95332420Q0050_Approved RFQ.pdf

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95332420Q0050

TABLE OF CONTENTS:

Listing of Incorporated Purchase Requisitions Section B - Supplies or Services and Prices/Costs Section C - Description/Specifications/Work Statement Section D - Packaging and Marking Section E - Inspection and Acceptance Terms Section F - Delivery or Performance Section G - Contract Administration Data Section H - Special Contract Requirements Section I - Contract Clauses Section J - List of Documents, Exhibits, and other Attachments Section K - Representations, Certifications, and Other Statements of Offerors Section L - Instructions, Conditions and Notices to Offerors Section M - Evaluation Factors for Award

Listing of Incorporated Purchase Requisitions

Incorporated Purchase Requisition Numbers:

Section B - Supplies or Services and Prices/Costs

Item Number Base Item Number

Supplies/Services Quantity Unit

0001 Malawi Land-Based Revenue Phase 1

1 LT

Contract Type:Firm Fixed Price Unit Price

Extended Price

Description:

Malawi Land-Based Revenue Study Phase 1.

Purchase Requisitions

IDC Type: Not Applicable FSC Codes: R499 SUPPORT- PROFESSIONAL: OTHER

NAICS Code: 541990 All Other Professional, Scientific, and Technical S...

Item Number Base Item Number

Supplies/Services Quantity Unit

1001 Malawi Land-Based Revenue Option One

1 LT

Contract Type:Time and Materials Unit Price

Other Direct Costs Extended Price

Description:

Option Period 1. Phase 2. Includes Labor and ODCs.

Purchase Requisitions

Option:

Option Time Date: 8/28/21 Option Time Duration: 364 Option Time Units: Days

IDC Type: Not Applicable FSC Codes: R499 SUPPORT- PROFESSIONAL: OTHER

NAICS Code: 541990 All Other Professional, Scientific, and Technical S...

Clauses incorporated by reference

None

Clauses incorporated by full text

Section B - Supplies or Services and Prices/Costs

B.1 SERVICES TO BE PROVDED

The Millennium Challenge Corporation (MCC) requires technical support services in the definition and development of a project focused on increasing the productivity of land in Malawi. This requirement will focus on insufficient public revenue mobilization and inefficient allocation of public and utilization of public funding at the national and municipal level. This requirement will be carried out in two phases, a Base Period (Phase One) and an Option Period (Phase Two).

The Contractor shall provide all personnel, equipment, tools, materials, supervision, and other items and non-personal services necessary to perform the tasks as defined in Section C of the Statement of Work.

This RFQ is issued in accordance with FAR Part 13- Simplified Acquisition Procedures

B.2 CONTRACT TYPE

MCC anticipates awarding a hybrid contract for this requirement. The Base Period is intended to be awarded on the Firm Fixed Price basis. The Option Period is intended to be awarded on a Time and Materials basis.

B.3 Price/Cost Schedule

Item Number Description of Supplies/Services

Quantity Unit Unit Price Amount

0001 Base Period 1 Lot $X.XX $X.XX

1001 Option Period One 1 Lot $X.XX $X.XX

Quoters shall submit pricing in the same format as the table shown above.

Labor rates at the inception of a contract period will carry through as "fixed-price" without adjustment for the life of that contract period.

Hours by labor category and pricing under ODCs are estimates only and may be increased/decreased as necessary for successful completion of the contract requirements and as approved by the COR/PM. However, the contractor's expenditures at any given point shall not exceed the total obligated amount or the total ceiling price for this contract as specified below.

Using the template below, Offerors must include all proposed labor categories, fully-burdened hourly rates and Other Direct Costs (ODCs) for Option Period One.

Option Period One

Item # Position Title Unit Qty Rate Total

LABOR

1001 Team Leader/Public Finance Management Expert hr.

Expert in Land Administration hr.

Assistant or Coordinator hr.

Total Labor Hours and Costs - -

Labor Sub-Total

Item # ODC Category Unit Qty Rate Total

ODCs

1001 Each

Each

Each

Each

ODC Sub-Total

Total Estimated Value (Option Period One)

Section C - Description/Specifications/Work Statement

Description/Specifications/Work Statement Malawi

MCC Due Diligence Support for Increased Land Productivity Project

National and Municipal Land-based Revenue Assessment and Program Recommendations

Statement of Work

I. GENERAL BACKGROUND AND MCC ANALYSIS

Malawi is a landlocked country in southern Africa and remains one of the poorest countries in the world. According to the 2018 Population and Housing Census, the nation's population was 17.5 million in a land area of some 45,560 sq. miles, making it one of Africa's most densely populated countries. Given its location along the great African Rift Valley, it is highly vulnerable to natural disasters and is prone to significant droughts and flooding. Climatic shocks play a significant role in its economic volatility. According to the 2017/2018 World Economic Forum Global Competitiveness Report, out of the 137 countries surveyed Malawi's ranked 132 in the competitive index, significantly behind other neighboring Sub-Saharan African countries.

