Malawi to receive a loan to fund rural agriculture

By James Karuga

Malawi’s Ministry of Agriculture is set to receive for the first time 10 million dollars in loan from OPEC Fund for International Development (OFID) for a rural livelihood and economic enhancement project set to benefit 24,000 rural farming households.

The Opec Fund For International Development
The OPEC Fund For International Development

The loan will be administered by International Funding for Agricultural Development (IFAD) over a four to five year period through the Ministry of Local Government and Rural Development.  According to Khaled Al Zayer OFID’s officer in charge of the project the loan will help farmers produce, transport, store and better access processing and marketing systems in Malawi and raise their incomes.

Besides the farmers, it will also benefit rural agro-dealers who supply stock farm inputs and strengthen their financial capacity to reach more farmers.  According to researches done by the Malawi government the program co-financiers there had been an under investment in the areas the loan will be utilised.

The 3 districts targeted Dedza, Mchinji and Ntchisi were selected on the basis of their food production potential.  These regions grow what the program outlines as priority commodities like Groundnuts and Irish potatoes largely grown by small holder farmers (SHF) there.  These commodities are also easier for the SHFs to engage in value addition using technologies they can easily afford.  Farmers to be impacted by the loan are to be clustered in groups than individuals so that more are reached.

Part of the loan will also be channelled to developing and improving communal infrastructure like bridges, drainage, feeder and access roads, storage facilities for produce and seed bulking like silos and warehouses.  That way the SHFs will be able to overcome constraints that restrict them from fully exploiting their farming potential in the agricultural value chain. The loan will be repaid over a 20 year period with a 5 year grace period by Malawi’s finance ministry.

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James Karuga is a writer from Kenya who is passionate about sharing information that changes lives and educates people. He strongly believes knowledge is power. Click here to view all contributions by James Karuga

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