IFC Helping Diversify Malawi's Economy

Like many African countries, Malawi depends heavily on agriculture for job creation and economic growth.

Tobacco, sugar, tea, coffee, and other crops account for more than 80 percent of Malawi’s export earnings and a third of its GDP. About 85 percent of the country’s population depends on agriculture and related industries for employment.

IFC is supporting the growth of Malawi’s dominant and important agriculture sector, but is also helping the country diversify its economy and find new ways to improve its business environment, create employment, and reduce poverty.

Broad-based growth

Supporting the growth of smaller businesses with a combination of investments and advisory services is one way IFC is helping Malawi’s economy move beyond agriculture.

IFC has provided training and committed $3 million to Malawi’s NBS Bank to help the lender broaden its portfolio among smaller businesses, which often struggle to obtain the capital they need to grow.

With help from IFC, NBS has supported hundreds of clients in the manufacturing, service, and retail sectors with loans and business guidance.

“There is much untapped potential in Malawi and businesses often fail not because of a lack of markets or desire, but because of a lack of skills and capital,” said NBS Bank’s CEO John Bizwick. “Working with IFC, we want to help add value to firms in Malawi so we can process materials and not rely almost entirely on raw exports.”

IFC has a portfolio of $23 million in Malawi spread across agribusiness, telecommunication and financial services.

IFC is also helping Malawi’s entrepreneurs sharpen their business skills. Several IFC-organized management workshops – often targeted at women entrepreneurs – have helped business owners acquire news skills and build better relationships with banks so they can access the financing they need to succeed.


Supporting trade

Supporting Malawi’s foreign trade is another important way IFC is helping the land-locked country strengthen its economy.

In 2008, IFC teamed up with Malawi’s First Merchant Bank to raise the country’s share of global trade. IFC provided $10 million in guarantees against FMB’s underlying trade transactions and will also provide advisory services to help the bank expand its range of loan products, raise its credit risk management practices, and increase its reach to smaller businesses.

Seetharama Srinivasan, FMB’s Deputy Managing Director, said: “Our collaboration with IFC will enable us to better support micro, small, and medium enterprises, which comprise a significant portion of Malawi’s economy and often face difficulty accessing credit.”

Working directly with Malawi’s exporters and the Malawi Export Promotion Council, IFC helped develop the ‘Exporter Handbook’, a comprehensive guide for any business seeking to understand the export process. The handbook has become a vital tool for Malawi’s exporters, especially those working in agriculture.


Connecting people, creating businesses

Malawi’s economy is also benefitting from IFC’s Village Phone Program, a developmental initiative designed to extend telephone access to rural and underserved areas, while also promoting entrepreneurship and creating jobs.

IFC has teamed up with telecom operator Zain Malawi to launch Village Phone in the country. The Program has helped hundreds of entrepreneurs set up a business selling telephone airtime in their local communities.

Village Phone provides much-needed communications access in Malawi, while also helping entrepreneurs start and grow a business, especially in places where other economic opportunities might be limited.

For more information contact:
Jason Hopps
Communications Officer
Johannesburg, South Africa
Phone: +27 11 731 3120
E-mail: jhopps@ifc.org