African Development Fund to support financial digitalisation in Malawi
The African Development Fund (ADF) and the government of Malawi signed a grant agreement in February for USD14.2 million to undertake infrastructure upgrades and create a more efficient and transparent digital payment system. It is part of the Digitalisation, Financial Inclusion and Competitiveness (DFIC) project, which was approved last December.
The ADF, the concessional financing window of the African Development Bank (AfDB) Group, contributes to the promotion of economic and social development in 38 eligible African countries by providing funding for projects and programmes, as well as technical assistance for studies and capacity-building activities.
“The DFIC project is aligned with the Malawi Digital Economy Strategy (2021-2026) and the Third National Strategy for Financial Inclusion (2022-2026); both contribute to achieving Malawi’s long-term objective of inclusive wealth creation supported by an inclusive financial system and digital economy,” said Malawi’s Minister of Finance Sosten Alfred Gwengwe.
The project will widen financial inclusion in the country, particularly among women, youth and rural dwellers. It will also enable more efficient business transactions, offering small businesses the opportunity to gain access to new national and international markets.
The DIFC is projected to boost Malawi’s domestic financial inclusion rate from 58% in 2019 to 65% in 2025, with the GDP contribution of the ICT sector expected to rise from 5.7% to 7% over the same period. Export volumes are also expected to rise from 31% to 35% of GDP, in line with the targets of the national export strategy. The total commitment in the AfDB’s active portfolio in Malawi currently stands at USD327 million.