Malawi Public Service Systems Reforms
Key Findings and Recommendations from the May 2021 Taskforce Report
Introduction: A System in Need of Overhaul
In February 2021, a Presidential Taskforce began a comprehensive review of Malawi's public service systems. The goal: reform allowances, employment contracts, procurement, conditions of service, and the overall structure to enhance efficiency, curb waste, and align the service with the national Malawi 2063 vision.
The Taskforce's stark conclusion: Endemic abuses were found across the board, with most control systems having collapsed, necessitating urgent and fundamental reforms.
1. Allowances: Rampant Abuse and Inequality
Allowances represent a significant portion of government expenditure, totaling MK 79 Billion in the 2019/20 financial year. Despite a 'clean wage' policy intended to consolidate pay, numerous allowances persist, creating unfairness. The system is plagued by widespread abuse, particularly concerning travel.
MK 33.7 Bn
Spent on Subsistence Allowances (2019/20)
(vs MK 27.4 Bn Approved)
Subsistence allowances, especially for local travel, are the most abused category, significantly exceeding budgeted amounts. Billions are lost annually through fraudulent claims.
Only 1.5%
of Audit Queries Resolved (2017-2020)
(Out of 908 internal audit queries)
A critical failure of accountability: the vast majority of identified irregularities, representing potentially billions in losses (like MK 7.08 Bn in 'illegal allowances' from 2010-19 NAO samples), are never acted upon.
Key Recommendations for Allowances:
- Implement Full-Board Travel: Replace cash Daily Subsistence Allowance with direct hotel payments for accommodation and meals for local travel.
- Standardize External Travel: Use destination-based rates (like United Nations), eliminate ad-hoc increases, enforce delegation limits.
- Eliminate Unjustified Allowances: Abolish sitting allowances for Members of Parliament/Staff (double pay) and health worker 'Risk Allowance' (already covered by Top-up). Use annual honoraria for Parastatal Boards.
- Enforce Accountability: Mandate swift action on all audit queries with sanctions for non-compliance. Empower Treasury to surcharge liable officers. Implement rigorous performance appraisals.
2. Employment Contracts: Inconsistency and Irregularities
The legal framework governing employment contracts is outdated and inconsistent, particularly between the main civil service and parastatals. Enforcement is weak, leading to numerous irregularities that undermine meritocracy and fairness.
Major Problems Identified:
- Legal Conflicts & Outdated Laws: Public Service Act clashes with Parastatal Acts on hiring authority; Malawi Public Service Regulations (1991) are obsolete.
- "Back-Door Entry": Political appointees (like Personal Assistants, non-career diplomats) absorbed into permanent civil service roles upon contract expiry.
- Flouted Procedures: Recruitment of unqualified individuals, appointments made without interviews or competition, exercising powers ultra vires (beyond legal authority).
- Political Interference: Cronyism and favouritism influencing hiring and promotions.
- "Warehousing": Staff deployed but given no duties while still receiving full pay.
Key Recommendations for Contracts:
- Harmonize Legal Framework: Update and align the Public Service Act, Malawi Public Service Regulations, and Parastatal Acts. Ensure correct hiring authority is used.
- Stop Absorption: Political appointees' contracts must end with their principal's term; no transition to permanent roles.
- Terminate Irregular Contracts: Immediately remove staff hired without proper qualifications, procedures, or those absorbed politically.
- End "Warehousing": Use formal disciplinary or redundancy processes for unassigned staff.
- Establish Clear Guidelines: Develop rules for diplomat selection, gender quota implementation, hiring rare skills, and staff redeployment.
- Merit-Based System: Enforce competitive selection for appointments and promotions (role for proposed Public Service Commission).
3. Conditions of Service: Glaring Disparities and Waste
Conditions of service vary dramatically across the public sector, creating significant inequity. The civil service lags far behind parastatals in pay and benefits, while certain entitlements represent considerable wastage of public funds.
Salary Inequity
Huge gaps exist. Civil Service Directors earn salaries comparable to Secretaries in some high-paying parastatals. Principal Secretaries often earn less than the Chief Executive Officers they supervise.
Pay vs. Basic Needs
Lowest paid civil servants (Grade R) earn only ~38.5% (MK 115,521) of the estimated basic needs basket (MK ~300,000 gross). This impacts morale and potentially fuels corruption.
MK 5.89 Bn
Annual Cost of Executive School Fees
Parastatal executives receive 100% private school fees for up to 2 children, a benefit unavailable in the civil service, costing billions annually.
MK 46-50 Bn
Potential 5-Year Savings on Vehicle Purchases
Downgrading vehicle types (e.g., from Prado 3500cc) and introducing loan schemes instead of direct provision could save massively.
Key Recommendations for Conditions:
- Rationalize & Harmonize Pay: Bridge the gap between civil service and parastatals. Raise lowest salaries towards the basic needs level (phased). Freeze pay in top-tier parastatals.
- Revise Vehicle/Fuel Entitlements: Significantly downgrade vehicle types for senior grades (e.g., 2500cc max). Introduce ownership loan schemes. Reduce fuel allocations. Extend disposal timelines.
- Abolish School Fees Benefit: Eliminate this costly and inequitable perk for executives.
- Strengthen Systems: Enforce performance management. Improve disciplinary procedures. Revive staff loan schemes.
- Expand Medical Cover: Progressively roll out contributory medical insurance to all civil service grades.
4. Procurement: A System Riddled with Malfeasance
Malawi's public procurement system, largely manual and paper-based, lacks transparency and is vulnerable to abuse at every stage. This results in significant financial losses, poor value for money, and substandard goods and services.
