Tracking Aid Flows in Malawi: Experiences, Challenges and the Way Forward

21st October 2009Hague, Netherlands

Contents

This presentation explains how Malawi begun aid monitoring and reporting in the interest of improved resource management. Specifically, we look at:

• why we collect aid data

• how we collect the data, and the analyses we undertake

• the challenges we have encountered

• our vision for the future

Why collect data?

• Ministry of Finance began collecting information on aid inflows to Malawi in December 2005. Prior to this, only debt data was held

• The Ministry of Finance consulted with users and providers of data before designing a reporting format in excel which included all information related to donor financing (amount committed, relevant dates, currency and amounts, disbursements etc)

• Information was initially collected to:• Monitor the prevailing macroeconomic programme (PRGF)• Provide a basis for project monitoring• Improve budget comprehensiveness

Why collect data?

• As data collection and analysis improved, we did more:• Annual reporting on aid inflows by sector, national development

strategy theme, donor, modality etc.• Quarterly project monitoring reports and Aid Atlas production• Calculate indicators of aid effectiveness and dependence:

predictability, use of national systems, use of PBAs, % of budget• Promote sector-led aid effectiveness reviews as part of national

reviewing process of the Malawi Growth Development Strategy

The Evolution of Data Collection

• Due to the complexity of handling large volumes of aid information using excel spreadsheets, the Government of Malawi decided to adopt a comprehensive AIMS

• In 2008, with funding from UNDP, the Government adopted the Aid Management Platform (AMP), which is a user-friendly web-based system for tracking aid inflows.

• AMP has facilities for tracking the financial flows in donor funded programmes as well as the physical implementation progress.

• It also has a facility for generating customized reports on aid management depending on the needs and requirements of the user.

• The main attraction of the AMP, however, was our ability to request changes to the system to improve its fit to Malawi’s specific needs

Why AIMS was adopted

• AIMS can support poverty reduction through efficient aid delivery as follows: Facilitate decision making on the allocation of resources by

providing an overall picture of aid flows;

Assist in identifying funding gaps, alerting both the Government and donors on the financing needs;

Support the national strategies and MDGs by making information relative to flows contributing to the specific indicators

Support national PFMS by interfacing with the national budget;

Improving aid predictability through multi-year programming;

Foster transparency and accountability by recording and tracking projects and financial flows.

Data Collection Formats

• The Ministry of Finance consulted with users and providers of data before designing a reporting format (screenshot overleaf).

• Key elements:• All support is reported on, including to NGOs and self-administered• Annual projections are provided prior to the FY for all funding

streams, quarterly projections for pooled funding, SBS and GBS• Actual disbursements are tracked on a monthly basis• Technical Assistance should be reported separately

• Data requests to donors are made on a monthly basis

Data Collection Format

Q1 Q2 Jul-07 Aug-07

1) Budgetary Support (BOP) (Total) (Total) (Total) (Total) (Total)

Non-tied (Sub-total) (Sub-total) (Sub-total) (Sub-total) (Sub-total)

Dedicated (Sub-total) (Sub-total) (Sub-total) (Sub-total) (Sub-total)

2) Project / Programme specific funding 40,290,000 6,638,631 6,700,000 1,692,500 1,692,500 1,236,097 610,838 5,300,000

Promotion of Democratic Decentralization 01.2483.4 7,290,000 Grant Not in Budget MLGRD 1,797,796 700,000 350,000 350,000 465,179 229,176 0Macro-Economic Advisory Services Project 03.2274.3 2,000,000 Grant Not in Budget MEPD / MoF 363,526 500,000 125,000 125,000 24,880 16,146 50,000Improving Basic Education 04.2176.8 4,700,000 Grant Not in Budget MoE&VT 1,537,447 600,000 300,000 300,000 139,000 215,725 0Promotion of sustainable Structures for Health Delivery Services 04.2022.4 8,000,000 Grant Not in Budget MoH 858,188 1,000,000 250,000 250,000 212,786 47,095 550,000

