CHAPTER 3
ENHANCING RURAL LIVELIHOODS IN MALAWI
Located in Southern Africa, Malawi is a landlocked country bordering Mozambique, Tanzania and Zambia. Poverty in Malawi is widespread and extreme, with the country considered the fourth poorest in the world (World Bank, based on 2019 data). An estimated 70 percent of Malawians are living on less than the International Poverty Line standard of US$2.15 per day and 78 percent of Malawians are considered multi-dimensionally poor. Malawi ranks 174 th of 187 countries in the Human Development Index (HDI) and exhibits one of the highest infant mortality and adult illiteracy rates in the world. At the time of the project’s approval, 82 percent of Malawi’s population lived in rural areas, where 77 percent of the population live below the international poverty line. Agriculture is by far the most important economic activity and source of livelihoods in Malawi. The sector’s potential to drive economic growth and reduce poverty is constrained by low productivity and profitability of the predominant smallholder agriculture. Low yields are also increasingly diminished by dependence on rain-fed farming and low levels of irrigation development, poor varietal selection, declining soil fertility and overall poor agricultural prac- tices. Moreover, many smallholder farmers lack adequate links to markets. Before this background, the OPEC Fund approved a US$10 million loan in 2012 to the government of Malawi for the Rural Livelihood and Economic Enhancement Program (RLEEP), developed and co-financed by the International Fund for Agricultural Development (IFAD), as well as the government and the Royal Tropical Institute of the Neth- erlands. The program was designed as a commodity-ori- ented rural commercialization initiative with two parallel
thrusts: (i) development of value chains through partici- patory processes and matching grants to public-private partnerships, consortia and farmer groups; and (ii) support to smallholder producers to ensure better connection to the value chains and share in the benefits. Project activ-
ities included training for government and local officials, NGOs, farmer groups, input suppliers, traders and processors to support the commercialization of agricultural goods. Moreover, the project provided access to finance including grants and constructed rural roads, bridges as well as storage and marketing facilities. The OPEC Fund’s financing was directed particularly at the
construction and rehabilitation of rural infrastructure for improving the access of farmers to markets. Implementa- tion started in 2013 and the project was completed in 2018.
According to the completion report, RLEEP reached 37,625 households and provided services to 166,883 people, including 51 percent women. Project activities were found to have been effectively delivered and to have resulted in income gains that contributed to poverty alleviation in target areas. The infrastructure component supported by the OPEC Fund rehabilitated 700 km of roads and built a total of 89 concrete bridges, 27 low-water crossings and 508 culverts which provided farmers with more opportu- nities for selling their products. In particular, the program was found to have helped diminish the reliance of farmers on purely local vendors and markets: Before the project, none of the farmers had reported selling their goods directly to regional vendors, processors or aggregators, whereas after the project, 100 percent of beef producers, 21 percent of soya farmers, 14 percent of sunflower farmers and 12 percent of potato farmers reported selling to addi- tional distribution channels.
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