Finance Minister Goodall Gondwe Wednesday lamented the decreasing levels of financial assistance Japan provides towards the implementation of various social and economic development programmes in Malawi
“The grant resources we have signed for today are just a quarter of what we have been receiving in the past. This huge reduction in the level of financing from 600 million Japanese Yen in the past facilities to 200 million Japanese Yen now, means that, this time around, we will not be able to extend the facility to all the sectors that have been benefitting in the past,” said Gondwe.
Gondwe told Japanese Ambassador to Malawi, Kae Yanagisawa, that the ‘huge reduction in the level of financing’ towards the programme will stop the Malawi Government from extending the facility.
Gondwe said this during the signing of a grant agreement totaling 200 Japanese Yen (approximately K1.3bn) between the governments of Japan and Malawi for the implementation of the programme in 2018.
The programme was introduced in Malawi in 1988 to promote economic and social development as well as to improve the balance of payment of the country.
Since then, Malawi has received about 4.8 billion Japenese Yen [approximately $43 million at present rate] under the programme.
Gondwe said the programme has, in the past, benefitted various sectors that include transport, construction, mining, agriculture, manufacturing and agro-processing.
But the minister said, following the reduction in the grant, the government will prioritse key areas in the Malawi Growth and Development Strategy (MGDS III).
“This financing has been earmarked to assist farmers and SMEs [small and medium enterprises] in the agriculture and agro-processing sectors.
“The successful beneficiary farmers or entities will, through loans, be empowered to acquire various equipment that will enable them achieve increased agricultural production and value addition,” Gondwe said.
Yanagisawa told journalists after the signing ceremony that there is a possibility for her government to increase the amount of the grant in the next years depending on how the performance of the current programme.
She said Japan hopes that the beneficiary SMEs will be selected in accordance with the Malawi Government’s priority areas as stipulated in MDGS III as well as the potential to achieve meaningful impacts.
“In this regard, allow me to call upon the commitment of your ministry to adhere to the principles of good governance, fairness, transparency and accountability,” Yanagisawa said.
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