Crisis Prevention Malawi - Forum for Dialogue and Peace 04.2204.8 1,600,000 Grant Not in Budget National Assembly 477,644 350,000 117,500 117,500 85,477 20,154 0School Feeding Program 05.2155.9 4,100,000 Grant Not in Budget MoE&VT 1,163,601 900,000 225,000 225,000 61,290 6,453 500,000Insecticide Treated Moskito Nets 05.2156.7 1,500,000 Grant Not in Budget MoH 406,026 400,000 200,000 200,000 247,330 75,548 0Support to Local Government Elections 05.2204.5 1,500,000 Grant Not in Budget MEC 34,403 1,000,000 125,000 125,000 155 541 500,000 Improving Basic Education (next phase) 07.2058.1 3,800,000 Grant Not in Budget MoE&VT 0 500,000 0 0 1,500,000

Promotion of Democratic Decentralization (next phase) 07.2060.7 4,800,000 Grant Not in Budget MLGRD 0 600,000 0 0 1,600,000Crisis Prevention Malawi - Forum for Dialogue and Peace (next phase) 07.2163.9 1,000,000 Grant Not in Budget National Assembly 0 150,000 0 0 600,000

3) Pipeline projects (total) (total) (total)

Macro-Economic Advisory Services Project (next phase) 08.2035.7 Grant Not in Budget MEPD / MoF 0 0 0 0 1,200,000

Actual Disbursements 2007/08Projected Expenditure

2008/09 (Donor Currency)Aid Category / Project Name

Total Donor Funding Donor Project

CodeImplementing Agency

Included in 2007/08 Budget?

Terms of funding (Loan or Grant)

Projected disbursments 2007/08 - Quarterly

Actual Disbursements 2006/07

Projected Disbursements

2007/08

Note: A number of columns and rows have been deleted for presentational purposes

Donor ratings: Provision of Info

Donor

Sendout 1 Aug 07

Sendout 2 Sept 07

Sendout 4 Nov 07

Sendout Dec 07

Sendout Jan 08

Sendout Feb 08

Sendout Mar 08

Sendout Apr 08

Send out May 08

Send out June 08 Total points

GTZ On time On time On time On time On time On time 24USAID On time On time On time On time On time On time 24World Bank On time On time On time On time On time On time 24ADB On time Late On time On time On time On time 20DfID On time On time On time Late On time On time 20KfW On time Late Late On time On time On time 18

Norway Late Late On time On time Late On time 16UNDP On time On time On time On time Not submitted Not submitted 16UNICEF Late Late On time On time Late Late 11EU On time Late Late Late Late Late 10WfP Not submitted Late On time Late Not submitted Not submitted 7FAO Not submitted Not submitted Not submitted Late Not submitted Not submitted 1WHO Not submitted Not submitted Not submitted Late Not submitted Not submitted 1JICA No RatingCIDA No Rating

On time

Not submittedNot submitted

On time

Not submittedNot submitted

Not submittedNot submitted

Late

Not submitted

LateOn time Late

On time

On time

On time

On time

On time

Late submission

Late

On time

on time

Late

on time

On time

On time

On time On timeLate On time On time

Not submitted

Not submitted

On time

Data Analysis

• Annually, the data collected is analysed to provide a comprehensive view of the distribution and effectiveness of aid

• The reports (www.finance.gov.mw) look at:• Aid by donor• Aid by modality• Aid by national development strategy theme and functional sector• Aid Effectiveness (Predictability of aid; Proportion of aid

administered through the budget)• Aid dependency (GDP, budget, development expenditure)• Sector level analysis has been done for the 2007/08 FY annual

report.