Binding Constraints to Economic Growth

In December 2018, the Millennium Challenge Corporation (MCC) Board of Directors declared Malawi eligible to develop a second compact and MCC completed a Constraints Analysis (CA) to diagnose key challenges to economic growth. The following three binding constraints were identified in Malawi:

-Lack of a stable macroeconomic environment as reflected in high and volatile inflation

-High price of road freight transport service and barriers to linking farms to markets in rural areas

-Difficulties with access to land for investment due to mismanagement of the estate sector and unclear/uncertain customary land rights, particularly for women smallholder

The CA found that interest rates on lending in Malawi are among the highest in the word and that domestic credit in Malawi provided by the financial sector is lower as a percentage of GDP than country comparators (Rwanda, Mozambique). MCC also recognizes that poor environmental management is both contributing to and affected by the identified constraint areas.

The World Bank Country Environmental Assessment Report (2019) for Malawi cites land degradation as a serious factor in the future of Malawi's economic growth as it affects agricultural productivity and reduces Malawi's resilience to climate change.

Root Cause Analysis

Following the identification of the binding constraints, the Malawi Millennium Development Trust The Malawi Millennium Development Trust (MMD) is the entity established by the Government of Malawi to develop the second compact in partnership with MCC. (MMD) and MCC, examined the root causes of these constraints using stakeholder discussions and further research into the various factors leading to the identified constraints. Through extensive discussions with stakeholders, several factors were identified contributing to difficulties with access to land for productive investment, the mismanagement of estate (public) land and lack of land tenure security.

A critical context for the land constraint is that Malawi's primarily land-based economy is less efficient and less productive than it should be to power growth and poverty reduction. Economic transformation and growth hinge on changes in land use—land converting efficiently towards increasingly higher-value uses. Success in changing land use depends on markets that function efficiently and regulation that promotes trust and enables corrections, including ensuring inclusiveness. In Malawi, land use is changing very rapidly, but the low quality of land governance and ineffective land use control makes this process inefficient and underproductive. The process engenders land idleness in some areas and land scarcity in other areas; the productive use, land rent and tax value of land not being captured by national and local governments to fund critical services;

development that is misaligned with appropriate land uses; and exclusion of and livelihoods impacts on the poorest populations, particularly on women. Malawi's low level of economic development translates to land being one of the only assets for wealth creation; further, refining the Malawian public sector's role in a market-driven economy is still in process.

Based on consultative analysis with responsible representatives and stakeholders in the land sector, the MMD proposed focusing on securing land rights to stimulate investment, productivity, and improving the functioning of the land market to help drive economic growth. With this MMD approach as a starting point broad agreement on objectives, strategic approach, and outcomes were agreed among MCC, MMD and the Government of Malawi. Along with a separate project concept focused on strengthening farm-to-market linkages and road transport, MCC and the GOM will pursue further diligence of four areas of potential solutions within the proposed land productivity project concept: (i) management and mobilization of estate lands; (ii) strategic mobilization of customary land to productive purposes; (iii) mobilization of national and local land-based revenues;

and (iv) targeted institution building. The focus of these Terms of Reference is specifically on item (iii), the proposed revenue mobilization topic.

II. Main Issues Related to Land in Malawi:

Approximately 78% of agricultural land in Malawi is dedicated to smallholder production—primarily maize and vegetables for subsistence and sales in local markets. Further exacerbating this underproductive use of land, 70 percent of smallholder farmers work on fragmented parcels of less than one hectare. Smallholder subsistence farming and parcel fragmentation work in tandem to negate the efficient and productive use of land and result in a per hectare yield much lower than the regional average. This fragmentation of smallholder farms will only continue due to population growth and continued splitting of parcels to accommodate the future land needs of heirs.

