Malawi - Support for Digitization, Financial Inclusion and Competitiveness - IPR April 2024

Implementation progress and results report ipr a. report summary and proposed actions report data project name: support for digitization, financial inclusion and competitiveness project code: p-mw -kf0-007 country malawi sector: institutional support environmental categorization 3-low es risks and report type: date of report: 24.06.2024 mission: desk supervision 2 from: 22.04.2024 to: 26.04.2024 prepared by task manager: kouassi bruno aka alternate task manager : division manager : drammeh lamin majula pifd1 project data project financing in uac financing sourceinstrument foreign currency local currency totala.d.f. inssupregrant 9,430,.00 570,.00 10,,.00t o t a l 9,430,.00 570,.00 10,,.00processing milestones bank approved financing only loan number date approved date signed date of entry into force date effective for first disbursement disbursement deadline 2100155041177 08.12.2021 04.02.2022 04.02.2022 30.05.2022 31.03.2026 loan amount in uac loan number net loan approved uac signed uac cancelled uac net loan uac 2100155041177 10,,.00 10,,.00 10,,.00 0.00 10,,.00 t o t a l 10,,.00 10,,.00 0.00 10,,.00 disbursment status at supervision date in uac loan number disbursed to date disbursed to date uac disbursed to date undisbursed to date in uac undisbursed to date 2100155041177 281,386.19 281,386.19 2.81 9,718,613.81 97.19 t o t a l 281,386.19 2.81 9,718,613.81 97.19 executing and implementation agencies borrower government of malawiguarantor government of malawiexecuting agency reserve bank of malawiperformance status progress towards development objective rating on development objective do performance rating summary of key findings current previous the disbursement rate remains very low at 4.8 by end of may 2024 after more than 1 year of effectiveness, mainly due to delay in starting procurement processes and although some progress have been made in catching up delays. other underlying key reasons of this counter -performance in terms of disbursement as follows: i poor responsiveness from some beneficiary satisfactory satisfactory institutions to the piu regaring starting of procurement processes or submission of proposals for re -preposing of funds, ii persisting challenges in procurement, notably some back and forth, on non -objection requests submission between the bank and piu. as a result, key activities of the project have not yet started and progress towards the development objective remains weak compared to the planned impact. implementation progress rating on implementation progress ip performance rating summary of key findings current previous the rating on implementation is quite satisfactory since january 2023. indeed, out of 23 planned activities in the procurement plan, 13 57 have their procurement processes launched or finalized, including 5 contracts signed with ongoing activities and 4 activities fully completed. ongoing activities represent 13 of the total project financing in terms of cumulative budget. there are also 4 almost completed procurement processes at the contracting stage. the remaining procurement processes are mainly a waiting completion of gap analyses and feasibility studies, or proposals from key beneficiairies for re -purposing of dedicated funds. satisfactory satisfactory overall project performance classification overall project performance pp, or n performance rating summary of key findings current previous the ratings on implementation progress ip and developement objectives go are quite satisfactory. the project is currently red flagged at the bank's level due to low disbursement 4.8 after more than 1 year of effectiveness. however, 57 of the proje ct's procurement processes have been launched and procurement for the activities with big budgets, will be conducted just after completion of gap analyses and feasibility studies by end of december 2024 at the latest. the disbursement is expected to reach 20 by the same deadline. further more, there is also an upcoming request from the client side for revision of the logs, due to the reality on the ground and last minute changes in the strategic priorities of some key beneficiairies mot and ppda. non potentialy problematic project non potentialy problematic project issues, risks and actions for management consideration issues affecting project implementation key issues corrective actions responsible deadline status delays in procurement processes and subsequent low disbursement. - in collaboration with the piu, ensure a weekly follow -up pending procurement processes. - speeding -up of the processing of request to provide bank's non -objection approval on time. - start and speeding -up of procurement processes that are not relate d to completion of gap -analysis or feasibility studies. piu bank 31.03.2026 in progress need for revision of the list of goods and services due to on -hold activities representing 21.7 of the project financing. - the piu and the bank should work closely to finalize discussion on potential activities including related budget and appropriate procurement processes that will be part of the formal request from the client side for revision of the list of goods and se rvices. piu bank 31.08.2024 in progressmain risks and mitigation risks mitigation measures applied or proposed responsible deadline non use of dedicated funds and potential duplication of some project activities these activities include: - upgradng of the nsw as the ministry of trade is benefitting support from the wb on this matter. this support helped develop the nsw software and the pilot system is expected by may 2024 - in replacement of the activity dedicated to the nsw, the mot transmitted a formal request for development of a national investment portal nip. this request is in line with the revision of the logs, and under review at the bank's level. - ppda submitte d 2 proposals of activities as part of a re -proposong of funds. these proposals are under review at the bank's level in line with the process for revision of the logs. piumotppda 31.08.2024 with the full rollout in december 2024. - implementation of e -market platform for smes, women and youth. ppda is implementing the e -goverment market place e -gm project under a funding from the wb. b. results reporting and assessment progress towards development objective project purpose state the project development objective usually the project purpose as set out in the results -based logframe and assess progress contribute to the structural transformation of the malawian economy through the promotion of inclusive finance and enhancing competitiveness of the economy. outcome reporting outcome indicators as per rlf baseline value most recent value end target progress toward endtarget assesment increased competitiveness malawi rank on gci ran 128. 