CHILIMA REFORMS: Detailed Summary: Review of Malawi Public Service Systems Report

Introduction

On February 19, 2021, President Lazarus McCarthy Chakwera appointed a Special Taskforce, chaired by Vice President Saulos Klaus Chilima, to review Malawi's public service systems focusing on allowances, procurement, and employment contracts. The goal was to recommend reforms for greater efficiency, effectiveness, and integrity, supporting the Malawi 2063 vision. The Taskforce also reviewed conditions of service and the overall structure of the public service. 

  Overall Observations

The Taskforce identified endemic abuses across allowances, procurement, and employment contracts, concluding that most control measures against wastage and abuse had collapsed. Key weaknesses included: Legal/Policy: Outdated, inadequate, and inconsistent laws (e.g., Public Service Act 1994, Malawi Public Service Regulations 1991). Systems/Procedures: Non-adherence, weak enforcement of rules and sanctions, lack of rewards for compliance. Human Capacity: Poor selection/deployment, lack of knowledge, ignoring procedures (like audit queries), weak performance management. Structures: Uncoordinated oversight, lack of a national body for harmonizing conditions, slow/partial devolution. ICT: Underutilization of Integrated Financial Management Information System, reliance on manual processes (allowances, procurement). Ethics: Moral decay, poor discipline, lack of integrity across the service. Equity: Remuneration disparities violating the principle of equal pay for work of equal value.

  

Key Findings and Recommendations by Area 

1. Allowances Problem: Allowances constitute a large part of the budget (Malawi Kwacha 79 Billion in 2019/20). Despite a 'clean wage' policy (2004), numerous allowances have created inequalities. Abuse is rampant, especially with subsistence allowances (Malawi Kwacha 33.7 Billion spent vs Malawi Kwacha 27.4 Billion approved in 2019/20). Billions lost through fraudulent claims (false travel, unauthorized activities, overlapping claims, unsigned receipts). Audit queries are largely ignored (only 1.5% of 908 internal audit queries resolved 2017-2020). Sitting allowances for Members of Parliament/staff amount to double payment for core duties. Parastatal board sitting allowances incentivize unnecessary meetings. Health worker 'Risk Allowance' is a double payment given existing 'Top-Up Allowance'.

  Recommendations: 

Local Travel: Implement a mandatory full-board system (direct payment to hotels) progressively from July 2021, replacing cash Daily Subsistence Allowance. Department of Human Resource Management and Development to negotiate government rates. Enforce 30-day payment of hotel invoices. Abolish illegal meal allowances for in-station meetings. External Travel: Abolish ad-hoc rate increases. Standardize rates based on destination costs (United Nations model) and make them uniform regardless of grade. Enforce limits on delegation size/duration. Strictly prohibit 'top-up' allowances for fully-funded trips. Sitting Allowances: Eliminate for Members of Parliament and Parliamentary staff. Replace per-meeting sitting allowances for Parastatal Boards with annual honoraria (paid quarterly). Stop Transport & Travel allowances for Ex-Officio board members using government vehicles/fuel. Parliament to budget for its own oversight visits, not rely on parastatals. Risk Allowance: Eliminate entirely. Address genuine profession-specific needs through conditions of service reviews. Accountability: Mandate immediate action on all outstanding audit queries by Controlling Officers within 30 days, with sanctions enforced by the Secretary to the President and Cabinet. Empower the Secretary to the Treasury (through Public Finance Management Act amendment) to surcharge officers personally liable for financial losses. Revive independent Audit Committees. Make action on audits a key performance indicator for Controlling Officers and the Secretary to the President and Cabinet. Appoint a permanent Auditor General immediately. 