In addition to small scale parcel fragmentation and low productivity, 13 percent (approx. 1.2 million ha) of agricultural land is devoted to estate farming on public land allocated to private individuals and enterprises through government leases. These estates are expected to produce cash crops such as tobacco, tea, sugarcane, and coffee. However, many are currently underutilized or simply left idle due to a combination of disincentives to use the land, including; low/non-market ground rents (lease rents) Current ground rents are MK 1,000 per hectare per annum (equivalent to approx. US$1.36 per hectare – March 2020)., lack of an up-to-date inventory of leases and lease status and the absence of a system for managing leases and for lease billing and payments It has been estimated through the Estate Performance Survey conducted by the MOLHUD in 2017/2018 that 70% of all public estate leases have expired and leaseholder may not be paying ground rents., all of which results in few practical consequences for not paying ground rent. Essentially, public land is undervalued and, with little incentive to use it productively, this leads to underutilization, encroachment and disputes, and a continuation of the spiral of underproductivity. Adding to the land challenge, there is a limited tradition of freehold land in Malawi, and the ability to hold land as freehold was eliminated in 2016.

Land in Malawi is underproductive primarily as a result of the core problems of sub-optimal investment and inefficient land allocation. The root causes of these problems have been identified as:

(i) time consuming and costly land transactions;

(ii) deficient governance of land allocation and land acquisition causing interference and rent-seeking in land mobilization, allocation and acquisition matters; and

(iii) land tenure insecurity, especially for smallholders and women and which complicates commercial and public sector uses.

Five principle factors combine to contribute to these root causes. These are:

(i) a legal framework The main laws are; the Land Act which governs land, the Customary Land Act which provides for the management and administration of customary land, the Physical Planning Act which makes provisions for the physical planning and the orderly and progressive development of land in both urban and rural areas, the Land Survey Act that regulates the surveying of land and establishes the Malawi Geographic Information Council and the Registered Land (Amendment) Act that provides for title registration and decentralization of land registries and registration to district offices. It is recognized that the suite of new land laws does not provide sufficient clarity on women's land rights or how they will be recognized and maintained under new legal regime rules or procedures (LANDESA, 2019). Any capacity enhancement initiatives would need to ensure that women's roles, rights and responsibilities are understood and acknowledged, and these aspects are inculcated in the officials and agencies responsible for implementing and overseeing the implementation of the laws. which is costly for government to implement;

(ii) unreliable and inaccessible land rights records and information systems;

(iii) conflicting allocation of responsibility for land use planning and controlling physical development;

(iv) a misalignment between the formal land administration regime and traditional customary practice for land governance; and

(v) insufficient public revenue mobilization combined with inefficient allocation and utilization of public funding at the national and municipal level.

Finally, underpinning the underproductivity of land is the political economy dimension which is that incentives for change appear limited.

Discussion of Root Causes

Time consuming and costly land transactions: Results of initial analysis indicate a general acceptance that senior officials of the land agencies are generally forward-looking and eager to improve land administration services. However, a significant obstacle to improving land administration services, including management of public land, certification of land surveys, and land records management, is the low salaries and other recurrent expenditures provided through government service.

The 2002 National Land Policy and the suite of land legislation eventually approved in 2016 to implement this Policy were significant and forward-looking reforms seeking to both address inefficiencies and align the formal land administration regime with the traditional customary practice through a process of decentralization to the district level. Implementation of these laws is on-going, and the establishment of the institutions and decentralization needed to support them in a sustainable way in the future is a challenge, both owing to the high costs and the complexity of the institutional arrangements called for in the law.

Building the societal awareness needed to understand and accept the reform has been limited in scope, in part because the Government's capacity to respond to increased societal expectation is limited. The CLA is intended to help decentralize land administration, provide the holders of customary estates with tenure security, and allow private leasing of land. But implementation of these pilot exercises is only now reaching a stage for comprehensive assessment or evaluation. Also, it is unclear whether the requirements of the CLA and the complex accompanying institutional arrangements will indeed result in sufficiently lower time or cost of land transactions to be widely usable. Finally, given the lack of adequate regulations to the full suite of land laws, implementing the Land Policy in the holistic manner originally intended remains a work in progress.

Deficient governance of land allocation and land acquisition: initial analysis shows land is neither unavailable nor inaccessible, but rather that ability to access and aggregate sufficient land for optimal productive investments is limited because land transactions are time-consuming and costly. When the government and traditional authorities are involved in identifying land or making land available to the private sector, it provides the opportunity for substantial rent-seeking and interference. In response, private sector investors internalize the inefficiencies and factor the rent-seeking of both the formal government and the traditional systems into their investment decisions to obtain land directly through government actors, traditional authorities, or informal 'land agents'. While this approach is arguably effective, it is non-transparent, inefficient, and favors aggressive and well-connected investors who are able to absorb the costs. It also causes substantial tenure insecurity and dispossession of current land users.

