World Bank (Washington, DC)

Malawi: World Bank Unveils New Country Assistance Strategy to Support Malawi's Economic Growth and Transformation

press release

Washington — The World Bank Group has released its new Country Assistance Strategy (CAS) to support Malawi's effort to diversify the economy and make it more competitive and resilient to shocks. The four-year CAS, which was discussed by the Bank Board of Executive Directors today, will cover the 2013 to 2017 financial years, and proposes an indicative envelop of US$ 695 million.

The CAS is aligned with the Second Malawi Growth and Development Strategy (MGDS II, 2011-2016) adopted in April 2012. It takes account of the new government's priorities of economic diversification, reducing vulnerability and improving infrastructure, to achieve sustained growth as outlined in its Economic Recovery Plan (ERP).

"Through this new Country Assistance Strategy, the World Bank Group is committed to continue to help Malawi accelerate progress towards poverty reduction and successful economic transformation. The total Bank commitment to Malawi currently stands at close to US$1 billion and will work closely with the Government and other stakeholders in ensuring strong development results are achieved through this new partnership" says Sandra Bloemenkamp, Country Manager for Malawi and Team Leader for the CAS.

The new CAS has three thematic areas to support the government of Malawi achieve the goals of its development strategy. The first theme promotes sustainable, diversified, and inclusive growth as a way of accelerating progress in reducing poverty. This will be done by helping the country achieve and maintain macroeconomic stability, invest in key infrastructure, improve the business environment, to promote competitiveness and support regional integration.

"Economic transformation and diversification will be key in reducing the country's vulnerability to shocks. In order to make our growth more inclusive we need to expand our sources of growth as well as increase our productivity and the participation of our people in this process," says Honourable Ken Lipenga, Malawi's Minister of Finance. "This CAS is therefore very responsive and supportive of our country's needs and programs to improve the lives of Malawians," Lipenga adds.

The second theme is on enhancing human capital and reducing vulnerabilities. This is designed to accelerate progress towards the Millennium Development Goals and enhancing Malawi's human resources. It will support delivery of social services such as education, water and sanitation, HIV/AIDS, and nutrition. It will also support efforts in climate change mitigation and adaptation, and natural resource and environmental management.

Mainstreaming governance for enhanced development effectiveness is the third theme. This theme comprises a cross-cutting effort to help government strengthen its systems, while also engaging citizens play their oversight role more effectively.

World Bank Group support will cover both investment lending and technical assistance and analytical work. The new CAS brings the Bank's support and commitment to Malawi to about US$3billion since Malawi became a member of the Bank after independence. The new CAS will continue to support some already existing projects such as the Malawi Social Action Fund, Agriculture and Irrigation programs, investments in key infrastructure sectors such as Energy, Mining, and Water, Natural Resources Management, Education, HIV/Aids and Nutrition, and in Higher Education and Skills. Special attention will also be given to improve the public finance management systems, and improved public sector management and statistics.

The CAS acknowledges the considerable risks to successful attainment of the results targeted in the proposed program. These stem from the political environment for sustained commitment to the reform agenda, external and internal macroeconomic risks, weather-related shocks, risks from the lack of diversity of the economy, and risks arising from inadequate public sector management capacity and fiduciary and governance issues. "Effectively managing these risks will be important for Malawi to ensure optimum results from the World Bank Group support during the implementation of this new CAS" says Ms. Bloemenkamp.

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