Malawi Government has lined up 215 new projects despite hundreds of previous ones stalling amid concerns over cost overruns from project management professionals and a background of underexpenditure on development.

The Nation analysis of national budget documents established the hypocrisy rocking decision-making processes at Capital Hill where new projects are being introduced every year when there is heavy underspending in the development budget.

Kenyatta Driver and Mzimba Street road construction

The 215 projects in the pipeline come on top of 234 ongoing ones, bringing the total to 449.

According to the Public Sector Investment Programme (PSIP) for 2023/24, which lists all public projects, 507 projects were submitted for appraisal out of which 215 are in the pipeline, meaning they have been approved for possible funding.

 Reads the PSIP: “Out of these, 234 are currently ongoing [196 at implementation phase, 20 at preparation phase, and 18 are nearing completion], 16 have been completed, two have been ended, 215 are in the PSIP pipeline, two have been terminated, 26 have been pended, 10 have been returned for further work, and two have been rejected.”

Experts have since questioned the continued commissioning of projects against a lean resource envelope, arguing that this will lead to delays in completion and consequently burden taxpayers to pay more due to cost overruns.

In the current financial year, the development budget has an allocation of about K896 billion for both central and local government. The budget includes 234 ongoing projects, of which 198 are government-funded (Part II) and amount to K295 billion, and 36 are funded by development partners (Part I) amounting to K600.3 billion.

This was also the case in the last financial year (2022/23) where government lined up 200 projects against its allocation of K237 billion out of K820 billion development budget allocation. While donors contributed 80 percent to this budget, they only targeted 30 development projects.

During the same year, 41 new projects were introduced in the PSIP for funding some of which equalled or were more than the size of the government allocation to development budget.

This includes construction of modern markets and a business park, which is estimated to cost K225 billion; and the construction of 34 secondary schools of excellence across the country at about K210 billion.

Others are construction of a new office space at Kamuzu Palace in Lilongwe estimated at K10.5 billion.

Between last financial year to the current one, there has been an increase by 141 in projects submitted for consideration in the PSIP from 366 to 507. Those in the pipeline have gone up to 215 from 161.

Ironically, government has struggled to complete a number of major construction projects some of which have been going on for the last 15 years across three regimes, such as the Thyolo-Thekerani-Muona Road (2008), Commercial Court in Blantyre (2009) and Mzuzu Youth Centre (2010).

The Tonse Alliance administration has also struggled to have its launched projects takeoff. Examples include the rehabilitation of the M1 whose groundbreaking ceremony was done in August last year. The rehabilitation of the stretch from Kamuzu International Airport junction to Mzimba is expected to be completed next year March yet the actual work has just started.

In the capital city, projects such as the dualisation of the M1 from Crossroads roundabout to Kanengo and the six-lane road project are all stagnant, almost a year after groundbreaking ceremonies, largely due to low cashflow.

Roads Authority (RA) acting chief executive officer Engineer Francis Dimu, while indicating that the delays were due to other issues such as compliance to environmental requirements and relocation of services, confirmed funding was another hiccup.

He said: “Progress on the capacity improvement of Kenyatta Road and Mzimba Street has been largely affected by relocation of services while rehabilitation of the M1, it is contractors fulfilment of environmental and social safeguard requirements. Projects commence once funding has been confirmed.”

Lilongwe University of Agriculture and Natural Resource (Luanar) associate professor of economics Kennedy Machila said it is worrying that government embarks on too many projects even when there are no resources to complete them on time.

He observed: “We need to be practical only to have projects that can be successfully implemented in line with the resource envelope.

“Our recent study showed us that almost 90 percent of government-funded projects have cost overruns and one of the causes is delay in completion of projects. The delay comes because the little resources are spread across so many projects. We must not over-commission projects for political gains.”

Machila was lead investigator for a study done by Luanar in collaboration with Economics Association of Malawi (Ecama) and Oxfam in Malawi which established that 90 percent of public projects attracted cost overruns of over 10 percent due to delays in implementation.

He said the study, whose policy brief was shared with government, should have been a wake-up call to prioritise only those projects that can be implemented based on available resources.

C o n s t r u c t i o n S e c t o r Transparency Initiative (CoST) country manager Lyford Gideon said most projects take longer to complete due to poor cashflow which leads to cost overruns due to extended time.

He called on government to ensure that errant officers or ministries, departments and agencies (MDAs) are taken to account for allowing taxpayers to pay more.

Said Gideon: “Overtime, we have noted with great concern, about time overruns on most public infrastructure projects; with serious implications on the intended benefits that the public would accrue from the same. Most of these challenges point to significant lapses in project management and lack of accountability.”

He observed that there is more efficiency in projects implemented by donor partners, citing a case of the Mzuzu-Nkhata Bay Road project which was constructed within time and the less than the projected budget.

The savings from this road projects were used to construct an additional 1.3-kilometre dual carriageway on Orton Chirwa Highway in Mzuzu, according to the project completion report available on African Development Bank website.

Reacting to the sentiments, Minister of Finance and Economic Affairs Sosten Gwengwe could not explain why Capital Hill commissions more projects against a small resource envelope, but stressed that Malawi ought to shift from overreliance on donors for development as this is not sustainable.

He said: “PSIP is just a plan. We need to generate more resources for development. Overreliance on donors is not sustainable. We need local resources.”

On delayed completion of projects leading to cost-overruns, Gwengwe said: “It’s operational inefficiencies that we must deal with. We need speed in approval processes.”

Our analysis last month exposed how government, in the last 14 national budgets, underfunded development projects. In 2020/21 financial year, according to the Audit General report for the year ending June 30 2021, government underspent on development budget by 59 percent. This is the trend over the years.

But Gwengwe dismissed suggestions that government could be using the development budget for other recurrent expenditure, saying this was unlawful.

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