Data Analysis

Apart from the annual reports we also produce • Quarterly Monitoring Reports for externally funded

projects and programmes• The Aid Atlas which illustrates as donor involvement at

sector level

Aid by Development Partner in 2007/08 FY

MWK US$Proportion of Total MWK US$

Proportion of Total MWK US$ Proportion of Total

DfID 16,370,155,476 117,935,632 26.15 18,412,619,066 131,284,747 24.12 15,044,530,222 107,079,955 19.62World Bank 6,254,248,402 44,926,221 9.99 11,236,104,291 80,165,252 14.72 12,173,457,874 86,645,000 15.88EU 8,507,084,917 61,104,104 13.59 10,936,941,358 77,953,179 14.33 4,963,248,098 35,326,087 6.47Norway 8,636,581,618 62,182,116 13.80 9,747,429,674 69,546,626 12.77 6,664,239,322 47,432,950 8.69USAID 5,052,439,387 36,290,677 8.07 7,904,734,796 56,339,994 10.35 10,785,111,428 76,763,397 14.07UN System 7,331,976,213 52,706,618 11.71 7,839,418,524 55,883,902 10.27 13,457,945,737 95,787,386 17.55UNICEF 2,249,166,835 16,169,430 3.59 3,815,768,030 27,214,016 5.00 4,163,005,910 29,630,336 5.43UNFPA 1,310,462,261 9,329,204 1.72 0 0 0.00WFP 3,867,218,117 27,794,236 6.18 1,191,855,106 8,484,883 1.56 6,223,211,180 44,293,917 8.12UNDP 858,090,889 6,175,195 1.37 1,166,300,677 8,322,188 1.53 3,071,728,647 21,863,133 4.01FAO 293,326,615 2,107,675 0.47 224,851,648 1,605,078 0.29 0 0 0.00WHO 64,173,755 460,081 0.10 130,180,803 928,533 0.17 0 0 0.00ADB 3,977,997,976 28,587,375 6.36 3,545,876,136 25,270,392 4.64 7,208,618,140 51,307,585 9.40GTZ 1,208,781,904 8,704,549 1.93 2,540,752,928 18,104,550 3.33 719,651,418 5,122,143 0.94JICA 2,465,064,403 17,709,056 3.94 2,218,141,987 15,784,000 2.91 2,316,566,272 16,490,364 3.02CIDA 1,862,980,325 13,393,106 2.98 1,098,681,836 7,829,450 1.44 1,668,519,701 11,875,746 2.18Ireland 442,862,411 3,152,088 0.58 0 0 0.00KFW 928,115,350 6,670,732 1.48 418,497,816 2,985,904 0.55 1,667,376,979 11,867,612 2.17Total 62,595,425,971 450,210,186 100.00 76,342,060,824 544,300,083 100.00 76,669,265,191 545,698,225 100

Of which humanitarian aidDfID 1,386,988,741 9,981,944 74,978,486 535,055 EU 109,489,643 779969.67

WFP 3,867,218,117 27,794,236 701,624,085 4,995,257 Total 5,923,572,199 42,569,171 886,092,214 6,310,282

Projected Disbursements 08/09

Donor

Actual Disbursements 07/08Actual Disbursements 06/07

Aid by Sector in 2007/08 FY

Graph 1: Donor allocations by sector

10.4%

3.1%

13.2%

12.0%

0.2%

5.8%

2.0%

30.8%

0.3%

1.9%

5.0%

4.6%

0.1%

1.3%

1.4% 7.8%

Agriculture

Democratic Governance

Economic Governance

Education

Energy and Mining

Environment, Lands and Natural Resources

Gender, Youth Development and Sports

Health

ICT and R&D

Integrated Rural Development

Public Administration

Roads, Public Works and Transport

Tourism, Wildlife and Culture

Trade, Industry and Private Sector Development

Vulnerability, Disaster and Risk Management

Water, Sanitation and Irrigation

Aid by MGDS theme in 2007/08

Graph 2: Donor Disbursements by MGDS theme

27.4%

1.4%

44.8%

5.2%

21.3%

Sustainable Economic Growth Social Protection Social Development Infrastructure Good Governance