2. Employment Contracts

Problem: Conflicts exist between the Public Service Act (Presidential appointment powers for Grade E+) and specific Parastatal Acts regarding hiring authority. Malawi Public Service Regulations (1991) is outdated. Poor enforcement of existing laws prevails. Political appointees (Personal Assistants, non-career diplomats) are often absorbed into the permanent civil service ("back-door entry"), demoralizing staff and politicizing the service. Some appointees are arbitrarily given higher grades without following procedures. Unqualified candidates are sometimes recruited, and procedures are flouted (ultra vires appointments, skipping interviews). Political influence, cronyism, and corruption affect recruitment. The practice of "warehousing" (deploying staff without assigning functions but paying them) exists. Recommendations: Legal Framework: Review and harmonize the Public Service Act, Malawi Public Service Regulations, and Parastatal Acts. Appointments in parastatals must follow their specific Act unless explicitly stated otherwise. Develop clear guidelines for Grade E+ recruitment. Political Appointees: Must not transition into the permanent civil service. Their contract length should align with their principal's term of office. Develop clear guidelines for implementing gender quotas (40/60) and hiring 'rare skills'. Irregularities: Terminate all irregular contracts (unqualified, unprocedural hires, political absorptions, post-retirement hires without approval) by June 2021. End "warehousing" immediately; use proper disciplinary or redundancy procedures. Resolve cases of redeployed officers within 3 months. Diplomats: Develop clear Malawi Public Service Regulations guidelines on eligibility, recruitment, and selection, aligning placements with foreign policy goals. Oversight: Establish a National Remuneration Directorate (under the recommended Public Service Commission) to harmonize pay/benefits across the entire public service. Conduct Human Resource audits across the service and act on findings.

  3. Conditions of Service 

Problem: Huge salary disparities exist, with the civil service paid significantly less than parastatals, violating 'equal pay for equal value'. Lowest civil service grades earn far below the basic needs basket (Grade R 61.5% below). Excessive vehicle (3500cc Prado for Grade C+) and fuel (500L/month) entitlements create massive costs (Malawi Kwacha 36.6 Billion purchase cost, Malawi Kwacha 4.07 Billion/year fuel) and wastage. Parastatals abuse vehicle disposal policies. Parastatal executives receive generous private school fees benefits, unavailable in the civil service. Performance management systems are largely dysfunctional and not linked to rewards/sanctions. Discipline has eroded due to poor enforcement and outdated regulations. Staff welfare systems (e.g., loan schemes) have collapsed. 

Recommendations: 

Salaries: Rationalize and harmonize across the public service. Raise lowest civil service pay towards the basic needs basket (phased, potentially using non-taxable housing/transport allowances). Freeze salaries in highest-paying parastatals. Review salaries against cost of living quarterly (via Public Service Commission). Ensure salaries are within approved scales (investigate Electricity Generation Company case). Vehicles/Fuel: Downgrade vehicle entitlements (e.g., Grade C to 2500cc like RAV4). Introduce a vehicle ownership loan scheme for Grade D and potentially lower grades. Reduce the number of vehicles for Ministers/Deputies/Grades A&B. Extend vehicle disposal period or increase buy-out price. Standardize fuel allowances. School Fees: Abolish the benefit entirely for executives in all public institutions (except diplomats posted abroad during their tour and transition period). Let current contracts expire. Systems: Enforce Performance Management rigorously, linking it to rewards/sanctions. Make it a key deliverable for Controlling Officers. Revamp disciplinary processes with clear manuals and strengthened committees. Re-establish staff welfare loan schemes (emergency, vehicle). Develop comprehensive welfare policies (health, work-life balance). Medical Scheme: Progressively roll out contributory medical cover to ALL civil servants, starting immediately with Grade I. 

  4. Procurement

Problem: The manual, paper-based system lacks transparency, enabling widespread malfeasance (fraud, corruption, collusion). Flawed processes include poor planning (bid slicing, under-budgeting), specifications tailored to favour suppliers, manipulation of evaluation criteria, abuse of single-sourcing, political interference, and awarding contracts to known poor performers. The 'lowest evaluated bid' principle often results in poor quality or abandoned projects. Government pays massively inflated prices. Multiple, confusing approval points (statutory: Public Procurement and Disposal Authority, Anti-Corruption Bureau; administrative: Office of the President and Cabinet, Government Contracting Unit, Ministry of Justice) cause delays and undermine Public Procurement and Disposal Authority's authority. Public Procurement and Disposal Authority lacks capacity (high vacancy rate). Consulting engineers lack accountability and sometimes collude with contractors. Framework agreements (e.g., Pharmaceutical Manufacturers Association of Malawi Memorandum of Understanding) lead to exorbitant prices. Preferential procurement rules lack clarity. 

