The Competitiveness and Job Creation Support Project involves the public sector and the private sector [in Malawi] working together to improve the competitiveness of the private sector in order to promote broad-based economic growth and development, export diversification and job creation. The strategic outcomes of the project include:
(a) Increased private credit by commercial banks from 8.9% in 2009 to 12% in 2016, to address the most important binding constraint to Micro, Small and Medium size Enterprises (MSMEs) development in Malawi;
(b) Increased Export Diversification with an increased percentage of non-traditional exports in total exports from 10.7% in 2009 to 14% in 2016, and a reduced reliance on the key export crop, tobacco; and
(c) MSMEs developed and formal employment in the private sector increased by 2,000 jobs (including 50% women and 25% youth) and 15% increase in the income of 20,000 existing pulse farmers in target areas (including 50% women and 25% youth); by 2016.
These outcomes will contribute to the reduction of poverty and vulnerability to socioeconomic shocks in Malawi. The total project cost is UA 11.18 million over a five year period.
Beneficiary Participation
The identification, preparation and appraisal of the Project included a wide consultation of stakeholders and its design has been conducted through a participatory process. Public sector institutions, private sector operators, financial institutions, the civil society and main development partners were consulted during all the stages of the preparation of the Project and their views incorporated in its design. These stakeholders will equally be involved in the implementation of the Project in various capacities, such as in monitoring and as service providers.
Project rationale
Malawi faces key challenges in sustaining its economic growth and the reduction of poverty. MSMEs, which have a major role in the socioeconomic development of the country, are in particular faced with poor access to finance, foreign exchange scarcity and low entrepreneurial skills. The proposed support by the Bank will address these constraints as a means of fostering job creation in the private sector and thereby contribute to the reduction of poverty in the country.
Bank’s Added Value
In responding to the Government of Malawi’s request, the Bank is focusing its intervention in a sector that receives considerably less support from donors (just 1% in 2010) compared to other sectors. The Project will also contribute directly to the implementation of the Malawi Growth and Development Strategy (MGDS), which prioritize private sector development for sustainable economic growth in Malawi. The Project will provide opportunities in Malawi for further interventions in key priority areas of the Bank’s Mid-Term Strategy. The project includes institutional capacity building activities, for improved governance as well as entrepreneurship skills development with linkages to the Bank’s development efforts in Higher Education Science and Technology (HEST) .
Knowledge Management
The project’s M&E process will include implementation monitoring by the project management team and the Bank as well as participatory monitoring by the Project’s public sector and private sector stakeholders. The project will generate lessons of interest to Government, the private sector, development partners and other stakeholders. Key knowledge generation processes envisaged under the project include a baseline survey, focus group discussions, in-depth interviews, a labour force sample survey, project reviews at stakeholder meetings, an impact evaluation study and the final project evaluation.
- Readers can access the complete project appraisal document (34 pages), dated November 2011, here.