As previously mentioned, a significant obstacle to improving land administration services including accessing public land, certification of land surveys, public land management and land and deed records management is the low-level public investment in institutional infrastructure for land-related services. Insufficient allocation of budget to the Ministry of Land, Housing and Urban Development (MOLHUD) and the ineffective utilization of budget resources are reasons for the lack of stronger performance and improved land administration services. The 2019-2020 budget for MOLHUD budget was equivalent to US $23.4 million with roughly 50% of this amount dedicated to salaries and rental of office accommodations.

In addition to insufficient public funding, another critical issue is the lack of revenue generation from land rents and land administration service fees. For example, MOLHUD has the legal mandate to collect land administration service fees as well as ground rents on leased land. In 2019, it was estimated that potentially the equivalent of US$4.6 million could be collected annually from these land-related services and rents. Yet, MOLHUD currently only collects 16% (approx. $1.5 million) of the ground rents due while rent arrears just since fiscal year 2017/2018 total approximately US$8.2 million. Beyond being an incentive for continued land underproductivity, the lack of collection of ground rents and the absence of consequences for non-payment reduces government revenue due which could, if government policy and regulations regarding allocation of revenue collected were changed, be used to finance improvements in land administration services. A proposed solution is that the MOLHUD be granted the ability to retain land-based revenue and to use this revenue, or a portion of it, to improve, decentralize and sustain land administration services. Another proposed solution calls for the establishment of an autonomous National Land Authority to improve land administration services.

Land tenure insecurity: Formal land tenure in Malawi is widely considered insecure especially for smallholders of customary land, and, in particular, women and their children. This land tenure insecurity is primarily the result of multiple – and often-times conflicting – land tenure regimes for public, private, and customary lands (though for women, social norms and practices are also key). Security is further weakened by the generally weak institutions responsible for the formal land administration system that underpins land tenure and by the misalignment of this formal system with customary practices. Approximately 80% of land falls under the customary regime, whose practice varies from region to region and within the hierarchy of the various traditional authorities. Recent surveys of land tenure indicate that while 71% of respondents perceived their current tenure situation to be secure, 63% of land holders have no evidentiary documentation to their land https://www.prindex.net/data/malawi/ and that a third of Malawians feared they would not possess their plots in ten years' time World Bank 2017.

III. Potential Solutions being considered

The following potential solutions have been identified by MCC and MMD and will be subject to further due diligence and project definition and development:

(i) More Inclusive, More Transparent Mobilization of Land for Increased Productivity

• Mobilize underutilized or 'idle' public estate land to increase its productivity, through inventory of legal status, lease status, current use, and potential use of these lands, followed by implementation of a plan for rights regularization or re-allocation, including lease renewal, re-allocation to the private sector, or allocating land back to customary land holders with more secure rights through land tenure formalization and registration.

• Improve models for supplying customary land to investors, by using the new CLA to help interested communities secure land rights through the creation of customary estates and partner with the private sector through use of leasing – to activate rental markets - or other partnership models for higher value activities or larger scale commercial production.

This could enable lease income to return to communities in perpetuity in place of the one-time "sales" model that is the prevailing land acquisition mode today and has an effect of taking land assets from smallholders. This type of solution puts CLA implementation emphasis on creating increased value for smallholders. This solution area builds on existing initiatives in Malawi already focused on more inclusive land acquisition.

• Create records systems, sufficient to underpin both estate lands and customary lands mobilization, but simple enough to account for the substantial records system sustainability challenges.

• Land planning interventions, as may be necessary to underpin estate lands and customary land productivity or linked to more productive urban expansion or economic hubs associated with possible transport/rural market linkages investments.

• Identify targeted gender interventions, the new suite of land laws includes some rights and protections for women, though initial analysis suggests further analysis is needed. MCC will focus on identifying ways to enhance women's land rights and tenure security through targeted interventions.

(ii) Increased Revenues to More Adequately Fund Land Administration and Improve Land Use Controls

• Retain revenues collected: as mentioned previously, MOLHUD has the potential to collect the equivalent of more than US$4.6 million annually from land-related services, but currently only collects about US$1.5 million (16%) of the ground rents due, while rent arrears just since fiscal year 2017/2018 total approximately US$8.2 million. Beyond providing an incentive for continued land underproductivity, the lack of collection of ground rents and the absence of consequences for non-payment reduces government revenue due, which could be used to finance strengthened land administration services. Given this, reform approaches will be explored that could permit the MOLHUD to keep revenues collected, increasing its incentives for better collection performance.

