Download Integration of BID Reforms into PRSP in Malawi

Integrating BIC Reforms
into the PRSP in Malawi
Johannesburg, 25th May 2006
Angela N. Zeleza, Economist
Joana Henseler, Economic Advisor
Ministry of Economic Planning and Development,
MALAWI
Presentation Structure
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Brief History of PRSP in Malawi
Malawi Growth & Development
Strategy
Linkages between the MGDS and
BIC/ EE
The role of Public – Private
Partnerships in the MGDS
Creating an Enabling Environment
for PPP in Malawi
Brief History of PRSP in Malawi
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Interim PRSP (2001)
Full PRSP: Malawi Poverty Reduction
Strategy (2002 – 2005)
• Malawi Economic Growth Strategy (2004)
• 3 Annual Progress Reports
• 1 Comprehensive Review
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Malawi Growth & Development Strategy
(2006 – 2011)
HIPC Completion Point: most likely summer
2006
Malawi Growth & Development Strategy
“the overall objective of the MGDS is to reduce
poverty through sustained economic growth and
development”
“The main thrust of the MGDS is to create wealth
through economic growth and infrastructure
development as a means of achieving poverty
reduction. This is expected to transform the
country from being a predominantly importing
and consuming nation to a predominantly
manufacturing and exporting country.”
His Excelleny, The State President of the Republic of Malawi
Malawi Growth & Development Strategy
5 Themes
1.) Sustainable Economic Growth
2.) Social Protection and Disaster
Management
3.) Social Development
4.) Infrastructure
5.) Good Governance
MGDS Theme 1:
Sustainable Economic Growth
Sub-Themes:
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Maximising the contribution to economic
growth through the sources of growth
Enabling environment for private-sector
led growth
Food security
Regional integration
Economic empowerment
Land
MGDS Theme 1, Sub-Theme 2:
Enabling Environment for private-sector
led growth
Goal
The goal for Malawi is to achieve increasing growth and
diversification of business products and economic sectors
while increasing the level of foreign and domestic
investment and profitable enterprises.
Strategy
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Address the infrastructure constraints – especially access to
reliable and seasonally priced electricity, water and
improved inter-modal transport to regional and domestic
markets through direct investment, privatisation, and
public-private partnerships;
Ensure sustained macroeconomic stability;
Improve vocational training through the current educational
system, focusing on improving the TEVET system and
updating equipment to meet international certification
standards;
MGDS Theme 1, Sub-Theme 2:
Enabling Environment for private-sector
led growth
Strategy (continued)
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Implement tax reforms; and
Improve coordination for domestic and international
investors to resolve problems that they face and to access
information.
For small and medium scale enterprises, specific strategies will
need to be developed, including:
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Improving micro-finance schemes and programmes;
Secure land registration and the functioning of land
markets;
Ensure Malawians have opportunities for jobs, especially in
rural areas; and
Finally, related strategies in health will be coupled with
efforts to improve occupational safety and labour protection.
MGDS Theme 1, Sub-Theme 2:
Enabling Environment for private-sector
led growth
Implementation
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Government will work with all relevant stakeholders
including private sector support institutions and interest
groups such as MIPA, MCCCI, NAG and other representative
organizations to help align policies and programs to address
the needs of the private sector
Mechanisms for public-private partnerships will need to be
strengthened
Government will focus on public-private partnerships not
only for the provision of infrastructure, but also for
continuous monitoring of the private sector environment
MGDS Theme 2:
Social Protection and Disaster Management
Sub-Themes:
 Protecting the vulnerable
 Improving disaster risk management
MGDS Theme 3:
Social Development
Sub-Themes:
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Health and Population
Prevent the negative consequences of
HIV/ AIDS
Nutrition
Education
Gender
MGDS Theme 4:
Infrastructure
Sub-Themes:
 Transportation
 Energy
 Water supply and sanitation
 Information and communication
technologies
 Science technology, Research and
Development
MGDS Theme 5:
Good Governance
Sub-Themes:
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Macroeconomic stability
Public policy formulation, expenditure
management and corruption
Decentralisation
Developing a strong justice system and
rule of law
Security
Corporate governance
Human rights
The Role of PPPs in the MGDS
Concrete Actions for which Government is
planning to engage in PPPs:
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Infrastructure for key mining companies (water,
electricity, roads)
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Rehabilitation and maintenance of port facilities
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Electricity supply
to name but a few…
Creating an Enabling Environment
for PPPs
INFRASTRUCTURE DEVELOPMENT
Infrastructure Law
Integrated infrastructure plan
•Privatisation Process
•State Support
•Key Project Risks Identification
•Infrastructure Authority (Executive body)
•Conciliation Board (Quasi -Judicial body)
•Coverage – Infrastructure Sectors
Extent & form of PSP
Stand on identified Risk Issues
Sector specific Incentives
Regulatory Framework
Necessary Legal Enablers
•Vision for the State
•Thrust areas
•Shelf of projects
•Integrated planning
•Sector level policy bottlenecks
•Investment requirement & State’s share
of the investment
•Private Sector Participation (PSP) required
Sector Policies
Model Concession Agreement
Contractual allocation of Risks, Roles and Responsibilities
State support framework
At the minimum ensure service level assurances for
prompt approvals and clearances or grounds for denial
Decreasing order of Govt. preference: Direct impact on Budget
Administrative Support
•Timely Approvals; Construction power & water at site
•Undertake Resettlement and Rehabilitation measures
Land & Infrastructure
Support
•Land at concessional prices
•Provision of supporting infrastructure for projects
•Bundling with suitable projects
Tax & Duty incentives
•Tax & Duty incentives (central/ local)
•Exemptions from other license and registration fees
Credit Enhancements
•Receivables Guarantee, Off take guarantees
•Forex guarantees, Credit guarantees, etc.
Direct Financial Support
•Soft Loans
•Grants, Subsidies, etc.
Form & extent of PPP
PPP extended to all stages of
infrastructure development
Financing
Designing
Operating
KEY BENEFITS
Larger inflow of investment
Better service standards
Cost and operating efficiencies
Lower burden on public finances
Currently private
sector mostly limited
to construction through
contracts
Zikomo Kwambiri!
Thank you very much for
your kind attention!