2019/20 social welfare budget brief malawi...social welfare5 was allocated a total of mk65 billion...

2019/20 Social Welfare Budget BriefTowards Inclusive, Productive and Resilient Communities in Malawi

MALAWI

1 The Government’s contribution to the Social Cash Transfer Program (SCTP) increased by 67% in the current fiscal year, indicative of Government’s commitment to increase the domestic share of social protection financing.

Recommendation: The Government should continue with this trend next fiscal year in order to gradually increase its relative share of financing for this flagship national social protection program to ensure its sustainability.

2 The allocation to Primary Child Protection Services (program 71.01) under the Ministry of Gender, Children, Disability and Social Welfare (MoGCDSW) has substantially declined by 95% from the previous year at a time when the country is grappling with high rates of child marriage, violence, abuse, exploitation and neglect.

Recommendation: The Government should prioritise child protection interventions during the fiscal year (FY) 2019/20 midyear review and for the FY2020/21 budget.Costing exercises to determine the minimum level needed to ensure that child protection interventions are carried out effectively should be considered.

3 The Early Childhood Development (ECD) budget substantially increased from MK3.4 billion in FY2018/19 to MK10 billion in FY2019/20, largely driven by the World Bank ‘Investing in Early Years’ project.

Recommendation: The Government should work with the World Bank to leverage these resources to strengthen national ECD financing policies, systems and quality standards. Parallel engagement from other donors and stakeholders in the sector with the World Bank is also necessary.

4 The Government has continued to prioritize programs for people with disability and albinism, with the budget for disability, including albinism, tripling in FY2019/20 compared to the previous year.

Recommendation: The Government should ensure timely disbursement and equitable distribution of resources in collaboration with Disability Peoples Organizations (DPOs).

5 District social welfare ceilings for other recurrent transactions (ORT) are too low to impact service delivery, vary with district and often suffer downwards revisions at mid-year.

Recommendation: In FY2020/21, the Government should increase the size of ceilings to social welfare in line with district needs. A costing exercise to establish the financial needs at the local level is recommended. In the meantime, at 2019/20 mid-year, the Government should safeguard the ceilings for social welfare as approved by Parliament. To ensure equitable distribution, the NLGFC should review the social welfare formula.

Key messages and recommendations

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1. INTRODUCTION This brief assesses the extent to which the fiscal year (FY) 2019/20 National Budget responds to social welfare needs of citizens in Malawi, including children. The brief analyses trends, composition and equity of spending on social welfare, focusing on allocations to social protection, child protection, disability and early childhood development (ECD). The brief concludes with a set of recommendations on how the Government of Malawi (GoM) can increase and improve the quality of public spending on social welfare related programmes, including by enhancing efficiency, effectiveness and equity in the allocation and utilization of resources. The budget analysis is based on in-depth review of budget documents, especially Program Based Budgets (PBBs) and Detailed Budget Estimates for FY2019/20.

The brief analysed all votes for Ministries, Departments or Agencies (MDAs) which fall under the Social and Community Affairs Committee of the Parliament of Malawi. These are: Ministry of Gender, Children, Disability and Social Welfare (MoGCDSW) (Vote 320), the Local Development Fund (LDF), now under National Local Government Finance Committee (NLGFC) (Vote 121) and Malawi Council for the Handicapped (MACOHA). Additionally, the analysis includes budget allocations to District Councils for Gender and Community Development sectors.

National Children’s Commission Act (2019), which provides for the establishment of a National Children Commission responsible for policy guidance to Government and multi-sectoral coordination of children’s issues and programs, including making children more visible in Government plans and budgets.

Malawi is experiencing a demographic explosion, which is significantly over-stretching social service delivery to children. According to the Population and Housing Census (2018), Malawi’s population grew by 35% from 13 million in 2008 to 17.5 million in 2018. With population growth of 2.9%, Malawi ranks among the top 40 countries with the fastest annual population growth rates in the world. Going by the current population growth trends, the overall population in Malawi is projected to reach 30 million by 2030, with the number of children almost doubling to 16.2 million.2 Malawi’s age dependency ratio is high at 87%.3 This means that Malawi will continue to have a large proportion of children and young people demanding social services.