• Improve national level lease payments billing and collection: building on estate lease inventory and regularization work above, the team will explore operationalizing an improved system within MOLHUD for the management of public land lease records, including lease conditions monitoring and enforcement, lease renewal date tracking, and billing and collections.. With the GOM, the viability of lease rate increases will be explored, acknowledging the potential political challenges; a fundamental reason public estate land in Malawi is underproductive is that it is not valued at appropriate, market levels.

• Expand local level revenues to fund better development and planning control as land use changes: unlike the MOLHUD, municipalities do have the ability to keep all revenue they are authorized to collect as lease and land-based tax payments, and they depend on this revenue to deliver critical services. As urban areas expand as Malawi's economy transforms, municipalities are not able to incorporate newly developed plots into their tax base, owing to properties not being on the tax rolls or any cadastral map due to outdated policies and procedures, a general lack of funding to implement in-person parcel mapping and valuation requirements One estimate suggested that that only half of all developed parcels are currently accounted for in Lilongwe's tax rolls. given existing procedures, and the lack of property-based information management tools and systems for land-based revenue management. Unlike the MOLHUD, initial analysis indicates that municipalities do have access to well-functioning computerized financial systems that have been provided by the Ministry of Finance. Strengthening and linking this revenue management systems with property mapping and mass appraisal systems could help integrate a greater share of plots into the local tax base and enable municipal governments to capture the value of the substantial conversion of rural and customary land that is taking place, to better fund land management services. The ability to tax equally serves as a land use and development control, which is of particular value in an environment where there are few functional tools to ensure the market aligns with permitted uses and plans as land use changes.

Increased revenues alone may not yield improved land administration and land use performance; ensuring their effective use through public financial management reforms and revenue management systems will also be needed and identifying these reforms and technical solutions is an important part of project development and design.

(iii) Targeted Institution Building and Reform

Program components that may be identified necessary to support success related to land mobilization and land-based revenues include:

• Reforms that may be identified that are necessary to anchor an eventual MCC program

• Streamlining of land institutional arrangements as may be identified over the course of due diligence

• Safeguards and strategy for information and records: while it is understood that an overall costing exercise has recently been undertaken by MOLHUD, a comprehensive, detailed plan for how to implement the suite of laws from 2016 and to modernize land records and property transaction systems is pending. The development and implementation of a national-level, decentralized Land Information Management System (LIMS) is being planned with possible funding from international donors. However, regardless of any eventual investment by other donors, MCC is unlikely to invest in the development and implementation of a national level, decentralized and comprehensive LIMS. There could, however if needed, be value in supporting the Government to develop a broader LIMS strategy and work plan for steps needed to modernize and decentralize records systems as called for in the 2016 land legislation. As well, Malawi's paper-based land records are at high risk of catastrophic loss from fire or other disaster and are not in a format that could support an efficient implementation of the 2016 land legislation. Therefore, as a foundational element of better land administration and to support land transactions, it will be important to consider investments related to land records organization and safeguarding including digitalization, storage and accessibility.

• Targeted training, communication and consultation: Skill-building for technical, legal and administrative land officials, as well as communication and interaction at the national, district and community levels will be needed as an input to all specific interventions.

IV. Current Project Development Timeline

The Malawi II compact development process is currently in the Project Proposal Assessment Memo (PPAM) phase (https://www.mcc.gov/resources/story/story-cdg-chapter-8-guidelines-for-developing-project-proposals). Detailed project development and design has been anticipated to conclude in March 2021; overall timelines could evolve owing to impacts of

COVID-19.

V. OBJECTIVE AND TASKS OF THE ASSIGNMENT

The overall objective of the National and Municipal Land-based Revenue Assessment and Recommendations Study is to support MCC in the definition and development of a project focused on increasing the productivity of land. This assignment will focus on analyzing one of the factors previously identified that contributes to the problem and root causes, specifically insufficient public revenue mobilization and inefficient allocation of public and utilization of public funding at the national and municipal level. Eventual funded interventions within a land project's 'revenue activity' would seek to increase land-based revenues at the national and municipal levels, resulting in better utilization of land resources – including more productive use of land, and support national and local efforts to improve land use controls. The assignment will be carried out in two phases, a Base Period (Phase One) and an Option Period (Phase Two).

