J.1 Section C - SOW.pdf

1 SUMMARY OF CONTRACT PERIODS AND TASKS

The Contract Periods and Tasks included in this Statement of Work are listed below, together with a summary of the primary uses of the deliverables. The deliverables will have standalone value to the Government of Malawi and will also serve as inputs to MCC and the GOM’s project design decision-making. Work under this contract will contribute, together with other inputs outside of the scope of this contract, to an MCC-funded land project that satisfies MCC’s investment criteria.

Base Period – Contains eight Firm Fixed Price (FFP) Tasks1.

Base Period Task Use of Deliverable

Part I – Legal and Institutional Reform Assessment and Options

Task

Cost of Land Administration Services • Assessment for GOM

• Inputs into MCC project sustainability approach and requirements

• Provides data for MCC’s use in project ERR modeling

Task

Cost Implications of Long-Term Operations of Customary Land Act (CLA) Institutions

• Assessment for GOM

• Inputs into MCC project sustainability approach and requirements

• Inputs into MCC project appraisal and design

Task

Land Authority Assessment and Recommendations

• Assessment for GOM

• Inputs into MCC project appraisal and design

Part II – Leasehold Estate Lands Regularization and Customary Estate Lands Registration, Consolidation and Partnering

Task

Estate Land Availability Assessment*

• Assessment and programming tools for GOM

• Inputs into MCC project appraisal and design

• Provides data for MCC’s use in project ERR modeling

Task

Estate Land Legal Typologies and Options • Assessment and programming tools for GOM

• Inputs into MCC project appraisal and design

Task

Environmental and Social Performance Support Tools

• Investment Decision Report, as input into MCC project appraisal and design

• Environmental and Social Screening Tools

• Resettlement Policy Framework

• Stakeholder Engagement Plan

Task

Estate Lands Field Operations Manual • Programming tools for GOM

• Inputs into MCC project appraisal and design

Task

Customary Estate Lands Field Operations

Manual

• Programming tools for GOM

• Inputs into MCC project appraisal and design

Option Period – Contains Two Time and Materials Tasks

1 Noting Task 4 has two components

The Option Period will be exercised at MCC’s discretion, and work will be mobilized on an as-needed basis for either or both Tasks, via the issuance of Technical Directives after option exercise. The Technical Directives will outline the work and deliverables required, consistent with the contract Statement of Work.

Task 1 – Further assessment, recommendations, and reform facilitation services related to solutions for legal or institutional reform, or related to the proposed estate lands or customary lands activities.

Task 2 – Assessment and recommendations regarding land-related expenditure and revenue?

strengthening at National and City Council level

2 BACKGROUND & CONTEXT

2.1 SECTOR ANALYSIS AND COMPACT DEVELOPMENT PROGRESS TO DATE

In December 2018, MCC’s Board of Directors selected Malawi as eligible to develop a second compact, having successfully completed the implementation of a first compact in September of that year. In accordance with the standard compact development procedures, the MCC first completed an initial constraints analysis with the Malawi Millennium Development Trust (MMD), which revealed three binding constraints affecting Malawi’s economy:

(i) An unstable macroeconomic environment, as reflected in high and volatile inflation.

(ii) A high cost for road freight transport services and barriers to linking farms to markets in rural areas.

(iii) Difficulties with access to land for investment due to mismanagement of the estate sector and unclear or uncertain land rights, particularly for women smallholders.

MCC and the Government of Malawi are developing two projects, the Land Productivity Project

(“Land Project”) – design and preparation of which the services under this SOW will contribute -and the Agricultural Growth Corridors Project (AGC), targeting the transport and farm-to-market constraint.

MCC’s standard root cause analysis was completed for both project areas, project proposals were developed, and these were assessed and approved by MCC for further diligence and development in December 2020. MCC and the GOM are now in the final phase of due diligence and design prior to project approval and compact signing.

Services under this SOW will provide inputs to final design decision-making and preparation related to certain aspects of the proposed Land Productivity Project, as described below.

2.2 CURRENT COMPACT DEVELOPMENT AND IMPLEMENTATION TIMELINE

The current project timeline for compact development and implementation is as follows:

• Final Land Project design completed, meeting all MCC investment criteria, for submission to MCC Investment Committee: January 2022

• Final Land Project design, meeting all MCC investment criteria, presented to MCC

Investment Committee for approval to negotiate: March 2022

• Targeted Compact Board approval and signing date: July 2022

• Legal, Technical, and Administrative Preparations for Compact Implementation: August

2022 – November 2023

• Targeted Compact Entry into Force (EIF) date: December 2023

• Compact Implementation: December 2023 – December 2028

Bidders should note that all compact funds associated with an eventual approved Land Productivity

Project will become available for commitment and disbursement after the Entry into Force date.

