In another example of the apparently unstoppable growth of digital finance in Africa, the African Development Fund (ADF) and the government of Malawi have signed a grant agreement for $14.2 million to undertake infrastructure upgrades and create a more efficient and transparent digital payment system.
Funding for the Support for Digitalization, Financial Inclusion and Competitiveness (DFIC) project, approved last December, will be sourced from ADF, which is the African Development Bank Group’s concessional financing window.
The project aims to widen financial inclusion in the country, in particular to women, youth and rural dwellers. It will also allow for efficient business transactions, offering small businesses the opportunity to gain access to new national and international markets.
In fact a number of upbeat projections have been offered for the project and ICT in the country. The project is expected to boost Malawi’s domestic financial inclusion rate from 58% in 2019 to at least 65% in 2025. The GDP contribution of the ICT sector is expected to rise from 5.7% to 7% over the same period. In addition, export volumes are expected to rise to 35% of GDP from 31%, in line with the targets of the national export strategy.
Currently, the total commitment in the African Development Bank’s active portfolio in Malawi stands at about $327 million.
“The DFIC project is aligned with the Malawi Digital Economy Strategy (2021-2026) and the Third National Strategy for Financial Inclusion (2022-2026); both contribute to achieving Malawi’s long-term objective of inclusive wealth creation supported by an inclusive financial system and digital economy,” said Sosten Alfred Gwengwe, Malawi’s minister of finance and economic affairs during a signing ceremony.