Ministry of Local Government and Rural Development has centralised procurement under the final cycle of the World Bank-funded Governance to Enable Service Delivery (Gesd) project, barring local councils from accessing about K20 billion.
In a circular dated January 22 2026 addressed to all district councils, the ministry ordered that funds under Performance-Based Grant (PBG) Cycle 4 will no longer be disbursed directly to councils, with procurement instead to be handled centrally.
A paying ward at Kasungu District Hospital contructed using Gesd funds. | Nation
Secretary for Local Government and Rural Development Dingiswayo Jere said the decision was prompted by slow procurement progress by several councils, which he warned could jeopardise the project and force Malawi to return funds to the financier, the World Bank.
He said many local authorities had failed to conclude procurement processes, while others had not started, and directed all councils to halt procurement for Cycle 4, including the awarding and signing of contracts.
Jere also instructed councils to submit quantities and cost estimates for furniture, solar equipment and medical equipment required for schools, police units and health facilities within their jurisdictions, aligned to their indicative planning figures.
Reads the circular: “Considering that the closure of the Gesd 1.0 Project is on June 30, 2026, we have reached a decision that all funds under PBG Cycle 4 will be used to purchase furniture, solar equipment and medical equipment for projects under any sector, regardless of the PBG cycle or financing window they fall under.”
Gesd is a five-year performance-based programme launched in 2021 and valued at $100 million (about K173 billion). The final cycle, running to June 30, is valued at $19.6 million (about K32 billion), with about $12 million (K20 billion) earmarked for procurement of furniture, solar installations and medical equipment.
The Malawi Local Government Association (Malga), which represents all local authorities, has confirmed receipt of the directive.
In a written response, Malga executive director Hadrod Mkandawire said councils were deliberating on the matter and would issue a collective position by January 26.
“We have taken note of the circular and, as Local Government Authorities, we are currently deliberating on it. A decision will be made and communicated to the Ministry of Local Government and Rural Development,” he said.
But Citizen Engagement Committee (Cec) under Gesd chairperson Willy Kambwandira described the directive as troubling and contrary to the principles of performance-based financing.
“PBGs are designed to reward councils for compliance, capacity and results, not to be recentralised when timelines become inconvenient,” he said.
Kambwandira further questioned the logic of procuring furniture and equipment for facilities that, in some cases, are yet to be completed, warning of legal and governance risks.
National Advocacy Platform chairperson Benedicto Kondowe also criticised the move, saying it contradicts the spirit of decentralisation and fiscal devolution.
“Recentralising procurement does not fix inefficiency; it centralises risk, weakens oversight and heightens exposure to corruption,” he said, adding that civil society would closely monitor implementation of the directive.
But Gesd national coordinator Charles Chunga justified the decision, saying it was necessary to avoid losing the funds.
“The money was at risk of being returned to the donor because procurement was taking too long at council level. Central procurement was the only way to speed up the process and catch up with time,” he said.
Gesd implementation has previously faced challenges. Project Cycle 3 had achieved only 68 percent implementation by June 2025, with a mid-year report flagging districts such as Mchinji, Salima, Chikwawa and Lilongwe as off track.
The National Local Government Finance Committee (NLGFC) is implementing the Gesd project with World Bank support. The project aims to strengthen local authorities’ institutional performance, responsiveness to citizens and resource management for improved service delivery, and is scheduled to close on June 30 2026.