MCC’s rules also permit a small percentage of an eventual compact Project budget to be expended after signing and prior to Entry into Force, for the purpose of implementation preparations. This percentage is called Compact Facilitation Funding (CFF).

2.3 SUMMARY DESCRIPTION OF THE PROPOSED LAND PROJECT ACTIVITIES

The proposed MCC-funded Land Productivity Project seeks to increase productivity of land in

Malawi through better functioning land markets and increased investment in land. The activities proposed collectively target the core root causes constraining investment in land and the overall functioning of land markets within both the estate and customary land sectors. In addition, the project’s focus on revenue collection and on the institutions responsible for carrying out the new land laws is expected to enhance the governance structure underpinning the registration and protection of land rights and the acquisition and allocation of land.

The activities being considered under an MCC compact are as follows:

• Estate Lands Activity – The goal of this proposed Activity is to create the incentives, conditions, and capacities to ensure that land parcels titled as leasehold estates are held under secure and objective tenure conditions, are transparently and efficiently administered by the state to ensure their optimal allocation, and that they are used efficiently and productively by the leasehold estate holders. Support will be aimed at enabling the Ministry of Lands (MoL) to complete a comprehensive regularization process in respect to the leasehold estate sector.

• Revenues Activity – The goal of this proposed Activity is to increase land-based revenues and available financial resources at the national and city council levels, to strengthen land administration by the MOL and the City Councils and expand effectiveness of land use controls as a result of increased incentives for productive land use.

• Customary Lands Activity – The goal of this proposed Activity is to undertake a next-generation approach to Customary Land Act implementation. The scope being explored focuses on using customary estate creation as a foundation for voluntary, community-driven land consolidation activities combined with land-based trust, leasing-out or partnering arrangements that could enable customary estate holders to realize increased value and income from their land holdings as a result of partnering with the private sector.

This approach would model more inclusive alternatives to existing mechanisms for private sector land acquisition.

The three proposed Activities reflect three critical pillars necessary for land sector transformation.

The Estate Lands Activity would aid the updating of existing records to better secure rights and strengthen administration of the share of land in Malawi that is already registered. The Customary Lands Activity would demonstrate an improved model for bringing benefits of more secure customary land to smallholders and making land available for higher value investment compared to the status quo model for much private sector land access. The Land-Based Revenues Activity will ensure that the Government of Malawi (GOM) and City Councils have the financial resources necessary to support strengthened land administration and improved land use. Land sector reform is a high priority of the President of Malawi, and a potential MCC-funded land project aligns with key GOM goals for the future of the sector.

2.4 KEY STAKEHOLDERS AND ROLES AND RESPONSIBILITIES FOR WORK UNDER THIS CONTRACT

The 609g Compact Development Funds financing the work under this RFQ are a grant from MCC to the Government of Malawi for purposes of supporting development of a second compact. MCC is undertaking this procurement on behalf of the Government of Malawi, and the resulting contract will be signed between MCC and the consultant. This Statement of Work has been reviewed by the

GOM.

The GOM’s team responsible for leading overall compact development with MCC is Malawi

Millennium Development Trust (MMD). MMD serves as the main interlocuter between MCC and key

Malawian institutions. While the GOM and MMD will be key actors associated with the execution of the statement of work, neither MMD nor the Government of Malawi are parties to the contract.

Once an MCC compact is signed (currently expected in 2022), an MCA accountable entity will be created by the GOM. The MCA will serve as the entity accountable for overall compact implementation by the Government, including with responsibility for procurement using eventual

Compact funds.

Because of the reform nature of the proposed Land Project’s Activities, the GOM, City Councils, and deconcentrated, decentralized, and community level entities will be the ultimate owners of the

Project’s eventual activities. For this reason, they are heavily involved in the work associated with project design, including related to the tasks in this SOW. The GOM Ministries and institutions key to Land project development work overall are:

− Ministry of Lands (MOL)

− Ministry of Local Government

− City Councils of Lilongwe, Blantyre, Mzuzu and Zomba

A variety of development finance and technical assistance partners are also supporting the GOM’s land-related priorities, with local NGOs active in implementation in some cases. The activities of these partners are summarized in the Annexes. The private sector will also be a key stakeholder of an eventual MCC-funded land project.

3 TASKS AND DELIVERABLES

Work will be executed under two contract periods, a Base Period and an Option Period. This section describes tasks and deliverables associated with each Period. The deliverables under this assignment will contribute to decision-making related to final project scope, design, and reform planning. The deliverables will also enhance and accelerate readiness for eventual implementation once a compact is signed and enters into force. This readiness will help maximize prospects for successful completion given the strict 5-year implementation period for MCC compacts. The deliverables generated under this contract also serve as stand-alone work products supporting decision-makers in Malawi to advance the intended reform process, including in coordination with other development partners.

