2015/16 PSIP FORMULATION: Reflection on Issues and Perspectives. Presented by: Charles Mtonga (265) (0) C. Economist (PSIP) Presentation 2

EP&D’s Decision Options on projects The MFEPD through EP&D will have to: 1)Accept/Reject a given project/program proposed for implementation through the development budget 2)Recommend inclusion of the project into any fiscal year’s devpt budget 3)Recommend pending or termination of a previously accepted (on- going) project 4)Provide indicative budgetary requirements to Treasury and the Cabinet

Agenda for this presentation Using a systems approach, this presentation seeks to: 1)Indicate basis for PSIP decisions 2)Give a summary description on how the process went for the 2015/16 FY 3)Outline issues/factors affecting quality of decision-making at EP&D 4)Outline suggestions for improvement 5)….get further suggestions from the participants

Basis of PSIP Decisions Inputs MDA’s expressed and properly described need in form of a PSIP project/program proposal Additional information provided through bilateral discussions ( PSIP Ministerial meetings) Reports of project performance (supervision and M&E reports) Indication of the resource envelope (global ceiling) from the budget framework Process/ Tools Newly proposed projects are appraised on Relevance, Efficiency, Effectiveness, Impact, and Sustainability On-going projects are appraised on their continued relevance and performance both financial and physical Prioritization across sectors is guided by national blue prints (MGDSII), reflected in appraisal matrix Within sector priorities are driven by the sector and confirmed by bilateral meetings Decision Accept/Reject a given project/program proposed for implementation through the development budget Recommend inclusion of the project into any fiscal year’s devpt budget Recommend Pending or termination of a previously accepted (on-going) project Provide indicative budgetary requirements to Treasury and the Cabinet Approval The PSIP Unit screens the received applications and makes preliminary recommendations by project Director of Development reviews the recommendations and makes his own to PS (EPD) Once endorsed by PS, Minister Responsible may make the final approval under delegated authority of both the Cabinet and the President

What happened for 2015/16 a) Inputs for decision-making MDA submissio ns 296 were submitted of which 218 were on-going and 78 were new proposals for inclusion into the PSIP MWK 162billion was required in Part II only… MK 127.4billion on on-going projects. While the quantity of information increased, data quality has lagged behind. 22% of submissions were done in time (on or before 28 November 2014) Ministeri al Meetings Meetings were arranged from 15 Dec’ 14 to 12 Jan ‘15, extended to 22 Jan ‘15 76% of the arranged meetings were held. MDAs Participation and Representation ranged from PS-led to just-2-members from Planning Unit Prj. Reports Regular progress reports were hard to come by for 2014/15 FY Very few MDAs provided progress reports Rapid updates were made only during Ministerial meetings Resource Envelope The Development Budget working figure hovered between MWK 65billion and MWK 35billion.

What happened for 2015/16 b) The Appraisal Process and Outcome On-going Projects 44 of 218 on-going projects were found to be weak in their continued relevance and stopped or merged with others Most projects’ financial performance was weak Consequently the physical performance was generally weak necessitating time extensions in many instances 174 projects were recommended for inclusion in 2015/16 development 62.3billion New Projects 67 of the 78 projects were found to be suitable candidates while 11 were found inappropriate in their design at that time. 17 projects were recommended for inclusion in the 3.2billion Outcome Further adjustments were made following Cabinet input and adjustments in the fiscal framework The Approved Development budget for 2015/16 stands at MWK 45billion

EPD’s Challenges in Decision-Making EPD runs into these challenges when making PSIP/Budget decisions:  Inadequate information to inform decision (submission of proposals with unfilled parts). M&E data is particularly hard to get.  Late submission of applications promotes suboptimal decisions  Priority setting (ranking) within the sector is less clear to guide EPD’s decisions  Coordination failure. Failure to engage in continuous dialogue and communication about the goals and strategies, and results from project implementation  Investment spending is subject to strong political input such that a public investment programming system requires both disciplined procedures and a high level of technical expertise both of which are presently very weak.

Supporting EP&D in Decision-Making: Suggestions for Improvement EPD would benefit from the following assistance when making decisions:  Submission of appraisable material requires that the Heads of Planning give adequate attention to what comes from the MDAs as proposals…. to check for the completeness and adequacy.  Regular (and Timely) provision of updates on programs/project performance and development results will enhance quality of decision.  Maintained interface and collaboration throughout the PSIP cycle  Specific tools have been designed (templates, financial management information tool, quarterly progress report and the database)

THE END Thanks for your attention