Development of Policy, Legal, and Insitutional Framework for - ppiaf

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Development of Policy, Legal, & Institutional Framework for the PPP Program in Malawi Final Report Institute private sector infrastructure financing facility with donor assistance Encourage commercial lending into PPPs by blending with donor financing Through regulatory guidelines, Malawi could explore the option of directing bank lending into infrastructure projects. Provide tax incentives for investments/lending to infrastructure projects. 23. The Exchange Control Act The Exchange Control Act gives guidance and authority to authorized dealers to transact on behalf of Reserve Bank of Malawi on matters concerning foreign exchange. Briefly, the Exchange Control Act sets out the parameters for dealings in foreign currencies. ISSUE: As a result of the structure of the economy, foreign exchange availability can be problematic. This has consequences on the stability of the currency. Investors in PPP projects will view this as a risk. 24. Competition and Fair Trading Act, 1998 The purpose of the Competition and Fair Trading Act is to establish and encourage an environment in Malawi that is conducive to fair trade and the development of competitive markets in goods and services. To support this goal, the Competition Act establishes the Competition Fair Trading Commission. ISSUE: The commission was set up sometime last year. The secretariat is yet to become fully operational. Time is of the essence. It is suggested that PPPs as other facets of the economy will benefit from a fully operationalised Competition Commission. 25. The Public Health Act The Public Health Act governs the health sector supported by the Nurses and Midwives Act; the Medical Practitioner and Dentists Act; the Pharmacy, Poisons and Medicines Act; and the Anatomy Act. CHAM’s administration of private hospitals is an example of PPPs at work. The government pays the salaries of staff while delivery of service is undertaken by CHAM. ISSUE: The main Act governing this sector is very old and could do with an overhaul that will seek to bring it in line with the realities of our world today. 26. The Education Act The Ministry of Education administers the education sector through the Education Act. THE INSTITUTE FOR PUBLIC-PRIVATE PARTNERSHIPS 100
Development of Policy, Legal, & Institutional Framework for the PPP Program in Malawi Final Report ISSUES: This Act is outdated. It could do with some review to bring it up to date. The sector needs to establish appropriate mechanisms to control quality. Develop systems that can ensure that there is transparency and accountability for the delivery of services. 27. The Environment Management Act The Act’s main objective is to provide for the protection and management of the environment. The Act entitles every person to a right to a clean and healthy environment. ISSUE: Enforcement remains a huge challenge. There are competing demands between the need for development and the realisation that such development has to be undertaken in an environmentally friendly manner for it to be sustainable. 28. Anti Money Laundering and Finance of Terrorism Bill Malawi does not have a law against money laundering or financing of terrorism. This has implications on the cost of doing business internationally. ISSUE: The cost of doing business internationally is said to have increased by as much as US$1.0 million per month by reason that Malawi does not have any legislation governing money laundering. A Bill has been before Parliament for a number of months. The approval of this bill is now a matter of great concern to captains of industry in Malawi. Potential areas for PPP Projects Local Assemblies: Under the government’s decentralisation policy, there are proposals to devolve water distribution and sales to local assemblies. The water boards will supply water in bulk to water reservoirs in the local assembly areas, from where local assemblies will distribute it to consumers in their areas, bill and collect the charges. However, local assemblies do not have the capacity to handle such tasks. This offers good potential for PPPs. Local Assemblies are also responsible for road maintenance. This is another area for PPPs. There are other infrastructure services as well which could be procured under PPP arrangements. Expanding the water kiosks is another possibility for PPPs. There are many opportunities for PPPs at the municipal level. Services such as sewage treatment, refuse collection, sanitation, city cleaning, landscaping, public transportation, kiosks to provide services to the public, public lavatories, car parking, covered markets, recreational facilities and even social services, all could be provided by the private sector in partnership with local governments. THE INSTITUTE FOR PUBLIC-PRIVATE PARTNERSHIPS 101
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31 March 2007 Mr. Constantine Chiko
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