The BIF programme in Malawi is now in its second phase, following the successful completion of the BIF Pilot in late 2013. We have maintained our interest in innovation whilst now adopting a market systems approach to our current portfolio of engagements. Malawi’s Growth and Development Strategy aims to transform Malawi from a country predominately focused on imports and consumption to a country focused on exports and production. BIF takes a systemic approach to market development, supporting commercially sustainable innovations which seek to enable the poor to benefit from markets.
BIF has evaluated and selected three markets based on their high potential for pro-poor impact, their economic growth opportunities and the feasibility of achieving change.
Agriculture accounts for 36% of Malawi’s Gross Domestic Product (GDP), 90% of foreign export earnings, and employs 87% of the population. BIF is currently working in two agricultural markets: Pigeon Pea and Rice.
Poor access to sustainable energy poses a binding constraint to achieving inclusive development. In Malawi the total rate of electrification is estimated at 9%. Most people rely on unsustainable energy sources for their basic needs. BIF is working in the Pico Solar Products market to strengthen the first rung on the ‘sustainable energy ladder’.
Pigeon Pea is a popular legume that is grown predominantly by smallholder farmers (SHFs) for food and cash purposes. In Malawi, there are approximately 775,000 pigeon pea growing households. Malawi is the world’s fourth largest producer and accounted for over 5% of world production in 2011-12. Malawi exports unprocessed and processed pigeon peas to regional and international markets, mainly India.
The sector is characterised by low productivity, low quality of grain and low prices fetched on markets. This is as a consequence of: poor agronomic practices by SHFs; low uptake of improved seed and Pest and Disease Management Inputs (PDMIs); not meeting buyers’ specifications; SHF constrained access to formal markets; and fluctuating export prices.
BIF is working with input companies to increase availability of improved seed varieties and appropriate PDMIs for SHFs. BIF is also supporting the development of a mechanism that stimulates coordination between stakeholders and improved aggregator-related interventions.
Rice is predominantly a smallholder crop in Malawi produced by over 75,000 smallholders. Historically, rice farming was encouraged by the appropriate climate conditions and Government investment in the value chain, such as cooperative irrigation schemes and their up-chain marketing establishments. Malawi rice, famous for its fragrance, became a household name in Southern and Eastern Africa.
The irrigation schemes of the 1960s were later overtaken by liberalised markets, in which smallholders started to rely on unpredictable rainfall as irrigation infrastructure deteriorated. BIF has discovered that there is low uptake of improved seed varieties, poor agronomy and inadequate processing. The state of affairs has resulted in perceived sub-optimal prices to smallholders.
Rice farming remains potentially viable and BIF is working with stakeholders in designing business solutions to encourage use of correct inputs, appropriate technology, good agronomy, investment in processing, commercialising by-products and development of markets. These interventions will in turn increase smallholders’ net incomes.
Pico Solar Products
More than 8 million pico solar products (PSP) have been sold across Africa in recent years. Technological advances, bringing increased quality and lower prices, coupled with business innovation has enabled a boom in the global PSP industry. PSPs provide safe, bright light and mobile phone charging, and the cheapest PSPs are available for just $10.
However PSPs are yet to gain a significant market share in Malawi; there is limited availability of products in rural areas and customers lack trust and awareness of the technology. The sector is yet to leverage commercial finance and lacks a supportive ‘enabling environment’.
BIF is supporting Malawian companies to grow the PSP market in Malawi by:
- Exploring new and better ways for PSP importers to market and distribute products
- Looking for novel finance mechanisms to increase sales to low-income consumers, and
- Influencing the enabling environment and facilitating the provision of market intelligence
In Malawi, BIF is implemented by our partner Imani Development.