Malawi government and the World Bank have announced the signing of two Financing Agreements amounting to USD70 million (over K53 billion) aimed at strengthening institutional and financial capacity in managing climate-related risks and shocks and disasters.
This is in form of a USD 40 million (MK32 billion) Disaster Risk Management Policy Financing (DPF) which has already been made available and another USD 30 million (K22.8 billion) Disaster Risk which would be made available upon request in case of future related emergencies effective in the next three years.
Minister of Finance, Economic Palnning and Development Joseph Mwanamveka, who signed the agreement on behalf of government, said Malawi has experienced excessive weather shocks which had coincided with government’s fiscal consolidation processes.
This, he said, rendered government with a limited fiscal space to respond to emergencies and undermined fiscal consolidation and macroeconomic gains that had been achieved.
“It is therefore envisaged that this program will support government’s efforts to shift from a disaster response approach towards a more proactive management of disaster and climate risks.
“This financing will also support Malawi’s need for immediate liquidity in the wake of Tropical Cyclone Idai which affected 975, 600 people leaving 732, 000 of them at risk of food insecurity, and also in event of subsequent catastrophic disaster striking,” he said.
Mwanamveka commended the World Bank for what he described as a timely support and expressed government’s commitment to implement the program in accordance with provisions of the Financing Agreement as well as Malawi’s own public Finance Management rules.
The funds are expected to be channeled towards institutional reforms, shock-sensitive social protection mechanisms, financial capacity to respond to disasters and safeguarding public infrastructure.
World Bank Country Manager, Greg Toulmin in his remarks said through the funds, the World Bank has provided a short term immediate response to the impacts of Cyclone Idai
“This is coming in various forms to a total of USD120 million (over K91.2 billion). But the USD 40 million has already been allocated which is working to improve the management of disasters and preparations of disasters in future,” he said.
He added that budget support was the proper context to respond to the issue of Cyclone Idai.
Government spokesperson, Mark Botomani said the financial support is a testimony of confidence donors and stakeholders have in government’s financial prudence and governance.