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afrol News, 31 October - The government of Malawi has asked the World Bank and IMF for emergency credits totalling US$ 72 million to support critical food imports and to assist in drought recovery efforts. The Bank is treating the application as an emergency case, and expects to produce an answer to Malawi's government by 5 November. Malawi is currently facing a severe food crisis. Production during the 2001/2002 growing season of the key food staple - maize - is estimated at 1.6 million metric tons. This is "approximately 600,000 tons short of estimated domestic disposition," the Malawian government informs in its application. The government estimates the economic cost of the crop failure to the economy in aggregate at "between US$ 150 million and US$ 180 million when the grain is valued at landed replacement cost." The incidence of the shock falls in most concentrated measure on Malawi's small-holder farmers, who are among the country's poorest citizens. The impact of the shortage on human health and nutrition was "expected to increase in severity during the coming eight months prior to the next harvest." This year's shortage follows the prior year's reduced harvest. "As a result of two successive years of reduced incomes and poor access to food, coping mechanisms, including casual labour and distress sales of household assets have been eroded," the Malawian Ministry of Finance says. Deaths from hunger-related diseases were now increasing. Children who are generally vulnerable to malnutrition - Malawi's chronic malnutrition rate is 49 percent - were particularly at risk of long-term consequences. In addition, households headed by women, the elderly, adolescent and the many HIV infected were "particularly food insecure." Overall, it was estimated that about 3.9 million people would require humanitarian assistance for varying periods of time until June 2003. Maize prices are expected to rise substantially as shortages increase. To avert famine, the government and donors were taking action to ensure adequate supplies of grain to the most vulnerable Malawians. Approximately 30 percent of this group was to receive humanitarian assistance from the 208,000 tons of donations in cash and kind anticipated from the donor community. Approximately 150,000 tons of the shortfall was expected to be met by the private sector and by increased winter production. "Hence donations and private sales will cover almost US$ 100 million of the cost of the shock, and will address the needs of 60% of the population," the Ministry says. The government was however importing further 250,000 tons at an estimated cost of US$ 75 million to augment available supply and "to address the needs primarily of the 40 percent of the population who will require some assistance but will not receive humanitarian aid." Additional support was needed for recovery of crop production, prevention of resort to coping strategies that undermine recovery and longer term growth, and maintenance and rebuilding of productive assets. To implement this emergency project and import the needed food, a total cost of US$ 82 million had been estimated. The Ministry of Finance itself had put aside US$ 10 million and asked the World Bank and the IMF to jointly make an emergency credit of the remaining US$ 72 million. The World Bank says it expects to reach a conclusion by 5 November.
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