MALAWI— The government of Malawi will benefit from two financings totaling around US$600 million to support its agricultural development, according to a press release published by the Millennium Challenge Corporation (MCC).
The first funding of US$250 million is part of a partnership between MCC and Lilongwe. It will come from the US$2.9 billion dollars promised by US President Joe Biden during the 77th session of the United Nations General Assembly (UNGA) to fight against global food insecurity.
The second financing is a US$350 million infrastructure grant whose agreement, called the Malawi Transport and Land Compact, between the MCC and the government of Malawi, will be signed next week.
It provides funding for three key projects, including the Accelerated Growth Corridors (AGC) project, the Land Productivity Enhancement Project and the US Catalyst Facility for Development (ACFD) project.
The goal is to reduce transportation costs and better connect goods, farms and rural populations to markets
US$245 million from this fund will be earmarked for road improvements in four selected corridors located in prime agricultural areas under the AGC project.
Even though agriculture plays a key role in Malawi’s economy, the small size of land holdings, an underdeveloped seed sector, weak agricultural extension services, limited access to finance, climate change and poor irrigation infrastructure continue to slow the evolution of the sector.
The authorities and their partners are undertaking several initiatives to boost the sector and stem the evolution of food insecurity. According to the MCC briefing note, “the goal is to reduce transportation costs and better connect goods, farms and rural populations to markets.”
According to data from the United States Agency for International Development (USAID), in 2019, before COVID-19, Malawi’s agricultural sector accounted for over 38% of Gross Domestic Product (GDP) and employed over 85% of the population.
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