Malawi Economic Justice Network (Mejn) says declining social protection spending can exacerbate poverty, widen inequality and increase social unrest.
The caution by Mejn follows published data by the Malawi 2025 Commitment to Reducing Inequality Profile indicating that Malawi’s social protection spending is low, dropping from 5.7 percent to 2.3 percent of the National Budget within two years, ranking among the lowest in Southern Africa.
In a written response on Tuesday, Mejn executive director Bertha Phiri said to avert the situation, there is need to diversify the economy and ensure that income generating sectors are supported to increase domestic revenue mobilisation.
She said: “The vulnerable populations may struggle to access essential services such as healthcare and education.
“Lower social spending can also widen income inequality, potentially leading to social unrest and decreased economic growth.”
According to the profile, most funds go to civil service pensions, covering less than three percent of older people.
Child benefits have broader coverage with the social cash transfer programme reaching about 300 000 households, but 97 percent is donor support, now at risk due to aid cuts.
Ministry of Finance and Economic Affairs data show that out of the K8.07 trillion 2025/26 National Budget, social benefits now stand at K286 billion, a decline from the K378 billion in 2024/25 fiscal year revised estimates, with K4.4 billion channelled towards the Social Cash Transfer Programme.
This is happening at a time Malawi is in a debt crisis, with K2.2 trillion or half of government revenue, spent on debt servicing, which is more than the combined spending on health, education and social protection.
In an interview on Tuesday, , Business Partners International country manager Bond Mtembezeka observed that ordinarily, a decline in social expenditure should be a result of improved economic welfare in the sense that those that were previously aided have graduated into a better level of economic welfare warranting such a reduction.
He said: “However in the local context, with how poverty levels have grown over the last few years, it signals that government has cut such expenditure due to most likely fiscal pressures.
“We have a situation where poverty levels are growing and social expenditure is declining and the effects are deterioration in welfare.”
On her part, Centre for Social Concern economic governance officer Agness Nyirongo observed that underfunding social protection will leave millions of Malawians vulnerable and stifle the country’s economic potential as investments in the sectors critical for reducing poverty and inequality are being sacrificed to repay debts, leaving ordinary Malawians more vulnerable.
She said: “Failure to act now risks locking another generation in poverty, but with bold policy choices, prioritising people over debt, raising more domestic revenue fairly and investing in inclusive social programmes, Malawi can unlock the potential of its youth, reduce inequality and move closer to its development vision.”
Ironically, despite years of social protection spending, poverty levels have deteriorated over the years.
World Bank data show that following the upward revision of the international poverty line (IPL) for low-income countries, including Malawi to $3 (about K5 253) per person per day, Malawi’s poverty rate now stands at 75.4 percent.
Under the previous IPL of $2.15 (about K3 764) per person per day, the poverty rate using the same data was at 70.1 percent, according to the bank.
The revision of IPL reflects changes in inflation between 2017 and 2021, which raises the line from $2.15 to about $2.50 (about K4 377) and improvements in how consumption is measured across low-income countries, which increases the line further from $2.50 to $3 per day
Recognising this gap, the Government of Malawi has taken a bold step through the launch of the National Social Protection Policy, whose overarching goal is to reduce poverty and empower the poor to overcome poverty and vulnerability.
The five-year policy focuses on social safety nets, resilient livelihoods, nutrition–sensitive social protection, shock–sensitive social protection, social security and creating an enabling environment for social protection systems and cross-cutting issues.