A main principle underpinning these deliverables is to permit GOM and MCC to reach decisions based on a shared view of the key challenges and opportunities. The work approach therefore needs to ensure that information gathering as needed is inclusive and transparent, with sufficient opportunities created for ground-truthing and validation. The approach to tasks and deliverables will also need to underpin policy dialogue among potential partners in the sector, and the decisions that will need to be made regarding the feasibility, scope, and size of an eventual program of activities under an MCC-funded compact. At the same time, MCC acknowledges that ongoing constraints related to the COVID-19 pandemic may impact or limit the ability of the Consultant and key stakeholders to engage in group-oriented and in-person meetings, discussions, and validation and refinement exercises. For this reason, bidders are encouraged to propose work approaches and methods that can achieve broader engagement and validation without relying on large group work sessions or even on substantial quantities of group-oriented work – with multiple alternatives to respond to a variety of potential COVID-19 scenarios over the life of the contract. Additionally, the sequencing of work under this statement of work also purposefully delays some broader review, comment, and validation work to later in the life of the assignment, in the event that pandemic-related restrictions and limitations may recede later in the life of the contract.

3.1 BASE PERIOD

The Base Period contains two areas of work: Part I – Legal and institutional reform assessment and options, and Part II – Leasehold Estate Lands Regularization, and Customary Estate Land

Registration, Availability and Partnering. Tasks will be completed in parallel; the deliverables and payment schedule section of this document details the exact sequence. The motivation for the specific sequence of work and deliverables required is that those tasks whose outputs are most critical to go/no-go decision-making related to compact scope will take place first; these are deliverables that most influence final design deadlines and MCC approval to proceed with negotiations and signing, currently planned for January and March 2022, respectively. Activities that are key to implementation preparedness, but whose outcomes are not material to go/no-go project scope decision-making, are sequenced second.

Task 0 Inception

Part I – Legal and Institutional Reform Assessment and Options

Task 1 Cost of Land Administration Services

Task 2 Cost Implications of Long-Term Operations of CLA Institutions

Task 3 Land Authority Assessment and Recommendations

Part II – Leasehold Estate Lands Regularization and Customary Estate Lands Registration Availability and Partnering

Task 4 Estate Land Availability Assessment

Task 5 Estate Land Legal Options

Task 6 Estate and Customary Environmental and Social Performance Support Tools

Task 7 Estate Lands Field Operations Manual

Task 8 Customary Estate Lands Field Operations Manual

3.1.1 Task 0: Inception

The Inception Task will produce a brief Inception Report. The Inception Report will contain three sections: 1) Detailed Workplan, 2) COVID-Related Implementation Plan and 3) COVID Risk

Management Plan

3.1.1.1 Task 0: Inception Deliverables

Deliverable Name Summary contents

0 Brief Inception Report • Detailed Workplan – provides an updated Gantt chart indicating timing and sequencing for work related to all Tasks and deliverables, including personnel mobilization

• COVID-Related Implementation Plan – This updates from the Technical Proposal, providing the Consultant’s final approach to staff deployment during the assignment. It may be updated later in the assignment if/as determined necessary.

• COVID Risk Management Plan – Covers conduct of work throughout the assignment, may be updated if/as the Consultant determines appropriate.

Guidance on template/contents may be provided by MCC. The template is merely intended as guidance to assist contractors in taking a risk-based approach to COVID. It does not replace any corporate requirements for COVID risk management.

3.2 PART I – LEGAL AND INSTITUTIONAL REFORM ASSESSMENT AND OPTIONS

The objectives of the Tasks in Part I are to a) generate the information and data required for i) the

GOM to adequately assess the ongoing operational costs and sustainability of the land administration institutions identified in the 2016 land laws, and for ii) MCC’s calculation of the economic rate of return for the Project’s Revenues Activity, b) identify more cost-effective approaches to the institutional structure for the implementation of some of these reforms – in particular for the implementation of the CLA – including, where necessary, further legislative, regulatory and/or institutional change, and c) assess viability, feasibility, and options for creation of a Land Authority in Malawi.

More broadly, the outputs of Task 1 intend to address the analysis that higher performing Land

Administration Services – including related to administration of state leaseholds, administration of growing numbers of customary estates – require that the institutional framework be one that is effective and transparent, but also sustainable and affordable for the GOM with its own resources.

While the focus of the proposed MCC-funded Land Project is on estate land regularization and management, customary estate mobilization for higher value activity, and expansion of land-related revenues to fund these services, implicit in the long-term sustainability required of the proposed MCC-funded outcomes is an institutional framework that is affordable for the GOM to maintain after the MCC compact closes. The tasks in Part I will contribute key information for the understanding of this broader issue and recommendations regarding potential reform options.

