The European Union (EU) and Malawi on Monday signed a fourth financial agreement amounting to 11.5 million euros (about K4 billion) towards supporting efficiency in the sugar industry.
The agreement is under the Malawi 2011-2013 Accompanying Measures for Sugar Protocol Project (AMSP).
The programme has so far benefited the Dwangwa Cane Growers Trust, the Shire Valley Cane Growers Trust and Agricane Malawi Limited in cooperation with Phata Sugarcane Growers Cooperative.
EU ambassador Alexander Baum said the sugar industry is recognised as a key contributor to Malawiâ€™s economy due to its high potential to earn foreign exchange and provide opportunities for employment.
Baum said the fund will also support out-grower expansion through new and existing schemes, physical infrastructure and technical support and capacity building of industry stakeholders.
“The signature of the financing agreement today reflects the continued dedication of the European Union and the government of Malawi to open avenues for resource poor smallholder farmers to become more self sufficient and industrious,” said Baum.
Finance Minister Dr. Ken Lipenga said the prospects of the projectsâ€™ long-term effects on poverty reduction are high.
According to Lipenga, 8 million euros will go towards expansion and development of new schemes for out-growers and the balance for improving industry sustainability.