Aid by Mode of Delivery in 2007/08Donor Kwacha ($) Proportion

Budget Support 6,223,454,791 44,411,248 2,708,386,124 19,307,356 2,802,648,001 20,000,000 1,578,798,014 11,274,554

13,313,286,930 94,993,158 DFID 7,049,719,824 50,262,822 Norway 3,822,866,513 27,307,552 World Bank 580,199,465 4,150,000 Total 11,452,785,803 81,720,374 EU 8,119,065,591.00 57,865,853 USAID 7,904,734,795.76 56,339,994 World Bank 7,853,256,826.00 56,015,252 UN System 7,137,794,440.44 50,888,645.00 UNICEF 3,815,768,030.05 27,214,016 UNFPA 1,310,462,260.78 9,329,204 UNDP 1,166,300,677.67 8,322,188 WFP 490,231,020.83 3,489,626 FAO 224,851,647.61 1,605,078 WHO 130,180,803.50 928,533 DFID 5,064,465,963.97 36,075,622 Norway 4,345,765,147.00 30,964,519 ADB 3,545,876,136.00 25,270,392 BMZ 2,540,752,928.00 18,104,550 JICA 2,218,141,987 15,784,000CIDA 1,098,681,836.00 7,829,450 Irish Aid 442,862,411.00 3,152,088 KfW 418,497,816.00 2,985,904 Total 50,689,895,878 361,276,269

75,455,968,610 537,989,802 100

Modality

World Bank

DFIDEU

Pooled Funds

Project Support

Grand Total

18

15

67

TotalNorway

Aid in Support of Programme Based Approaches in 2007/08

Programme Base Approach Donor Value of Support (K) Value of Support ($)Proportion of Total Support (%)

DfID 6,223,454,791 44,411,248 EU 2,708,386,124 19,307,356 Norway 1,578,798,014 11,274,554 World Bank 2,802,648,000 20,000,000 Total 13,313,286,929 94,993,158 DfID (pooled) 5,415,477,970 38,625,571 Norway (pooled) 2,787,955,805 19,904,910 ADB (project) 311,805,650 2,227,951 UNICEF (project)* 239,000,000 1,703,541 Other Discrete Donors* 105,000,000 748,418 Total 8,859,239,424 63,210,391 World Bank 580,199,465 4,150,000 DfID 562,009,121 4,000,640 Norway 776,124,102 5,551,603 Total 1,918,332,688 13,702,243 DfID 1,072,232,733 7,636,611 Norway 258,786,607 1,851,039 Total 1,331,019,340 36,892,137

25,421,878,381 192,643,727 34

Budget Support

18 Health SWAP

12

Grand Total

Agricultural Inputs Subsidy

2

NAC Funding

3

Predictability of Project Support

Graph 4: Predictability of Project Support, 2007/08

(80)

(60)

(40)

(20)

-

20

40

60

80

100

KF

W

AD

B

US

AID

DF

ID

FA

O

JICA

CA

NA

DA

WH

O

WF

P

EU

UN

DP

Norw

ay

UN

ICE

F

World B

ank

BM

Z

Donor

Per

cen

tag

e V

aria

nce

Predictability of Budget and Pooled Support

Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 TotalDfID GBP 22,000,000 22,000,000 22,000,000 22,000,000 - EU Euro 8,000,000 9,000,000 17,000,000 8,000,000 60,480 4,805,168 12,865,648 (24) Norway NoK 40,000,000 20,000,000 60,000,000 40,000,000 20,000,000 60,000,000 - ADB UAC 14,900,000 14,900,000 - - - - - (100) World Bank USD 20,000,000 20,000,000 20,000,000 20,000,000 - DfID GBP 19,267,100 7,920,300 8,040,500 3,306,320 19,267,120 0 Norway NoK 52,500,000 52,500,000 105,000,000 67,500,000 37,500,000 105,000,000 - World Bank USD 10,000,000 - - - - - (100) DfID GBP 2,000,000 2,000,000 2,000,000 - Norway NoK 30,000,000 30,000,000 30,000,000 30,000,000 - World Bank USD 3,500,000 2,000,000 3,500,000 9,000,000 4,150,000 4,150,000 (54) DfID GBP 3,795,240 3,795,240 3,795,240 73,880 3,869,120 2 Norway NoK 10,000,000 10,000,000 10,000,000 10,000,000 -

