Media Contact: In Washington: Aby Toure (202) 473 8302 Akonate@worldbank.org Herbert Boh (202) 473 3548 hboh@worldbank.org WashingtonDC, September 15, 2005 – The World Bank Board of Executive Directors today approved an International Development Association (IDA) grant of US$30 million to support emergency recovery activities in Malawi. The Malawi Emergency Recovery Project will support the Government of Malawi’s efforts to adequately feed its people and allow agriculture production to rebound following the drought-induced emergency in early 2005, and thereby support the growth path central to the Government’s macroeconomic program adopted in May 2004. The grant will provide foreign exchange to support critical private sector imports for the restoration of investment and production of the economy. The domestic financial resources generated by the grant will go towards financing the Government’s budget, including expanded safety nets and public works programs to help poor people feed their families during the current crop cycle and provide seeds and fertilizer for the coming planting season. It will also allow Government to reduce domestic debt levels and maintain spending levels in line with the targets of the International Monetary Fund’s recently approved Poverty Reduction and Growth Facility program. “The Government has taken a proactive approach to managing a difficult situation in Malawi,” noted the Hon. Goodall Gondwe, Malawi’s Finance Minister, “and the World Bank has been a steadfast partner from the beginning. The $30 million Emergency Recovery Project will provide vital support to the Government’s implementation of its program to prevent hunger and help ensure a successful harvest in the coming planting season.” Malawi is one of the countries in Southern Africa most affected by drought this year, and its agricultural production has fallen by 7 percent compared to the previous year. The maize crop for 2005 has been hit especially hard and is estimated to be almost 30 percent lower compared to last year, itself a shortage year, resulting in the worst maize season in ten years. The failure of the maize crop is of particular concern for food security as maize is the main staple food in the country. “This operation is a key component of the Bank’s support to Malawi to mitigate the impact of the drought crisis and allow a speedy recovery to a poverty-reducing medium-term growth path,” said Timothy Gilbo, the World Bank’s Country Manager for Malawi. The World Bank has been monitoring the situation in Malawi since February 2005 and gearing up additional support since May. The Bank is mobilizing $53 million in new IDA resources and reallocating existing operations to address both the immediate food shortage and to help restore production levels for next year. This includes a $30 million quick-disbursing operation, prepared in record time, to help the government cover foreign exchange needs, so that the cost of maize and fertilizer imports does not harm growth prospects over the next year. A reallocation of $7 million under the ongoing Malawi Social Action Fund also plays a part in the social safety net to protect the most vulnerable households during the food crisis by helping them to purchase inputs for the coming crop season and feed their families during the current cycle. The Bank is also adding $15 million to the planned Rural Livelihoods and Irrigation Project to sustain the safety net measures over the medium term. Even with normal rainfall, Malawi has large pockets of chronic food insecurity, and needs a new approach to address chronic and persistent hunger. The Bank is supporting the Government in designing a comprehensive rural development strategy that would include rural infrastructure, supply side investment in agro-business including private and cooperative farm input suppliers, soil and water conservation investments, irrigation rehabilitation, rehabilitated agricultural extension and rural financial services. “The World Bank recognizes the constructive manner in which the Malawi Government has addressed the present food emergency,” said Hartwig Schafer, the World Bank Country Director for Malawi, Zambia and Zimbabwe, “and, together with other development partners, we will continue to support efforts to strengthen food security and rural productivity in Malawi.” For more information on the World Bank’s work in Africa visit: http://www.worldbank.org/afr/ For more information on the World Bank’s work in Malawi visit: www.worldbank.org/afr/mw For more information about this project visit: http://web.worldbank.org/external/default/main?pagePK=64027221&piPK=64027220&theSitePK=355870&menuPK=355906&Projectid=P097292 |
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