Malawi Fiscal Governance Program for Results

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The Malawi Fiscal Governance Program for Results (PforR) is supporting the delivery of the Malawi Public Finance Management Strategy 2023 – 2028 with the overarching objective of attaining sound financial management and discipline in public service delivery for sustainable development. The IDA operation (US$80 million) will support the GoM in the delivery of the recently launched Malawi Public Finance Management (PFM) Strategy 2023 – 2028, with results under the program having significant complementarity with a new IMF Extended Credit Facility (ECF) arrangement and World Bank Development Policy Financing (DPF), both approved in late 2023. It will evolve World Bank support to PFM strengthening from prior input-based instruments to financing linked to implementation of policy reforms and achievement of continued results throughout the span of the PFM Strategy. The operation represents the first Program for Results (PforR) introduced in Malawi, with the objective of increasing trust and strengthening controls for spending through government systems. This will enable the GoM to further invest in the credibility of its systems and improve its ability for harmonized planning, coordination, and utilization of resources for service delivery aligned to national development priorities.The operation will be hybrid (PforR, with IPF component) as notable capacity gaps still remain. Based on the findings of the Program Assessments, a prioritized IPF component (PforR US$75 million, IPF US$5 million) will be included in the operation with two primary objectives. The first objective is to provide targeted Technical Assistance (TA) and capacity building to supplement the financial incentives of the PforR to support the achievement of identified results. The second is to support the development of a centralized unit within MoF to bolster the institutionalization of Financial Management, Procurement, and E&S Safeguards implementation capacity within government systems and across MDAs.