Malawi has made some progress in reducing child poverty, national ultra-poverty and inequality. Child poverty in Malawi reduced from 63% in FY2010/11 to 60.5% in FY2015/16 with ultra-poverty falling from 24.5% in FY2010/11 to 20.1% in FY2016/17. Income inequality,

2 World Bank (2018)3 World Bank (2019)

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2. OVERVIEW OF SOCIAL AND CHILD WELFARE IN MALAWIThe Government of Malawi developed several laws, policies and strategies related to social protection, ECD, child protection and disability. Social protection is currently guided by the Malawi National Social Support Program (MNSSP II) (2017) while ECD is guided by the National Early Childhood Development Policy (2017). The Government has also shown commitment to ensure children living with disabilities (CwDs) are protected through the enactment of the Disability Act of 2012. A National Disability Policy was drafted and forwarded to the Cabinet for approval. Unfortunately, most legal and policy commitmments have not been accompanied by commensurate resources to ensure their full implementation.1

Several laws, policies and plans are in place to ensure children are protected from abuse, neglect and all forms of violence. These include Child Care, Protection and Justice Act (CCPJA) (2010), Marriage, Divorce and Family Relations Act (2015), National Plan of Action for Vulnerable Children (2015-2019), the National Children’s Policy (2019) and the

1 The yawning gap between the making of policies and their full imple-mentation has been echoed by the Committee on the Rights of Child in its Concluding Observations after the 3rd, 4th and 5th State Party Report to the Committee in 2017.

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3. SIZE OF SOCIAL WELFARE BUDGETSSocial welfare5 was allocated a total of MK65 billion in FY2019/20, up from a revised estimate of MK43 billion in 2018/19 (Figure 1). The FY2019/20 allocation is 1.5 times the FY2018/19 revised social welfare budget and is 36% higher in real terms. The increase in the social welfare budget is largely driven by a substantial increase in the budget for MoGCDSW which swelled by 399%, following the channeling of World Bank funds for the Social Cash Transfer Program (SCTP) and the ‘Investing in Early Years’ project.

5 Social welfare is the sum of budget allocations to votes which fall under the Social and Community Affairs Committee in the Parliament of Malawi. These are Ministry of Gender, Children, Disability and Social Welfare (MoGCDSW) (Vote 320) and the Local Development Fund (LDF) budgets for Productive Public Works (60.3) and Social Cash Transfer (60.4), now under the National Local Government Finance Committee (NLGFC) (Vote 121). Budget allocations to the Ministry of Civic Education and Community Development (MoCECD) -Vote 170 (now disbanded), Ministry of Local Government and Rural Development (MoLGRD) – Vote 120, and the Malawi Council for the Handicapped (MACOHA).

measured by the Gini Coefficient, declined from 0.45 to 0.42 between FY2010/11 and 2015/16. Extending the coverage of social protection, which has documented positive impact on poverty and vulnerability, is key in addressing social exclusion in Malawi.

Children in Malawi experience multiple forms of abuse, which affect their well-being. Malawi has one of the highest rates of child marriage in the world, with approximately 42% of girls getting married before the age of 18, and 9% below the age of 15. One third of children aged 13 to 17 witness violence in the home. Moreover, 71% of children aged 2-4 years have experienced violent discipline, with 6% experiencing severe physical punishment.4 These statistics have grave and lasting implications on children’s short and long-term health, wellbeing and productivity, and on that of the nation.

TABLE 1 Selected social welfare indicators in Malawi

Indicator Value Source

Total population 17,563,749 NSO

Children (% of population) 8,957,511 (51%) NSO

Population growth 2.9% NSO

Moderate, ultra and child poverty 51.5%, 20.1% and 60%

NSO

Income inequality 0.42 NSO

Child marriage rate 42% Traditional Practices Survey (2019)

Proportion of children (5 to 17) engaged in prohibited work

38% National Child Labor Survey (2015)

Prevalence of violent discipline among children 2-4

71% Violence against Children Survey (VACS) (2013)

Prevalence of physical violence experienced before age 18 (female, male)

42% and 66% VACS (2013)

KEY TAKEAWAYS

High levels of monetary and multi-dimensional poverty in Malawi make social protection programmes such as cash transfers highly needed.

The demographic explosion facing Malawi requires the Government to invest in social services, if the country is to reap the demographic dividend.

