Malawi’s government and the African Development Fund (ADF) have inked a $14.2 million grant deal to enhance infrastructure and build a more efficient and transparent digital payment system.
The Bank Group’s concessional financing window, ADF, will provide funding for the Support for Digitalization, Financial Inclusion, and Competitiveness (DFIC) project, which was approved in December.
During a signing ceremony, Malawi’s Minister of Finance and Economic Affairs, Sosten Alfred Gwengwe, said, “The DFIC project is aligned with the Malawi Digital Economy Strategy (2021-2026) and the Third National Strategy for Financial Inclusion (2022-2026); both contribute to Malawi’s long-term goal of inclusive wealth creation supported by an inclusive financial system and digital economy.”
The project will increase financial inclusion in the country, particularly for women, youth, and people living in rural areas. It will also facilitate efficient commercial transactions, allowing small enterprises to tap into new national and international markets.
Malawi’s domestic financial inclusion rate is predicted to rise from 58 percent in 2019 to at least 65 percent in 2025 as a result of the project. Over the same time period, the ICT sector’s GDP contribution is predicted to increase from 5.7 percent to 7%. Export volumes are predicted to increase to 35% of GDP from 31%, in line with the national export strategy’s goals. The African Development Bank’s active portfolio in Malawi now has a total commitment of $327 million.
The signing of the DFIC project grant agreement today, according to Macmillan Anyanwu, the African Development Bank’s Country Manager for Malawi, was an important step toward promoting the use of electronic transactions in Malawi to increase access and use of affordable financial services, particularly among women, youth, and rural dwellers. He added, “The project will also enable more efficient commercial transactions, allowing small enterprises to get access to new markets.”