The Board of Directors of the African Development Bank (AfDB) has approved two grants of $9.25 million to implement the Africa Disaster Risk Financing Programme (ADRiFi) in Malawi.
The move will boost the country’s resilience against climate-related shocks and food insecurity.
The funding is expected to support the government of Malawi to develop climate risk management solutions and pay its sovereign risk premium for the transfer of drought risks under the Africa Disaster Risk Financing Programme.
The initiative, a partnership between AfDB and the African Risk Capacity Group (ARC), enhances the preparedness and strengthens countries’ financial resilience against climate hazards by supporting participation in ARC’s sovereign risk pool. ADRiFi’s presence in Malawi will help shield the country’s smallholder farming communities — including women and children — from the worst impacts of drought.
The first grant, worth $4.9 million, will come from the African Development Fund. The ADRiFi Multi-Donor Trust Fund will provide financing for the second grant valued at $4.35 million. The grants will support the first of two phases of the program, covering the 2022-2023 period. The government of Malawi and ARC will also contribute funding toward total costs of $10.13 million for Phase 1 of the programme.
“Africa is the world’s region most vulnerable to climate change-related weather extremes like flooding, droughts and tropical cyclones. We welcome Malawi into the Africa Disaster Risk Financing Programme, which boosts participating countries’ ability to respond rapidly to the aftermath of climate-related disasters, arrange finance before shocks and better serve their most vulnerable populations impacted by the effects of climate shocks.” Dr Beth Dunford, AfDB Vice President for Agriculture, Human and Social Development.
Agriculture contributes about 30% of Malawi’s GDP and employs about 64% of its workforce. The nation’s agriculture sector is primarily dependent on rainfall. However, rainfall patterns have become more erratic and harder to predict due to climate variability. Climate-induced shocks are predicted to become more frequent and severe, especially in southern Africa. This has increased the vulnerability of rural dwellers, including farmers, and the overall economy, to weather-related shocks.
Read also; Kenya to Receive $170 Million AfDB Loan for Budgetary Support.
