By Dumbani Mzale in Cairo, Egypt:
Malawi and four other developing countries are set to benefit from a $2 billion African Export-Import Bank (Afreximbank) facility which was signed on Monday in Cairo, Egypt, on the sidelines of the Intra-Africa Trade Fair (IATF2023) meetings.
Using the facility, Malawi, Botswana, Zimbabwe, Chad and Benin seek to address the problem of food insecurity by implementing export agriculture for food security (ExAFS), among others.
According to a ‘framework agreement’ of the facility, Afreximbank, a multilateral financial institution, is committing $2 billion financing to boost food production, processing and intra-Africa trade in agricultural products, thereby providing African farmers and agribusinesses with opportunities to access larger markets within the continent.
“The purpose of this agreement is to establish a collaborative platform to facilitate implementation of the Export Agriculture for Food Security Initiative [ExAFS] in order to strengthen the cooperation in food production and promote intra-African trade in agricultural products,” reads the framework agreement in part.
Meanwhile, the signing of the facility has excited President Lazarus Chakwera, who described it on Monday as a “milestone” to Malawi’s pursuit for increasing food production as well as adding value to agriculture goods as envisioned by the Malawi Vision 2063.
Speaking to local journalists hours before his departure from Cairo to Lilongwe, Chakwera said his government will use part of the proceeds from the facility to boost mega farms programs as well as industrial parks initiative which are both flagship projects for his government.
“The whole idea about mega farms and industrial parks is to add value to our products so that we earn more [foreign currency] from international trade. What we haven’t done is to export more and by doing so, you end up borrowing more to satisfy the zeal for consumption,” Chakwera said.
Statistics show that Malawi’s trade gap (the gap between the value of imports and exports) was estimated at $2.23 billion in 2023, one of the worst gaps in history, signaling continued appetite for consuming foreign goods by Malawians.
According to Chakwera, the country can only realise the aspirations of thec if it grows her exports by establishing large estates while also embracing modern ways of doing farming, among others.
Malawi 2063 envisions a lower middle income economy by 2030 and a higher middle income country by 2063, as well as a transformation of the country into a self-reliant, wealthy and industrialised economy.
Minister of Trade and Industry Sosten Gwengwe said in a separate interview that he is optimistic that the resources from Afreximbank will go a long way in helping Malawi boost agriculture production, help the country achieve more value addition, as well as exporting more to the international community.
“The key thing and real deal is what we have signed today and this is a $2 billion facility which Afrexim has put together for four to five countries, Malawi inclusive. It will help us enhance production, which is basically the maga farms, which the president has been preaching about for some time now.
“And then after we produce, the goods will be added value and this basically to the industrial parks that Malawi has already partnered with Afreximbank to establish. In the end, the value added goods will be exported and attract a lot of value,” said Gwengwe.
Commenting on the facility, Afreximbank Chairperson and President Benedict Oramah said the bank expects the facility to help beneficiary countries like Malawi “to begin to provide food that Africa needs”.
