[{"bbox": [126, 121, 276, 147], "category": "Section-header", "text": "## Accountability"}, {"bbox": [126, 161, 1103, 335], "category": "Text", "text": "Civil society organisations and the academia (CSOs) are key players in domestic accountability but are hampered by limited capacity. There have been a number of cases where Government has offered public positions to outspoken CSO leaders, who in turn became more lenient in addressing key accountability issues with central government. Nevertheless, they operate relatively freely and are generally vocal and outspoken. The media operates largely outside of the government interference and is a major whistle-blower in exposing corruption and maladministration."}, {"bbox": [126, 347, 1103, 435], "category": "Text", "text": "The main accountability institutions are the National Audit Office (NAO), Ombudsman and the Anti-Corruption Bureau; the latter having recently received additional oversight responsibilities under the new procurement law."}, {"bbox": [126, 447, 650, 476], "category": "Section-header", "text": "## 1.4 Priority areas for support/problem analysis"}, {"bbox": [126, 488, 1103, 691], "category": "Text", "text": "Malawi is challenged by limited fiscal space due to a relatively high wage bill, subsidies/transfers and debt servicing costs, accounting for more than 70 % of domestic revenues (FY 2016/17)⁹. Currently there are no indications for a reversal of this trend. Therefore, enhancing spending efficiency, improving the effective use of domestic revenues and improving the fairness, transparency, efficiency and effectiveness of their tax systems is vital for Malawi to address inequality and to improve the business climate for more investments leading to increased growth and job creation¹⁰."}, {"bbox": [126, 703, 1103, 877], "category": "Text", "text": "On the revenue side, the Tax Administration Diagnostic Assessment Tool (TADAT) 2015 identified major shortcomings in almost all areas, including lack of automated systems allowing to cross-check information, an incomplete tax registry, major compliance weaknesses and management of risks, among others. Efforts are underway to address identified weaknesses, resulting in about 16 modernisation projects being simultaneously implemented but progress is slow and lack of sufficient funding poses a major constraint."}, {"bbox": [126, 889, 1103, 1064], "category": "Text", "text": "On the spending side, four years after the 'cashgate' corruption scandal revealed a significant looting of public funds, the Government's efforts to restore basic financial management functions and trust in their fiduciary stewardship are starting to show progress. Nevertheless, more efforts need to be undertaken to consolidate and continue to strengthen fiscal discipline, transparency and accountability. The main challenges lie in the low capacity of staff executing routine tasks and the potential threat of interference (political) in applying rules and regulations."}, {"bbox": [126, 1076, 1103, 1278], "category": "Text", "text": "Malawi is particularly challenged in the area of public procurement and contracting, commitment controls and arrears (debt). Corruption scandals unearthed by audits, the media and civil society are most often linked to public procurement, whereas challenges in contract implementation, often result in illicit payments for undelivered or substandard works, goods and services. Without recourse to strong control over public procurement/contracting and commitment oversight, debt levels are bound to increase¹¹. Particularly, the oversight with regards to multiannual commitments has been strongly compromised."}, {"bbox": [126, 1291, 1103, 1377], "category": "Text", "text": "Another major expenditure risk is the lack of oversight over parastatal performance and poor management of government investments, exposing the Government to unpredictable risks regarding liabilities and bail-out demands. There are currently about 30 parastatals. In 2011,"}, {"bbox": [126, 1469, 487, 1491], "category": "Footnote", "text": "⁹ IMF ninth review, July 2017, page 15."}, {"bbox": [126, 1491, 1103, 1534], "category": "Footnote", "text": "¹⁰ The Delegation together with the Government of Malawi has finalised a 'Growth and Jobs Compact', which operationalisation is set to start soon."}, {"bbox": [126, 1534, 1103, 1601], "category": "Footnote", "text": "¹¹ The latest debt sustainability analysis shows that debt levels have doubled since the HIPC and Multilateral Debt Relief Initiative in 2006. Debt servicing costs have risen significantly over the recent years, from 12 % (FY 2009/10) to 23 % (FY 2016/17) of revenue, particularly regarding domestic debt."}, {"bbox": [609, 1667, 622, 1687], "category": "Page-footer", "text": "6"}]