3.2.1 Task 1: Calculate Cost to GOM of Current and Future Required Land

Administration Services

The goal of Task 1 is to complete a study that will serve at least two purposes:

1) Provide input to reform planning – The Task will provide data and analysis on the current and optimal costs of providing Land Administration Services (LAS), so that GOM decision-makers can readily understand some of the key cost implications of the institutional approaches to LAS reform already called for under the 2016 laws, together with possible alternative approaches. The results of Task 1 will also be considered in the context of decision-making around institutions and institutional reform scope and requirements under a potential MCC-funded Land Project.

2) Provide input for MCC’s ERR analysis of Land Project’s Revenues Activity – The ERR for the

Revenues Activity is projected to be based on the benefits associated with improved land administration services as a result of increased spending by the GOM on key land administration functions and outcomes. Work under contract Task 1 will also produce data inputs for MCC’s use in generating an ERR calculation for the Revenues Activity. Three aspects of the deliverables under this task will support this need: 1) the comprehensive identification of the total current baseline operational spending on land administration in Malawi by MOL’s key land administration-focused departments and the Ministry’s associated deconcentrated entities (presently – the regional deeds and land registries located in Mzuzu, Lilongwe, and Blantyre, and some limited land-related tasks already undertaken by district officials), 2) an Africa-regional benchmark for what more adequate spending on land administration would look like, reasonable and appropriate as a medium- or long-term target for a country like Malawi, and 3) a reasonable projection of by how much land administration spending in Malawi would need to increase in order for land administration services to improve, based on current spending, the global benchmarks, and a set of assumptions that will be proposed by the Consultant and agreed with MCC.

Background

Land registration in Malawi currently operates centrally, via a deeds registry and three regional title registries. The registration of all land rights (including, inter alia, leasehold estates on government land, customary estates, and private leases where required) is decentralized under the 2016 reforms: responsibilities are passed from the current regional level (currently operated by MOL) to District Land Registries, which currently do not exist2. These District Land Registries are to be responsible for the registration of both leasehold estates and customary estates within the district, as well as all subsequent transactions that are subject to registration. The latter obligation is introduced through the Registered Land (Amendment) Act 2017 (RLAA)3, clearly indicating that the district registries are to function as title registries, at least in respect to the customary estates.

Although termed ‘District Land Registries’, Section 2 of the RLAA 2016 amends the definition of “registration district” to mean “the area under the jurisdiction of a local government authority”.

Under the Local Government Act (LGA), a “local government authority” means a district council, a town council, a municipal council, or a city council.4 This effectively means that every local

2 There are 28 Districts in Malawi

3 Act 7 of 2017

4 Section 2 of the Local Government Act and section 2 of the Local Government (Amendment) Act, 2016.

government authority, and not just the district councils, must have a land registry for the purpose of registering land parcels within their local authority area. 5 While the implication is clearly that these Registries are to be managed, staffed, and maintained by the district, town, municipal or city authorities, the route towards implementing this reform country-wide remains to be finalized. In addition to registration, the reforms also increase dramatically the scope and scale of the functions performed by local authorities in respect to the administration of both customary and leasehold estates within their jurisdictions; a range of brand-new statutory responsibilities are to accrue to the LAs, which would require trained personnel to perform, as well as operational budgets.

Together with the MOL, the Ministry of Local Government has taken on board issues of decentralization. The MOL’s current planned approach is to start the process of establishing lands offices in districts that will be targeted to implement this and other land sector projects (with current staff of Departments of Lands, Physical Planning and Survey to be deployed).

An initial MOL District Registry Plan is in development. However, comprehensive data on the ongoing operational costs of these reforms and services once instituted has not yet been generated. For this reason, it is important for the GOM and MCC to be able to assess the future likely costs of the proposed devolution of land registration and estate administration to the local government authorities. In particular, the compact’s proposed Revenues Activity centers on supporting increased revenues collected to better fund land administration; as important as expanding revenue is determining how it should be optimally allocated to materially improve the quality of land administration, and identifying the degree to which current institutional arrangements detailed in law will permit optimal allocation of scarce budgetary resources.

Finally, effective long-term administration of land in Malawi and more inclusive land markets must include some form of sustained, institutionalized advisory services to support customary rights holders to negotiate good, fair land-related transactions – leasing out, trust arrangements, or other transfers – and to ensure individual rights holders are protected within these arrangements.

The optimal institutional arrangements for organizing this service is an open question, and will be addressed in Task 2.

3.2.1.1 Task 1 Deliverables

1.1 Methodology and final

report table of contents

Methodology for conducting the analysis and projection of costs, identifying 1) the existing costs of the current provision of land administration services by central, regional, and local authorities, 2) the projected costs of the reforms introduced by the RLA, which envisages the introduction of land registries at local authority level

(district level), 3) the additional spending that would be required for more optimal land administration and land registration service provision under the current central and regional service provision structure as well as the new decentralized approach in the 2016 laws and 4) the additional spending that would be required for development of a transaction advisory function or other institutionalized mechanism to support fair, transparent land markets. Includes preparation of an institutional mapping and specific land administration services offered, as well as the methods for determining actual costs and expenditures and the Africa-regional/global benchmarks.