4 Government of Malawi (2013), Malawi Violence Against Children Survey (VACS).

0

10

20

30

40

50

60

70

80

Social Welfare Budget

2019/202018/192017/182016 /172015 /162014 /152013 /142012 /130

1

2

3

4

5

6

7

8

% of GDP% of Gvt. Budget

21

49

32 3143

60

43

65

FIGURE 1 Trends in Social Welfare Spending

MK,

bill

ions

Perc

enta

ge (%

)

Source: Government Budget Estimates (FY2012/13 to 2019/20)

The increase in the social welfare budget is largely driven by a substantial increase in the budget for MoGCDSW which swelled by 399%.


Social welfare accounts for a relatively low share of the Government budget. The FY2019/20 social welfare budget is equivalent to 3.7% of the national budget, compared to education (25%6), agriculture (10.4%), health (9.4%) and security7 (6.2%). Relative to GDP, the social welfare budget has increased from 0.8% in 2018/19 to 1.1% in 2019/20.

KEY TAKEAWAY

The increase in social welfare budgets should be accompanied by efforts to strengthen efficiency and effectiveness of spending.

6 The education figure includes Aid in Appropriation (the revenue as-signed to and collected by public institutions which they are permitted by the Treasury to appropriate against expenditure approved by Parlia-ment) for subvented education institutions. If Aid in Appropriation is excluded, the share of education spending stands at 18.5%.

7 Allocations to security sector are defined as allocations to Ministry of Defense (Vote 100), Malawi Defense Forces (Vote 101), Malawi Police Service (Vote 341) and Ministry of Home Affairs and Internal Security (Vote 340)

4. COMPOSITION OF THE SOCIAL WELFARE BUDGETAllocations to the MoGCDSW for FY2019/20 constitute 53% of the social welfare budget. This represents a significant increase if compared to the average allocation of the social welfare budget received by the Ministry between FY2012/13 and FY2018/19, as shown in Figure 2. As said earlier on, the increase in the share of MoGCDSW budget is explained by a marked increase in the social protection budget, mostly linked to World Bank funding for the SCTP channeled through the budget. Allocations to the Local Development Fund (LDF) (now under the NLGFC), also linked to SCTP funding provided by the World Bank, currently represent the second largest share of the social welfare budget. The Public Works Programme Funds, also provided by the World Bank, constituted the bulk of the resources under the LDF, before being drastically reduced in FY2018/19 and FY2019/20, as shown in Figure 4. Transfers to Local Councils for gender and community development have stagnated at about 1% of total allocations to social welfare as shown in Figure 2.

FIGURE 2 Trends in the Composition of Social Welfare Budgets


0 10,000 20,000 30,000 40,000 50,000 60,000 70,000

MACOHA (Vote 275)District Councils (Gender & Community Development)

Local Development Fund (Vote 272)MoLGRD (Vote 120)

MoCECD (Vote 170) MoGCDSW (Vote 320)

2012 /13

2013 /14

2014 /15

2015 /16

2016 /17

2017/18

2018/19

2019/20

MK, millions

KEY TAKEAWAYS

Budgets for social welfare are highly variable and strongly dependant on the size of the donor contributions to key programmes, such as the SCTP and the Public Works Programme, leaving the national social protection system vulnerable to donor funding withdrawal or discontinuation.

Higher contributions through Government’s own resources would help stabilise the funding to the sector.

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to progressively realize better outcomes. Notwithstanding the increase, social protection continues to be largely donor funded. In FY2019/20, for example, 93% (MK34 billion) of the on-budget social protection programs are funded by donors.

5. THEMATIC ANALYSIS OF ALLOCATIONS TO KEY SOCIAL WELFARE ISSUES5.1 Social Protection

The total social protection budget8 doubled in nominal terms compared to the previous year. The social protection budget takes the biggest share (57%) of the social welfare budget for FY2019/20. A total of MK36.9 billion was allocated to social protection in FY2019/20, compared to the MK18.4 billion allocation for FY2018/19, a nominal increase of 101%. In real terms, the social protection budget increased by 82%. Accordingly, the share of the total budget for the allocations to social protection increased from 1.3% in FY2018/19 to 2.1% in FY2019/20. In relation to GDP, the social protection budget has doubled from 0.3% in 2018/19 to 0.6% in FY2019/20.