Modality Projection

VarianceActual

Budget Support

NAC

Agricultural Inputs Subsidy

No quarterly projections provided

No quarterly projections providedNo quarterly projections provided

Donor Currency

Health SWAP

Reporting Aid on the budget

Graph 5: Proportion of Aid using Budget Execution Procedures

-

10

20

30

40

50

60

70

80

90

100

Wor

ld Ban

kDfID EU

ADB

Norway

KfWUNDP

UNICEF

JICA

CIDA

BMZ

FAOW

HO

UNFPA

USAIDW

FP

Irish

Aid

Development Partner

Per

cen

tag

e o

f A

id o

n B

ud

get

These donors channelled no funds through the Government of Malawi Budget in 2007/08

Direct Project Support - Analysis by Donor - Av. Disbursement Rates vs Project Ages -

Direct Project Support - Analysis by Sector - Av. Disbursement Rates vs Project Ages -

0% 20% 40% 60% 80% 100% 120% 140%

Energy & M ining

Roads, Public Works &Transport

IC T and R&D

Democratic Gov ernance

H ealth

Integrated Rural Dev elopment

Agriculture

Education

Trade, Industry & Priv ate Sector Dev elopment

Water, Sanitation & Irrigation

Vulnerability , Disaster & Risk M anagement

Tourism, Wildlife & C ulture

Public Administration

Env ironment, Lands & N atural Resources

Economic Gov ernance

Gender, Youth Dev elopment & Sports

TotalDisbursementRate

Project AgeRatio(Age/Period)

Direct Project Support - Over-aged Projects -

Overage Months Number of ProjectsCumulative Undisbursed

BalanceAverage Disbursement

Rate

25-36 5 16,070,375 65.7%

19-24 10 5,792,780 92.7%

13-18 19 29,982,837 88.0%

7-12 11 62,309,022 66.8%

1-6 24 38,783,027 70.0%

Total 69 152,938,042 76.6%

Achievements

• November 2008 Government launched the 16 sector working groups as a means of implementing the Development Assistance Strategy (DAS)

• Donor membership of SWGs enables DPs to participate in monitoring sector performance against mutually agreed objectives

• Malawi adopted AMP which has deepened the analysis of aid flow as illustrated in the Malawi Aid Atlas. The Atlas illustrates donor involvement at sector level by capturing the level of financial resources disbursed

• Division of labour is emphasised as a mechanism for reducing fragmentation and enhancing effective delivery of aid

Challenges

Progress in Malawi has been made in spite of a number of challenges

• Some donors remain reluctant or unable to provide data regularly: UN agencies are particularly culpable, but intermittent problems exist with most donors;

• Quality assurance of data remains difficult: information is taken on trust

• Whilst there is a criteria of including aid on the national budget there are still exists gaps in definitions

• Aid flow projections – preferably monthly or quarterly will assist in analysis

Vision for the Future

• We will strive to improve the process and outcomes of tracking aid through improved collection and analysis of aid data and increased accountability

• Changing the way donors operate through aligning their procedures/practices with Government systems;

• Provide limited access to donors to record information directly in AMP, of course this is subject to further discussions with GDI and donors;

• Extend usage of AMP to implementers of donor funded projects and programmes in Government

Where IATI can Add Value

• In the case of Malawi IATI would very much help on Information on non-DAC and NGOs in areas of aid predictability and transparency

• Provide agreed aid information definitions and classifications

• Given the experiences and lessons, Malawi is well positioned to provide practical pilots to the IATI concepts

• Capacity building in the Ministries of Finance and Development Planning and Coorperation

Zikomo Thank you