Final report table of contents.

5 Currently, Malawi has a total of thirty-five Local Government Areas in which Local Government Authorities (Councils) have been established; in addition to the twenty-eight districts, there are four City Councils, two Municipal Councils and one Town Council.

1.2 Draft costing report Draft cost and benchmarks report, according to the approved Deliverable 1.1 and the information and requirements for Task 1 as described in the SOW section devoted to Task 1. Includes initial reform recommendations. Will include presentation of conclusions and assumptions in Excel format.

1.3 Final costing and

recommendations report

Final costing report and reform recommendations, according to the approved Deliverable 1.1 and the information and requirements for Task 1 included in the SOW section devoted to Task 1. Will include presentation of conclusions and assumptions in Excel format. In addition to the final costing and costing projections analysis, the report is expected to provide a set of institutional reform recommendations, with a focus on further potential reforms to streamline costs and ensure the sustainability of the land administration services. The report will also include all final Excel-based material supporting the final costing study results. The final costing and recommendations report will reflect reform facilitation services provided by the Consultant following the draft costing report - to support review, dialogue, and debate among key stakeholders.

Completed Task 1 deliverables will reflect at least the following work:

1. Identification of all land services institutions to be accounted for. Generate an institutional map of all entities to be included in the study, with the related LAS they currently (and/or will) provide, and design a methodology for engaging stakeholders as appropriate6.

2. Review of latest Ministry of Lands District Land Registry Plan documentation that may be available at time of work start, to build on existing work.

3. Identification of land administration expenditures for the most recent year available, and past trends in spending for service delivery by all existing land administration-related entities, including all cost dimensions including maintenance, operational costs, salaries, consumables, field-related costs, and associated staff numbers. Trends should look at the

5 years prior to the most recent year expenditure information is available.

4. Design and implement an analysis methodology – and data collection method as needed -which can quantify as best as possible the past and current volume of outputs from all relevant land administration services and the related costs of this provision, including inter alia:

a. Activities/tasks involved in registration of land rights, titles, deeds, and other related services provided

b. Activities/tasks in respect to leasehold estate adjudication and administration.

6 As mentioned elsewhere in this TOR, there is uncertainty about what the precise COVID-19-related situation will be both globally and in Malawi at the time of execution of this work. As such, engagement with key stakeholders, interviews with key stakeholders, and processes for input or validation from local entities of work products may require adjustment at the time of actual work start. These adjustments could be to expand and deepen stakeholder engagement, to the extent that improving conditions permit, or to pursue a more restrained approach, to the extent that conditions do not improve or have worsened. As needed, adjustments shall be made to limit the number of consultant personnel participating at any one time in-in person meetings, obtain transmission of documents by email, and to conduct meetings and interviews by telephone or another mobile phone or web-based platform. While optimal for sourcing inputs, in-person multiple-person group engagement sessions may be curtailed if COVID conditions do not permit them, and engagement methods may be adjusted to best align with the tools available (ie audio and/or video).

c. Activities/tasks in respect to land-based revenue collection.

The data collection should rely on existing current and past transaction volume reports and other documents of the relevant institutions, together with other data gathering efforts including interviews with key staff as needed to supplement, to effectively yet efficiently achieve the goals of the deliverable.

5. From the activities/tasks identified in 4 a, b & c above, identify those which will be provided in whole or in part by entities to be newly created/newly devolved authorities, and estimate and assess any related future additional costs of provision of these services by the new entities.

6. Development of an Africa-region (and further global, as useful and relevant) benchmarking on realistic additional costs and additional spending for improved land administration in

Malawi. This will be a practical benchmarking; it will account for the fact that resourcing and/or efficiency elsewhere in the region also may not be optimal, but will use all available inputs and reasonable assumptions to identify low-medium-high scenarios for the level of expenditure necessary for land administration that is more effective in processing land transactions and maintaining up-to-date and complete record of rights holdings, but appropriate for Malawi. The benchmark may also rely on information available or that can be obtained around expenditure across other areas of central government service delivery in Malawi, to ensure that benchmarks used avoid an implication that the land sector is being suggested to be funded at levels that vastly exceed that of all other government functions in the country. The benchmark will identify the standard of service or metric of service delivery it reflects, and how this differs from current standards or metrics; the metrics or service standards may be discussed with MCC for feedback, with input from the

GOM. The metrics should also reflect parameters for transparency and equity (particularly gender equity) in service delivery.

