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AfDB approves K12.2 billion grant for Malawi

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Malawi is expected to receive a grant of K12.2 billion Food Crisis Response Budget Support Programme from the African Development Bank (AfDB) following its approval by the bank’s group board of directors.

The programme will support government’s emergency response plan to mitigate the current food crisis through the purchase of maize for distribution to vulnerable households.

In a statement posted on its website, AfDB said the grant will enable Malawi, through the National Food Reserve Agency (NFRA), to procure 36,000 metric tons of maize from international sources, as well as from local suppliers.

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According to the bank, it is estimated that the programme will benefit more than 700,000 food insecure people, most of whom are women and vulnerable children.

The resources will help the country to achieve short term-food security at the household and national levels, as well engender economic stability.

The AfDB Resident Representative, Andrew Mwaba, said that this support was in line with the commitments by AfDB president, Akinwumi Adesina, when he visited Malawi in April 2016.

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“The package is within the context of the Bank’s US $550-million relief package from various AfDB windows and financial instruments in support of 14 countries severely affected by the drought in Eastern and Southern Africa due to the El Niño weather-related hazards in 2015-2016,” Mwaba said.

The bank provided a grant of US$1 million in emergency food relief in June 2016, which was used to purchase 2,600 metric tons of maize distributed to beneficiaries.

This coincides with news that The African Risk Capacity Insurance Company Limited has begun processing an insurance payout of approximately US$ 8.1 million to Malawi to support its response to the drought which resulted from the poor 2015/16 agricultural season.

The payout will be released to Malawi as soon as Capital Hill’s plan on how the payout will be used to respond to those affected by drought – known as the Final Implementation Plan – is approved by the Insurance company.

This is standard practice for African Risk Capacity Insurance Company payouts, and is expected to take place by the end of November.

The company issues insurance policies to its African Member governments; any payout thereof is based on results from its drought risk model, the Africa Risk View.

Malawi bought a parametric drought insurance policy from the Insurance company for the 2015/16 agricultural season. However, the policy did not initially trigger a payout, because the model indicated a low number of people affected by the drought.

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