The Reserve Bank of Malawi (RBM) is laying the groundwork for a more climate-resilient financial sector through a feasibility study that outlines key strategies for achieving this goal.
The study titled ‘Greening the Malawi financial sector’, emphasises strengthening the RBM’s capacity, establishing a framework for disclosing climate-related risks and incentivising private financial institutions to invest in green technologies.
Presenting the study’s findings in Lilongwe on Monday, United Nations Environment Programme consultant Dumisani Chirambo said there is need for RBM to establish a dedicated climate unit.
He said: “This unit will serve as a knowledge hub for academia, government officials and other stakeholders.
“It will also collaborate closely with the National Technical Committee on Climate Change and Disaster Risk Management, which unites key stakeholders to tackle Malawi’s climate challenges.”
Central to the plan is the creation of a framework for managing and disclosing climate-related and environmental financial risks.
According to the report, such transparency is vital for the ambitious strategy to green the economy.
Speaking at the launch of the study, RBM deputy governor McDonald Mafuta-Mwale said the study’s insights will guide the formulation of a roadmap to help RBM develop the requisite capacity, institutional structures, systems and processes.
“This will enable us to streamline our monetary policy and financial supervision mandates,” he said.
Mafuta-Mwale said there is need to pay close attention to climate change to counter its impact.
Ministry of Environment and Climate Change deputy director of climate Evans Njewa stressed the importance of a coordinated approach to implementing climate policies.
“A unified effort in formulating and executing climate change strategies is essential for the success of this blueprint,” he said.
The launch comes as climate risks grow more severe, demanding specialised personnel to address emerging challenges.
Last week, RBM revised Malawi’s growth forecast, lowering it to 1.8 percent from 2.3 percent largely due to the impact El Nino weather phenomenon.
As Malawi faces escalating climate risks, the RBM’s bold initiatives aim to secure a sustainable and resilient financial future.
RBM’s climate scenario analysis, which assesses the potential impacts of various climate scenarios on the financial system, is also expected to play a crucial role. In addition, the central bank aims to enhance the capacity of various ministries to integrate environmental considerations into financial planning and operations.