7. Calculation of a reasonable operating cost of improved operations that could be reasonably supported by increased revenues and resources (together with increased expenditure efficiency). This calculation will be based on the benchmark developed.

8. Identification of the main current institutional framework bottlenecks within the LAS system, and propose elements/processes/functions that could be reformed within the current system, ensuring that the dimensions of allocative efficiency (what to do) as well as technical efficiency (how to do it) are included in the analysis, and calculate the added costs of improved operations. Note that the Consultant is not being requested to undertake a detailed business process analysis at the level of individual transaction types – the focus is on the current institutional framework for service delivery, the future institutional framework as indicated in the 2016 laws, and based on those results and how viable they are or not given likely realistic future budget scenarios and identifying options for reform.

While the focus of this task is land services institutions indicated in the 2016 laws, the

Consultant may identify institutions outside of the land administration system that play a role that should be identified, to the extent these other institutions contribute core functions that should factor into analysis of land administration service.

9. The work will address any other related issues or priorities indicated by MCC at time of

Task work

3.2.2 Task 2: Calculate Cost Implications of the Customary Land Act and Recommend

Reforms for Institutional Streamlining and Rationalization

The 2016 legal reforms in the Malawi land sector introduce a range of decentralized institutions for conducting land administration activities; in particular, the new Customary Land Act (CLA) and the amended Registered Land Act (RLA) institute reforms which significantly alter the institutional landscape. Under the CLA, both the local government authorities and the Traditional Authorities have greater responsibilities and powers, and under the RLA the land registry function is devolved from central/regional to district/local authority level.

The MCC Root Cause Analysis for Malawi’s land constraint concluded that, when paired with the variety of existing institutions, both statutory and traditional, the new envisaged CLA-related level institutional framework is complex, and may be too costly for Malawi to reasonably implement and maintain countrywide. MCC now wishes to support a comprehensive review and costing of the current and proposed CLA-related institutional framework, and support the development of recommendations for further reforms which could streamline the approach to providing land administration services, particularly in relation to costs.

Background

The CLA devolves responsibilities for land administration down to the community level, introducing institutional arrangements at Group Village Level within the Traditional Land Management Areas

(TLMAs), and at District Council level, where the figure of Land Clerk is encumbered with much of the responsibility for integrating the management and administration of both leasehold estates – the main existing registered tenure form, and customary estates, the new tenure form introduced by the CLA and for which small-scale pilots have begun to create records for.

New institutional responsibilities for land administration are located with:

− Customary Land Committees (CLCs) established at Group Village Level, responsible for overseeing the adjudication processes related to defining customary estate land holdings within their jurisdictions and for approving subsequent transactions.

− Traditional Authorities, at Traditional Land Management Area level, who are charged with the management of the adjudication records generated by the CLCs within their jurisdictions and for approving subsequent transactions.

− Land Clerks, allocated to each TLMA, but employed via the local authority (district), and responsible for providing a wide range of land administration services in support of the

CLCs within the TLMA.

− Customary Land Tribunals, at TLMA, District and National levels.

To date, the MOHLUD has piloted the implementation of the CLA – to define and adjudicate customary estates – in targeted areas of eight districts7, supported through donor assistance.

Implementation has largely been focussed on the systematic first-time registration of newly created land rights, which has been undertaken principally by the ministry through seconded staff as well as by external service providers working under the direction of MOHLUD. The implementing arrangements and tools for these pilots have varied. A costing analysis looking at the range of approaches is currently in process, and any available reports will be provided to the Consultant following award. This costing analysis is expected to contribute to an understanding of the financial implications of a large-scale rollout of the CLA. At the same time, the attendant costs of building and maintaining institutional capacities at local level across the country to undertake the ongoing, long term provision of decentralized land administration services – both leasehold and customary estates - as envisaged under the CLA/RLA, also needs to be assessed. While Task 1 includes an assessment and projection of the costs of the operations of the district land registries indicated in the 2016 laws, this Task 2 will build on all available costing analyses to assess other costs related to the ongoing provision of LAS by the customary authorities and institutions, after the initial first-time registration through systematic LTR activities. In 2017, as part of the Land Reform

Implementation Plan (Piloting of Customary Estate Titling and Registration)8, the MOHLUD produced an initial cost estimate for the piloting phase. Available CLA costing analyses will be shared as relevant after contract award, together with the Ministry’s District Registry Plan efforts, mentioned in Task 1, above.

7 The eight districts include Karonga, Rumphi (Northern region), Nkhotakota, Mchinji, Kasungu (Central region), and Phalombe, Chikwawa, and Nsanje (Southern region).

