The World Bank will finance construction of four one-stop-borderposts and improvement of the M1 road in order to facilitate Malawi’s trade with the neighbouring countries.
The funding comes following the signing of US$69 million (about K41 billion) loan agreement between the bank and Malawi government on Wednesday.
The bank’s country manager Laura Kullenburg and Finance Minister Goodall Gondwe signed the credit agreement following parliamentary approval of the loan.
The funds have been provided by the International Development Association (IDA) under the second phase of the Southern Africa Trade and Transport Facilitation Programme, which aims at easing the movement of goods and people along the North-South Corridor (NSC) and at the key border crossings in Malawi.
“Malawi being a landlocked country needs to be well connected to ports and key cities through good quality roads to help reduce transport costs which are one of the major obstacles to increasing trade and economic growth,” said Kullenberg.
Minister of Transport and Public Infrastructure Francis Kasaila said the loan will relieve the country which seeks resources for infrastructure development, especially roads.
“We have a lot of work to improve our road infrastructure and this project will reduce the challenge to source the required financial resources,” said Kasaila.
The NSC runs for 3,900 km from the port city of Dar-es-Salaam in Tanzania to Durban in South Africa.
The World Bank says Malawi being a landlocked country needs to be well-connected to ports and other key cities through good quality roads to help reduce transport costs which are one of the major obstacles to increasing trade and economic growth.
The bank noted that some sections in Malawi and neighbouring countries are in poor condition and the railway services are unreliable, resulting in 80 percent of all freight in the NSC being moved by road transport.
The M1 project will focus on the priority routes in the north, including Karonga-Songwe (46 km), Kacheche-Chiweta (70 km) and Mzimba Turn Off -Mzuzu -Kacheche (147km).
The border post component is aimed at improving trade facilitation at Songwe on the Tanzania border, and Dedza, Mwanza, and Muloza border crossings on the Mozambique border.
The bank says, among other, improvements will be structured sharing of information across borders, Information and Communication Technology (ICT) connectivity, inter-agency co-operation, and equipment for physical inspections.
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