AfDB Approves Malawi’s Economic Strategy
AfDB Approves Malawi’s Economic Strategy – The African Development Bank has approved its Country Strategy Paper for Malawi for 2018-2022 to boost economic diversification, reduce dependency on rain-fed agriculture and build resilience for growth in the southern African nation.
The Country Strategy Paper will guide the African Development Bank’s operations in Malawi with regards to its financial, technical and knowledgeable assistance to the country.
It will seek to ameliorate Malawi’s low levels of industrialization, infrastructure gaps in energy, lack of diversification, limited sources of export revenue and low financial intermediation.
The new five-year plan builds on the Bank’s previous Malawi Country Strategy Paper 2013 – 2017 and will advance corporate strategies and the country’s most pressing development needs to be detailed in Malawi’s Growth and Development Strategy III.
The strategic blueprint is articulated around two main strategic pillars focused on further development of the country’s energy, transport, agriculture and water sectors.
The first pillar proposes investments in infrastructure development, while the second seeks to advance investments in economic transformation projects and programs.
Through these pillars, the Bank will aim to strengthen the foundations for private sector development by unlocking private and public investment, promote diversification, build economic resilience to reduce poverty and address rising income inequalities across gender.
Subdued agricultural output and increased maize import caused by two consecutive years of drought were responsible for the 2016 slump in economic growth to 2.7 percent.
Malawi’s economic growth, however, rebounded to 5.1 percent in 2017 owing to a recovery in agricultural production.
The Bank’s interventions will thus build on ongoing positive developments in the domestic environment, driving economic transformation and small industry to support diversification and (decent and formal) job creation.
Designed to reduce fragility and address issues of economic, social and climate resilience, the new Country Strategy Paper gives greater attention to the specific challenges Malawi is facing as a small landlocked country, with a growing population that currently doubles every 22 years.
The Bank’s plans will also support key water basins such as Songwe River and Lake Malawi.
The Country Strategy Paper was developed through consultations with the Government of Malawi, the private sector, civil society, and other development partners.
Based on these successful engagements, the Government has expressed greater Bank participation in its knowledge-management, transportation, macroeconomic and policy reforms agenda.
The impact of two upcoming events on the country’s macroeconomic outlook – the 2018 Population and Housing Census and 2019 Presidential and Parliamentary elections – have also been factored into the design of the country strategy
The Malawi Country Strategy Paper 2018-2022 aligns with the Bank’s Human Capital, Agricultural Transformation in Africa, Industrialization for Africa and Jobs for Youth in Africa strategies. It also operationalizes the Bank’s High 5 priorities.
As of October 2018, the Bank’s active portfolio in Malawi covered 15 operations totaling slightly over US$308 million.