Economic/Financial Analysis and Impact Assessment of World Bank Financed Information and Communication Technology (ICT) investments in Malawi

Advisor

Semester

Spring 2017

Malawi, a landlocked country in East Africa, lags behind its peers in the development of a telecommunications and digital services market. Lack of access, affordability, and quality of broadband connectivity, coupled with low human and institutional capacity, constrain access to digital technologies and services in Malawi and hold the country back from capitalizing on new opportunities. To address this issue the World Bank has invested USD 20 million on the Regional Communications Infrastructure Program (RCIP) project since 2009 and is now aiming to roll out a second tranche of USD 80.4 million to finance the Digital Malawi project. The objective of this project has been twofold: first, to carry out an Economic and Financial Analysis of the Digital Malawi project in order to estimate it projected benefits and second, to assess the impact of the completed RCIP project.

The E&F analysis for Digital Malawi has projected promising results of the World Bank’s investment. The Capstone team estimated that the growth rate of internet users will accelerate to 24% by 2022. This will increase internet users by 3.16 million in 2027 resulting in a 0.06-0.08 percentage point increase in Malawi’s GDP. The increase in GDP is estimated at $45.98-47.76 million in 2027, the benefit-cost ratio is estimated at about 2.21-2.35 for an investment of US $37 million and the expected internal rate of return is between 22.6%-23.8%.

To present the qualitative impact of the RCIP project, the team translated the success stories of its beneficiaries such as entrepreneurs, students and employees in the ICT sector into separate case studies that attempt to capture the impact the project has had on Malawi.