The African Development Bank through the African Development Fund (ADF) has announced that it would be disbursing $45.07 million (K33 billion) to help Malawi in the fight against Covid-19 pandemic and stimulate the economic growth.
The money has been categorised into a concessional loan and a grant.
The bank indicates that growth outlook in countries like Malawi had been favourable, driven by exports and tourism but now economic recession is hitting the poorest households and informal sector as food prices have soared.
It says shutdown of borders has also disrupted trade patterns and supply chains, hitting Small and Medium Enterprises the worst and putting pressure on the food supply systems.
“The response, which aligns with the ADF-15 strategic priority of building resilience to economic shocks, is underpinned by each country’s Covid-19 response strategy that gives a high priority to health, social protection and economic stimulus,” says AfDB in a statement issued on Friday.
Former Economists Association of Malawi (Ecama) Executive Director, Edward Chilima, applauded the regional bank for supporting the country, saying, the fund would help cushion Malawi from possible effects of the pandemic.
He then urged the government to channel the funds towards SMEs development initiatives.
“All areas are critical but most immediate would be the Small and Medium Enterprises, especially those who are producing for export markets. If they can be promoted, I think that will be ideal and also increasing access to the SMEs that are producing locally so that they borrow at a reasonable rate,” He said.
Other countries who have received the help are Madagascar, Mozambique and São Tomé & Príncipe.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.