The World Bank Board of Executive Directors recently approved an $86 million credit for the Malawi government to increase access to financial services and promote the entrepreneurship and capabilities of micro, small, and medium enterprises (MSMEs) in Malawi, including addressing the negative economic effects of COVID-19 (coronavirus).
The COVID-19 pandemic has created economic shockwaves transmitted through falling demand, reduced and disrupted input supply, tightening of credit conditions and liquidity crunch, and rising uncertainty. These developments are amplifying the challenges faced by MSMEs, including lack of access to finance, and damaging otherwise healthy firms. The Government of Malawi is, therefore, seeking to support MSMEs in the short- and medium-term to weather the impacts of the pandemic, and in the medium- and longer-term, to boost job creation and sustainable inclusive growth.
“This project is an important element of the World Bank Group’s response to COVID-19 in Malawi, from relief, through re-structuring, towards ensuring a resilient recovery. This project contributes to relief efforts, with a clear focus on helping communities and businesses persist and find new opportunities. It provides flexible support in line with the government’s contingency plan, along with other key development partners, by contributing to select elements of business growth in the private sector and enhancing financial inclusion and job creation,” said Hugh Riddell, Word Bank Country Manager for Malawi.
The project will make financial resources available through a credit line to ensure MSMEs continuously supply essential goods and services to the economy and to mitigate the risk of failure/bankruptcy. In addition, the project will facilitate opportunities for MSMEs that have potential for high growth to thrive and grow over the medium-to-long term by providing training, particularly for youth- and women-owned businesses, followed by measures to connect trainees with market opportunities. Finally, the project is also expected to address some of the market failures that limit the supply of affordable finance and develop solutions for a more conducive business environment for dynamic business creation, including building capacity of institutions and business development thereby sustaining the lending and investment.
“The majority of MSMEs in Malawi are informal, and access to finance remains a key constraint, coupled with low capacity and inadequate innovation. Despite this situation, innovative start-ups and MSMEs with high-growth potential can create jobs and, hence, are an important area of focus for governments,” said Niraj Verma, World Bank Finance Competitiveness and Innovation Practice Manager.
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 76 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.6 billion people who live in IDA countries. Since 1960, IDA has supported development work in 113 countries. Annual commitments have averaged about $21 billion over the last three years, with about 61 percent going to Africa.
Partnership with Private Sector is Key in Closing Rwanda’s Infrastructure Gap
The COVID-19 (coronavirus) pandemic has pushed the Rwandan economy into recession in 2020 for the first time since 1994, according to the World Bank’s latest Rwanda Economic Update.
The 17th edition of the Rwanda Economic Update: The Role of the Private Sector in Closing the Infrastructure Gap, says that the economy shrank by 3.7 percent in 2020, as measures implemented to limit the spread of the coronavirus and ease pressures on health systems brought economic activity to a near standstill in many sectors. Although the economy is set to recover in 2021, the report notes the growth is projected to remain below the pre-pandemic average through 2023.
Declining economic activity has also reduced the government’s ability to collect revenue amid increased fiscal needs, worsening the fiscal situation. Public debt reached 71 percent of GDP in 2020, and is projected to peak at 84 percent of GDP in 2023. Against this backdrop, the report underlines the importance of the government’s commitment to implement a fiscal consolidation plan once the crisis abates to reduce the country’s vulnerability to external shocks and liquidity pressures.
“Narrowing fiscal space calls for a progressive shift in Rwanda’s development model away from the public sector towards a predominantly private sector driven model, while also stepping up efforts to improve the efficiency of public investment,” said Calvin Djiofack, World Bank’s Senior Economist for Rwanda.
According to the Update, private sector financing, either through public-private partnerships or pure private investment, will be essential for Rwanda to continue investing in critical infrastructure needed to achieve its development goals. The analysis underscores the need to capitalize further on Rwanda’s foreign direct investment (FDI) regulatory framework, considered one of the best in the continent, to attract and retain more FDI; to foster domestic private capital mobilization through risk sharing facilities that would absorb a percentage of the losses on loans made to private projects; and to avoid unsolicited proposals of public–private partnership (PPP) initiatives; as well as to build a robust, multisector PPP project pipeline, targeting sectors with clearly identified service needs such as transport, water and sanitation, waste management, irrigation, and housing.
While the report findings establish clearly the gains of public infrastructure development for the country as whole, it also stressed that these gains tend to benefit urban and richer households most.
“Rwanda will need to rebalance its investment strategy from prioritizing large strategic capital-intensive projects toward projects critical for broad-based social returns to boost the potential of public infrastructure to reduce inequality and poverty,” said Rolande Pryce, World Bank Country Manager for Rwanda. “Any step toward the Malabo Declaration to allocate 10 percent of future infrastructure investment to agriculture, allied activities, and rural infrastructure, will go a long way to achieving this goal.”
