|September 26, 2002
World Bank Loans Malawi US $50
The World Bank has loaned Malawi US$50-million for an emergency recovery project to improve harvests and prevent more food shortages next year. The bank said in a statement that US$40 million of the loan will finance imports of farm supplies, including fuel, irrigation equipment, machinery and spare parts, the statement said. The remaining $10-million will go to public works projects to create jobs for poor villagers hardest hit by the food shortage problem providing them with an income to buy food and farm supplies in rural areas, where more than 80 percent of Malawi's 11-million people live.
The Bank said some of the money will also be used for studies to review options for avoiding or reducing the impact of similar disasters in future. The loan will augment foreign exchange reserves and buffer the economy from pressures of currency depreciation and general inflation, the statement said. A shortfall of 600 000 metric tonnes of maize, the staple food in Malawi, has left up to 3.2 million people threatened with starvation as the Southern African country battles with a debilitating drought and floods. The food crisis was caused by droughts in some regions and floods in others.
The International Monetary Fund (who is accused to have recommended to the government the sale of Malawi's strategic maize reserves just before a crop failure occurred red.) early this month announced a US$23 million emergency aid package to finance food imports because government's food purchases were draining the budget. (MALAWI INSIDER)