Speech by Ambassador Sandra Paesen on the Launch of Chuma Cha Dziko – Public Finance Management Programme

Dear fellow Malawians, I am honoured to be here with you today, to publically launch a new impetus to PFM reform implementation.

Transparency and accountability are essential for sustainable and inclusive growth through efficient use of public funds effective resource mobilisation and strengthened domestic accountability. People have a right to information on and a say over decisions that affect them, and to hold decision-makers to account. The best way to manage public funds efficiently and equitably is through systems that are transparent, inclusive, and effectively monitored.

Just a few weeks ago, we were all witness to a monumental event in Malawian history; an event which has set a new precedence for transparency and accountably in Malawi. It is our hope that this superb display of values, conduct and commitment will prevail in other areas of public interest.

Hence, the EU welcomes its collaboration with government to improve transparency in the management of public resources and to be more accountable to Malawians regarding the use of tax payer's money. We look forward to joining hands with you, the public and the citizens as well as the Ministry, Departments and Agencies, to continue moving the development agenda of Malawi forward.

We have committed 17 billion Kwachas over a period of 5 years to improve the control, transparency and accountability for public resources in Malawi.

The majority of funds will benefit directly government institutions like the Ministry of Finance, Malawi Revenue Authority and Public Procurement and Disposal of Assets Authority, while other funds will focus on strengthening civil society to demand accountability and on increasing visibility for the management of public finances in general.

Malawi has made progress in the area of PFM, for example, cleaning up any ghost workers from the payroll, improving public procurement to stop overpricing and escalation of costs, to strengthen contract management to achieve value for money, to limit parastatals appetite to borrowing without due regard to repayment capacities and the need to widen the tax base to equally share the burden of taxes among all.

• We look forward to seeing this reform help control the use of public funds.
• We look forward to seeing the ministry applying adequate transparency  and information on this journey, so that we can all be part of the process
• And we look forward to the ministry showing results to all of us.
• Which brings me to the reason why we are gathered here tonight:
• Government's commitment to improve the management of public funds and enhance transparency and accountability will be witnessed tonight by all of us, broadcasted through TV and Radio, to thousands of you at home. Those of you with questions will have the opportunity to send texts to the moderator who will include them in the ensuing discussions.

In a couple of minutes the Minister and his colleagues from Government agencies will talk to you about their plans and intended impact for the coming years, to further improve the use and control of tax payers money and increase transparency for and accountability to Malawians.

Before I make way for this interesting discussion to commence, I would like to re-emphasise the importance of transparency and accountability, for you - for us - for all. In fact, this year's theme for the EU in Malawi evolves around accountability and is called: "Empowering Voices".

First: Last month, to be precise on 28/01, the ministry of finance, economic planning and development mentioned two top reforms in the media: the PFM Act review and the implementation of the 'Integrated Financial Management Information System'. This sets precedence on the relevance, credibility and prioritization of the plan to guide future reforms in PFM.

We commend the ministry for setting these two clear priorities and will closely follow their implementation. But we would also like to remind that legal frameworks and systems are only the vehicle upon which accountability for public funds strive. To remind ourselves, examples like Cashgate, Maizegate, Tractorgate etc., have shown that the abuse of public funds did not happen because of system failures… but because of the collusion and impunity of selected public officers going undetected or unsanctioned. Hence, we know that any reforms need to go beyond the improvement of systems and procedures and at least include, or even focus on, HOW public officers are conducting business:

• are they being transparent (where warranted) regarding their actions and decision making?
• are they being accountable to the citizens?
• is managerial oversight being executed?
• is there adherence to rules and regulations and non-compliance is disciplined?
• do we have a culture where promotions and rewards are based on merit and performance?

All these will play important roles in the success or failure of reforms.

Second: Transparency is paramount for a social contract to function. For the citizens to entrust part of their earned money to government as taxes, Government in turn needs to provide the necessary public services to its citizens. Therefore, for citizens to feel comfortable and even compelled to pay taxes, government needs to be able to demonstrate that: a) it uses the funds for their intended purposes, b) it manages the resources efficiently and effectively and c) it can show results.

Finally, let me assure you, that the EU has had a long-lasting and strong interest in improving financial governance in Malawi, not only because it makes the Ministry of Finance more accountable and transparent, but also because it makes all public services more efficient for Malawians.

Hence, we would like to ask the leadership in the Ministry of 'Finance Economic Planning and Development' with its Departments and Agencies, to set the marching order, to set the tone for change and to lead the path of reform: Rewards based on merits, sanctions for non-compliance and transparency and accountability regarding all public funds.

Without further ado, let me THANK YOU for your presence tonight whether physically here, at home, in the car or wherever you might find yourself. It shows we all attach great importance to the use and control of public funds and its key elements of transparency and accountability.

Zikomo Kwambiri.