1. Malawi is one of the poorest countries in the world. It depends on maize for subsistence and on tobacco as its principal export, with few other industries or resources. The population has grown steadily, making Malawi one of the most densely occupied countries in Africa, with most households subsisting on about one hectare. Poor harvests and famine have dominated the lives of ordinary Malawians. Malawi also has inadequate physical and social infrastructure such as roads, utilities, schools and hospitals - particularly in the rural areas where 88 per cent of its people live. Most people are poorly educated. The Government of Malawi (the Government) has very limited fi nancial and economic resources.
2. DFID has provided some £312 million (or 21 per cent of all aid) between 2003-04 and 2007-081, rising from £54 million in 2003-4 to a planned £80 million by 2010-11. This report examines the extent to which DFID has achieved its objectives - objectives which require it to work effectively with and through others. We look at DFID work on health and food security in more detail, areas where DFID has been particularly active.
3. Malawi has recently been one of the fastest growing economies in Africa, after decades of relative stagnation, and levels of poverty have decreased. Increased agricultural productivity has reduced hunger. The capacity of the health system has substantially improved, contributing to better health outcomes, although progress has been uneven. In treating AIDS, lowering child mortality and increasing immunisation coverage, improvements are at or above the rates DFID expected. Although maternal mortality has fallen from its 2000 peak, it is still not on track to achieve an internationally agreed target or the related DFID Malawi target. Relatively high rates of pupil enrolment in the free primary school system have not been matched by high pupil attainment. Governance is improving, though slower than DFID had expected - in part because the Government's Parliamentary minority between 2004 and 2009 hindered the passing of legislation and budgets, affecting some DFID programmes.
4. DFID has contributed to these gains. It is well-regarded by Malawi's Government and by other donors. Against recognised international standards for donors its scores well in how it delivers support. Its project performance has improved since 2004, and DFID Malawi staff show increasing confi dence in how their business operates. Progress has, nevertheless, been slower than planned: only 61 per cent of the targets DFID Malawi set for June 2008 were achieved on time, and a further 14 per cent within the subsequent year. And measures themselves need to be more robust, unambiguous and relevant: few directly address value for money in project implementation. DFID tracks trends in public access to services, but more tracking of indirect costs encountered by ordinary people would better inform its analysis. DFID Malawi also faces challenges in tracking the use made of its support through central and local government.
5. DFID's interventions in health have been well-designed, concentrating on illnesse that affect most Malawians, and have contributed to the overall positive trends (paragraph 3). But DFID recognises that there are challenges still to be addressed. Malawi's system is funded at about half the level necessary for basic provision, so allocating scarce resources effi ciently is vital. More qualifi ed health workers are coming through an expanded training system, but efforts to direct trained clinicians to disadvantaged rural areas, where most poor people live, have so far had little effect. Arrangements for management oversight, motivation, and quality assurance of staff remain weak. Drug procurement and distribution processes have improved, but people told us of frequent stock-outs of simple products, such as anti-malaria nets.
6. DFID has targeted hunger, the top concern amongst Malawians we interviewed, and contributed to reducing hunger: rates of malnutrition have decreased, and since 2005 offi cial statistics indicate that national maize production has exceeded national consumption. During that time DFID has supported a Government programme of subsidised fertiliser and seeds, focused on poor farmers and implemented through issuing coupons. Aspects of DFID support to the subsidy have been particularly good value for money, but the programme's overall value for money depends heavily on maize and fertiliser prices and on how well it is managed. Value for money could be raised by addressing weaknesses in the distribution of coupons and fertiliser, problems with the Government's purchase of fertiliser and the exclusion of private sector distributors.
7. From the early 2000s, DFID has supported development of a further Malawian programme to benefi t people unable to farm or afford even subsidised fertiliser. Whilst progress has been made, a national programme is not yet in place. Donors have been divided on which schemes are most appropriate and Malawi's Government has concerns about affordability.
8. Since 2004 DFID Malawi has reduced its running costs while improving its management of aid. It has cut staff numbers from over 100 to under 40, by better matching of staff to the nature of the programme, and transferring project delivery work and staff to the Malawian Government. Additional fi nancial pressures in 2009-10 arising from a weaker pound have led to further reductions in DFID Malawi's front line teams, accommodated partly by sharing posts and responsibilities with other donors.