The Government has significantly increased its allocation to the SCTP for FY2019/20. A total of MK2.5 billion was allocated to the SCTP, which is 67% up from MK1.5 billion in FY2018/19. The allocation is in line with the financial support required to cover the SCTP as well as the general coordination and monitoring. This commitment should be sustained and matched with timely disbursements of funds

8 In this budget brief, the total social protection budget is composed of Social Cash Transfer Program (SCTP) under the MoGCDSW and the Local Development Fund (LDF), which now falls under the NLGFC and the Public Works Program (PWP) also under the LDF. Also see Figure 4 for the composition of social protection budget.

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0

5

10

15

20

25

30

35

40

Allocations to Social Protection

2019/202018/192017/182016 /172015 /162014 /152013 /142012 /130.0

0.5

1.0

1.5

2.0

2.5

3.0

SP % Gvt. Budget

FIGURE 3 Trends in Social Protection Spending

MK,

bill

ions

Perc

enta

ge (%

)

Source: Government Budget Estimates (FY2012/13 to 2019/20

0

8

21 21

16

22

18

37


There are synergetic investment opportunities for the current social protection system in Malawi. For instance, there is potential for the Government to use existing social protection systems to complement other programmes, including humanitarian support and disaster financing to mitigate the impact of climatic shocks. Such synergies would move the country towards the adoption of a shock-responsive social protection system, advocated for by most donors. In a similar fashion, leveraging on the ongoing intervention on nutrition could bring the country closer to applying a nutrition-sensitive social protection system.

The financing modalities of social protection programs in Malawi remain highly fragmented. Funding channels for the SCTP vary by funding source – whilst some funds are channelled via the Reserve Bank of Malawi (RBM), the World Bank is using the Local Development Fund (LDF), whilst other donors are using separate mechanisms. The Government contribution is being channelled through the MoGCDSW. Fragmentation of funding mechanisms is a concern that has been raised by several stakeholders.12 The frequency of distribution of cash transfers also varies depending on the source of the funds. As recommended by the SCTP Cost-Efficiency Analysis (CEA), the use of e-payment solutions offers a great opportunity to improve efficiency in the delivery of SCTP in Malawi.

12 See for example, Hemsteede Roeland., (1-10-2017), Fragmented donor funding: Malawi’s Social Cash Transfer Programme, http://social-protection.org as well as World Bank (2016), Pathways to prosperity in Malawi.

The SCTP remains the flagship social protection program. Allocations to the SCTP account for 95% of the on-budget social protection programs in FY2019/20. Public works program (PWP) accounts for the remaining 4.7%. After dipping in FY2018/19, the PWP budget considerably increased by 67% from MK1 billion to MK1.7 billion in FY2019/20. However, the PWP budget has declined as a share of the social protection budget, from 5.6% in FY2018/19 to 4.7% in FY2019/20. Allocations to SCTP channelled through the NLGFC9 increased by 18%. The high share of the SCTP budget demonstrates increasing donor appreciation of the effectiveness of cash transfers, at a time when the effectiveness of PWP is being questioned.10 Figure 4 shows trends in the composition of the social protection budget.

Despite the overwhelming positive evidence on the effectiveness of cash transfers in Malawi, coverage is low. The SCTP coverage is limited to the 10% poorest of the population, while the GoM recognizes that 51.5% of the population lives in poverty. Social protection coverage in Malawi is still relatively low in comparison with comparable countries such as Zambia. Current benefit levels are too low to impact on poverty. The average monthly transfer value (MK7,000) is around 20% and 12% of the extreme and moderate poverty lines, respectively.11 Moreover, benefit levels, last revised in 2016, are continously being eroded by inflation (which is currently at 9%) with negative impacts on child welfare. In addition, there are clear linkages between the agricultural cycle, dependant on the rains, and seasonal price patterns in Malawi, with food-inflation spiking during the lean season, further eroding the value of the cash transfer.

9 The funds for the SCTP budget under NLGFC are provided by the World Bank via the Local Development Fund, which now fall under the NLGFC since FY2019/20.

10 World Bank (2018). Malawi Economic Monitor (MEM).11 As of 2016, the extreme and moderate poverty lines stood at

MK85,260 and MK137,428 per person per year. For comparison purposes, the extreme and moderate poverty lines were converted to monthly amounts and an average household size of five members was used.

