Bank sets aside $200m for Malawi development projects

The African Development Bank (AfDB) has set aside $200-million to finance development projects in Malawi from this year until 2010 under its soft loan lending cycle.

This is more than double the funding allocated to Malawi for a two-year period from the previous $80-million.

AfDB president Donald Kaberuka says the AfDB decided to increase the allocation for Malawi because it was impressed by the economic reforms undertaken by President Bingu wa Mutharika’s government.

“These reform efforts are leading to major developments in the delivery of social ser- vices and in other areas that visibly [improve] the lives of people,” he says.

The Malawi government priority areas under the Malawi Growth and Development Strategy include agriculture and food security, irrigation and water development, and transport and communications.
“After implementing these top priorities for the last four years, we have achieved remarkable stability in our macroeconomic indicators. “The average annual growth rate between 2005 and 2007 was above 7% a year. Inflation dropped from 17,1% in 2004 to about 7,8% in 2007. “Our foreign exchange rate has been stable and predictable,” says Wa Mutharika.

The AfDB last month approved a loan and two grants totalling $47,5-million for Malawi’s National Water Development Programme.

Currently, the AfDB group is involved in nine operations in Malawi worth $170-million, which are mainly in the economic and social sectors, including rural infrastructure development.

Meanwhile, the AfDB has outlined a four-point economic growth agenda for Africa, which is expected to run from 2008 to 2012, with emphasis on infrastructure development.

Kaberuka says that, under this medium-term strategy, the AfDB will direct 50% of its resources towards developing infrastructure on the continent, while the other key areas will include governance, aimed at the establishment of regional institutions, the development of the private sector and regional integration.

“Africa can only grow [if there is an] emphasis on infrastructure development and the other three areas. {Infrastructure touches on everything. It is the key to stable institutions and it is the key to economic growth.”
He says Africa, which holds 10% of the world’s oil reserves and 8% of its gas reserves, has failed to develop over the years because it has not done well in these four areas.

“Our strategy now is to get a growth agenda in Africa and multiply access to education, health facilities, information technology, and many other essential needs,” says Kaberuka.