Private Sector Development Programme in Malawi

The Private Sector Development Programme has five components: the Business Enabling Environment Programme (BEEP), the Malawi Oilseeds Sector Transformation Programme (MOST), the Business Innovation Facility (BIF), and the Malawi Innovation Challenge Fund (MICF) and the Monitoring and Evaluation component. The first four programmes were hampered in some way by external factors during the year under review, including a near total rain failure during the 2015/2016 cultivation season, power shortages that resulted in daily blackouts lasting up to 16 hours. Though later amicably resolved, the Malawian government’s arbitrary application of import taxes on vital agricultural equipment caused unforeseen delays and additional costs for the programme. The MOST programme was poised to demonstrate significant impact in the year under review, but found it challenging to facilitate farmer level changes during a year in which agricultural production was at a steep shortfall from average. It focused instead on continuing to build its platform of partnerships with Malawian firms, and adding interventions in access to finance and sesame. MICF’s portfolio of grantees suffered from the same set of constraints, with all of them requiring performance period extensions to achieve their benchmarks. Despite being stymied by the hesitation of the Malawian government to institute reforms, BEEP made significant progress on delivery of the World Bank Malawi Country Economic Memorandum and the GIZ Malawi Extractives Industry Transparency Initiatives. The Control of Goods Act and the Investment and Export Promotion Act were also delivered to respective Government Ministries as planned. Meanwhile, the BIF programme, which had been previously delayed by internal factors, used the year to catch up to the other components in the portfolio, developing a strong partnerships with private sector actors in the pico solar power, pigeon pea and rice market systems and addressing all other recommendations in the previous review.

As a result, BIF, MICF and MOST are poised to demonstrate significant impact in the coming year, particularly at the end of the 2016/2017 cultivation season. DFID should be able to see demonstrable impact midway through calendar 2017. However, even with sufficient rains this year, the other constraints continue to threaten the success of the programmes in the portfolio. DFID and the component managers should closely monitor the impact of these factors on component performance and grant flexibility where needed to adapt to new circumstances.

As in the previous year, in order to evaluate progress towards fostering systemic change, the review focusses on identifying evidence of learning and adaptation. Each of the programme teams: the MOST programme, BIF and MICF, demonstrate significant meaningful engagement with their work, with the teams able to articulate what they have learned and how they have adapted their activities in response. In the previous year, the review team commented that BIF’s pace of partnership development and experimentation was stymied by internal factors – those issues have been thoroughly addressed. All three programmes now demonstrate strong contextual learning and learning.

Also in the year under review, BEEP supported three key  initiatives as outlined above. 
While some of the some constraints are major investment areas, eg power, we are, as part of the Country Economic Memorandum and wider economic development engagement in Malawi, aware and taking action (eg discussions with CDC and UK investors). For climate related constraints and outside our control, eg poor rains, DFID would need to put the emphasis back on climate–resilient investment decisions.