Malawi Govt launches job creation support project

The Ministry of Trade and Industry on Monday stressed the need for the private sector to play its rightful role, saying the sector was crucial to poverty eradication efforts.

Secretary for Trade and Industry, Nebert Nyirenda, said the important role of the private sector in realizing government’s mission of eradicating poverty could not be overemphasized.

“There is, therefore, urgent need to reposition ourselves to enable the private sector to play its rightful role,” Nyirenda said.

He was speaking in Salima during the launch of the $15 million (about K4.5 billion) Competitiveness and Job Creation Support Project (CJCSP) financed with a loan from the African Development Bank (ADB).

The project aims at contributing towards the reduction of poverty in Malawi through sustainable pro-poor economic growth and improved socio-economic development led by the private sector as enshrined in the Malawi Growth and Development Strategy (MGDS) and its successor, the MGDS 11.

The CJCSP, which has a five-year life span, aims to achieve this by improving capabilities and competitiveness of the private sector, thus increasing export diversification and job creation.

Nyirenda, who launched the project on behalf of Trade and Industry Minister John Bande, said the MGDS recognized that continued poverty reduction could be easily achieved through sustained broad-based economic growth driven by a thriving private sector.

Secretary for Trade and Industry, Nebert Nyirenda addresses the gathering in Salima during the launch of the Comptitiveness and Job Creation Support Project (CJCSP). -photo by Gospel Mwalwanda /Mana

He said despite the far reaching contribution to the country’s economy, the private sector, particularly the Micro Small and Medium Enterprises (MSMEs) was beset by a number of constraints including a weak culture for entrepreneurship among indigenous Malawians, and the lack of access to capital.

He said other constraints that MSMEs face are high cost of capital, weak private sector institutions, outdated policy, legal and regulatory framework, the lack of access to technology and markets, and unreliable and costly infrastructural services.

“Recognizing the important role the MSME sector offers to economic development of the country, government is committed to implementing effective support programmes for the development of MSMEs,” Nyirenda said.

He said the CJCSP was one of such programmes aimed at addressing some of the constraints as a means of empowering citizens to engage in sustainable economic and productive activities.

The project has three components, namely capacity building which includes institutional strengthening and entrepreneurship skills development, strategic value chain development, and access to finance, and project management.

After the expiry of the project, it is expected that there will be increased private credit by commercial banks to address binding constraints to MSMEs development in Malawi, increased export diversification with a reduced reliance on tobacco, currently the country’s key export crop.

Another expected outcome of the project is the development of MSMEs and formal employment in the private sector increased by 2000 jobs (including 50 per cent women and 25 per cent youth).

It is also hoped that there will be an increase in the income of existing and new pulse farmers and existing edible oil farmers in target areas with 50 per cent of those benefiting to be women and 50 per cent youth.

Under the strategic value chains development subcomponent, the inclusiveness and competiveness of target value chains will be strengthened. The target value chains are pulses with focus on pigeon, and edible oils with a focus on soya beans.

Farmers will be targeted in 10 districts of Mzimba, Kasungu, Ntchisi, dowa, Lilongwe Rural, Dedza, Zomba Rural, Chiradzulu, Thyolo and Mulanje. About 20, 000 existing and 5,000 new pulse farmers as well as 40,000 existing and 10,000 new edible oil farmers will be targeted in the districts.

Nyirenda said the success of the project required an enabling environment, pledging that government would continue to create a favourable business climate in which the private sector could perform efficiently, without excessive interference.

“My expectation therefore is that this project will be able to uplift the livelihoods of our citizens,” Nyirenda said.

He thanked the ADB for providing both financial and technical support which he noted had made the project possible, adding “I look forward to the continued cooperation between the Bank and Malawi Government in areas of private sector development.”

ADB Resident Representative, Dr Andrew Mwaba in his remarks called on all stakeholders involved in the implementation of the project to learn from experiences of other bank-supported projects.

Dr Mwaba said issues of rules and procedures, financial management, procurement, monitoring and evaluation should be comprehensively discussed so that implementation could start on a good note.

He said the project, coming at a time when the country was going through difficult times with many Malawians jobless, should make sure that it creates employment to meet people’s high expectations.

Dr Mwaba said since the implementation of the project involved many stakeholders from government and the private sector, there was need for effective leadership from the Ministry of Trade and Industry, but also more importantly effective collaboration among all stake holders.

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