By Burnett Munthali
LILONGWE, Malawi — Malawi’s flagship social protection programme is facing mounting questions over its long-term financial sustainability as new research highlights heavy dependence on development partners and warns that external financing is increasingly shaping decisions that should ultimately remain under national control.
A new study published in the second volume of the Malawi Journal of Politics and Public Affairs says the Social Cash Transfer Programme (SCTP), a critical safety net for some of the country’s poorest households, relies on development partners for about 95 percent of its financing.
The study, titled Beyond the Transaction: The Political Economy of Donor-Government Collaboration in Malawi’s Social Cash Transfer Programme, was launched in Lilongwe on Thursday and examines how financing arrangements have affected decision-making, institutional ownership and implementation of the programme.
Researchers Professor Michael Chasukwa and Harold Kapito argue that the substantial imbalance between domestic and external financing has given development partners considerable influence over how the programme is designed, financed and implemented.
Since the 2016/17 financial year, the Malawi Government has contributed an average of only five percent of SCTP financing. According to the study, the World Bank accounts for 36 percent, Germany 27 percent, the European Union 23 percent, Irish Aid seven percent and UNICEF one percent, mainly through technical support.
The researchers say such overwhelming reliance on external financing has allowed development partners to exercise significant influence over implementation schedules, beneficiary targeting and broader policy decisions. While formal mechanisms exist for cooperation between government and donors, financial dependence has created an uneven relationship in which government’s ability to independently determine the programme’s direction is constrained.
Rather than being merely a technical partnership, the study portrays donor-government relations around the SCTP as a complex political economy shaped by financial leverage, institutional interests and negotiations over resources and decision-making authority.
One consultant interviewed as part of the research identified the balance of power within government itself as another major challenge, particularly over which institutions should ultimately exercise control over the programme.
The study points to disagreements between the Ministry of Finance, Economic Planning and Decentralisation and the Ministry of Gender, Children and Social Welfare over institutional ownership, while competition among development partners with different priorities has added another layer of complexity to programme management.
Researchers say the establishment of the Multi-Donor Trust Fund has intensified some of these tensions by giving the National Local Government Finance Committee a greater role within the World Bank’s financing model.
Donor financing is also distributed unevenly across the country. The World Bank supports SCTP activities in 11 districts, while the European Union and Germany each support seven districts. Ireland finances activities in two districts.
Funding Pressure Deepens
The findings come at a particularly difficult moment for Malawi’s social protection system, with government allocations declining at a time when economic pressures continue to place millions of households at risk.
Government has allocated K123 billion to social protection for the 2026/27 financial year, down sharply from K217 billion in the previous financial year. Of the new allocation, government’s own contribution is only K7 billion.
The reduction is expected to affect programmes supporting approximately one million beneficiaries. SCTP financing has declined by 14 percent, while funding for the Climate Smart Enhanced Public Works Programme has fallen by 57 percent. The Urban Public Works Programme has suffered a 35 percent reduction.
Speaking during a national dialogue on inclusive social protection held in Lilongwe in June, Ministry of Finance senior deputy director for poverty reduction and social protection Dalitso Kalimba attributed the K93 billion reduction in the overall allocation to declining international donor support.
Kalimba warned that the funding cuts would reduce the reach and operational capacity of several major social protection programmes, underscoring the vulnerability of a system that remains heavily dependent on external resources.
Applied economist Steve Kayira warned that the situation could become considerably more serious if major development partners further reduce or withdraw their support. Such a development could leave government with difficult choices over how to sustain assistance to vulnerable households.
Kayira said government could be forced to reduce the number of beneficiaries, lower cash-transfer amounts, delay payments or redirect scarce domestic resources from other priorities to keep programmes running.
Such measures, he warned, could undermine progress made in reducing extreme poverty and leave already vulnerable households exposed to even greater economic hardship. He stressed that effective social protection requires predictable, long-term financing rather than dependence on short-term external projects and shifting donor priorities.
Calls Grow for Greater Domestic Financing
The growing financial uncertainty has intensified calls from economists, researchers and civil society organisations for Malawi to assume greater responsibility for financing its own social protection system.
Kayira said government should progressively increase its contribution while protecting social protection allocations from unpredictable expenditure cuts. He recommended stronger domestic revenue mobilisation, expansion of the tax base, reduction of inefficient government spending and improvements in public financial management.
He also urged Malawi to negotiate a longer-term transition arrangement with development partners under which donors would increasingly concentrate on strengthening institutions, systems and technical capacity while government gradually assumes a larger share of recurrent cash-transfer costs.
Such an approach could reduce the risk of abrupt financing gaps while allowing Malawi to build the institutional and fiscal capacity required to take greater ownership of programmes that have become essential to the survival of vulnerable households.
The Ministry of Finance says it is developing a Social Protection Legal Framework intended to provide a comprehensive legal foundation for the sector. According to Kalimba, the framework is expected to strengthen institutional coordination and promote more predictable and sustainable delivery of social protection services.
Northern Region civil society organisations vice-chairperson for social protection Kinnear Mlowoka has also called for increased government allocations, arguing that greater domestic financing is essential if Malawi is to build a resilient social protection system.
Centre for Human Rights and Rehabilitation executive director Michael Kaiyatsa said donor assistance remains important but should increasingly be used to strengthen the programme while government progressively assumes greater responsibility for its financing.
He warned that the livelihoods of vulnerable Malawians should not remain dependent on whether international development partners choose to maintain, increase or reduce their financial commitments.
A Wider Poverty Challenge
The debate over financing comes against the backdrop of widespread poverty and enormous demand for social assistance in Malawi, making the sustainability of programmes such as the SCTP particularly important.
United Nations data cited in the discussion indicate that social safety-net programmes reach only about 27 percent of Malawi’s population, while roughly 71 percent of the population lives below the international poverty line of $2.15 a day.
Malawi spends approximately 0.9 percent of its gross domestic product on social safety nets, considerably below the cited regional average of two percent, highlighting the gap between the scale of social vulnerability and the resources available to address it.
Heavy donor dependence therefore presents Malawi with two interconnected risks: the possibility of a major financing gap if external support declines and the gradual erosion of national control over how social protection policy is designed, financed and implemented.
At the launch of the journal, Political Science Association of Malawi secretary general Makhumbo Munthali said evidence-based research and informed public debate were essential to improving public policy and governance.
For Malawi, the challenge now goes beyond keeping cash transfers flowing. It is about building a social protection system that can withstand changes in donor priorities, strengthen national ownership and provide predictable support to vulnerable households.
The findings ultimately raise a broader policy question for government: whether a programme considered central to Malawi’s fight against poverty can remain sustainable when almost all of its financing comes from outside the country. Addressing that vulnerability will require greater domestic commitment, stronger institutions and a carefully managed transition towards a social protection system that Malawi can increasingly finance and control itself.