PHASE ONE: ANALYSIS TO SUPPORT PROJECT DEFINITION

Phase One of this assignment includes five tasks that are intended to provide analysis and recommendations needed to support MCC's understanding of the potential activities in the area of land-based revenue mobilization.

These are:

(i) Task 1, general orientation and desk research;

(ii) Task 2, in-country orientation, data collection, initial analysis;

(iii) Task 3, initial reporting on findings and identification of gaps and key issues;

(iv) Task 4, in-country data gap collection and review of initial findings; and

(v) Task 5, final analysis, reporting and presentation of recommendations.

Task 1, General orientation, desk research, and preparation of detailed methodology: the purpose of this task is for the Consultant to familiarize themselves with the prevailing institutional infrastructure, revenue policies, legislation, regulations, distinct revenue sources, information and revenue management systems of land administration and public financial management revenue policies in Malawi at the national level and the municipal level. Initially, the Consultant will prepare a detailed Work Plan presenting the overall staffing, responsibilities and planned activities to successfully complete the assignment. This Work Plan (Deliverable 1) will be delivered to MCC no more than 10 days after contract signing.

Also, as part of this Task, the Consultant will conduct orientation and initial research through desk review of policy documents, national and municipal legislation and available data. The consultant will focus research on understanding the policies, legislation, regulations and guidelines regulating ground rents at the national level and property taxes, licenses and fees, property mapping and valuation at the municipal level. With the findings of this research as a foundation, the Consultant will develop a methodology and questionnaire that can be used to conduct a series of systematic interviews with an agreed upon list of government representatives and relevant public sector stakeholders during the field visit included in Task 2. The methodology should also detail data needed from key institutions to supplement the analysis. This methodology and questionnaire should also show the approach to describe, and measure where possible, opportunities and challenges related to land-based revenue reform including the viability of ground rent increases and practical revenue management including analyzing existing work flows and identifying inefficient processes and gaps related to billing and collection of rents and fees.

As a separate deliverable of this portion of Task 1, the Consultant will prepare and submit the Initial Report (Deliverable 2) including the findings of the desk research, interview methodology and questionnaire and details of the planning for completion of Task 2, including list of people to be interviewed and institutional functions to be assessed. The methodology submitted under the Initial Report should show at least all areas of inquiry listed below under Task 2.

Task 2, In-country orientation, data collection, initial analysis and advance reporting on findings: For this task the Consultant will travel to Malawi to meet with representatives and technical personnel of MOLHUD, a representative number of District/Local Government Authorities Chapter 5.15.8(b) of the Land Policy of 2002 devolves the administration of leaseholds – including collection of ground rents to the District Land Registry Offices. It is, however, unclear how many and which district offices have taken responsibility for this function. and, at minimum, the City Councils of Malawi's four major urban centers (Lilongwe, Blantyre, Mzuzu and Zomba) to present the revenue governance and administration assessment task, validate the results of the desk research, collect further data on revenue – preferably disaggregated by source/type of payment/fee – conduct the interviews using the previously developed methodology, perform in-country analysis and begin to formulate recommendations on scope and activities to be include in a potential land project.

During discussions with MOLHUD, local government authorities and the municipalities the Consultant will seek to fully identify, categorize and analyze the following aspects (not presented in a prioritized order) of mobilizing land-based revenue. These aspects will build on the initial desk research and be included in the methodology and questionnaire submitted and approved as Deliverable 2 prior to the trip to Malawi:

• describe current policies, legislation, regulations and guidelines regulating ground rents at the national level and property taxes, licenses and fees at the municipal level;

• identify, present and discuss the role of land-based revenues (nationally/district and at the municipal-level) within the overall public financial management regime;

• investigate how the MILHUD is preparing – or has prepared – local government authorities to assume their role in billing and collection of ground rents;

• describe the national budgeting process, and how the MOLHUD's annual budget is determined and used;

• compare MOLHUD's budget allocation and level of revenue generation to that of other Government of Malawi Ministries Possible comparative examples are: Ministry of Local Government and Rural Development, Ministry of Energy and the Malawi Revenue Authority with comparable functions;

• compile a complete list of the types of government lease rents, taxes, fees and payments related to land and land-related government services at the national and municipal level;

• develop 'funds flow' process mapping – including estimates of time – for property/land-based rent/tax/fee generation at the national and the municipal levels of government;

