ABSTRACT
This chapter outlines the weakness of the Bank's initial position when Structural Adjustment Loans (SAL) negotiations were opened with the Malawian Government in the early 1980s. The Bank's disbursement dilemma in Malawi was compounded by the fact that the Bank's analytic position at the time of the 1980 SAL request was weak. In order to improve the financial and operational efficiency of The Agricultural Development and Marketing Corporation (ADMARC), the findings of the ADMARC study commissioned under SAL I were to be implemented. The increase in smallholder export crop prices towards export parity levels had occurred in advance of market liberalisation and had consequently placed a financial strain on ADMARC. The new combination of price and market liberalisation measures for the smallholder sector came too late, however, to avert problems created by the previous neglect of appropriate sequencing of price and market liberalisation.
