By Taonga Sabola:
German Ambassador to Malawi Jurgen Borsch on Friday challenged the country’s manufacturers to come up with projects that would help pull many Malawians out of poverty.
Borsch was speaking in Blantyre when the Malawi Innovation Challenge Fund (MICF) launched its fourth window targeting manufacturers.
MICF is a competitive, transparent mechanism that provides matching grant finance for innovative projects proposed by the private sector active in Malawi’s agricultural, manufacturing and logistics sectors.
Supported by the United Nations Development Programme (UNDP), and the Federal Republic of Germany through KFW, the MICF is designed to be a quick, responsive mechanism that is not overly bureaucratic and understands the needs of the private sector.
The German government has allocated Euro 5 million to the MICF Manufacturing Window which will be managed by UNDP.
Borsch said despite decades of development efforts supported by significant amounts of foreign aid, Malawi has experienced weak economic growth and has fallen behind its peers.
He said per capita income has improved only minimally in the 50 years since Malawi’s independence, adding that growth has been volatile and distributed unequally, with little impact on poverty.
“Together, we need to identify ways for Malawi to achieve robust and stable growth that includes the poor. In this respect, the MICF has been successful in addressing a new narrative, identifying a vanguard of Malawi’s private sector.
“MICF stands for better integration. Entrepreneurs working hand in hand with the poor either as producers in their supply chains or as new customers, receiving better products and services at lower price,” Borsch said.
He said MICF is looking for projects that are somewhat ‘out of the box’ but will bring about a major positive social and environmental impact that benefits the poor.
MICF Director, Buddhika Samarasinghe, said, through the manufacturing window, his organisation aims to enable manufacturers in the agriculture and non-agriculture sectors in Malawi to backward integrate processes to incorporate locally produced products and services that would enable them to compete in international markets or allow for import substitution in the domestic market while delivering far-reaching social and environmental impact.
Samarasinghe said MICF is private sector-friendly and aims to harness strengths of the private sector to generate and test new ideas.
He said, ultimately, MICF is in existence to prove the viability of new, inclusive business models and enhance ability of such projects to be scaled up on a purely commercial basis.
“MICF accepts that projects have a high degree of commercial risks, especially those that aim to trigger innovation or speed up implementation of new business models and or technologies.
“MICF is looking for big positive impacts on the poor in terms of numbers of poor that benefit from increased incomes and job creation through the development of new inclusive business models,” Samarasinghe said.
He said total grant funds requested must be between $250,000 and $850,000, with the applicant providing a similar amount in the project.
UNDP Resilience and Sustainable Growth Portfolio Manager, Andrew Spezowka, said his institution is impressed with the impact the MICF is having on Malawians.
This is the second window under MICF to support manufacturing. The first round of the manufacturing window was launched in 2016.