• December 5, 2022 12:50 am

ADB reserves $1.5Bn for African Countries, Malawi to get $20.2M

Jul 29, 2022

President Dr Lazarus McCarthy Chakwera continue demonstrating good leadership in the Malawi governance system.

The President is attracting attention of many multilateral and bilateral donors from accross the board.

Of late a lot of funding agreements have been signed and just on Friday, African Development Bank Senior Vice President announced $1.5billion funding which is aimed at cushioning African poor countries against effects of Ukraine War and Covid 19.

Apart from the expected $20.2 million(K20.6 billion) from African Development Bank(ADB) which aims at assisting farmers to acquire fertilizer and drought resistant seeds so that they can plant early to avert a looming food crisis caused by the war in Ukraine , ADB is also funding the weather alert equipment.

ADB senior vice-president Swazi Tsabalala disclosed this in Lilongwe on the sidelines of the Southern Africa Development Community (Sadc) Ministers of Finance and Investment Meeting .

Malawi is among few countries that will benefit from the African Emergency Food Production Facility worth $ 1.5 billion which was approved by the bank’s board in June this year.

Tsabalala said half of the amount is a grant and the rest is a concessional loan.

According to Tsabala : “This is an emergency facility and therefore it is important that it is quickly signed and funds disbursed. I had a meeting with Minister of Finance Sosten Gwengwe yesterday and he assured me that all things will be finalised very soon.”

She said SADC is blessed with abundant natural resources in forestry, water, fisheries, land.

She said the region is also rich in minerals, gold, diamonds, coal, copper, uranium, zinc, chrome, titanium, and of course, natural gas.

“Urgent responses are needed to mitigate the impacts on food and energy costs. This is why last month; the African Development Bank Group launched a $1.5 billion African Emergency Food Production Facility. The facility will provide 20 million African smallholder farmers with certified seeds. It will deliver enough agricultural fertilizers to make it possible for farmers to rapidly produce 38 million tons of food. This could increase food production by $12 billion in just two years.”

She said these resources provide tremendous opportunities for economic development and regional integration.

Mozambique and Tanzania are poised to become natural gas exporters. In Mozambique, LNG investments are expected to reach $55 billion, almost four times the country’s GDP.

The sheer volume of the discovery could place Mozambique third in the rank of global LNG suppliers. That is why the Bank worked so aggressively to secure a $400 million senior loan to help Mozambique take the project forward. We are also exploring financial mechanisms to help SADC and Mozambique overcome the current security challenges so that the country can reach production stage as quickly as possible.

But production of LNG is only a first step. If we stop there, Africans’ lives may be improved, but they won’t be transformed. For LNG to make a lasting difference in the lives of SADC citizens, we need to move decisively to develop downstream industries: from producing fertiliser to powering up regional agriculture, we need a cost-effective, coordinated plan to generate and distribute LNG-fuelled power in the region.

The LNG windfall is giving us a unique opportunity to accelerate industrial development. Southern Africa should not forgo those benefits by simply exporting the gas in raw form.

The development model we prefer has us doing more than extracting our natural resources: it has us leveraging them. This can occur in a myriad of ways.

Take for example the Bank’s arrangement of the $5 billion flagship Nacala rail and port deal, in which we invested $300 million. The deal uses mining revenues to deliver a 900 km railway across Malawi to the world-class port of Nacala. The Nacala port has a general cargo capacity of more than 6 million tonnes a year and we believe its logistics will cut production costs and give regional agro-industries access to global markets. We see this project as a blueprint for development across the region.

Another important aspect of the Bank’s blueprint for development, is climate resilience.

Cyclones Chalane and Eloise have hit Mozambique’s coast last year, destroying crops and damaging infrastructure. And yet, the region was only just recovering from the catastrophic damage inflicted by cyclones IDAI and Kenneth two years prior.

She said just a few months ago, heavy rains and flooding battered the eastern coast of South Africa, killing hundreds of people, damaging roads and destroying homes.

ADB chief said SADC is also highly vulnerable to El Nino, with cycles of floods and droughts that destroy livelihoods and cripple agriculture.

“We take climate resilience and disaster risk management very seriously. The African Development Bank Group is proud to have mobilized $100 million at record speed to finance post-IDAI reconstruction. We are also proud to be investing $15 million in helping SADC build a state-of-the-art weather alert system.”

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