FIGURE 4 Trends in the Composition of Social Protection Budget by Programme


0 5 10 15 20 25 30 35 40

Public Works Program (PWP)Total SCTP

2012/13

2013/14

2014/15

2015/16

2016/17

2017/18

2018/19

2019/20

MK, billions

0

8

3

2

9

17

35

21

18

14

13

1

2

0

0

Despite the overwhelming positive evidence on the effectiveness of cash transfers in Malawi, coverage is low.

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TABLE 2 Changes in Allocations to Sub-programs under MoGCDSW

Sub-program under MoGCDSW 2018/19 2019/20 % change

(nominal)

Social and Economic Empowerment (69.01)

51 32 (36)

Gender Mainstreaming (69.02) 8 27,029 322,444

Gender Based Violence (69.03) 33 25 (23)

Primary Child Protection Services (71.01)

337 18 (95)

Probation & Rehabilitation Services (71.02)

324 271 (16)

Disability Mainstreaming (71.03) 42 284 573

Ageing & Human Rights (71.04) 107 589 449

SCTP (71.05) 1,555 2,505 61

NGO Coordination (71.06) 127 612 382

Primary Child Protection Services (99.01)

63 25 (60)

ECD (99.02) 535 803 50

Family Nutrition & HIV (99.03) 4 26 618

MoGCDSW 6,915 34,530 399

Source: PBB for 2019/20

KEY TAKEAWAYS

The current levels of benefits are too low to have a significant impact on poverty and are vulnerable to inflationary pressures and seasonal price hikes. Therefore, the benefit amounts should be regularly updated and SCTP beneficiaries should be linked to other programs, such as the FISP and empowerment programs, to leverage on synergies.

There is urgent need to address the fragmentation in administration and flow of funds to social protection. A consolidated social protection financing strategy is required.

An e-payment system is a great opportunity to solutions to improve efficiency in the delivery of SCTP.

5.2 Child Protection (CP)

The visible budget for child protection13 has declined by 49% in nominal terms and by 54% in real terms, from MK796 million in FY2018/19 to MK406 million in FY2019/20. The reduction in the child protection budget might cause a deterioration in services at a time when cases of violence against children are high. The child protection budget is a very small share (0.02%) of the FY2019/20 Government Budget (MK1.73 trillion) and is negligible relative to the GDP. In per capita terms, the total visible allocation to child protection translates to approximately MK23 (US$0.03) per child per year.

The budget for child protection under MoGCDSW has declined while other allocations to most sub-programs within MoGCDSW have increased. Table 2 shows that 60% of the sub-programs under MoGCDSW that suffered budget reductions in 2019/20 are child-protection related. Compared to FY2018/19, child protection related sub-programs (71.01, 71.02 and 99.01) under MoGCDSW suffered a combined budget reduction of 56%, while the other eight programs under MoGCDSW registered budget increases, with the allocation to Gender Mainstreaming increasing by 322,444%. Such increase is explained by donor funds to the SCTP and ‘Investing in Early Years’ project which were budgeted under Gender Mainstreaming in FY2019/20. Funds to Social and Economic Empowerment and Gender-based Violence were also cut.

13 The child protection budget is the sum of allocations to primary child protection services, probation and rehabilitation services under MoG-CDSW, Child Justice Court under the Judiciary and District Councils’ budgets for primary child protection services.

0

200

400

600

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1000

Total visible CP Budget

2019/202018/192017/182016 /17

FIGURE 5 Trends in Visible Allocations to Child Protection

MK,

mill

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Shar

e of

Gov

t. B

udge

t


0

247

0.02

0.06

839 796

0.06

406

0.02

0.00

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

% of Govt. Budget

The budget for child protection under MoGCDSW has declined while other allocations to most sub-programs within MoGCDSW have increased.


the National Children’s Commission (NCC) following the April 2019 assent to the NCC Act. Preliminary comparative calculations with other Commissions show that about MK810 million will be required to operationalize the NCC during the first year.

In FY2019/20, a total of 24 District Councils committed resources to Primary Child Protection Services (sub-program 99.01), increasing from the 20 District Councils in FY2018/19. This is a commendable development, which should be sustained. The 4 District Councils which did not budget for child protection are Zomba, Mwanza, Nkhatabay and Nsanje. A total of MK54 million was allocated to Child Protection by the 24 District Councils in FY2019/20. This represents a nominal increase of 36% from MK39.7 million in FY2018/19 and 22% in real terms. However, 9 District Councils reduced their Child Protection budgets for FY2019/20. The total district Child Protection budget (MK54 million) for FY2019/20 is 1.25 times the Primary Child Protection Services (sub-programs 77.01 and 99.01) budget at the MoGCDSW of MK43 million.

