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Speech bt the EU Ambassador, MARCHEL GERRMANN on Behalf of the Donor Committee on Agriculture and Food Security-DCAFS; at the Launch of the National Agriculture Investment Plan-NAIP

13.06.2018
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I want to assure you that Development Partners’ are here to work side by side with you on these important actions articulated in the NAIP. Like you, we want to devote less of our limited resources responding to short-term food emergencies, and invest more in the long-term sustainable growth of the agriculture sector.

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It gives me great pleasure and honour this morning, to make remarks on behalf of the Donor Committee on Agriculture and Food Security (DCAFS) on the occasion of the National Agriculture Investment Plan (NAIP) launch.

This is also a very special occasion for the EU.  Honourable Minister, you may wish to note that the EU has taken over DCAFS Chairmanship from the World Bank a few days ago. I am therefore very pleased to make my maiden speech on behalf of the DCAFS in such an important occasion for the agriculture sector.

During my four years stay in Malawi, I have learnt that DCAFS is a reliable strategic partner to the agriculture sector. For instance, in the last 5 years, DCAFS alone has contributed over USD1.2 billion to the sector, with nearly USD 300 million during the 2017/18 financial year. For comparison the Government agriculture spending in the same financial year was close to USD 100 million.

Let me start my remarks by congratulating you, Honourable Minister and the government as a whole for developing this well-articulated NAIP through an extensive and intensive consultative process. I would like also to applaud the Government of Malawi for the passing of a number of Policies and Bills in the recent past years that improve the enabling environment for the new NAIP such as:

•          The National Agriculture Policy

•          The National Seed Policy

•          National Irrigation Policy

•          The Land Bills

•          The Control of Goods Act (amendment)

•          Warehouse Receipt System Bill

•          Pest and Control Bill

Honourable Minister, Ladies and gentlemen,

As we are all aware, the NAIP we are launching today provides a framework to coordinate and prioritise investments by various government agencies, Development Partners (DPs) and Non-State Actors. More importantly, NAIP serves as the main implementation vehicle for the National Agriculture Policy (NAP) which was launched in November 2016.

Such a comprehensive investment framework calls for better partnership and collaboration of various stakeholders, including different Ministries other than the Ministry of Agriculture which has the lead.

It is time to shift from "Doing Business as Usual” if we want to embrace an agricultural transformation agenda.  All stakeholders will need to align and harmonize their budgets to NAIP. It is the belief of the DCAFS members, which I represent now, that an agriculture transformation in Malawi is possible if, under government leadership, resources are balanced and aligned to all the NAIP intervention areas and implemented according to the plan.

Honourable Minister, Ladies and Gentlemen,

As DCAFS we are committed to do our part to support agriculture transformation and help break the cycle of food insecurity and vulnerability.

As donors, we do recognize that budget allocation to the agreed NAIP priorities and Intervention Areas is critical to achieve NAIP's goals. Therefore, DPs have rebalanced their budget allocations across the NAIP program areas. I am glad to announce that a total of USD1.4 billion has been committed by DPs to the sector for the next 5 years.

Let me take this opportunity to applaud the Government of Malawi for continuing to meet its international commitment of investing at least 10% of its budget in agriculture since the signing of the CAADP Compact in 2010.  Unfortunately however, while this high level of expenditure is laudable, Government’s investments have primarily focused on Farm Input Subsidies (FISP) and maize purchases while systematically crowding out proven drivers of growth such as extension, research and irrigation. Over the past 5 years, the government Public Expenditure (PE) on FISP and Maize purchase has ranged between 71% to 84%, thus leaving only 4% to 16% for other strategic areas. This trend has been confirmed in next year's budget and it is a concern.

Honourable Minister,

The budgetary allocations of Government for the agriculture sector do not reflect your own Government's priority areas as ¨reflected in the NAIP. As a result, the sector lacks a solid foundation of functional institutions to develop food and nutrition security, resilience building, sustainable land resources management and use and economic growth. In fact, Malawi’s agriculture sector is fragile and extremely vulnerable to external and weather-related shocks. It consistently fails to attain the minimum six percent sector growth target expected under the CAADP compact.

We therefore strongly encourage the Government to align its agriculture spending to the NAIP and to go beyond allocating resources to FISP and maize procurements in next years' budgets across all 16 intervention areas of the NAIP.  If the NAIP and National Resilience Strategy (of which the NAIP is a major component) are implemented successfully, the country will mitigate its vulnerability.

Beyond the need to properly allocate spending across priorities, it is important also to channel spending through the right level of government. Lessons learnt from the agriculture previous investment plan, the ASWAp, showed that public spending has been highly centralized despite the country adopting the Decentralization Policy. This was confirmed by a Public Expenditure Review done by the World Bank. We believe it is important, to achieve the highest impact, that resources are allocated at the lowest level possible, in line with the spirit of decentralization.

Honourable Minister, Ladies and Gentlemen,

Last but not least, I wish to re-emphasise the importance of an enabling environment for private sector investment in agriculture. We would like to commend the Government for progress done so far, in particular the approval of the Seed Policy by Cabinet, and the passing of the Control of Goods Act in Parliament. It is important for Government to strive for increased transparency and predictability on the way it intervenes in the market. Implementation of the just passed Control of Goods Act (COGA) would be a good starting point, particularly addressing the issue of unpredictable export bans that continue to create uncertainty regarding export markets and depressing prices. More concretely, subsidiary regulations for COGA need to be developed. It is necessary to define the grounds of public interest and related thresholds that will trigger trade regulatory measures and the consultation process required to have these measures in place.

Honourable Minster,

Representatives from the private sector and non-state organisations

As an essential driver of market driven agriculture growth, the Private Sector has become an indispensable partner in development. It is encouraging to learn that the private sector in Malawi has showed ambitious investment intentions towards the agriculture sector.

Since 2013, the New Alliance has been an important tool to bring the focus of Government, private sector, Development Partners and Civil Society Actors around a limited set of key commitments to improve enabling environment to invest in agriculture. Because of the slow pace of reforms, however, the expectations of private sector have not been met. We need to revamp this. Let's not forget that the very ambitious goals of NAIP will not be achieved without leveraging resources from the private sector.

I am very glad that this afternoon the New Alliance High Level Task Force will meet. Private sector re-engagement is high on the agenda. The Country Agriculture Partnership Framework (CAP-F), introduced by the African Union, looks like a very relevant tool for Malawi to build upon what NA has done so far.

CAP-F has the potential to increase private sector engagement and investment through a more direct, transparent and accountable system of commitments and it is a critical tool to trigger private sector investment into the NAIP priorities. CAP-F will also serve as a registry for private investments that support the NAIP. We would like therefore to also encourage the private sector to contribute to develop, drive and participate into agriculture markets, and to do so in the framework of the CAP-F and the NAIP.

Honourable Minister, Distinguished guests,

In conclusion, I want to assure you that Development Partners’ are here to work side by side with you on these important actions articulated in the NAIP. Like you, we want to devote less of our limited resources responding to short-term food emergencies, and invest more in the long-term sustainable growth of the agriculture sector.

We all agree with the sayings that “if you want to travel fast, travel alone, if you want to travel far, travel together”. With the current Malawi situation on low agriculture growth and increasing vulnerability and market volatility, it is clear that we need to travel both far and fast.  So let’s keep moving, but faster and with a renewed sense of purpose.

I thank you all for your attention. 

Zikomo Kwambiri

Category
Joint Statements
Location

Lilongwe

Editorial sections
Malawi