson learnt, next time a reasonable percentage of the contracts should be allocated to main contractors with adequate capacity and experince to deliver on time……awooh
WORLD BANK, THATS IS TRUE, I WANTED TO BUY FERTILIZER AND SEEDS AND I WAS TOLD THAT I BUY THESE SEPARATE.AFTER BUYING FERTILIZER,I WENT TO BUY SEEDS AT ANOTHER DEPOT WHERE I WAS TOLD IT SHOWS THAT I HAVE BOUGHT THE ITEMS ALREADY, I URGUED BUT IT FAILED, SUCH MIX UP IS NOT GOOD MR AGGRIC MINISTER SHAME
Tonse alliance did not do the assignment right.In the modern dayveconomy sustainability is key.
There is need to revisit the programme and come up with something that is good for Mw.
Apa Chilima ndi abusa anapanga phuma by not involving ma economists.