Malawi lands  $70 million deal with World Bank over disaster management

Malawi lands $70 million deal with World Bank over disaster management

By Joseph Dumbula, Blantyre Malawi

The Malawi Government has reached deals worth $70 Million (  55 Billion Malawi Kwacha) meant to strengthen its capacity to deal with disasters and climate risks, a government statement has revealed.

The first part of the deal will assist in the developing a Disaster Risk Management Development Policy Financing (DPF) which will be to the tune of $ 40 million (Equivalent to MK 32 billion) and a Disaster Risk Management Development DPC with a Catastrophe Deferred Drawdown Option in the amount of USD 30million (MK23.3billion ) which is for future emergency.

“This will be achieved through policy and institutional reforms aimed at strengthening the Government’s coordination mechanisms, shock-sensitive social protection mechanisms, and financial capacity to respond to disasters as well as safeguarding public infrastructure.”the statement reads.

It adds: “Malawi has experienced success weather-related shocks whose impact has been significant. These shocks coincided with the fiscal consolidation process where Government has been trying to contain expenditure growth, grow revenues and limit domestic borrowing. Thus, Government has had limited fiscal space to respond, putting pressure on the budget and undermining the fiscal consolidation and macroeconomic gains realized in the past few years.”

According to the government of Malawi, the monetary support will go a long way in the realisation of Government’s agenda to enhance disaster and climate resilience particularly in the wake of Tropical Cyclone Idai which severely affected nearly half of the country’s geographic districts, impacting an estimated 975,600 people, and leaving about 732,000 of them at risk of food insecurity.

The government hopes that the programme will also support its efforts to shift from a disaster response approach towards a more proactive management of disaster and climate risks. The financing will support Malawi’s need for immediate liquidity in the wake of Tropical Cyclone Idai and if a subsequent catastrophic disaster strikes.

“On behalf of the people of Malawi, Government wishes to express gratitude to the World Bank for this timely support and assures the Bank that Government will endeavour to implement the programme in accordance with the provisions of the Financing Agreement as well as the Public Finance Management Act rules to ensure proper financial management and effective implementation to achieve its intended outcomes.” Concludes the statement.

Malawi was among Southern African nations struck by a devastating Cyclone Idai situation. Floods and rainstorms have also left thousands of Malawians destitute over the last few months, developments that have opened the need for more policies to address these fatal environmental occurrences.

 

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