Through the International Development Association (IDA), the World Bank has approved $380 million in financing to support Malawi and Mozambique increase regional trade coordination, reduce trade costs and time, develop regional value chains, and improve access to infrastructure.
The new Southern Africa Trade and Connectivity Project (SATCP) seeks to benefit the two countries through investments that will facilitate trade, strengthen regional coordination, and increase diversified economic opportunities.
The project investments are expected to bring about increased regional trade, income growth, and job creation.
By improving trade competitiveness and regional connectivity, the project will help reduce costs from the exporting firms to the importing market, thereby reducing costs for the consumers. This includes addressing behind-the-border costs, such as improving standards compliance and increasing the institutional capacity of authorities; at-the-border costs, including accelerating border procedures and reducing trade restrictions; and other costs involved in trade across borders.
Additionally, the development of regional value chains would help increase trade integration and private sector investment, including in agribusiness, logistics, and storage infrastructure.
On the other hand, upgrading road infrastructure to be climate resilient in most potential areas along the Nacala corridor will further improve trade connectivity and lead to increased opportunities for firms and farmers.
The World Bank’s International Development Association (IDA) helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth and reduce poverty.