The World Bank Group has approved a $70 million (about K54 billion) grant to help Malawi recover from the impact of Cyclone Idai which affected the country’s 15 districts in March this year.
The resources comprise two grants to support economic and humanitarian costs associated with the impact of the floods.
Minister of Finance, Economic Planning and Development Joseph Mwanamvekha announced the World Bank funding in Parliament last Friday.
He said: “The World Bank has just approved some resources and the bank will make the announcement next week [this week]. These resources should help us cushion our Balance of Payments position.”
However, The Nation understands that the approved funds are in form of a different instrument and not direct budgetary support.
The World Bank was expected to disburse $80 million (about K62 billion) towards the 2018/19 Budget but the bank withheld the resources as Capital Hill was yet to implement some agreed set of actions in agriculture and fiscal management. The budget expired on June 30 2019.
But in an email interview with The Nation, World Bank country director for Malawi, Tanzania, Somalia and Burundi Bella Bird said it is expected that the approved funds will also strengthen the institutional and financial capacity of the government to prepare for and deal with future similar crises.
She said: “The first grant provides upfront financing of $40 million [about K31 billion] from the International Development Association Crisis Response Window. This is part of a multi-pronged response to help government secure prompt financial support to respond to the impact of Tropical Cyclone Idai.”
The second grant, Bella said, is a Catastrophe Deferred Drawdown Option (Cat DDO) worth $30 million (about K23 billion), which she said will be available in the event of future crises within three years of signing the grant.
She said drawing down from the Cat DDO will be triggered by a presidential declaration on March 8 of a state of national disaster.
“Our aim is to help strengthen Malawi’s resilience to climatic hazards so that economic gains made are not easily reversed by such shocks,” she said.
The World Bank official further said along with this support, the bank will provide targeted technical assistance to implement policies that strengthen disaster risk management and climate adaptation.
The technical assistance, according to Bella, will be financed through programmes funded by the Global Facility for Disaster Reduction and Recovery (GFDRR) and the European Union, in the framework of the Africa Caribbean Pacific–European Union Natural Disaster Risk Reduction Programme, managed by GFDRR.
The floods affected an estimated 975 588, displacing over 90 000 and killing 60 people. The most affected districts were Chikwawa and Nsanje. The World Bank has since estimated that post-recovery disaster needs will require Malawi resources worth $368.3 million (about K277 billion), particularly to rebuild destroyed physical assets and infrastructure to disaster-resilient standards and conditions.