  Recommendations: 

Digitization: Expedite rollout of e-Procurement system nationwide, including e-marketplaces for price comparison. Awarding Criteria: Mandate inclusion of past performance. Replace 'lowest evaluated bid' with 'most economically advantageous bid' for complex procurements. Combat Malfeasance: Require disclosure of beneficial owners. Link Public Procurement and Disposal Authority/Registrar General/Malawi Revenue Authority systems. Develop and enforce use of market price indexes. Sanction collusion and overpricing. Terminate the Pharmaceutical Manufacturers Association of Malawi Memorandum of Understanding immediately; use open competition with standard preference margins. Capacity & Planning: Upgrade procurement roles/grades within Ministries, Departments and Agencies. Fill all Public Procurement and Disposal Authority vacancies urgently. Enforce procurement planning aligned with budgets and the Public Sector Investment Programme. Ensure projects only start with full funding identified. Streamline Approvals: Remove administrative vetting layers (Office of the President and Cabinet, Government Contracting Unit role limited to contract support). Clarify Anti-Corruption Bureau's vetting role to avoid conflict with investigations. Resource Government Contracting Unit adequately for contract management support only. Withdraw circulars mandating specific suppliers/brands (e.g., Prado). Accountability: Hold consulting engineers professionally liable for substandard work (joint debarment with contractors). Public Procurement and Disposal Authority/National Construction Industry Council to regulate them better. Enforce strict sanctions (debarment, surcharge, prosecution) against officials and suppliers for misconduct. Intensify Public Procurement and Disposal Authority monitoring and post-reviews. 

  5. Restructuring the Public Service 

Problem: Lack of clear constitutional/legal definitions ("Government", "Public Service"). Secretary to the President and Cabinet's role as Head of the entire Public Service conflicts with the Constitution (only mentions Secretary to Cabinet) and Separation of Powers. No constitutional limits on the number of ministries, constituencies, or senior judges, leading to potential bloat and instability. Duplication and fragmentation of functions exist. Devolution is slow and incomplete. Governance of State-Owned Enterprises is weak (Department of Statutory Corporations relevance questioned, Reserve Bank of Malawi operates with excessive independence, inconsistent board structures). Political interference blurs lines between Ministers' policy/oversight roles and Principal Secretaries' administrative/implementation roles. 

  Recommendations:

Constitutional/Legal Clarity: Amend Constitution to clearly define "Government" and "Public Service". Establish an independent, overarching Public Service Commission responsible for harmonizing grading, remuneration, conditions, appointments, and discipline across the entire public service. Define Secretary to the President and Cabinet constitutionally as Head of the Civil Service only. Structure & Size: Introduce constitutional limits on the number of ministries (max 21 recommended), constituencies (max 200), and senior judges. Standardize definitions of ministry/department/division structures. Conduct a comprehensive functional review to eliminate duplication and align structure with Malawi 2063. System of Government: Hold a national conference and referendum to decide on the optimal system (presidential, parliamentary, hybrid) to address issues like Ministers serving as Members of Parliament. Stop assigning sitting judges to executive roles. Devolution: Fast-track complete devolution of functions, funding, assets, and Human Resource management to local authorities, making them the primary service delivery points. Central government to focus on policy, standards, Monitoring and Evaluation, and resource mobilization. State-Owned Enterprise Governance: Review the relevance of Department of Statutory Corporations. Standardize board appointments (competitive selection, independent chairs). Improve Reserve Bank of Malawi accountability (remove Public Finance Management Act exemption, review governance structure). Ensure all State-Owned Enterprises adhere to public finance laws. Roles: Amend Constitution/Public Service Act to clearly delineate Minister's role (policy formulation, direction, oversight) from Principal Secretary's role (chief executive: advising minister, implementation, day-to-day management). 

  Conclusion

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) 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. 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 and Malawi Public Service Regulations, amending the Public Finance Management Act (e.g., to empower the Treasury to surcharge officials for losses), 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 is not just an ethical imperative but an economic one. These recovered funds are essential to finance critical reforms like raising civil service salaries towards the basic needs basket and improving the provision of public services, thereby creating a virtuous cycle where better conditions reduce incentives for corruption. Buy-in from Public Servants and the Citizenry: Lasting change requires acceptance and participation from those within the system and those it serves. Clear, consistent communication is needed to explain why these reforms are vital, linking the identified abuses directly to poor service delivery and economic stagnation. Engaging public service unions, civil society organizations, and the media in monitoring implementation can build trust. Furthermore, fostering a culture change, as recommended through initiatives on ethics training in schools and the public service and identifying national champions for values, is crucial for embedding integrity long-term. Ultimately, addressing the identified weaknesses requires a coordinated, persistent effort across all these fronts. 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.