The government of Malawi and the International Fund for Agricultural Development (IFAD) have signed a deal that would see the latter pump in $ 125.4 million (K 94 billion) towards development of the country’s rural areas.
The two parties signed the deal in Rome, Italy, on Friday.
Ministers responsible for Finance and Rural Development Joseph Mwanamvekha and Ben Phiri represented Malawi.
“At least 300,000 highly vulnerable Malawian families will benefit from the programme that aims to increase their productivity and strengthen their market access,” observed Mwanamveka.
He stressed that Agriculture being the backbone of Malawi’s economy, this initiative is imperative.
“Agriculture accounts for 30 per cent of GDP and 80 per cent of foreign earnings, and it employs more than three quarters of the active population. It therefore makes sense to invest in the sector for improved economic gains,” Mwanamveka added.
His counterpart, Phiri, stated that since half of all farmers cultivate less than one hectare, making it hard for them to produce a surplus for market, they require a boost.
“Rural development can only be achieved if and when we have inclusive programmes targeting the rural poor,” observed Phiri.
He added that the financing agreement for the Transforming Agriculture through Diversification and Entrepreneurship Programme (TRADE) will certainly catalyse rural growth in Malawi.
President IFAD Gilbert Houngbo said the initiative will go a long way in tackling poverty in the country.
He said the funding includes a $51.1 million loan and $18.9 million grant from IFAD and $20 million in co-financing from the OPEC Fund for International Development.
In addition, said Houngbo, $15.3 million is provided by the Government of Malawi, $11.7 million from the private sector and $8.3 million from beneficiaries themselves.
TRADE will help Malawi achieve the Sustainable Development Goals and contribute to improving the livelihoods of rural people.
“It will help develop value chains for seven commodities – groundnuts, soybean, sunflower, Irish potato, diary, beef and honey,” said Houngbo.
“This new programme for Malawi will consolidate and scale up the success and good practices of the completed Rural Livelihoods and Economic Enhancement Programme,” said Ambrosio Barros, Country Director for Malawi.
“It will focus on the commercialization of smallholder agriculture through strengthened access to markets and financial services, while also focusing on adaptation to climate change, which is key for poverty reduction.”
The programme will strengthen the capacity of smallholder farmers, organize them into producers’ organizations and promote partnerships with small and medium enterprises. It will also develop roads and other rural infrastructure.
At least 55 per cent of vulnerable women and 50 per cent of young people in the 11 districts covered by TRADE will benefit from programme activities.
Since 1981, IFAD has invested more than $336 million in 14 rural development programmes and projects in Malawi worth a total of almost $638 million.
These interventions have directly benefited more than 2 million rural families.