Announcement of IDA Credit to Malawi for Agricultural Development on October 15, 1981

. !f~R IMMEDIATE. R'E[~J\SE . . • World Bank 181 B H Street, N.W., Washington, D.C. 20433 1 U.S.A.• Telephone: (202} 477-1234 IDA NEWS RELEASE NO. 82/lZ October 15, 1981 IDA CREDIT ·ro MALAWI FOR AGRICULTURAL DEVELOPMENT Malawi's National Rural Development Program will be assisted by an SOR 6.5 million ($7.3 million) credit from the International Development Associa- tion (IDA), the concessional lending affiliate of the World Bank. Under Malawi's official development policy, public investment goes primarily to support private effortJ _in t_~~ directly p_roductive sectors through the provision of essential 1.nf~~c!?.~r~ucture, publi.c.1:1_1;.i.J.ities,. an_d _support services. In addition, the government attaches high priority to investments that assist smallholder agriculture, as about 90% of the population depends on agriculture for its iivelihood. To improve the productivity of the small private farmer, the government recently embarked on a 20-year National Rural Development Program to extend improved agricultural services to smallholders throughout the country. • Phase I of the program aims at completing an agricultural development program in the Lilongwe area. Phase II is a wood-energy project on a national scale. Phase Ill is a four-year, $8.6 miilion program aimed at deve~oping agri- culture in the far north of the country, in Karonga and Chitipa districts. Although the least developed region, the northern areas have the advantage of less population pressure on arable land. About 32,000 farm families live in the project area. The main crops are maize, rice, cotton, and groundnuts; livestock rearing is also important. Under the project, the government's extension and research program will be strengthened. To help farmers, livestock development centers will be upgraded, with 46 dip tanks constructed or improved. Slaughter facilities will also be constructed. The project also provides for two pilot schemes: for grazing and for burley tobacco. Fuelwood plantations and forest reserves will also be established. The project also includes provisions for improving health and water supplies. The Ministry of Agriculture will be strengthened to improve project management and evaluation. The IDA credit will be the eleventh IDA or World Bank Joan to Malawi for rural development. The new SOR 6.5 million credit to the Republic of Malawi is for 50 years, with 10 years of grace; it is interest-free but carries a 3/4 of 1% service charge to cover IDA administration costs. The credit will be committed when funds are available • • NOTE: IDA credits are denominated in SDRs (Special Drawing Rights) which are valued on the basis of a "basket" of currencies. The U.S. dollar equivalent of the SDR a~ount of the IOA credit reflects the exchange rates existing at the time of negotiation of the credit. FORM NO, 1121 (5-i6) T E C HN I CA L DA T A PROJECT: COUNTRY: TOTAL COST: National Rural DeYelopment·Proqtam, Phase Ill Malawi $8.6 mi11ion • IDA FINANCING: SOR 6.5 million ($7.3 mi'lion) on standard IDA terms. OTHER FINANCING: Government of Malawi, $1.3 million IMPLEMENTING ORGANIZATION: Ministry of Agriculture (MOA) P.O. Box 30134 Capital City Li 1ongwe, Ma 1awi PROJECT DESCRIPTION: The project aims to strengthen project management ,3pabilities and support agricultural development in the Karonga and Chitipa districts, through: (a) strengthening of extension, training and research programs; (b) expanding livestock d~velopment; (c) promoting burley tobacco as a smallholder cash crop; (d) pro'viding marketing faci ]Jties and • expanding credit activities to provi~e greater coverage; (e) improving water supply and health facilities; (f) improving administration and evaluation of project actiyities; and (g) P.rovidi~g ~ssistance to the Ministry of Agriculture and the National Statistics Office in data gathering and analysis. PROCU.REMENT: Procurement of vehicles, machinery and equipment ($0.6 mi 11 ion) for orders of $100,000 and more wi 11 be subject to international competitive bidding according to IDA guidelines; orders will be grouped whenever possible. Orders which cannot be grouped in packages of $100,000 and more, up to $250,000 in aggregate, will be procured in accordance with local procedures acceptable to IDA. Civil works construction ($2.3 million), due to their small sizes and dispersed locations, will be constructed after local competitive bidding or, if approved by IDA, force account. CONSULTANTS: Four man-months of consultant services will assist in the training program for extension staff, 36 man-months for a financial controller, 36 man-months for a public health specialist, 12 man-months for a systems -analyst~· ano 12 man-months for a survey specialist. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: About 17% 1986 - 0 - •