US$30 Million Grant Will Help Fill Malawi's Cooking Pots

WASHINGTON, DC, September 19, 2005 (ENS) - Emergency recovery activities in the southern African country of Malawi will be supported by an infusion of US$30 million in the form of a grant approved Thursday by the World Bank Board of Executive Directors.

The Malawi Emergency Recovery Project will support the government of Malawi’s efforts to adequately feed its people and allow agriculture production to rebound following the emergency in early 2005 touched off by persistent drought. The project is aimed at supportign the growth path central to the government’s macroeconomic program adopted in May 2004.

The International Development Association (IDA) grant will provide foreign exchange to support critical private sector imports for the restoration of investment and production of the economy.

"The World Bank recognizes the constructive manner in which the Malawi government has addressed the present food emergency," said Hartwig Schafer, the World Bank country director for Malawi, Zambia and Zimbabwe, "and, together with other development partners, we will continue to support efforts to strengthen food security and rural productivity in Malawi."

The domestic financial resources generated by the grant will go towards financing the government’s budget, including expanded safety nets and public works programs to help poor people feed their families during the current crop cycle and provide seeds and fertilizer for the coming planting season.

It will also allow government to reduce domestic debt levels and maintain spending levels in line with the targets of the International Monetary Fund’s recently approved Poverty Reduction and Growth Facility program.

Finance Minister of Malawi Goodall Gondwe (Photo courtesy Government of Malawi)

Malawi is one of the countries in southern Africa most affected by drought this year, and its agricultural production has fallen by seven percent compared to the previous year.

The maize crop for 2005 has been hit especially hard and is estimated to be almost 30 percent lower compared to last year, itself a shortage year, resulting in the worst maize season in 10 years. The failure of the maize crop is of particular concern for food security as maize is the main staple food in the country.

"This operation is a key component of the Bank’s support to Malawi to mitigate the impact of the drought crisis and allow a speedy recovery to a poverty-reducing medium-term growth path," said Timothy Gilbo, the World Bank’s country manager for Malawi.

The World Bank has been monitoring the situation in Malawi since February 2005 and gearing up additional support since May.

The Bank is mobilizing $53 million in new IDA resources and reallocating existing operations to address both the immediate food shortage and to help restore production levels for next year.

This includes a $30 million quick disbursing operation, prepared in record time, to help the government cover foreign exchange needs, so that the cost of maize and fertilizer imports does not harm growth prospects over the next year.

A reallocation of $7 million under the ongoing Malawi Social Action Fund also plays a part in the social safety net to protect the most vulnerable households during the food crisis by helping them to purchase inputs for the coming crop season and feed their families during the current cycle. The Bank is also adding $15 million to the planned Rural Livelihoods and Irrigation Project to sustain the safety net measures over the medium term.

Malawi child shows the typical profile of malnourishment, a protruding belly. (Photo courtesy WFP)

The Bank is supporting the government in designing a comprehensive rural development strategy that would include rural infrastructure, supply side investment in agro-business including private and cooperative farm input suppliers, soil and water conservation investments, irrigation rehabilitation, rehabilitated agricultural extension and rural financial services.

The grant is part of a growing understanding that hunger is the breeding ground for terrorism and that there is no justification for permitting people to go hungry.

"There is no technical reason why anyone should not have enough to eat - yet one in seven humans is undernourished," said Dr. Jacques Diouf, head of the United Nations Food and Agriculture Organization at the UN World Summit last week in New York.

"We need to persuade governments that it is in everyone's interest to rid the world of hunger. For individuals who face hunger every day of their lives, we are literally dealing with a life or death issue. But the presence of widespread hunger also holds back the economic growth to which all nations aspire. As long as large numbers of people are hungry, the growth needed to reduce poverty will be out of reach," he said.

Chronic poverty, HIV/AIDS, and regular disruptions to food security caused by erratic weather and policies have plagued Malawi for the last several years. A UN assessment in 2004 indicated that up to 1.3 million Malawians needed food aid over the 2004-2005 period.

In July, millions of people around the world turned out to Live Aid concerts to "make poverty history" particularly in Africa, where the world's poorest nations are located - Malawi among them.