The Governments of Malawi and Ireland have signed a Memorandum of Understanding (MoU) for support to a social cash transfer programme and for replenishment of the strategic grain reserves.
Speaking during the signing ceremony on Monday in Lilongwe, Ireland Ambassador to Malawi Liz Higgins said the MoU will allow the National Food Reserve Agency (NFRA) to perform its mandate.
“This funding will allow the NRFA to perform its mandate which is to release maize to the market to meet humanitarian needs and depress prices when they are high reflecting scarcity,” said Higgins.
The programme, financed by Ireland and other partners gives the Malawi Government the assurance that 50,000 metric tonnes of maize will be replaced which allows government to draw down the reserve by 50, 000 metric tonnes of maize.
The Irish Ambassador added that apart from replenishing the grain reserves, the donation will also help the Malawi Government to stabilise the macro-economy.
“Apart from the fact that imported maize does not represent value for money, importing grain would also contribute to depleting exchange reserves. The foreign exchange which would have been used in maize imports will therefore be held as foreign exchange reserves and can be used to ease pressure on the exchange rate,” said Higgins.
At present, the resources made available for the replenishment of the strategic grain reserves will be disbursed immediately to the Reserve Bank of Malawi.
Higgins further said there is need to look at how to strengthen the linkages between the different instruments for social protection- including the farm inputs subsidy programme, the public works and social cash transfers programmes.
“Government needs to review its budgetary allocations to these programmes. Development partners have scaled up their support to social cash transfers in response to government’s request for additional resources to protect the most vulnerable households from the impact of devaluation,” she said.
In his remarks, Minister of Finance Dr. Ken Lipenga, said the two programmes are innovative and well designed.
“The Social Cash Transfer (SCT) programme intends to support Balaka district council with necessary infrastructure to start up and implement the SCT Programme, provide technical support to the Ministry of Economic Planning and Development to assist with coordination of social protection,” he said.
Lipenga added that government has for the mean time responded to the situation by drawing down 25,000 metric tonnes from the strategic grain reserves and it has also approved the release of an additional 50, 000 based on the pledges from Ireland and Norway.
Lipenga thanked the Ireland for the donation citing if such a donation was not made, a lot of problems would have been ensued for Malawians.
“If such support were not provided, the coping strategies of vulnerable households would have included sale of assets, reducing food intake, deforestation to sell charcoal, withdrawing children from school and other destructive coping mechanisms including engaging in transactional sex- which fuel the transmission of sexually transmitted infections,” he said.
At present according to the Malawi Vulnerability Assessment Report release in July, 1.97 million Malawians are in need of humanitarian assistance.
A total of 2, 781, 895 Euros has been given to Malawi government for a period of four years with the first disbursement of 899, 910 in December 2012.Follow and Subscribe Nyasa TV :