8 Ref to doc.

At this stage in Compact development, it is important for the GOM and MCC to be able to assess the costs and sustainability of the institutional arrangements proposed under the 2016 laws and identify potential reform activities that could rationalise and streamline these, to ensure that any

MCC-funded CLA-related investments will be well-positioned for adequate longer-term customary estate administration. Potential alternative institutional arrangements need to be examined, and the consequences for the costs to the GOM require careful analysis.

3.2.2.1 Task 2 Deliverables

Deliverable Objective

To quantify the resources that would be needed for national implementation of the CLA, and most importantly for long-term operations of its associated institutions (Traditional Land Management

Authority Area [TLMA] and Group Village Level, and at District Council level, where new Land

Clerks are charged with much of the responsibility for supporting the management and administration of leasehold estates and customary estates); assess aspects related to feasibility, affordability, and efficiency; and develop reform proposals.

Estimates for long-term operation should also reflect expenditures associated with advancing equity in the sector, both for women and for smallholders as a class; the Consultant is not requested to “cost” these things separately, but to indicate functions, staffing and other reasonable resourcing associated with applying gender equity provisions of the Customary Land

Act or other relevant law, tasks associated with avoiding capture by powerful interests, transparency in service delivery and decision-making, and public access to services and information. This includes provision of transaction advisory support to smallholders negotiating land transactions, to overcome pervasive information and power asymmetries. The Consultant should also be sure to identify and cost the dimensions of responsibilities under the Customary

Land Act which have a relationship to themes such as consultation, environmental management, and environment-related decision-making.

Deliverable Name Summary contents

2.1 Draft CLA Institutional

Framework Costs

Report

Draft Report, incorporating discrete chapters on at least the following:

a. Institutional map of TLMAs and Group Village Areas

b. Summary of the non-land trends identification

c. Financial model for scenario planning and cost analysis.

d. Initial review of feasibility, affordability, and efficiency of the institutional framework and service provision as envisaged under the CLA.

2.2 Draft Final CLA

Institutional Framework Costs and Reform Options

Will reflect feedback received on the draft report, and include final presentation of:

a. Model for scenario planning and cost analysis.

b. Assessment of feasibility, affordability, and efficiency of the institutional framework and service provision as envisaged under the CLA.

c. Proposals for reforms to rationalize and/or streamline the institutional framework and/or for the adoption of alternative strategies for CLA implementation.

2.3 Final CLA Institutional

Framework Costs and Reform Options

Will reflect final updates, including but not limited to the reform proposals, as a result of more formal consultation events with the GOM and potentially other stakeholders

Task 2 deliverables will reflect at least the following work

1. Compilation of a “map” in table form and by district of all officially recognised TLMAs and

Group Village Areas, including data as may be available on the current population, land area and date of establishment for each of these ‘administrative’ units. If possible (but not mandatory), the database should also incorporate spatial data on the extent and location of the units.

2. Review of findings of the Ministry’s CLA pilot costing exercise, as may be available following contract award.

3. Information gathering on any likely relevant trends that are not narrowly land-specific in available financing and fiscal policy ‘ceilings’ in Malawi over the next 10 years, along with other non-land-specific reforms that may impact on the cost structure of implementing the

CLA (such as civil servant reforms, subsidies to Traditional Authorities and Group Village

Headmen, the creation of additional TLMAs, GVAs, etc.).

4. Creation, review, and analysis of the following, reflecting information inputs from MOL:

a. Unit cost estimates for the annual operating costs of the CLA institutions, including the specific costs of service provision by the TAs, CLCs, Land Clerks and the

Customary Land Tribunals. This operating cost should include, at minimum:

salaries, office space, maintenance services, consumables, and costs associated with activities that have proven necessary to CLA implementation to date (or have been needed to be expended) and can be anticipated to be incurred over the long term, for example transportation costs for various local officials, members of CLCs, etc; other costs associated with the participation of individuals required by law to participate in customary estate identification, adjudication, registration, and future transaction management. Information on these costs can be obtained from MOL and from the donor partners who have funded CLA pilots. The estimates should take care to identify all costs, even those that have been characterized as

“informal” or related to “participation” in the course of donor-funded projects. Cost estimates should also reflect costs – such as in staff numbers or staff time – associated with applying gender-equity in application of law and regulation.

b. Unit Cost estimates for the capital investment costs required in establishing the

CLA institutions, including physical infrastructure, furniture, vehicles and non-major information technology equipment (i.e., office computers and associated printers, but not the technical equipment to support the main ICT functions, such as servers etc.). These should reflect one-time initial investment costs as needed as well as periodic equipment refresh. Regular maintenance and consumables will be included under a), above.