Common Issues in the Procurement Cycle:
Key Recommendations for Procurement:
- Implement e-Procurement Urgently: Digitize the entire process nationwide for transparency and efficiency.
- Improve Award Criteria: Mandate 'past performance' evaluation. Use 'most economically advantageous bid' for complex projects.
- Combat Fraud & Overpricing: Require beneficial ownership disclosure. Use market price indexes. Terminate problematic framework agreements (e.g., PHAMAM). Sanction collusion.
- Streamline Approvals & Boost Capacity: Remove redundant administrative vetting (Office of the President and Cabinet after Public Procurement and Disposal Authority). Clarify Anti-Corruption Bureau role. Upgrade procurement roles in Ministries, Departments and Agencies. Fill Public Procurement and Disposal Authority vacancies.
- Increase Accountability: Hold consulting engineers liable. Enforce strict sanctions (debarment, surcharge) for all misconduct. Intensify monitoring.
5. Restructuring the Public Service: Addressing Foundational Issues
Fundamental structural issues, including unclear legal definitions, conflicting roles, lack of institutional limits, slow devolution, and weak State-Owned Enterprise governance, undermine the effectiveness and accountability of the entire public service.
Structural Weaknesses:
- Ambiguous Definitions: Lack of clear legal distinction between "State" and "Government", unclear scope of "Public Service".
- Conflicting Headship: Secretary to the President and Cabinet role over entire Public Service conflicts with Constitution & Separation of Powers.
- Lack of Limits: No constitutional caps on number of Ministries, constituencies, or senior Judges.
- Inefficiency: Duplication of functions, institutional instability, slow and partial devolution of powers to local government.
- Weak State-Owned Enterprise Governance: Department of Statutory Corporations relevance questioned; inconsistent board structures; Reserve Bank of Malawi lacks sufficient oversight.
- Political Interference: Blurred roles between Ministers (political direction) and Principal Secretaries (administration/implementation).
Key Recommendations for Restructuring:
- Constitutional/Legal Reforms: Clearly define "Government" & "Public Service". Establish an independent **Public Service Commission** to oversee harmonization, appointments, conditions across the *entire* service. Define Secretary to the President and Cabinet as Head of **Civil Service only**.
- Set Limits: Introduce constitutional limits (e.g., max 21 Ministries, 200 Constituencies, 9 Supreme Court Judges). Standardize structures. Conduct functional review.
- Fast-Track Devolution: Fully empower local authorities with functions, funding, assets, and Human Resource management.
- Overhaul State-Owned Enterprise Governance: Review Department of Statutory Corporations. Standardize board appointments (competitive, independent chairs). Improve Reserve Bank of Malawi accountability.
- Clarify Roles: Legally define Minister's role (policy/oversight) vs. Principal Secretary's role (Chief Executive Officer for implementation/management).
- System of Government Review: Hold referendum on hybrid system issues (e.g., Ministers as Members of Parliament).
Conclusion: A Call for Committed Action
The report proposes **radical, systemic changes** necessary to address the deep-seated dysfunction observed across Malawi's public service, affecting areas from daily allowances and procurement practices to employment conditions and the very structure of government. The success of these reforms hinges critically on several interconnected factors:
- Strong Political Will: This requires unwavering commitment from the highest levels of all three branches of government – the Executive, Legislature, and Judiciary. Leadership must set the example, accepting potential reductions in benefits (such as the proposed downgrading of vehicle entitlements for senior officials from 3500cc Prados to 2500cc vehicles) and consistently enforcing sanctions against misconduct, even when politically sensitive. The recommendation to introduce performance appraisals for the Secretary to the President and Cabinet and even public participation in Ministerial appraisals underscores this need for top-down accountability.
- Comprehensive Legal Reforms: The foundation of the current dysfunction lies partly in outdated and inconsistent legislation (like the 1991 Malawi Public Service Regulations). Implementing the recommendations necessitates significant legal changes, including amending the Constitution (to clarify definitions, establish the Public Service Commission, set limits on government size), updating the Public Service Act, amending the Public Finance Management Act (e.g., to empower the Treasury to surcharge officials for losses like the MK 7.08 billion in 'illegal allowances' noted), and harmonizing various Parastatal Acts. Without these legal underpinnings, reforms lack authority and enforceability.
- Improved Economic Performance Funded by Reduced Wastage: The report highlights billions lost through abuses – for instance, the Malawi Kwacha 7.08 billion in 'illegal allowances' noted in National Audit Office reports between 2010-2019, the estimated Malawi Kwacha 5.89 billion annual cost of executive school fees, or the potential Malawi Kwacha 46-50 billion in vehicle purchase savings over five years. Successfully curbing this wastage (where only 1.5% of internal audit queries were resolved) is not just an ethical imperative but an economic one. These recovered funds are essential to finance critical reforms like raising civil service salaries (e.g., Grade R from MK 115k towards the MK 300k basic needs level) and improving public services, creating a virtuous cycle.
- Buy-in from Public Servants and the Citizenry: Lasting change requires acceptance and participation. Clear communication is needed to explain *why* these reforms are vital, linking abuses directly to poor service delivery. Engaging unions, civil society, and media in monitoring can build trust. Fostering a culture change through ethics training and promoting national values is crucial for embedding integrity long-term.
Ultimately, addressing these weaknesses requires a coordinated, persistent effort. It demands confronting entrenched interests, overhauling outdated systems, and committing to transparency and accountability, demonstrating that ethical governance and efficient public service are the cornerstones for achieving the Malawi 2063 vision.
