Announcement of IDA to Lend Twenty-Two Million Dollars for Agricultural Development in Malawi on November 30, 1978

FOR IMMEDIATE RELEASE · . ~ ' .World Bank 1818 H Street, N.:W., Washington, D.C. 20433, U.S.A. o Telephone: (202) 477-1234 IDA NEWS RELEASE NO. 79/23 November 30, 1978 IDA TO LEND $22 MILLION FOR AGRICULTURAL DEVELOPMENT IN MALAWI ------~-------------· ,--------- A project to extend and consolidate existing agricultural programs in Malawi will be supported with a $22 million credit from the International Development Association (IDA), the World Bank's affiliate for concessionary lending. The $66 mill ion project will assist the Malawi government in imple- menting the first phase of its National Rural Development Programme. The pro- gram's primary objective is over the next 20 years to increase productivity, especially that of the small farmer, by consolidating existing agricultural development programs and extending the program to new areas to cover the entire country. Agriculturai extension services and materials to help farmers will be provided. Soil conservation, watershed management, and afforestation are also included in the national program. • Responsibility for the implementation of the program lies with the Ministry of Agriculture and Natural Resources. The country is being divided into eight agricultural development divisions, each of which will be administered by a management unit. Each division will be divided into five development areas, with approximately 25,000 farm families in each area, which will form the basic unit of development. The first phase of the program, to be supported by IDA, will strengthen the central services and four management units of the Ministry of Agriculture and Natural Resources. The first phase will also cover operations in eight new development areas and also complete the consolidation phase of the 1.2 million- acre Lilongwe Land Development Programme, started in 1968 with IDA support. The new development areas are: Thiwi-Lifidzi, Ntcheu, Mzimba, Henga Valley, Nchisi, Phalombe, Mwanza, and Kawinga. At full development, the project will benefit some 90,000 farm families and enable them to increase their annual income by at least 40% to $170. The project will result in additional farm production (mainly maize, groundnuts, tobacco, and rice) valued at about $12 million a year. Co-financing for the project is expected from: Canadian International Development Agency, $2.6 million; European Development Fund, $13. 1 million; Overseas Development Ministry (U.K.), $11.7 million; and Federal Republic of Germany, $6.6 million. • The IOA credit to Malawi is for 50 years including a grace period of 10 years. The credit bears no interest but carries a charge of 3/4 of 1% per annum to cover 1DA 1 s administrative costs. NOTE: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T E C HN I CA L D A T A PROJECT: COUNTRY: TOTAL COST: National Rural Development Programme (NRDP) - Phase I Republic of Malawi $66million • IDA FINANCING: $22 million OTHER FINANCING: Expected from Canadian International Development Agency, $2.6 million; European Development fund, $13.1 million; Overseas Development Ministry (U.K.), $11.7 million; and Federal Republic of Germany, $6.6 million. Agricultural Development and Marketing Corporation, $1.5 million; and the Government of Malawi, $8.5 million. IMPLEMENTING ORGANIZATION: Ministry of Agriculture and Natural Resources Capital City Lilongwe 3 Cable: MINAGRIC Ma 1awi PROJECT DESCRIPTION: It will assist the Government to implement the first phase of Malawi 1 s National Rural Development Programme. Over a five-year period, it aims to increase output of four major crops (maize, groundnuts, dark-fired and oriental tobacco, and rice) and expand production of milk and meat through strengthening the Ministry of Agriculture and Natural Resource's. central services, and four existing management units and establishing eight new development areas. It will also complete the consolidation phase of the Lilongwe Land Development Programme. PROCUREMENT: Of the IDA and CIDA (Canadian International Development Agency) financed components, vehicles, machinery and equipment ($2.2 million) in orders of $100,000 or higher will be procured through international competitive bidding in accordance with Bank guidelines; orders will be bulked whenever possible. Civil works and boreholes ($5.5 million), which, due to their small sizes and widely distributed locations, will not attract international interest 1 will be constructed after local competitive bidding, or by force account. Procurement of the project components being financed by other agencies will follow those agencies' procurement policies, except for CIDA's which will be administered by IDA according to Bank procedure. CONSULTANTS: Consultant services will be required for two studies of the extension service and credit system. ECONOMIC RATE OF RETURN: 43% ESTIMATED COMPLETION DATE: 1983 - 0 - •