A significant share of child protection budgets goes to recurrent expenditures budgeted under the MoGCDSW. In FY2019/20, for example, the entire budget for primary child protection services (program 99.01) under MoGCDSW was for recurrent costs, mostly for internal travel (62%) as shown in Figure 7. The travel budget covers case management, which largely involves travel to follow-up victims. Limited capital investments constrain the establishment of infrastructure to support children at risk such as the establishment of safe houses and improvement of reformatory centers.

In addition to being very low, the FY2019/20 budget has not addressed key child protection issues that have been consistently raised by several stakeholders. For instance, the issue of inclusion of child protection workers (CPWs) under the Government payroll has not been addressed. The majority of CPWs continue to work as volunteers, despite their importance as frontline workers. On the basis of the current salary structure, about MK1.2 million (inflation adjustable) will be required per year to pay each worker. No provision was also made for the operationalization of

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5.3 Early Childhood Development (ECD)

The profile of ECD in Malawi is improving. ECD is a key priority of the Government of Malawi, guided by the National Early Childhood Development Policy (2017). Through the third Malawi Growth and Development Strategy (MGDS III), the Government committed to improve the access to and the quality of ECD services. The Government is aiming to ensure that all eligible children have access to quality ECD services by 2030. ECD encompasses a wide range of services such as early stimulation, nutrition and early learning.

Reflecting the increasing profile, the number of children reached with ECD services have tripled over the past decade.14 By December 2018, a total of 2.2 million children were reached by ECD services, up from 0.74 million in 2008, as shown in Figure 8.15 This places Malawi ahead of many African countries in terms of access to ECD. By October 2017, Malawi had 11,600 ECD centres, including Community Based Child Care (CBCC) centres. Service at ECD centres is provided by caregivers, majority of which work as volunteers.

14 MoGCDSW (2017), Annual ECD Report, Lilongwe. 15 MoGCDSW, (2017), Report on Purposely Upgraded ECD Centers/

CBCCs funded by the Government of Malawi and Stakeholders, Lilongwe.

KEY TAKEAWAYS

The reduction of the child protection budget and its comparatively low levels overtime constrain the capacity of the MoGCDSW and the Local Councils to effectively deliver child protection services. There is therefore need to ensure allocations directed towards child protection are increased and that service delivery costs are identified and used as a parameter.

Incentivizing child protection workers is key in ensuring an effective child protection system.

The Government should include a budget line for the operationalization of the National Children’s Commission Act during the mid-year budget review (February 2020).

The four District Councils that did not yet commit resources to Primary Child Protection Services (program 99.01) are encouraged to do so for FY2020/21.

FIGURE 7 Composition of Program 99.01


Motor vehicle running expenses

Office supplies and expensesInternal travelRefundsPublic utilities

3%

17%

15%

62%

3%

0 200 400 600 800 1000

District CouncilsChild Justice Court (060)MoGCDSW

2016 /17

2017/18

2018/19

2019/20

FIGURE 6 Composition of Visible Child Protection Budgets by MDA


MK, millions


There are significant challenges regarding the quality of the ECD services, linked to the type of infrastructure, the unavailability of trained care givers and the insufficient supply of stimulation, learning and nutrition interventions. Reports from the MoGCDSW show that majority of ECD centres are built with less durable materials than those promoted by the national housing standards, resulting in many of them being rendered not fit for use whenever there is heavy rain, floods and strong winds. The MoGCDSW estimates that only 23% (257 centres) have been purposely built.

The ECD budget substantially increased in FY2019/20, largely driven by the World Bank ‘Investing in Early Years’ project. The total ECD budget for FY2019/20 stands at MK10 billion, which is thrice the FY2018/19 budget of MK3.4 billion. Government’s own contribution stands at MK803 million, 1.5 times the revised estimate of MK535 million for FY2018/19, as shown in Figure 9. However, it is important to note that the approved Government’s contribution to ECD for FY2018/19 was MK669 million. The bulk of the FY2019/20 ECD budget – to the tune of MK9.1 billion – comes from the World Bank under the auspices of the ‘Investing in Early Years’ project16, channeled through the MoGCDSW. The total ECD budget translates to 0.58% of the total Government Budget and 0.17% of the GDP. In per capita terms, the FY2019/20 ECD budget translates to MK4,545 (US$6, at current prices) per each of the 2.2 million children accessing ECD services per year.

