World bank offer gives Malawi hope
The Centre for Research and Consultancy says Malawi could be cushioned from the negative impacts of the war in Ukraine following World Bank’s $170 billion (about K140 trillion) commitment to Least Developed Countries (LDCs).
In a written response on Tuesday, the centre’s executive director Milward Tobias said Malawi will benefit once it has met financing conditions.
He said: “Whether Malawi meets the conditions will tell whether we benefit from the package or not.”
The development follows the bank’s announcement that over the next few weeks weeks, it will be discussing with its board for a 15-month package to help countries address multiple overlapping crises arising from the Ukraine crisis.
In a published statement, the bank said it is working to provide an initial crisis response of around $50 billion by June 30 2022.
World Bank Group president David Malpass said developing countries are facing multiple overlapping crises, including the pandemic, rising inflation, Russia’s invasion of Ukraine, large macroeconomic imbalances, and energy and food supply shortages.
“These are causing massive reversals in poverty reduction, education, health, and gender equality.”
The response also follows the World Bank Group’s fast and comprehensive action to help countries address the Covid-19 crisis, with over $200 billion committed between April 2020 and March 2022 to fight health, economic, and social impacts of the pandemic.
In a written response on Tuesday, National Planning Commission director general Thomas Chataghalala Munthali said Malawi, as a leader of the Least Developed Countries (LDCs) group, been spearheading for such initiatives.
He said: “The task remains with the LDCs to channel the resources towards facilitating growth and recovery of the productive sectors to tap on in the event of more shocks.”
Munthali said there is often the push for short-sighted use towards social sectors, obserrving that such expenditures become unsustainable when the productive sectors are neglected.
World Bank country manager Hugh Riddell last week said the global economy, including Malawi, is heading towards a historic food price crisis as world price indices are a record high owing to the Ukraine crisis amid Covid-19 effects.
He said the Sub-Sahara African region’s food system faces substantial and immediate food security risks from the Russia-Ukraine conflict and its potential further escalation could worsen the current situation.
The war in Ukraine is provoking a rapidly expanding global crisis, with the economic and social impacts spreading through commodity markets, trade, financial flows, and impacting market confidence.
The surging cost of food, fuel, and fertiliser is increasing hunger, malnutrition, food insecurity, and hardship for millions of poor people around the world.
If protracted, the bank said the impacts of the war in Ukraine, could also lead to lasting fragmentation of global trade and foreign investment networks.
