Donors are working towards a SWAP in the health sector. A common understanding of SWAp reporting and accounting procedures has been reached. Participating donors are AfDB, DFID, EC, JICA, Netherlands, NORAD, UNFPA, UNICEF, USAID, WHO, and the World Bank. A Memorandum of Understanding (MOU) between the Government and donors has been prepared and a Program of Work (POW) has been proposed for July 2004 onwards. In addition, the Government has developed a National AIDS Strategy, which donors have pledged to support. Malawi National AIDS Commission (NAC) and a group of like-minded donors are developing a framework for HIV/AIDS basket funding.

The process of building a SWAp at the same time as the capacity to manage it (under pressure of an AIDS epidemic) has produced friction between the NAC and donors, delays in funding and an erratic start to programming. The process to date could have benefited from better initial understanding of mutual expectations, especially around roles, responsibilities and minimum accountability requirements. Despite the high level of risk, the potential benefits of the SWAp remain significant, and are considered to outweigh the challenges.

On the Government’s side, NAC (an independent Government Trust) would lead the process. Basket fund donors are: CIDA, DFID, and NORAD. The World Bank Multi-Country HIV/AIDS Program funding mechanism is flexible and has basket-like features, in that it can support areas of the NAC work plan, as required. Other donors active in the HIV/AIDS sub-sector are: ADF, AfDB, JICA, NORAD, UNDP, USAID and the U.S Center for Disease Control.

Work is ongoing towards common conditionalities and joint financing arrangements. For example, DFID, WFP and other development partners are pooling funds for humanitarian food imports.

There are several examples of delegated cooperation agreements in Malawi. For example, on the country program, (i) Switzerland and the Netherlands have an agreement with the latter as the silent partner, and (ii) Norway and Sweden agreed on a cooperation framework to reduce the administrative burden for Malawi and improve the efficiency of the development assistance programs managed by NORAD and SIDA respectively.

The details of the agreement for Norway and Sweden are as follows. Based on Annual Meetings, Sweden makes available an annual grant (in quarterly payments to NORAD) to finance specific development projects/programs in Malawi based on an indicative request from Norway. Sweden may, in addition, offer technical assistance when requested by Norway. Norway manages Sweden’s grants in accordance with the guidelines for Norwegian development assistance. Norway submits to Sweden in advance a financial overview and plan that includes budgets on project level.

As lead donor, Norway provides Sweden with copies of the annual report, audit reports by the Auditor General of Norway, evaluation reports and other reports requested by Sweden. Norway has entered into a MOU with the Government of Malawi stating Norway’s authority to represent both Norway and Sweden within the scope of the development cooperation agreement.

In education, UK and the Netherlands have an agreement with the latter as the silent partner.

In the health sector, there is a cooperation agreement between Norway and Sweden, with Sweden as silent partner as well as for HIV/AIDS, between Canada and Japan (JICA).

Canada and Japan (JICA) also have an agreement on water development, while a delegation cooperation agreement also exists between Canada and the UK.

Germany (GTZ) and the Netherlands (Ministry for Development Cooperation) have concluded an agreement for the support of the SADC Program on Biomass Energy Conservation in Tanzania, Zambia and Malawi. GTZ will administer the contribution provided by the Netherlands for the said project in addition to its own support.

In the education sector, joint (Government, donors, civil society) annual review assesses the sector's performance and determines future priorities. Agreement has been reached on sector performance indicators, code of conduct and a Policy and Investment framework (PIF).

In the area of decentralization, a National Decentralization Program exists which has been coordinated with the donor community and provides the basis for their engagement. Continued coordination takes place within the framework of a taskforce chaired by the Dept. of Local Government that meets regularly. A review mission of the Decentralization Program jointly organized by the Government and the donor community ( AfDB, GTZ, KfW, NORAD and UNDP/UNCDF) was undertaken in 2004.

In 2002, a joint CFAA was completed with some SPA donors (AfDB, CIDA, DANIDA, DFID, JICA, KfW and NORAD) as a pilot exercise.

A Diagnostic Trade Integration Study (DTIS) was prepared in 2002-2003 by team including Government officials, IMF, NORAD, UNDP, WB and WTO.

Joint DFID/SIDA Evaluation of Budget Support is in progress for 9 countries (including Malawi). The work is led by DFID and the literature review has been completed. Final report in the form of a SIDA working paper is expected by December 2005.

Multilateral Organizations Performance Assessment Network (MOPAN) - an informal network of like-minded donors (Canada, Denmark, Germany, the Netherlands, Norway, Sweden, Switzerland and the UK) - was launched in 2002 in response to an increased focus on the performance of multilateral organizations at the country level. In 2003, MOPAN conducted a pilot performance assessment of select multilateral organizations (AfDB, AsDB, IADB, UNICEF, WB and WHO) who were involved in the health sector in 8 countries (Bangladesh, Ghana, India, Malawi, Mozambique, Nicaragua, Uganda and Vietnam). The assessment primarily looked at the organizations’ support for national policies and institutions and their participation in aid coordination activities and other partnerships. The report from this pilot exercise has been completed.

Joint DFID/SIDA Evaluation of Budget Support is in progress for 9 countries (including Malawi). The work is led by DFID and the literature review has been completed. Final report in the form of a SIDA working paper is expected by December 2005.