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

Development of Policy, Legal, & Institutional Framework for the PPP Program in Malawi
Final Report
Current Legal Framework Impacting on PPPs
In order to set up an environment suitable for implementing PPPs in this country
Malawi has over the recent past, commissioned a number consultants to design
appropriate legal and policy framework. Utho Capital Partners were contracted to
undertake a situational analysis of the prevailing environment in Malawi in order to
determine what needed to be done to improve the PPP legal and institutional
framework. Utho Capital Partners provided a comprehensive review of the operational
environment. We have reviewed their work as well as that of PricewaterHouseCoopers.
PWC also undertaken a similar analysis with particular emphasis on recommending
strategies that were to benefit the pace of the privatisation programme. This report
benefits from their respective reports.
In addition, to the work undertaken by Utho Capital Partners and PWC we also
collected and reviewed a number of laws, by-laws and policy documents in order to
identify any bottlenecks that currently exist in Malawi’s legal framework that would
make PPPs especially difficult to implement.
1. The Constitutional Framework
The Constitution stipulates that the Government’s paramount duty shall be to
promote, safeguard, and advance the welfare of the people of Malawi. The
Constitution also commits the Government to long-term investment in health,
education, economic and social development. This has clear implications on the
amount of investment needed to fulfil these commitments. As discussed above,
there does not appear any reasonable likelihood that the Government can meet these
commitments. The obligations on the part the Government are clear. Equally clear
is the fact that pursuing private enterprise, whether by the Government or the
private sector or in association, is not prohibited.
ISSUE:
Supremacy of the Constitution
Any Act of the GoM or any law enacted that is inconsistent with the provisions of
the Constitution shall to the extent of that inconsistency be invalid. Thus, any law
that would seek for instance, to detract from the commitments articulated in the
Constitution could potentially be declared invalid. This needs to be borne in mind in
the preparation of the new PPP legislation and the amended Privatisation Law.
2. Privatisation - Public Enterprises (Privatisation) Act
By virtue of the Public Enterprises (Privatisation) Act, the Privatisation Commission
is the sole authority in Malawi to implement the privatisation of any public
enterprise. Although the privatization programme started off impressively, progress
has slowed down. The Privatisation Commission engaged PwC to recommend
mechanisms for increasing the pace of the programme. PwC’s final report, delivered
in June, 2004, contained a total of 291 recommendations covering all aspects of the
privatisation programme and some touching on other areas of Malawi’s economic
landscape. Overall, the recommendations sought to create an environment that
THE INSTITUTE FOR PUBLIC-PRIVATE PARTNERSHIPS 88