Ministry of Finance and Economic Affairs has signed three financing agreements with the African Development Bank (AfDB) worth $42.6 million (about K75 billion) to revamp the country’s agriculture sector.
Minister of Finance and Economic Affairs Simplex Chithyola-Banda and AfDB country manager for Malawi McMillan Anyanwu signed the agreements in Lilongwe.
The agreements, namely the agricultural-based budgetary support, agricultural productivity and commercialisation programme and Transition Credit Facility, seek to boost farmer productivity, improve financial transparency and enhance the country’s resilience to climate-related disasters.
Anyanwu said the $23 million (about K40 billion) agriculture-based budgetary support programme is designed to unlock the agriculture sector’s potential as a catalyst for economic transformation.
He said: “The direct budget support will target key reforms to protect the well-being of people in rural and vulnerable communities.
“We believe that these reforms will help Malawi realise its dream of becoming a net-exporter of value-added products.”
Beyond increasing productivity, the support will also focus on improving public finance management in the agricultural sector.
This is expected to be achieved through the continued rollout of the Integrated Financial Management Information System to improve expenditure efficiency, transparency and budget execution.
To help safeguard the agricultural sector from these risks, the government has also signed an agreement under the Africa Disaster Risk Financing (AdrifiI) programme.
Anyanwu said the Agirifi programme is designed to strengthen the country’s resilience by improving disaster planning and crisis response capabilities, particularly for rural farming communities that are most at risk.
On his part, Chithyola-Banda commended AfDB for providing the support, saying it complements the Malawi 2063, the country’s long-term development plan which earmarked agriculture productivity and commercialisation as key pillars for promoting economic transformation.
“This budgetary support will help create an enabling economic and regulatory environment for agricultural transformation by promoting agricultural productivity, commercialisation and market access to help our farmers increase their output and connect to better markets,” he said.
Agriculture remains the backbone of the country’s economy and this funding is expected to help farmers increase their output and connect with better markets, addressing one of the major challenges smallholder farmers face.
The signing of these agreements represents a collective commitment to driving agricultural transformation in Malawi. By focusing on enhancing productivity, ensuring financial transparency and preparing for climate risks, the Malawi Government hopes to create a sustainable and resilient agricultural sector.