128. 120. 0.00 likely to be achieved with correctives actions on -hold procurement processes for the following competitiveness -related activities: national single window, e -commenrce platform for the mpc, and e -commerce analysis. the activity related to improvement of trade facilitation measures is ongoing.ict contribution to gdp 5.700 4.800 7. - 69.23 likely to be achieved with correctives actions some of the ict related activities recently started with key deliverables and outcomes not yet completed or achived, as the ongoing activities are at the stage of gap analyses and feasibility studies, i.e i e-meney framework, ii upgrading of natswitch and mfi hub digital payments infrastructure, e -commerce frameworks and platforms.increase financial inclusion population with access to financial services women, rural population; sme in climate hotspots 58. 74. 65. 228.57 likely to be achieved with correctives actions updating of e -money frameworks and platforms and conduct of an awareness - raising campaign on dfs recently started but related outcomes are not yet achieved. the upgrading of natswitch and mfi hub systems is awaiting completion of the gap analysis.[women] -population with access to financial services women, rural population; sme in climate hotspots 36. 69. 43. 471.43 likely to be achieved with correctives actions updating of e -money frameworks and platforms as well as conduct of an awareness - raising campaign on dfs recently started but related outcomes are not yet achieved. the upgrading of natswitch and mfi hub systems is awaiting completion of the gap analysis. dfs access points pos nbr 110. 5,852. 140. 19,140.00 likely to be achieved with correctives actions updating of e -money frameworks and platforms as well as conduct of an awareness - raising campaign on dfs recently started but related outcomes are not yet achieved. the upgrading of natswitch and mfi hub systems is awaiting completion of the gap analysis. dfs access points atm nbr 496. 508. 520. 50.00 likely to be achieved with correctives actions updating of e -money frameworks and platforms as well as conduct of an awareness - raising campaign on dfs recently started but related outcomes are not yet achieved. the upgrading of natswitch and mfi hub systems is awaiting completion of the gap analysis. dfs access points mobile agents nbr 120. 331.317 200. 264.15 likely to be achieved with correctives actions updating of e -money frameworks and platforms as well as conduct of an awareness - raising campaign on dfs recently started but related outcomes are not yet achieved. the upgrading of natswitch and mfi hub systems is awaiting completion of the gap analysis. actors connected to the national switch interoperabilty players nbr 12. 15. 17. 60.00 likely to be achieved with correctives actions updating of e -money frameworks and platforms as well as conduct of an awareness - raising campaign on dfs recently started but related outcomes are not yet achieved. the upgrading of natswitch and mfi hub systems is awaiting completion of the gap analysis. increased access to regional and global export markets exports contribution to gdp 31. 8.200 35. - 570.00 likely to be achieved with correctives actions activities about improvement of trade facilitation measures and increase of regional market access recently started but the key deliverables and outcomes are not yet completed and achieved.malawi trade balance mi 2,028. 564. 1,870. 926.58 likely to be achieved with correctives actions activities about improvement of trade facilitation measures and increase of regional market access recently started but the key deliverables and outcomes are not yet completed and achieved.export markets serviced nbr 79. 87. 100. 38.10 likely to be achieved with correctives actions activities about improvement of trade facilitation measures and increase of regional market access recently started but the key deliverables and outcomes are not yet completed and achieved.outcome rating rating on project outcomes performance rating summary of key findings current previous the overall outcomes rating is 3. it is considered as satisfactory due to recent procrurement progress for actual start of activities, even if no outcome was achieved todate. indeed, the project implemention pace in on good track since the beginning of 20 23 with catching -up of initial procurement delays. four 4 activities related to the component 3 are finalized while 5 key activities are ongoing, with an estimated disbursement rate of around 20 by end of december 2024. most of the project key outcomes will progressively be achieved by 20252026 when activities with big budgets will actually be conducted. 3 3 output reporting output indicators most recent value annual target end target progress towards annual target progress towards end of project target assessment improved offer of digital financial services providers offering digital financial services nbr 15. 17.00 20. 60.00 37.50 on track actual implementation of related activities has not yet started, awaiting completion of the gaps -analysis. providers offering digital financial services nbr 15. 17.00 20. 60.00 37.50 on track actual implementation of related activities has not yet started, awaiting completion of the gaps -analysis. partnership between fintchs mfis and mnos set up to foster the development of innovative productsservices targeting underserved populations, mainly women, youth and rural populations nbr 15. 4.00 5. 375.00 300.00 on track related activities has not yet started. awareness -raising campaigns conducted at national level, including rural areas nbr 0. 