Unicef Malawi says rising prices erode cash transfers’ purchasing power, thwarting efforts to cushion the poor.
In its 2024/25 Budget Brief, Unicef observes that as inflation increases, the K14 900 monthly stipend under the Social Cash Transfer Programme (SCTP) will lose value, reducing its effectiveness in meeting basic needs.
This, the United Nations agency, says will worsen poverty and vulnerability as beneficiaries struggle to afford essential goods and services as inflation rises.
Reads the brief written by Unicef Malawi social policy team of Chisomo Alice Tsonga, Sekerani Mvula and Tapiwa Kelvin Mutambirwa under the leadership of Mathew Tasker: “Given this, the current inflationary environment significantly impacts the real value of cash transfers, the welfare of beneficiaries, and programme costs.”
In an interview on Thursday, Blantyre-based SCTP beneficiary Annete Banda said despite being on the programme and doing some small scale-business, life is still tough.
“The money is not enough and considering the every rising prices, it is failing to serve its purpose,” said the single mother of three.
The team argues that assuming a gradual increase in coverage, the total regular SCTP basic transfer costs are estimated to increase from K30 billion in 2022/23 to K150 billion by 2026/27.
These estimates are based on costing of the SCTP Strategic Plan undertaken by Unicef in 2023/24 that assumes a gradual increase between 2024-2027.
However, data shows that Malawi’s social protection budget continues to depend heavily on donor support.
“Government contribution to SCTP funding is currently at 3.5 percent, substantially lower than the target of 15 percent [of the programme’s funding] by 2027,” observed the team.
For instance, in 2024/25, donors’ contribution to the SCTP is estimated to be 96 percent (K121.6 billion), compared to just 3.5 percent (K4.1 billion) from the government.
Unicef has since urged government to progressively increase its contribution to the SCTP funding to enhance sustainability and national ownership of the flagship programme, and in line with its commitment to contribute at least 15 percent of the total SCTP budget by 2027 as outlined in the five-year SCTP Strategic Plan.
Development of the programme’s strategic plan comes at a time Malawi is fighting poverty and vulnerability in line with Malawi 2063, the country’s long-term development plan to enable Malawi to be an inclusively wealthy and self-reliant nation.
The social cash transfer programme, locally known as Mtukula Pakhomo, is the country’s main social safety net that targets the 10 percent ultra-poor of the country’s population.
Under the 2022-2027 SCTP Strategic Plan, government plans to increase funds to reduce poverty, improve access to health and education services in communities and boost local economies, thereby improving the lives of beneficiaries and non-beneficiaries.