• identify main impediments/reasons including regulatory, institutional, legal and technical, for the inability/unwillingness to collect ground rents, taxes and fees;

• describe current policies governing the current levels of public ground rents and the administrative procedures and systems being used for billing collection of ground rents This work includes clarifying the status and technical details of the implementation of the World Bank-funded rent rolls module and investigating the MOLHUD's plans related to this system.;

• identify possible incentive/disincentive structures that allow for municipal and local levels to collect additional fees/taxes in property/land transactions

• describe current policies, legislation/ordinances, administrative procedures and technical requirements and standards for property valuation and appraisal of land value;

• in the municipalities, complete an inventory and assessment of the land administration, property mapping (cadastre) efforts in-place and/or planned, including identifying and describing the types of property maps, tax rolls, information management and property valuation systems in use etc.;

• for national government – MOLHUD and deconcentrated offices – describe in detail the systems and technology currently used to monitor and manage billing, collection, payments, as well as systems and technology in use for management of budget as allocated by the Ministry of Finance.

• identify the scope and type of technical staff and human resources currently dedicated to property tax management and licensing and fees for land-based municipal services;

• review existing and identify potential uses of innovative land valuation methods such as Automated Valuation Models (AVM) and CAMA approaches/systems to increase revenues;

• work with Ministry and municipal authorities to collect (or validate) land-based revenue data for a minimum of the past five years In an effort to advance analysis on the proposed revenue activity, during March/April, the land specialist of MMD will meet with representatives – primarily policy makers and technical financial personnel – at MOLHUD and the municipalities of Lilongwe and Mzuzu to gather detailed revenue data, as well as determine amounts collected in the past three years and trends in collection. This data will be provided the Consultant when it is available.;

• as possible, present national revenues (ground rents, fees, others) by region and district;

• explore roll-out of revenue collection initiatives for towns – who have authority to collect revenues from land and land-based services, but are currently not – this could target towns related to geographies where MCC might make targeted land investments Note that municipal boundaries are typically expansive, substantial undeveloped 'rural looking' land is in many cases classified as urban and included in municipal jurisdictions.;

• describe the current and potential future role in Malawi of market-based ground rents and, taxes and fees in land use and physical development control, as well as the sub-optimal implications of land grabbing, holding, non-use or underproductive use and speculation;

• at both national level and municipal level, identify and validate the main drivers of the revenue limitations (i.e., among base, rate, coverage, valuation, collection dimensions). MCC's understanding is that at the national level, the problem relates to collection and to the rate, whereas at the municipal level, the problem mostly relates to or originates with the limited base, lack of enforcement and compliance resulting from inadequate mapping, outdated valuation of properties and less revenue collection;

• describe in practical, operational terms the links between availability and quality of land rights-related records to the ability to have up-to-date tax and rent rolls. This should be examined for both MOLHUD's collections based on MOLHUD registries, and in particular at the council level, to the extent that council revenue collection depends on access to and up to date MOLHUD records;

• outline the principle elements of an 'ability-to-pay' analysis that would examine the level of fees/taxes that are/could be leveraged at the municipal levels;

• identify key policies and successful initiatives within Malawi, even in other sectors, (if they exist) as well as regionally and internationally as possible examples of interventions that can be implemented through a possible revenue mobilization activity (as foundation for recommendations portion of eventual deliverables); and

• complete other tasks that are needed to complete the assignment and after identification and agreement with MCC.

Task 3, Advance reporting on findings and identification of gaps and key issues: at the conclusion of Task 2 and the first trip to Malawi, the Consultant will continue the analysis into national and municipal revenue aspects. At this point in the assignment the Consultant will prepare and submit the Advance Report (Deliverable 3) presenting a description of the work completed and the findings of Task 2 and following and responding to the questions established in the previously agreed methodology. In responding to the approved methodology, the report will include at least the following:

• revenue data as collected at Ministry and municipal offices;

• copies of relevant legislation, policies and municipal ordinances;

• names and contact information of entities and individuals interviewed while in Malawi;

• identification of key potentially problematic issues identified during the interviews in Malawi;

• initial analysis of the information and data collected;

• initial analysis of the policies, legislation, institutional and technical aspects;

• initial analysis of the key issues impacting revenue generation to support land administration and revenue allocation and utilization, including full description of the issue, the implications of the issue, examples and cases highlighting the implications or impacts of the issue;

• initial recommended programmatic solutions, targeting both revenue mobilization program solutions and revenue allocation and use solutions, once revenue is collected, to ensure that increased revenues can effectively flow to increased land-related service levels within national government and council-level institutions;

• identification of key gaps in data, information or analysis;

• work Plan for the completion of Task 4, including the second trip to Malawi.

