The World Bank has approved a US$95 million (K69.7 billion at current exchange rate) credit which is expected to boost the country’s quality and quantity of various agricultural products for domestic and export markets.
The credit targeting about 70,000 farmers and 300 producer organizations, has been approved under the Agriculture Commercialization Project (AGCOM), and it follows a budget support of US$80 million (K58.7 billion) the bank approved for Malawi earlier this month.
Valens Mwumvaneza, World Bank Task Team Leader for AGCOM said in a statement issued to Nyasa Times on Monday evening they expected the funds to catalyze and strengthen the role of commercial agriculture in turning around Malawi’s economic fortunes.
“The project will help develop Malawi’s productive base of farm and agribusiness products to foster export competitiveness and economic empowerment,” said Mwumvaneza.
Mwumvaneza said a major activity of the project would be establishing productive alliances between producer organizations (POs), other value chain actors and product off-takers.
The capacity of the POs and other value chain actors will be built through technical assistance and matching grants to produce the quality and quantity required by the identified off-takers and strengthen the POs to meet market required standards and norms.
“AGCOM will also support the creation of business enabling services by improving access to finance, standards and certification, and trade facilitation.”
About 70,000 farmers and 300 producer organizations are expected to benefit from the Agriculture Commercialization Project.
Mwumvaneza added: “In order to create a conducive environment for farmers and agro-businesses to operate in, the project will support last-mile infrastructure such as feeder roads and electricity, as well as supporting agro-business reforms and strengthening the warehouse receipt system in Malawi.”
Beneficiaries of the project are various value chain actors, including producers (farmers and farmer producer organizations), buyers (processors, retailers, exporters, and aggregators), and financial institutions that will be lending to the agribusiness sector in the country.
The project will also target youth and women, and will have national coverage. The funding for the project is from the World Bank’s International Development Association (IDA) and is expected to close in 2023.
Ministry of Agriculture, Irrigation and Water Development and the Ministry of Industry, Trade and Tourism are the once expected to lead the implementation of the project.
The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives.
IDA is one of the largest sources of assistance for the world’s 77 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.3 billion people who live in IDA countries. Since 1960, IDA has supported development work in 112 countries. Annual commitments have averaged about $19 billion over the last three years, with about 50 percent going to Africa.
On May 5th the World Bank approved the first budget support to Malawi in four years after donors pulled out their support following Cashgate scandal, a financial scandal involving looting, theft and corruption that happened at Capitol Hill, the seat of government of Malawi.
The scandal was uncovered during the administration of President Joyce Banda, though it is believed to have begun prior to her taking office. Over K240 billion is believed to have been stolen through this uncalled for theft.Follow and Subscribe Nyasa TV :