Posted on October, 23, 2023 at 11:25 pm
TACOMA — On September 7, 2023, the Government of the United States of America announced a $44.6 million joint investment into sustainable growth in Malawi, through the U.S. Agency for International Development’s (USAID) new partnership with Pyxus Agriculture Malawi.
In Lilongwe, Malawi, USAID Deputy Administrator Isobel Coleman made the announcement of a partnership focused on increasing economic growth in the country through inclusive and sustainable methods. Included in the total $44.6 million is $14.6 million from the U.S. Government, as well as a maximum of $30 million from Pyxus, a Malawian-registered company based in the U.S.
The investment is set to last five years and has the central goal of improving the economy through agriculture, a sector that accounts for over 25% of Malawi’s GDP. Some of the main acts of the investment include finance to supply high-quality seed to farmers, market expansion for groundnut farmers and help to advance the sustainable production of Malawian food products of high international value.
Deputy Administrator Coleman noted the positive impact of supporting agribusiness in Malawi and throughout Africa, citing “commercially sustainable industry” as something “critical for lifting people out of hunger and poverty.” In addition to the launch of the USAID–Pyxus partnership, Deputy Administrator Coleman spent two days gaining more knowledge of the economic challenges and policies Malawi is currently facing and discussed ways in which USAID could further support growth in the country in the coming years.
For several years, a transformation of agriculture into a major force for sustainable growth in Malawi has been one of the country’s long-term goals.
Maize is the major focus of Malawi’s agenda for agricultural growth, but its government has also acknowledged that significant diversification is needed in order to grow the economy, increase food security and reduce extreme poverty. Tobacco alone, for example, currently represents more than 40% of total export earnings. Other than tobacco, the country’s main agricultural sub-sectors include livestock production, fisheries, irrigation, horticulture and crop farming — this wide range of resources showcases an opportunity for considerable economic growth.
In 2022, the International Trade Administration, part of the U.S. Department of Commerce, laid out a number of opportunities for investment in Malawi. For instance, the newly announced USAID–Pyxus package could go towards supporting pork production, integrated cotton development and mushroom growing in its goals for sustainable growth via agriculture.
The ITA also notes how providing Malawian farmers with new and innovative technologies could help boost the economy: Some available technologies would lead to the improvement of efficiency and yield in farming, while others can help protect crops from extreme weather events. There is also room, it suggests, for modern computer technology in Malawi’s agricultural sector, which would improve current methods of collecting and transmitting important data.
The USAID-Pyxus announcement is a significant example of how stimulating growth in a country’s private sector can help fight extreme poverty within its communities. A governmental organization and a private company make for a strong partnership in the realm of poverty reduction because of the unique economic powers each is able to wield.
USAID investment is made stronger alongside an additional injection of funding from Pyxus. Private companies are often able to contribute larger amounts of money, provide more jobs and allow more services to function compared to agencies like national governments. These lenders have no cap on their budget — this greater freedom to invest makes them a vital component in combating poverty via direct economic stimulation.
Malawi will hopefully see sustainable economic growth in its agriculture sector thanks to Pyxus’ work in the country in partnership with USAID. Deputy Administrator Coleman echoed this optimism at the end of her speech in Lilongwe, as she pointed towards opportunities for growth in other sectors, noting how a number of companies are interested in investing in Malawi. Examples like this show how combined governmental and private aid can create some of the strongest forces to combat global poverty.
Source: Borgen Magazine