4.00 5. 0.00 0.00 on track related activities is ongoing. a money legal and regulatory framework is available, including relevant recommendations to foster digital financial inclusion no na yes na na on track related activity is ongoing. a consumer protection strategy drafted, and complain management mechanism developed and implemented no na yes na na on track some of the concerned activities recently started while the others have their procurement processes ongoing or not yet started. dfs interoperability with key players in the eosystem attained stakeholders trained on digital financial servives matters nbr 0. 10.00 20. 0.00 0.00 on trackactual implementation of related activities has not yet started. rbm and natswitch staff trained od payment systems managementsupervison matters nbr 0. 20.00 50. 0.00 0.00 on track actual implementation of related activities has not yet started. national switch upgraded no na yes na na on track actual implementation of related activities has not yet started. international payment gateways implemented no na yes na na on track actual implementation of related activities has not yet started. competitiveness and trade facilitation enhanced through digitalisation stakeholders involved in nsw benefit from capacity building on digitalization matters nbr 0. 20.00 30. 0.00 0.00 not on track nsw related activities are expected to be replaced in line with the revision of list of goods and services. the nsw upgraded with a buit -in e-payment platform and exchange of information between different customs operators and other government agencies no na yes na na not on track acticities related to nsw are expected to be replaced in line with the revision of the liste of goods and services. an e -market for ppda is in place no na yes na na not on track actual implementation of related activities has not yet started. some of them ppda -related activities are expected to be replaced in line with the revision of the list of goods and services. technical equipment installed within the postal network to strenthen its operational efficiency no na yes na na on track actual implementation of related activities has not yet started. some of them ppda -related activities are expected to be replaced in line with the revision of the list of goods and services. an e -market for ppda is in place no na yes na na not on track actual implementation of related activities has not yet started. some of them ppda -related activities are expected to be replaced in line with the revision of the list of goods and services. a digital hub dedicated to smes, women and youth is in place to scale up adoption of green and climate resilience technologies no na yes na na on track actual implementation of related activities has not yet started. business environment and regulatory frameworks improved for greater market access policy and law makers trained on rules and regulations in relation to digital economy nbr 0. 30.00 50. 0.00 0.00 on track related activity recently started but the deliverables and outcomes are not yet completed and achieved. e-commerce gap analysus conducted with regard to regulations of the electronic no na yes na na on track actual implementation of related activities has not yet started. e-commerce policy developed no na yes na na on track actual implementation of related activities has not yet started. cftc's information management system implemented no na yes na na on track actual implementation of related activites has not yet started. enhanced readiness to benefit from afcfta diagnostic study to harmonize regulation to reduce time and coast of trade at key corridors undertaken nbr 0. 0.00 1. 0.00 0.00 on track related activity recently started but the key deliverables and outcomes are not yet completed or achieved. trade negociators trained on e -commerce matters nbr 0. 20.00 30. 0.00 0.00 on track related activity recently started but the deliverables and outcomes are not yet completed and achieved. road map for malawi's participation in afcfta no na yes na na not on track the related activity recently started but the key deliverables and outcomes are not yet completed and achieved. road map for malawi's participation in afcfta no na yes na na on track the related activity recently started but the key deliverables and outcomes are not yet completed and achieved. output rating rating on project outputs performance rating summary of key findings current previous the overall output rating is 3. it is considered as satisfactory due to recent procrurement progress for actual start of activities, even if no output was achieved todate. indeed, the project implemention pace in on good track since the beginning of 2023 with catching -up of initial procurement delays. four 4 activities related to the component 3 are finalized while 5 key activities are ongoing, with an estimated disbursement rate of around 20 by end of december 2024. most of the project key outputs wil l progressively be achieved by 20252026 when activities with big budgets will actually be conducted. 3 3 development objective do rating progress towards development objective rating on development objective do performance rating summary of key findings current previous the disbursement rate remains very low at 4.8 by end of may 2024 after more than 1 year of effectiveness, mainly due to delay in starting procurement processes and although some progress have been made in catching up delays. other underlying key reasons of this counter -performance in terms of disbursement as follows: i poo r responsiveness from some beneficiary institutions to the piu regaring starting of procurement processes or submission of proposals for re -preposing of funds, ii persisting challenges in procurement, notably some back and forth, on non -objection request s submission between the bank and piu. as a result, key activities of the project have not yet started and progress towards the development objective remains weak compared to the planned impact. satisfactory satisfactory additional andor unanticipated outcomesoutputs optional indicator baseline end target most recent value prd

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