LILONGWE, Nov. 15 -- China and Malawi governments have signed a 23 million U.S. dollars Framework Agreement for the provision of concessional loan by China to Malawi for the construction of a national fiber backbone for internet and bandwidth connectivity.
The two governments signed the agreement on Monday in Malawi capital, Lilongwe, with Malawi Finance minister, Goodall Gondwe, representing Malawi government while Chinese Ambassador to Malawi, Wang Shiting, represented the Chinese government.
Wang said although Malawi was one of the least developed countries, Malawians were entitled to play a role in the global village that had come into being with the advent of internet.
The Ambassador said the project, when completed, would create an important engine of the Malawian economy and that the internet-based economy could change the structure of production and break the traditional method of doing business.
"As an agricultural country, Malawi can take advantage of internet to help the local farmers, especially small-scale farmers, to enter the market more easily and effectively," said Wang, adding: "Farmers can also use the network to sell their products to the domestic or even international buyers."
He added that the project would also create employment and reduce poverty among Malawians.
The Chinese Ambassador described the 8-year-old Malawi-China relations as "young but vigorous and productive" owing to the substantial support that China had given to Malawi in the areas of education, health, agriculture, and infrastructure over the period.
In his remarks, Goodall Gondwe hailed the Chinese government for the concessional loan saying the national fiber backbone would help improve connectivity for government systems.
Gondwe said as a country, Malawi was lagging behind in automating her systems due to poor internet connectivity and that a large part of the country's population remained unreached by internet services.
"The project will connect 24 districts (out of the country's total 28 districts) with drop points at the Capital Hill in Lilongwe, Blantyre Government Office Complex and Zomba Government's Offices at the District Commissioner's Office," explained Gondwe.
He said the private sector like banks and mobile phone operators would be connected to the fibre network and that government would generate revenue through the connection.
The loan will be concessional at 2 percent interest rate with 5 years grace period and a repayment period of up to 15 years, according to the minister.
The national fibre backbone will be constructed by the Chinese company Huawei, which is one of the leading companies in technology solutions in China and the world at large.