U.S. Embassy Lilongwe Offers Grant for Transparency in Malawi’s State-Owned Enterprise Debt

U.S. Embassy Lilongwe announces this Notice of Funding Opportunity (NOFO) for a Fiscal Transparency Innovation Fund (FTIF) grant up to $50,000 to examine debt accrued by state owned enterprises (SOEs) in Malawi. The project will result in an increase in transparency and public oversight of SOE debt. Increased transparency will benefit the Malawian economy by compelling the SOEs, which account for a large part of the country’s economic activity, to run more efficiently and to reduce irresponsible and possibly corrupt debt accruement. The period of performance is maximum of twenty-four monthsU.S. Embassy Lilongwe announces this Notice of Funding Opportunity (NOFO) for a Fiscal Transparency Innovation Fund (FTIF) grant up to $50,000 to examine debt accrued by state owned enterprises (SOEs) in Malawi. The project will result in an increase in transparency and public oversight of SOE debt. Increased transparency will benefit the Malawian economy by compelling the SOEs, which account for a large part of the country’s economic activity, to run more efficiently and to reduce irresponsible and possibly corrupt debt accruement. The period of performance is maximum of twenty-four months.

Malawi has 71 SOEs that play a significant role in the economy and that provide important public goods like water, electricity, and education. SOEs are also involved in regulation, fair trade enforcement, and quality assurance. However, SOE finances are opaque and overall statistics on profits and losses are not easily available. SOEs can take on debt to cover losses, and the government of Malawi has on occasion used general budget funds to pay down SOE debt. The Ministry of Finance and Economic Affairs annual debt report provides limited information on loan guarantees to SOEs and debt levels or payment status. The lack of transparency in the accrual and payment of SOE debt makes public oversight of SOE finances very difficult for watchdog civil society organizations (CSOs) and journalists. The U.S. Department of State 2021 Fiscal Transparency Report states that Malawi’s fiscal transparency would be improved by disclosing all SOE debt.