Greenpeace Africa responds to the cancellation of oil blocks in Salonga National Park
On Monday the UNESCO World Heritage Committee decided to remove Salonga National Park in the Democratic Republic of the Congo from the List of World Heritage in Danger. The decision follows clarification “provided by the national authorities that the oil concessions overlapping with the property are nul[l] and void and that these blocks will be excluded from future auctioning.”
Oil blocks overlapping with Salonga were awarded by President Joseph Kabila in the twilight of his regime. Greenpeace Africa has repeatedly demanded their cancellation, while local leaders voiced their opposition to the project in light of its impacts on communities.
“A decision by President Felix Tshisekedi to cancel all oil blocks in Salonga Park must be followed by a decision to cancel oil blocks in Virunga Park and across the Cuvette Centrale region. These are vast areas rich in biodiversity that provide clean water, food security and medicine to local communities and which render environmental services to humanity,” says Irene Wabiwa Betoko, International Project Leader for the Congo Basin forest.
The Salonga National Park, which is Africa’s largest tropical rainforest reserve, was inscribed on the World Heritage List in 1984. The park plays a fundamental role in climate regulation and the sequestration of carbon. The park is also home to numerous endemic endangered species such as the pygmy chimpanzee (or bonobo), the forest elephant, the African slender-snouted crocodile and the Congo peacock. Salonga had been inscribed on the List of World Heritage in Danger in 1999, due to pressures such as poaching, deforestation and poor management. The government of DRC later on issued oil drilling licences that encroached on the protected area, posing a threat to the wildlife-rich site.
“DRC’s auctioning of oil blocks has not only been scandalously lacking transparency and menacing for particularly sensitive environmental areas – they neither benefit Congolese people nor the planet. Instead of privileging a small group of beneficiaries of the toxic fossil fuels industry, diversifying the DRC’s economy should be done through renewable energy investments that will make energy accessible and affordable for all,” Irene Wabiwa concluded.
Greenpeace Africa urges full transparency from both UNESCO and the DRC government and calls for the publication of all supportive documents regarding the decision to cancel the aforementioned oil blocks, as well as the map of the nine oil blocks that are still being auctioned in the Cuvette Centrale region.
Domestic violence, forced marriage, have risen in Sudan
Deteriorating economic conditions since 2020 and the COVID-19 pandemic have fuelled an increase in domestic violence and forced marriage in Sudan, a UN-backed study has revealed.
Voices from Sudan 2020, published this week, is the first-ever nationwide qualitative assessment of gender-based violence (GBV) in the country, where a transitional government is now in its second year.
Addressing the issue is a critical priority, according to the UN Population Fund (UNFPA) and the Government’s Combating Violence against Women Unit (CVAW), co-authors of the report.
“The current context of increased openness by the Government of Sudan, and dynamism by civil society, opens opportunities for significant gains in advancing women’s safety and rights,” they said.
Physical violence at home
The report aims to complement existing methods of gathering data and analysis by ensuring that the views, experiences and priorities of women and girls, are understood and addressed.
Researchers found that communities perceive domestic and sexual violence as the most common GBV issues.
Key concerns include physical violence in the home, committed by husbands against wives, and by brothers against sisters, as well as movement restrictions which women and girls have been subjected to.
Another concern is sexual violence, especially against women working in informal jobs, but also refugee and displaced women when moving outside camps, people with disabilities, and children in Qur’anic schools.
Pressure to comply
Forced marriage is also “prominent”, according to the report. Most of these unions are arranged between members of the same tribe, or relatives, without the girl’s consent or knowledge.
Meanwhile, Female Genital Mutilation (FGM) remains widespread in Sudan, with varying differences based on geographic location and tribal affiliation. Although knowledge about the illegality and harmfulness of the practice has reached community level, child marriage and FGM are not perceived as key concerns.
Women’s access to resources is also severely restricted. Men control financial resources, and boys are favoured for access to opportunities, especially education. Verbal and psychological pressure to comply with existing gender norms and roles is widespread, leading in some cases to suicide.
The deteriorating economic situation since 2020, and COVID-19, have increased violence, especially domestic violence and forced marriage, the report said. Harassment in queues for essential supplies such as bread and fuel has also been reported.
Data dramatically lacking
Sudan continues to move along a path to democracy following the April 2019 overthrow of President Omar Al-Bashir who had been in power for 30 years.
Openly discussing GBV “has not been possible for the last three decades”, according to the report.
“GBV data is dramatically lacking, with no nation-wide assessment done for the past 30 years, and a general lack of availability of qualitative and quantitative data,” the authors said.
To carry out the assessment, some 215 focus group discussions were held with communities: 21 with GBV experts, as well as a review of existing studies and assessments.
Research was conducted between August and November 2020, encompassing 60 locations and camps, and the data was scanned through a software for qualitative analysis, followed a model first used in Syria.
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