5. Generation of an Excel-based model that shows estimated costs of achieving and maintaining full implementation of the CLA across the national territory. The model should incorporate:

a. Costs - for all the required activities for9:

i. Comprehensive land tenure regularization activities (first-time registration of customary estates) across all administrative units

ii. The cost of longer-provision of land administration services by the decentralised institutions in these units.

b. Scenarios - Scenario planning functionalities that allow for costs analysis based on:

9 The detailed findings and analysis of a.ii are higher priority and are the goal of this Task. However, it is important to also account as best as possible for the one-time cost of first-time customary estate creation, in order to be able to clearly distinguish the two. Often these costs are inadvertently mixed, challenging understanding of ongoing institutional operations costs imposed by specific institutional arrangements.

i. Varying annual targets for achieving full implementation of the CLA.

ii. Varying demand levels for the provision of ongoing services (authorizing future transactions, dispute resolution, etc.).

iii. Alternative institutional strategies for service coverage or delivery

iv. Different contexts of macroeconomic growth and/or fiscal austerity.

c. Cost Projections - Cost projections, as a result of the scenarios, for a) annual operating costs and b) capital investment costs, for each administrative unit identified in the local institutional mapping, based on the estimates compiled.

6. Using the scenario planning/cost analysis model as a basis for discussion, jointly assess with the MOL the feasibility, affordability, and efficiency of implementing the CLA in its current form and through potential alternative strategies/institutions. This assessment should lead to the development of proposals for potential reforms to the institutional framework and/or the strategic approach for implementation of the CLA.

7. COVID-19 pandemic conditions permitting, assist the MOL to conceptualise, plan, host and report on a consultative workshop with relevant stakeholders

(public/private/technical/policy/central/local). The results of Tasks 1 to 6 should be presented in appropriate formats for discussion and validation at the workshop. There should be an emphasis on small group-based discussions that focus on specific issues and questions directed at the most relevant stakeholders. All workshop reports and materials must be made available at least 2 calendar weeks before the event to all intended participants.

8. Update the potential scenarios, cost projections and reform proposals as may be needed following the consultation workshop and produce the final report.

9. The work will address any other related issues or priorities indicated by MCC at time of

Task work

3.2.3 Task 3: Land Authority Assessment & Implementation Options

Background

The GOM has requested MCC support for a study that examines the possible institutional arrangements and implementation options for the establishment of a National Land Authority

(NLA). As with all other topics addressed in this TOR, no decisions have yet been made on whether or how this would be addressed or included in an eventual MCC compact; this study will serve as one set of inputs into that decision. The GOM considers that such an authority could be a more efficient and cost-effective institutional arrangement for the delivery of land administration services, working closely with decentralised authorities, While the MOL would maintain responsibilities for establishing and maintaining policy and regulatory frameworks.

The NLA is therefore envisaged as being a quasi-governmental body, which would run the essential functions of land administration, but would be independent of the government. The guiding principles for the NLA would be that it is professionally managed and operated in a largely autonomous manner in accordance with its objectives, that it can provide cost-effective and efficient services to the public and land users, that its services are accessible to and meet the needs of women and the poor, that it is able to hire and retain qualified managerial and technical staff; and that it should be wholly or largely financially self-sufficient, retaining some or all land-related revenues collected. The proposed National Lands Authority, if adopted, will need to be preceded by final review of existing laws and drafting of specific legislation to facilitate its establishment.

Objective

To produce a comprehensive assessment of the options for establishing an administratively and financially autonomous NLA, including evaluations of potential risks, opportunities and sustainability scenarios, proposals in respect to the scope, powers, structuring and institutional responsibilities of such an authority, and an outline of a potential timeline and sequencing for institutional reform. The assessment will also identify potential areas of service provision to local government and community level authorities or service provision coordination with local government or community level authorities.

3.2.3.1 Task 3 Deliverables

3.1 Methodology, table of

contents and structure of report

• Methodology for generating contents of the report, including approach to engaging key government and other stakeholders and interlocuters.

• Contents and structure of the report, with main content developed around chapters dedicated to key issues. The chapters will be readable as standalone issue notes, to facilitate efficient review and discussion by key stakeholders (easing distribution, and review of certain sections without obligating readers to engage with the entire report if only certain portions are of relevance).

3.2 Draft Land Authority

Assessment and Options Report

• Reflects all items listed in Task 3 content and deliverables section in this SOW

• Will be developed with input from MOL and others

• Consolidated report including all sections

3.3 Final Land Authority

Assessment and

Options Report

• Final report

• Reflects all items listed in Task 3 content and deliverables

• Reflects final input from GOM and MCC, including results of more formal consultation or other events held with GOM stakeholders, if/as COVID conditions permit

Task 3 deliverables will reflect at least the following work

1. Through consultations with stakeholders from public and private sector, conduct an evaluation of the potential risks, opportunities, and sustainability scenarios for the establishment of an NLA, including a systematic analysis of the efficacy of the MOL’s land administration and regulatory services as currently provided, identifying whether or how these could be improved through the introduction of an NLA and what the necessary pre-conditions for improvement would be.