AfDB approves K9.5 billion in grants to Malawi


The Board of Directors of the African Development Bank (AfDB) has approved two grants amounting to $9.25 million (K9.5 billion) for implementation of the Africa Disaster Risk Financing Programme (ADRiFi) in Malawi which will boost the country’s resilience against climate-related shocks and food insecurity.

According to AfDB, the funding will support the government of Malawi to develop climate risk management solutions and pay its sovereign risk premium for the transfer of drought risks under the Africa Disaster Risk Financing Programme.

The initiative, a partnership between the African Development Bank and African Risk Capacity Group (ARC), enhances preparedness and strengthens countries’ financial resilience against climate hazards by supporting participation in ARC’s sovereign risk pool. ADRiFi’s presence in Malawi will help shield the country’s smallholder farming communities — including women and children — from the worst impacts of drought.

The first grant, worth $4.9 million (about K5 billion), will come from the African Development Fund. The ADRiFi Multi-Donor Trust Fund will provide financing for the second grant valued at $4.35 million (about K4.5 billion).

The grants will support the first of two phases of the program, covering the 2022-2023 period. The government of Malawi and ARC will also contribute funding toward total costs of $10.13 million for Phase 1 of the programme.

“Africa is the world’s region most vulnerable to climate change-related weather extremes like flooding, droughts and tropical cyclones,” said Dr. Beth Dunford, the Bank’s Vice President for Agriculture, Human and Social Development.  “We welcome Malawi into the Africa Disaster Risk Financing Programme, which boosts participating countries’ ability to respond rapidly to the aftermath of climate-related disasters, arrange finance before shocks and better serve their most vulnerable populations impacted by the effects of climate shocks.”

Agriculture contributes about 30% of Malawi’s GDP and employs about 64% of its workforce. The nation’s agriculture sector is primarily dependent on rainfall. However, rainfall patterns have grown more erratic and harder to predict due to climate variability, and climate-induced shocks are predicted to become more frequent and severe, especially in southern Africa. This has increased the vulnerability of rural dwellers, including farmers, and the overall economy, to weather-related shocks.

ADRiFi will safeguard investments and development gains in Malawi related to five Bank agricultural projects, including to rebuild infrastructure damaged when disaster strikes. Grant funds will also help build the capacity of national agencies that manage disaster risk.

Rollout of the disaster risk advances Malawi’s Vision 2063, which aims to promote a transformative agriculture sector that is smart and resilient to climate change.

Malawi is the ninth country to join the ADRiFi programme. The other participants are Gambia,  Mauritania, Niger, Sudan, Madagascar, Mozambique, Zambia and Zimbabwe.  Under the initiative, Madagascar, Mauritania and Niger have already received insurance payouts with a combined value of $17 million. The funds have been used for recovery efforts following drought and tropical cyclones.

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