Malawi aims to improve the environment for growth and investment. EU firmly supports this agenda for growth through various projects.
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Overview of EU-Malawi cooperation
Malawi and EU signed in May 2015 the national indicative programme up to 2020 for an amount of EUR 560m.
In line with the European Union's Agenda for Change emphasis on concentrating funding for greater impact, bilateral cooperation between the EU and Malawi until 2020, as supported through the 11th EDF, concentrates on a limited number of sectors: (1) governance, (2) sustainable agriculture and (3) secondary education and vocational training. Following the mid-term review undertaken in 2017, the breakdown of the national indicative programme aongst the three areas is as follows: EUR 291 m for Sustainable Agriculture and Nutrition; EUR 169m for Secondary, Technical and Vocational Education; and EUR 70 m for Governance.
The European Union programme is fully aligned with the national development strategy and key policy documents of Malawi.
Some of the key objectives under ongoing interventions of the European Union include:
(1) Agriculture: The EU is committed to help transform agriculture from a sector largely based on low-value and subsistence production to a competitive, sustainable and private sector driven agricultural sector that brings economic growth, improved livelihoods, and food and nutrition security.
(2) In the Education sector the focus is on (i) improving the facilities and strengthening secondary schools and vocational and technical education bodies and training institutions; (ii) improving the quality and relevance of secondary education and vocational training, including through the rehabilitation of school infrastructures and (iii) promoting equitable and gender-based access to secondary education and vocational training.
(3) On Governance, the EU continues to focus on supporting the Government's plans to improve financial and economic management, and contribute to strengthening democratic governance, accountability and access to justice.
Also in the sector of transport, the EU and Malawi have a long standing partnership that has resulted in significant improvements in the road network and the transport sector in general. The EU continues to work on rural roads and other rural infrastructure in the 11th EDF. Infrastructure activities related to Malawi' regional integration are also supported by the EU through the regional programme for Southern Africa, including through blending of grants with EIB loans.
Under these key objectives, some of the main programmes currently being implemented include:
- Sustainable Agriculture (KULIMA, €100 million grant + €20 million loan) and Nutrition (AFIKEPO, €70 million): Kulima supports extension services through Farmer Field Schools, agricultural research, access to finance through blending of with EIB and value chains. Afikepo focusses on improving nutrition of under-5 children and support school meals.
- Skills and Technical Education Programme (STEP): € 32.6 million. Rehabilitation and equipment of workshops is ongoing. 28 beneficiary institutions are: 4 Technical Colleges, 10 Community Colleges, 3 trade testing centres, the Polytechnic and 10 Skills Development Centres. TEVETA and Ministry of Labour also receive support.
- Improving Secondary Education in Malawi (ISEM): € 36 million. Construction works are ongoing for rehabilitation and equipment of 21 Community Day Secondary Schools as well as 20 technical workshops. The programme is also supporting i.a. bursaries, decentralisation of secondary education and the roll-out of the new curriculum.
- Rural Roads Improvement Programme (RRIMP): € 35 million. Rural roads will be rehabilitated in 12 districts of Malawi selected by the Government. Works will start in 2018.
- Irrigation schemes: €30 million from EDF10 for irrigation infrastructures (2.300 ha) plus €4 million for software. Main projects are: (i) Bwanje Dam 800ha – Dedza, € 11 million; (ii) 6 medium scale irrigation schemes (80-300ha per scheme – € 17.2 million); (iii) Expansion of Phata cooperative Sugar outgrower scheme in Chikwawa (342 ha, € 2.1 million). Works are ongoing or about to be completed for all but one scheme.
- Governance, Chilungamo programme: €48 million. Implementation of most activities is under way. Chilungamo continues and scales up EU support to i.a. the Ministry of Justice, the Judiciary, the Police, the prisons, CSOs, NICE and the Malawi Electoral Commission. Significant support is also provided to the National Registration an ID System (€8 million).
- A new programme to support Social Cash Transfers and Resilience (€55 million) has been designed together with the Ministry of Gender and the Department of Economic Planning and Development. This programme should be launched end of 2017.
In addition to the EDF bilateral envelope, Malawi benefits from programmes financed under other budget lines, including for instance the EU Global Climate Change Alliance supporting i.a. the resilience of vulnerable communities to climate change.
The European Investment Bank (EIB)
The EIB expanded its portfolio in Malawi last year with a new loan to National Bank of Malawi for lending to the construction of agri-storage facilities (€30 million). Other active operations include (i) the Lilongwe Water Board (€24 million), (ii) a credit line for exporting industries with an emphasis on agriculture (€15 million), (iii) a sovereign loan to replace and upgrade safety equipment in the Lilongwe and Blantyre Airports (€21 million).
New projects under consideration which should commence in the coming months include (i) blending (€20 million, part of Kulima) for affordable access to finance for farmers and agroprocessing enterprises, (ii) loan for the Mzuzu Water Board (€20 million) and (iii) a loan for the Roads Authority to rehabilitate a phase of the M1 road corridor (€40 million loan + €40 million grant).