{"id":42940,"date":"2017-03-22T09:08:37","date_gmt":"2017-03-22T07:08:37","guid":{"rendered":"http:\/\/www.times.mw\/?p=42940"},"modified":"2017-03-22T09:08:39","modified_gmt":"2017-03-22T07:08:39","slug":"micf-a-private-sector-tool-for-economic-growth","status":"publish","type":"post","link":"https:\/\/archive.times.mw\/index.php\/2017\/03\/22\/micf-a-private-sector-tool-for-economic-growth\/","title":{"rendered":"MICF: a private sector tool for economic growth"},"content":{"rendered":"

A<\/strong>s a country, Malawi is struggling to have a vibrant economy as it is more of a consuming than exporting country.<\/p>\n

The manufacturing and agriculture sectors are key in export business. However, they do not produce enough to meet the demand and earn the country the much needed foreign exchange.<\/p>\n

The private sector, which is the main player in production, is failing to grow due to financial challenges coupled with high interest rates, making capital borrowing difficult for most companies.<\/p>\n

However, donor partners such as (United Nations Development Fund (UNDP), DfID, KFW and Ifad, jointly put together resources under the umbrella, Malawi Innovation Challenge Fund (MICF) and provide funds towards innovative projects.<\/p>\n

What is MICF? <\/strong><\/p>\n

MICF is a challenge fund established in 2014, under the UNDP supported Private Sector Development Project, with the purpose of providing grant funding for innovative inclusive business projects in the agriculture, manufacturing and logistics sector in the country.<\/p>\n

The fund is an instrument that contributes towards the ambition of transforming Malawi from an importing country to a producing and exporting country. It targets the National Export Strategy (NES) prioritised sectors.<\/p>\n

The MICF is operated in form of a matching grant that requires the grantees to cover at least half of the project costs. By providing matching grants, MICF helps to absorb part of the commercial risk new innovations face and allows for a faster implementation of new business models and technologies with a high social impact.<\/p>\n

MICF seeks to utilise the strengths of the private sector in developing and testing new ideas.<\/p>\n

What is MICF\u2019s funding capacity? <\/strong><\/p>\n

UK\u2019s DfID, contributed $8 million to the first round of competition in manufacturing and agriculture windows. The performance grants range between $150,000 and $850,000 per project and are reimbursed based on verification of expenditures for each milestone set at the beginning of the project.<\/p>\n

The German Development Fund (KFW) contributed Three million Euro for a second round of competition for a new challenge window on manufacturing and logistics launched in 2016.<\/p>\n

Another new challenge window on irrigation is expected to be launched during the first quarter of 2017 with the International Fund for Agriculture Development (Ifad) contributing $2.5 million for its implementation.<\/p>\n

MICF success story<\/p>\n

One of the success stories for the MICF in 2017 is the inaugural of the Sunseed Oil Limited fridge free manufacturing factory in Lilongwe.<\/p>\n

The project is expected to improve value addition in Sunflower production. It expects to benefit over 10,000 farmers and create over 1,000 jobs.<\/p>\n

Through the factory, Sunseed will be producing the first of its kind product, Sunspread fridge free margarine which will be sold locally, reaching out especially to rural areas.<\/p>\n

Sunspread margarine has a ready market locally and there is a growing demand regionally, especially in Zambia and Mozambique.<\/p>\n

DFID thoughts on the project and Malawi <\/strong><\/p>\n

Dfid said Malawi needs a business sector that creates jobs and growth, if it has to get itself out of poverty.<\/p>\n

DfID, Head of Office, Jan Marshall, said the project has a value chain benefit that will see sunflower farmers moving out of poverty.<\/p>\n

Marshall said through the Malawi Innovation Challenge Fund (MICF), the UK government is committed to support Malawi eliminate poverty.<\/p>\n

She, however, said it is important to look at how the two countries can improve its trade relations.<\/p>\n

Marshall also said it is important for the private sector to think outside the box and start creating jobs that will eventually see a growth in the economy.<\/p>\n

Marshall said the MICF is aimed at making the private sector to be innovative and help the government in job creation.<\/p>\n

\u201cThrough this instrument, the Malawian private sector is expected to rise to the overarching challenge of poverty reduction and human development.<\/p>\n

\u201cThe projects that are being implemented under the MICF are expected to create jobs and improve the livelihood of the beneficiaries through the implementation of successful inclusive business models, rather than solely placing reliance on the government,\u201d she said.<\/p>\n

She said the project launched shows that Malawi firms have the ability to test new innovative ideas and carry the associated risk.<\/p>\n

\u201cThis is central to the concept of the MICF which supports innovative ideas that are perceived as slightly too risky, or have too low a financial return to go ahead on purely commercial terms, but with assured development impact in terms of increased employment or returns to the poor,\u201d Marshall said.<\/p>\n

Sunseeds views on the project <\/strong><\/p>\n

The company\u2019s Managing Director, Wassim Kassam, said it is pleasing to note that Sunseed has brought on the market a new product that will be competing with foreign products.<\/p>\n

He said being the first locally produced fridge free margarine; the company has put its emphasis on high quality standards which is key in MICF projects.<\/p>\n

Kassam said the product does not require electricity for storage, hence those in rural areas and without power supply will be able to access the product.<\/p>\n

He also said being a value added product, their main challenge is supply of raw materials.<\/p>\n

\u201cRaw materials are never enough that is why we are engaging sunflower across the country to produce more. Apart from that we are offering them with certified seeds and other farm inputs as quality is our key,\u201d said Kassam.<\/p>\n","protected":false},"excerpt":{"rendered":"

As a country, Malawi is struggling to have a vibrant economy as it is more of a consuming than exporting country. The manufacturing and agriculture sectors are key in export business. However, they do not produce enough to meet the demand and earn the country the much needed foreign exchange. The private sector, which is […]<\/p>\n","protected":false},"author":3,"featured_media":42943,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-42940","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/posts\/42940","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/comments?post=42940"}],"version-history":[{"count":1,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/posts\/42940\/revisions"}],"predecessor-version":[{"id":42945,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/posts\/42940\/revisions\/42945"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/media\/42943"}],"wp:attachment":[{"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/media?parent=42940"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/categories?post=42940"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/archive.times.mw\/index.php\/wp-json\/wp\/v2\/tags?post=42940"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}