• August 14, 2022 9:41 pm

Ministry of Finance signs two financing agreements worth K30 bn

Aug 4, 2022

Minister of Finance Sosten Alfred Gwengwe on Wednesday signed K30 billion Agriculture Emergency Food Production Facility. 

Speaking during the signing ceremony, Gwengwe said he was pleased to have signed on behalf of  the Government and the people of Malawi, the two Financing Agreements.

“The first one is for the Malawi  Agriculture Emergency Food Production Facility. This Financing Agreement is a concessional loan amounting to Unit of Account 15million (about  US$20.2 million, approximately, MK21 billion) and the second one is a grant of US$10 million (MK10 billion) from the Africa Disaster Risk Financing Programme (ADRIFI), which seeks to enhance the Country’s resilience and response to disaster,” said Gwengwe.

Gwengwe said the US$20.2 million facility will help 500,000 farming households with 70,000 tonnes of fertiliser and 2,500 tonnes of certified seed will go along way in ensuring food security.

On the other hand the US$9.25 million agreement will help Malawi pay its sovereign risk premium for the transfer of drought risks to the African Risk Capacity.

Gwengwe MP says the $20.2 million is a concession loan while the $9.25 million is a grant.The Bank and the Malawi Government signed the two agreements at Capital Hill in Lilongwe.

The African Development Fund (ADF) and the government ofbMalawi also signed a grant agreement for $14.2 million to undertake infrastructure upgrades and create a more efficient and transparent digital payment system.

Funding for the Support for Digitalization, Financial Inclusion and Competitiveness (DFIC) project, approved last December, will be sourced from ADF, the Bank Group’s concessional financing window.

As that is not enough, in late July 2022, the Bank also approved the $20.2 million for Malawi Agricultural Emergency Food Production Facility Project (AEFPF) Project, whose main goal is to support the government in its efforts to nelp smallholder farmers access fertilizers, certified climate-smart seeds, and technology to increase food production. 

The project would target about half a million (0.5 million) farming households and help deliver about 70,000 tons of fertilizer and 2,500 tons of smart/certified seed. 

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