African Development Bank Propels Competitiveness of Small Businesses and Cooperatives

3 September 2019
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African Development Bank (Abidjan)

Mega Signs and Media Ltd is today the first and unique printing company able to manufacture professional, directional and product signs and all-size billboards across Malawi. Based in Blantyre and Lilongwe, this local enterprise has expanded remarkably thanks to a "matching grant" of MWK40,000,000 (about $42,400) from the Competitiveness and Job Creation Support Project, supported by the African Development Bank.

Under this project, the Bank, through the government of Malawi, has given out grants to 141 local micro, small and medium enterprises (MSME) to match their investments up to 50% while the businesses contribute the other half either in cash or in-kind. The scheme has so far created some 2,641 permanent jobs and 1,000 seasonal ones.

Mega Signs and Media Ltd is one of the beneficiaries. It received a PVC welding machine and a Roland printer under the scheme and is now able to offer services that were previously only provided by foreign companies.

"There is now no need for anyone to go to South Africa. All the billboards and signage can be done locally. We wouldn't have been able to reach this far without the support from the Project," said its managing director Michael Chombo.

MSMEs and cooperatives play a critical role in the socioeconomic development of Malawi, but they face constraints to access the needed finance.

As part of the Competitiveness and Job Creation Support Project, the Bank supported the Malawi government with about $14 million in 2011 to boost the capacity of the private sector. This has helped to boost the financial sector and almost doubled private sector access to finance from 8.9% in 2009 to 16.3% in 2017.

In addition to the MSMEs, support was also provided to cooperatives, supporting 3,500 farmers. Sophie Katulukira is the director of the Tithokoze farm in Lilongwe, whose business has expanded with the acquisition of 10 greenhouses with the support of the Project. She produces farm fresh organic vegetables for local supermarkets.

"This project has really assisted us to have more markets. We can now grow more quality products throughout the year. The markets know they can rely on us to get the best products," she said.

The project supported the construction of 23 cooperative warehouses across Malawi. In Mulanje, a town of about 21,000 inhabitants in the southern region, the Namulenga cooperative has also seen its membership increased, after the construction of a warehouse, from 77 in 2011 to 350 members in 2019. Thanks to this facility, the farmers can store and aggregate their products, allowing them to negotiate better prices with the expanded market access.

During the last season in 2018, non-member farmers sold at prices as low as MWK 60/kg of pigeon peas, while the cooperative sold 22.5 tons at MWK 230/kg.

In addition to helping to boost cooperative membership, the scheme provided pulse farmers with inputs and training, resulting in an increase in pigeon pea export from 220,000 tonnes in 2010 to 516,941 tonnes in 2017.

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