Shire Valley Transformation Programme phase II faces $91 million deficit

Gladys Ganda

The government has indicated that the second phase of the Shire Valley Transformation Programme is facing a financing shortfall of about $91 million owing to project variations and the recent devaluation of the Kwacha.

This came out over the weekend when the Budget and Finance Committee of Parliament toured the project site to appreciate how the initial financing approved by the August House was being used.

But in an interview, Principal Secretary in the Ministry of Agriculture responsible for irrigation, Geoffrey Mamba, said the first phase has not faced any funding challenges.


“We expect a deficit as we go into phase two of the project. The World Bank has already given us $134 million for phase two but we have a shortfall of $91 million and have been engaging the African Development Bank (AfDB). We held an appraisal mission and they have assured us they will come back with resources close to $50 million and when these resources come, they will have to go through Parliament for approval,” Mamba said.

Chairperson for the committee Gladys Ganda disputed the reasoning behind the deficit saying devaluation should not affect the project as the funding has been quoted in dollars.

“One key gray area that we have noticed as a committee is price escalations. We have noted that they are increasing prices that are already in dollars and the explanation is devaluation.


“We, as a committee, are not impressed because the project is already in dollars; in fact, they are supposed to benefit from the devaluation and not otherwise.

“If the project is in dollars, when they were given, for example, $1 million they got K1 billion but because of the devaluation the same $1 million gives them K1.5 billion; so, this argument doesn’t hold, perhaps the impact of the cyclones experienced last year on the intake holds,” Ganda said.

Objectives of the second phase include increasing agricultural productivity in targeted smallholder-owned commercial farm enterprises, support value chain and value addition, extend areas supported with irrigation and farm development, and continue and expand efforts to address land degradation and sustainable management of forests, wetlands and protected areas.

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