The World Bank has approved $380 million package from the International Development Association (IDA) to support Malawi and Mozambique increase regional trade coordination, and reduce trade costs and time.
The money will also be used to develop regional value chains and improve access to infrastructure.
Of the package, $305 million is a grant while $75 million is a loan.
According to the Bank, the New Southern Africa Trade and Connectivity project (SATCP) would benefit Malawi and Mozambique and local communities through investments that would facilitate trade, strengthen regional coordination and increase diversified economic opportunities along the Nacara and Beira corridors, connecting Mozambique to Malawi and along the Maputo corridor, connecting Mozambique to South Africa through Ponta do Ouro.
The bank also exposed that the project would ensure that youth and women are well represented among its beneficiaries.
World Bank Director of Regional Integration for Sub Saharan Africa, the Middle East and North Africa, Debora Wetzel said regional integration can play an important role in helping southern Africa recover sustainably from the current economic crisis.
According to the Bank the project investments are expected to lead to substantial economic benefits, including increased regional trade, income growth, job creation and greater resilience with positive economic spillovers that will benefit other countries in the region.
Meanwhile, Southern African Trade Connectivity Project (SATCP) Task team Leader, Ankur Huria underlined that the project will bring trade facilitation, regional value chains and transport infrastructure in one project to address key constraints to regional integration.
Ankur said, “Small scale producers and cross border traders-primarily women- will benefit from improved facilities and value chain development mechanisms to reduce harassment and further access to skills and finance.”