Malawi finance minister calls for aid accountability for private sector

19 Oct 16

Private companies that become involved in development and aid programmes need to be made accountable to wider society and not just to their shareholders, Malawi’s finance minister has said.

Addressing the first day of the Overseas Development Institute’s annual Centre for Aid and Public Expenditure conference yesterday, Goodall Edward Gondwe stressed that aid programmes needed to be inclusive, involving the private sector and civil society as well as central governments.

“We will not deal with issues of leaving no one behind if we continue to rely on central government,” he said.

More “imaginative” means of harnessing finance for development were also needed, the minister said. He gave an example from Malawi, where efforts to boost the country’s power supply were helped by $300m in catalysing investment, which has since led to multiple power countries operating in Malawi.

But during the Q&A session that followed his speech Gondwe acknowledged that the private sector should not be viewed as a “silver bullet” and there was a question mark over how to make the private sector accountable to the public realm and not just to company shareholders.

During his speech, Gondwe also maintained that strong systems for resource organisation and allocation were a cornerstone of development effectiveness.

“One point that set us back and meant we didn’t meet the Millennium Development Goals, was because of a shortage of funds,” he told the conference.

“We did nothing ourselves but looked forward to receiving aid from developed countries. This time [as Malawi works towards the Sustainable Development Goals] it is crucial that we mobilise resources from within rather than relying on ODA.”

This year’s CAPE conference was considering the question of where next for development effectiveness ahead of next month’s high-level meeting in Nairobi of the Global Partnership for Effective Development Co-operation.

The meeting will finalise a statement on how development partners can better work together towards the 2030 agenda and SDGs.

Gondwe is one of three co-chairs of the global partnership. The others are Mexico’s secretary of foreign affairs, Claudia Ruiz Massieu Salinas, and Dutch foreign trade and development co-operation minister, Lilianne Ploumen.

Ed Hedger, the ODI’s interim executive director, told the conference there had been a “step change” in the nature of the development debate. There was now widespread agreement that development effectiveness needed to better reflect country perspectives, include a greater role for the private sector, ensure no one was left behind by progress, and be evidence-based, he said.

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