Malawi has secured $104-million from the African Development Bank (AfDB) in funding for infrastructure projects that include the fourth phase of the multinational Nacala Road Corridor Development Programme.

The deal was signed by AfDB country representative for Malawi Andrew Mwaba and Malawi Finance, Economic Planning and Development Minister Goodall Gondwe. Phase 4 of the Nacala Corridor Development Programme, which will involve the construction of roads in Malawi linking the country with Mozambique and Zambia, will receive $66-million of the total amount.

Mwaba explains that the Nacala Road Corridor Programme will be financed with concessional African Development Fund resources, including some of the Pan-African bank’s multinational operations window as well as a grant.

“These resources will be used to rehabilitate a 75 km road between Liwonde and Mangochi, in south-eastern Malawi, and to establish one-stop border posts between Malawi and Mozambique and between Malawi and Zambia,” says Mwaba.

Some of the funds will be used for the development of associated economic services and capacity buidling for populations living along the road corridor and for facilitating cross-border trade among the three countries.

“Apart from the wider regional integration and trade facilitation benefits, the project will enhance socioeconomic activities in the corridor by improving access to services and markets,” he says.

Part of the $104-million package, comprising loans and grants, will go towards the Sustainable Rural Water and Sanitation Infrastructure for Improved Health and Livelihoods Project.

For this project, Malawi will receive $23-million from the AfDB and $8-million from the Nigerian Trust Fund in the form of concessional loans for the development of water and sanitation infrastructure and services.

The remainder of the $104-million will finance the Lower Shire Water Development feasibility study, which will map out programmes to ensure effective and sustainable use of the Shire river for the benefit of surrounding communities.

Meanwhile, the AfDB is in discussions with the Malawi government regarding the possibility of resuming its budgetary support.
Mwaba says the Pan-African bank has set aside $15-million as a contribution to Malawi’s Budget for the 2014/15 financial year, to be released if the talks come to fruition.

Traditional donors, including the AfDB, the International Monetary Fund, the World Bank, the European Union (EU), the government of Norway and the UK government, through the Department for International Development, finance up to 40% of Malawi’s Budget.

But the donors suspended their support during the last financial year following reports of massive looting of funds from Malawi government accounts.

The administration of newly elected President Peter Mutharika has pledged zero tolerance towards corruption. Besides the AfDB, the World Bank and the EU are also negotiating with the Malawi government on the possibility of resuming their budgetary support.