Malawi - Entrepreneurship Development and Drought Recovery Program (supplemental financing arrangement)

l <sM > z 1 .5 11-2 &') - /A /q Doc=mt of The World Bank FOR OFCAL USE ONY Rega No. P-6428-MAI REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INlENATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED SUPPLEMEAL FINANFCING ARRANGEMENT OF SDR 27.6 MILLION (US$40 MILLION EQUIVALENT) TO THE REPUBLIC OF MALAWI UNDER THE ENTREPRENEURSHIP DEVELOPMENT AND DROUGHT RECOVERY PROGRAM (CREDIT NO. 2396-MAI) OCTOBER 11, 1994 MICROGRAPHICS This document bas a resicted disibution 5 Report No: P- 6428 MAI dteir official duies. Its contents may DOt C Type: MOP  CURRENCY AND OTHER EQUIVALENTS CURRENCY EQUIVALENTS Currency Unit: Malawi Kwacha (MK) US$ 1 = MK 9.0 MKI = US$0.11 MKl = 10 Tambala WEIGHTS AND MEASURES 1 cubic foot (cu ft) 0.0283 cubic meters I cubic meter (m3) = 35.3 cubic feet = 264 US gal 1 kilometer (kIn) - 1,000 meter = 0.621 miles I hectare (ha) - 10,000 square meters - 2.47 acres GLOSSARY OF ABBREVIATIONS ADMARC - Agricultural Development and Marketing Corporation DCA - Development Credit Agreement EDDRP - Entrepreneurship Development and Drought Recry Program ESAF - Enhanced Structural Adjustnent Facility FAO - Food and Agricue Organition of the United Nations MRFC - Malawi Rural Finance Company NGOs Non-Govemetal O nizations PFP - Policy Framework Paper SACA Smallholder Agricultural Credit Association SAF - Social Action Fund SGR - Stategic Grain Reserve WFP - World Food Programme Government of Malawi Fiscal Year April I - March 31  FOR OFFICIAL USE ONLY MALAWI SUPPLEMENTAL FINANCIAL ARRANGEMENT UNDER THE ENTERPRENEURSHIP DEVELOPMENT AND DROUGHT RECOVERY PROGRAM Table of Contents Page SUMMRY ..... OVERVIEW.1 EMEROENCY FOOD ImPORTS - NEEDS ASSESSMENT ..........................................2 M EASURES TAKEN TO ADDRESS RECURRENT DROUOHT ......................................... .........................5 MEDIUM-TERM MACROECONOMIC OBJECTrVES .6 PROGRESS UNDER THE ADJUSTMENT OPERATION .8 JUSTICATION OF PROPOSED BANK ACTION ........................................ 10 EXTERNAL FINANCING PLAN ........................................ 11 DISBURSEMENT, PROCUREMENT, AND AUDrI ........................................ 12 ECMIOMEDATION ........................................ 13 FIGUS Figure 1: Malaui - Maize Production .....................................3 Figure 2: Malawi - Sources for Meeting Maize Requirements ....................................4 TABLES Table 1: Malawi - External Financing Requirements .................................... 12 Annex I: Malawi: Key Macroeconomic Indicators, 1989-97 This report is based on the findigs of a drought assessment mission which visited Malawi in May 1994. The mission consisted of Mr. Hartwig Schafer (Mission Letder and Country Economist). Mr. Ataman Aksoy is the managing Division Chie