Task 4, in-country data gap collection and review of initial findings: the purpose of this Task is to return to Malawi to address any data gaps, complete follow-up interviews and interview newly identified individuals as needed, address feedback from MCC on the advance report, further analysis and review/validate findings with personnel at the MOLHUD and with selected municipalities (at minimum Lilongwe and Mzuzu). The Consultant should be prepared to present analysis to date, key issues and data to MOLHUD and municipal personnel and to gather feedback on the issue identified in terms of land administration, property management and revenue billing and collection etc. At this point in the assignment the Consultant should have developed proposed solutions to address the key issues which should be shared with government representatives to determine, feasibility, costs, institutional roles, technical requirements. At the end of this Task the Consultant will prepare and submit the Draft Final Report (Deliverable 4). MCC and MMD personnel will review the report and make final comments that the Consultant must address prior to the final reporting and presentation.

Task 5, final analysis, reporting and presentation of recommendations: the final Task of the assignment involves compiling and completing analysis of the data and information gathered during interviews and generating final programmatic recommendations for an MCC-funded land revenue activity into a comprehensive Final Report (Deliverable 5) of the Base

Period including:

• data presented in understandable charts/tables;

• overall findings and recommendations of the study including as a result of the various interviews;

• detailed description of proposed programmatic solutions and opportunities, their objectives, and their associated implementation steps and sequence over a five-year compact

• discussion of risks and mitigants, including related to sustainability and as associated with the successful completion and effectiveness

• preliminary activity budget in Excel, according to a template that will be agreed with MCC

• list of recommended prerequisites, policy conditions, or operational requirements necessary for the success of the recommended interventions;

• theory of change for recommended activity components – outputs, short term outcomes, long term outcomes, including main measures of success, assumptions and risks;

• response to areas for further development identified following MCC's review of Task 3 deliverables; and

• recommendations for additional analysis.

As needed and requested by MCC, the Consultant should be available to travel to Washington, DC to present the findings of the assignment to representatives of the MCC Land Team and the broader Malawi Country Team. MMD representatives will attend via teleconference).

PHASE TWO: DUE DILIGENCE TO SUPPORT FINAL PROJECT DEVELOPMENT

Phase Two may be executed upon completion of the previous Phase One activities. The optional Phase Two will focus on supporting MCC to further develop or assess approaches or provide further due diligence recommendations to MCC focused on public finance management and mobilization of land-based revenues. This optional phase may include: (i) a more detailed analysis of issues emerging from deliverables produced under Phase One; (ii) further development of recommended operational details and cost estimates for recommendations and more comprehensive analysis of potential revenue increase projections; (iii) design recommendations and monitoring support for possible willingness/ability to pay study that would be completed by another entity; (iv) completion of a detailed TADAT assessment of land administration systems including real property taxation and rents on leased public lands; and (iv) other activities related to project assessment and due diligence to be agreed with MCC prior to commencement of work under Phase Two.

Details for above and any other tasks and associated deliverables will be finalized at the time that the option period is exercised.

VI. MCC CONTRIBUTIONS

This assignment is being carried out to assist MCC with analysis and due diligence recommendations related activities to support land-based revenue mobilization and resource allocation at the national and municipal levels. MCC will contribute to this work in the following areas:

1. Background Documents: Electronic copies of relevant analyses and studies in possession will be shared will provided as attachments to the RFP to support proposal development and ability for the Consultant to finalize work plan and mobilize rapidly, including:

a. MCC Constraints Analysis Summary (attached as Annex 1)

b. Relevant documents detailing legal, institutional and other dimensions of Malawi's land situation. These include documents prepared for MCC, as well as reports on the estate lands issue and other related topics produced by the World Bank and others

Supplemental Consultant Work: MCC anticipates other consultants working on complementary analyses and studies. MCC will share draft documents from these consultancies as relevant if/as they become available and facilitate coordination and contact between other consultant teams and the Consultant. Where relevant, MCC will also share key background analyses or documents prepared by other institutions and internally in MCC.

2. MCC Investment Criteria and Compact Development Process: See MCC's website for a list of MCC investment criteria. The MCC Team will also be available to discuss these criteria in more detail.

3. Attendance at Key Meetings: MCC and/or the MMD will participate in all key meetings in Washington and/or…