The International Development Association (IDA) of the World Bank on Tuesday signed two financial agreements with the Malawi Government totalling $110 million (about K30 billion).
The funds will be used for the implementation of the Agriculture Sector Wide Approach (ASWAp) ($30 million) as well as support for the countryâ€™s nutrition and HIV and Aids interventions ($80 million).
The ASWAp funds are an additional financing to an initial credit of $32 million which the World Bank provided to Malawi in 2008.
World Bank country manager Sandra Bloemenkamp and Finance Minister Dr. Ken Lipenga signed the agreements on behalf of the World Bank Group and the Malawi Government, respectively.
During the signing ceremony that took place at Capital Hill in Lilongwe, Bloemenkamp said the ASWAp financing is a response to Malawi governmentâ€™s request for additional support to enable it to include new interventions in agricultural diversification, commercialisation and market access.
She said many domestic and international stakeholders have reiterated the importance of diversification and that the World Bank is aware of the recent national dialogue in Mangochi which endorsed agricultural commercialisation and diversification as an important priority.
Said Bloemenkamp: â€œThe additional credit will also help the project look beyond food security and start addressing some key constraints in the business environment to facilitate and attract more private investments.â€
She said the funds will also continue to support Malawiâ€™s efforts to fight HIV and Aids, with a priority objective of reducing the number of new infections.Â
Lipenga saluted the World Bank for the financial support, saying it comes at an opportune time when government has just approved its second Malawi Growth and Development Strategy (MDGS).
Said the minister: â€œThe financing agreement that we have signed today will go towards two sectors which are very critical in the development of Malawi.â€
According to the Ministry of Finance, the $30 million for ASWAp is a loan whereas the $80 million for nutrition and HIV and Aids is split into twoâ€”half a loan and the other half a grant.