Malawi secures US$83.76m from World Bank Loan to commercialize agric sector

MALAWI – The government of Malawi has secured a US$83.76 million (K61bn) credit facility from the World Bank as it seeks to commercialize the country’s agriculture sector through the Agricultural Commercialization (AGCOM) Project.

According to a Nyasa Times report, Alexa Namaona from the ministry of agriculture said that  AGCOM is a five years initiated in 2018 and “aims at increasing commercialization of agriculture value chain products including crops, livestock and fisheries for domestic and export market.”

The project is being implemented by the ministry of agriculture in conjunction with Ministry of Industry, Trade and Tourism through Independent Project Implementation Unit (PIU).

He explained that AGCOM will target small scale and farmer organizations to transform the sector from predominantly peasant farming to commercial farming and subsequently support the country’s economy.

“The project will also work with Agriproducts buyers, processors, retailers, exporters, and aggregators and Financial Institutions lending to the agriculture sector,” said Namaona.

Namaona said that the project will be implemented across the country by facilitating financing of farmers’ agribusiness proposals.

“The project is a flagship of Malawi government to graduate farmers from subsistence farming to commercial farming, we will identify small scale and medium farmers who will be required to submit proposals,” added Dr. Ted Nankhumwa, National Coordinator for AGCOM,.

Nankhumwa noted that the project will work with trade officers and other officials across the country to ensure financing of most dynamic proposals.

“The aim is to build 300 alliances which translate to 650,000 households that will benefit and graduate from subsistence farming,” he explained.

Successful farmers’ cooperatives and groups will be given matching grants to procure capital equipment and technical support to link them to markets.

According to Namaona the concept of mobilizing farmers, training and linking farmers to better markets are aspects bound to promote high diversified and standardized production, a situation which is likely to result in commercialization.

The project will also provide Partial Credit Guarantee Fund (PCGF) which will act as an incentive to commercial banks to provide competitively priced agriculture financing to small scale farmers who are usually viewed as a risky category.

AGCOM is expected to create a well cushioned and resilient agriculture sector which has lately proven fragile to the impact of climate change and environmental degradation.

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