MALAWI – The African Development Fund (ADF), the concessional financing window of the African Development Bank, and the government of Malawi have signed a grant agreement for US$14.2 million to undertake infrastructure upgrades and create a more efficient and transparent digital payment system.
“The DFIC project is aligned with the Malawi Digital Economy Strategy (2021-2026) and the Third National Strategy for Financial Inclusion (2022-2026); both contribute to achieving Malawi’s long-term objective of inclusive wealth creation supported by an inclusive financial system and digital economy,” said Sosten Alfred Gwengwe, Malawi’s Minister of Finance and Economic Affairs.
The project will widen financial inclusion in the country, in particular to women, youth and rural dwellers. It will also allow for efficient business transactions, offering small businesses the opportunity to gain access to new national and international markets.
The project is expected to boost Malawi’s domestic financial inclusion rate from 58% in 2019 to at least 65% in 2025. The GDP contribution of the ICT sector is expected to rise from 5.7% to 7% over the same period.
Export volumes are expected rise to 35% of GDP from 31%, in line with the targets of the national export strategy. Currently, the total commitment in the African Development Bank’s active portfolio in Malawi stands at about US $327 million.
Macmillan Anyanwu, The African Development Bank’s Country Manager for Malawi, said the signing of the DFIC project grant agreement today was an important step towards promoting the use of electronic transactions in Malawi to increase access and use of affordable financial services, particularly, amongst women, youth, and rural dwellers.
“The project will also enable more efficient business transactions, offering small businesses the opportunity to gain access to new markets,” he said.
The African Union
The African Union Commission (AUC) will benefit from an US$11.48mn grant from the African Development Fund to strengthen its governance and provide it with institutional support.
Approval for the grant, from the Fund’s regional public goods window, came a few days ahead of the 35th ordinary session of the African Union Assembly, which closed on Sunday in Addis Ababa, Ethiopia.
The grant will contribute to the institutional capacity building for the African Union Project, designed to improve the AUC’s capacity to drive Agenda 2063. Agenda 2063 is the African Union’s vision for “an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena.”
In 2017, the AUC launched a comprehensive institutional reform process to make the institution more nimble, efficient and financially self-sufficient. The project will continue those reforms through upgrading its systems, as well as improving planning, coordination, and service delivery capacities.
A portion of the funds would be allocated to the AUC’s disaster risk reduction practices, and climate change adaptation mechanisms, while support for women will include developing the commission’s gender and youth mainstreaming guidelines and related activities over and above the support towards the AU’s institutional reform.
It also supports the African Continental Free Trade Area secretariat, the Africa Centres for Disease Control and Prevention and the Climate for Development in Africa Program.
The total cost of the project is US$12.6 million, including an in-kind counterpart contribution from the African Union.