Small and Medium enterprises (SMEs) which focus on increasing productivity stand to benefit from 200 million Japanese Yen (K1.3 billion) worth of grant that the Japanese government has given to Malawi.
Minister of Finance, Economic Planning and Development Goodall Gondwe signed the grant on behalf of the Malawi Government on Wednesday at a ceremony held at Capital Hill in Lilongwe.
The grant is aimed at promoting economic and social development of the people of Malawi, especially the SMEs.
Speaking after the signing ceremony, Japanese Ambassador to Malawi Kae Yanagisawa said the grant is a compliment to Malawi Government’s efforts in eradicating poverty through promotion of social and economic development.
She said Japan keenly followed the development of the Malawi Growth and Development Strategy (MGDS) III and noted that one of the proposed themes which talks about “building a competitive, productive and resilient nation” is reflecting the exact needs of Malawi.
The Japanese envoy, therefore, asked the Malawi Government to select beneficiaries in accordance with its priority areas as stipulated in the MGDS III for the grant to achieve meaningful impact.
“Allow me to call upon the commitment of your ministry to adhere to the principles of good governance, fairness, transparency and accountability,” she said.
Yanagisawa further called for vigilance in management of the loans to ensure that the money is repaid and placed into a revolving scheme called “Counterpart Funds” as agreed by the two countries.
In his remarks, Gondwe pledged to manage the grant “very carefully”, saying a special entity had been created in his ministry for careful handling of the grant resources.
He, however, observed that following the reduction in the amount of the new grant compared to the previous ones, some sectors that benefited in the past would miss out this time around.
“The amount of resources we have signed today is just a quarter of what we have been receiving in the past grants.
“As such, this huge reduction in the level of financing means that we will not extend the facility to all the sectors that have been benefitting in the past,” Gondwe said.
The minister has since asked the Japanese Government to consider increasing the grant facility.
Malawi has benefitted from Japanese Grants through the window of economic and social development programme since 1988 with the total reaching to about 5 billion Japanese Yen (MK31.82 billion).