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European Commission

MEMO

Brussels, 5 March 2013

EU Development Work in Malawi

An overview of Malawi

Malawi is one of the world's least developed countries. One person in two lives below the poverty line and is unable to cover his or her basic needs. From 2010, economic growth weakened considerably due to economic policy failures. The very poor agricultural performance in the 2011/12 season and the resulting food shortages, combined with high food inflation, have added pressure to a difficult economic recovery programme, resulting in an inflation rate of above 33.3% in 2012.

The economic development of the country is hampered by several factors that include poor access to energy and a lack of trained and skilled workforce. Compared to other countries in Southern Africa, Malawi is also lagging behind on access to quality education. Moreover, Malawi is poorly connected internally and with neighbouring countries, leading to transport costs which are the highest in the region, which severely affects the economic competitiveness, exports and eventually economic growth.

Malawi underwent a major political and economic transition in 2012, when Mrs Joyce Banda took over as president after her predecessor suddenly passed away in April. She immediately embarked on a path of economic reform and readjustment, including a drastic devaluation of the national currency. Economic growth is expected to pick up again in 2013 to 5.5%.

The country is due to hold tripartite elections (Presidential, Parliamentary, Local) in 2014. Malawi is also one of 11 countries currently negotiating an EPA (Economic Partnership Agreement) with the EU.

EU Development Work with Malawi

Malawi-EU cooperation

EU cooperation with the Malawi government is centred on reducing poverty, achieving sustainable development, and gradually integrating Malawi into the world economy.

To achieve these goals, EU development assistance to Malawi focuses particularly on two sectors: food security and agriculture, while developing the road infrastructure to boost regional interconnection.

Beyond that, the EU channels its development cooperation programmes through general budget support to support health, education and public finance management, governance, regional integration (investment and trade), HIV/AIDS, and institutional capacity-building.

To this end a total amount, under the 10th EDF (2008-2013), of €605 million has been allocated, (broken down as follows): General Budget Support (€196 million), agriculture and food security (€188 million) and regional interconnection (€70 million).

The other programmes, which are targeting governance, access to water, fighting HIV-AIDS and gender promotion, are worth €146 million. For the period to start in 2014 (11th EDF), the EU proposes to focus its support on Governance, Agriculture and Education.

Food security and agriculture

Due to a lack of jobs in other areas of the economy, nearly 90% of the population works in farming, most of them small farmers (with less than 0.5 hectares) who depend on food crops.

Many households suffer from food insecurity and malnutrition remains endemic (47% of children are stunted) - due both to a lack of food and to poor diet- and this affects childhood development as well as leading to a vulnerability to diseases such as HIV/AIDS, malaria and tuberculosis.

To address food insecurity and spur agriculture-led growth, the government of Malawi supported by the EU, has developed a National Nutrition Policy and Strategic Plan, closely linked to its Comprehensive Africa Agriculture Development Program (CAADP) plan, and the Agriculture Sector-Wide Approach. This plan translated in increased investments in the agricultural sectors and improved coordination of food security programming at the national and community levels.

Food self-sufficiency is a high priority. The goal of its Farm Input Subsidy Program (FISP), to which the EU, alongside other donors, has contributed with €3 to 4 million per year (seeds only) is to enhance food self-sufficiency by increasing smallholder farmers’ access to improved agricultural inputs (seeds, fertilizers) in order to give a boost to the incomes of resource-poor farmers.

In the season of 2008–2009, 150,000 tons of maize fertilizer and 20,000 tons of tobacco fertilizer were acquired by the government to distribute to smallholder farmers through the FISP. This year, the FISP is helping 1.5 million beneficiaries to buy fertiliser and seeds at a heavily subsidised price.

Through various projects and programmes, the European Union is helping Malawi to improve its nutrition situation. Among them is the 'Farm Income Diversification Programme' whose purpose is to develop crop diversification, with a strong agribusiness focus. The Farm Income Diversification Programme (FIDP) helps to reduce poverty by improving the livelihoods of rural communities through conserving natural resources, diversifying agricultural production and increasing farmers' income. 12 districts out of 28 in Malawi, around 350,000 people, could benefit from this programme. The European Commission provides €20 million to the programme.

The 'Assistance Towards the Scale Up of the Malawi National Social Cash Transfer Programme (SCTP)' is targeting 300,000 ultra-poor households. Between 2012 and 2016 the Commission is investing €35 million to contribute to the poverty reduction efforts of Malawi's government. With KfW (German Reconstruction Credit Institute) as an implementation partner, the Commission contributes to improve nutrition, health, shelter, hygiene, sanitation, protection and well-being of the target group.

Infrastructure

Malawi is a landlocked country. As a consequence, developing transport infrastructure is of particular importance to improve the regional connectivity in view of fostering economic activities and enabling the better circulation of goods and persons.

Thanks to EU support, Malawi is maintaining its current road network; the focus is put on rural road maintenance by communities, with labour-intensive techniques as an integral part of European support to agriculture and food security, enabling better access to market centres and with positive implications for food security and the health and education of rural communities.

The Rural Infrastructure Development Programme (RIDP) improves the socio-economic situation of the rural population through small scale infrastructure, like rural roads, to facilitate access to social services and markets and fosters investments in irrigation to improve food security. 17 districts are supported through this programme, to which the European Commission has provided € 42 million.

Governance

Governance is one of the key priorities of the Agenda for Change. A Democratic Governance Sector Strategy has been very recently developed, designed to strengthen the efficiency of key institutions, such as the Malawi Electoral Commission, the National Initiative for Civic Education, the Human Rights Commission, and civil society organisations.

The Anti-Corruption Bureau, the National Audit Office, and the Office of the Directorate on Public Procurement’s accountability have also been endorsed to ensure that they are independent, and procurement, audit and reporting systems improved. The independence and credibility of the judicial system and promotion of a people-centred and accessible justice system is also part of the EU priorities.

Education

The EU is considering supporting the implementation of the National Education Sector Plan (2008-2017), to increase access to education and the management and quality of education in Malawi. More specifically, in the area of technical and vocational education, support is envisaged for Technical, Entrepreneurial and Vocational Education and Training (TEVET).

For more information:

IP/13/185: Commissioner Piebalgs and FAO Director-General underline support for nutrition and food security in Malawi


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