16 This commitment is mainly for general systems strengthening, coor-dination and monitoring of service delivery in ten districts. Due to lack of disaggregation, it is difficult to know how these resources will be distributed amongst the ten districts.

0

2,000

4,000

6,000

8,000

10,000

Investing in Early Years (World Bank)ECD (GoM)

2019/202018/192017/182016/172015/162014/15

FIGURE 9 Trends in ECD Budgets


MK,

Mill

ions

54 35338

616

2,850

535 803

9,197

0

0.5

1

1.5

2

2.5

2018201720162015201420132012201120102009

FIGURE 8 Number of Children Accessing ECD Services Through Centers

Mill

ions

Source: MoGCDSW (2019)

0.740.82 0.84

1.00

1.181.26 1.30

1.42

1.64

2.20

FIGURE 10 Composition of the Government 2019/20 ECD (Program 99.02) Budget

Source: PBB for 2019/20

Office supplies and expensesRoutine Maintenance of AssetsMotor vehicle running expenses

Education Supplies and ServicesInternal and external travelWages and SalariesAcquistion of fixed assets

49%

7%

3% 0%

21%

15%

5%

The total ECD budget translates to 0.58% of the total Government Budget and 0.17% of the GDP.

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5.4 Disability and Albinism

The Government has enhanced its focus on disability. For the first time, the Government committed resources to the Disability Trust Fund in line with the recommendation of the Disability Act (2012). The funding is expected to assist in enhancing functionality of crucial disability structures such as the National Coordinating Committee on Disability Issues (NACCODI). The Government has also committed resources to the operationalization of the National Action Plan for People with Albinism established in 2018. This is an indication of Government’s commitment to respond to issues affecting People with Albinism (PwAs).The Government also developed a Disability Policy which is awaiting approval by Parliament.

The budget for disability, including albinism tripled in 2019/20. A total of MK3.6 billion was allocated to disability and albinism in FY2019/20. This is thrice the FY2018/19 revised budget of MK1.28 billion, as shown in Figure 11. As a share of the total budget, the disability budget doubled from 0.09% in FY2018/19 to 0.18% in FY2019/20 and increased from 0.02% to 0.05% relative to GDP.

Nearly half (49%) of the Government ECD budget is for acquisition of fixed assets. It is expected that part of the resources will be devolved to District Councils to help in upgrading several Community-Based Child Care Centres (CBCCs), the majority of which were not purposefully built. A fifth (21%) of the ECD budget is for education supplies and services while 15% goes for internal and external travels. Figure 10 shows the composition of the Government’s ECD budget (sub-program 99.02), a balanced allocation mix between capital and recurrent costs. The World Bank ECD budget is mainly for general systems strengthening, coordination and monitoring of service delivery.

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2019/202018/192017/182016/17

FIGURE 11 Trends in Allocations to Disability, including Albinism

MK,

mill

ions


0

1,198 1,1471,282

3,676

KEY TAKEAWAY

The Government should leverage the World Bank resources to strengthen national existing ECD systems, with a focus on enhancing district planning for ECD, expanding financial and information management systems and conducting robust monitoring and evaluation.

© UNICEF/2012/Asael


KEY TAKEAWAY

While the increase in allocations is a positive step, there is need to improve the efficiency, transparency and effectiveness of expenditures for disability and albinism. In particular, clear access modalities and criteria should be put in place for the Disability Trust Fund and budget for albinism to avoid abuse in the use of the resources.

Majority of the disability budget is for infrastructure. In the current year, a total of MK600million was allocated for construction of houses for PwAs and MK400 million for implementation of the Action Plan for People with Albinism. This is the first time the Government has allocated resources for such programmes. For the first time, the Government allocated funds to the Disability Trust Fund to the tune of MK200 million. Resources for Kachere and MACOHA are however largely recurrent.

Despite the increase, if compared to the previous year’s budget, the disability budget remains insufficient to respond to needs of PwDs. For instance, there is very little resources for specialised goods and services, including assistive devices. This has significantly affected learning by children with disabilities. Furthermore, work on disability mainstreaming is very minimal in various sectors, both at the national and sub-national levels. In its programme-based budget, the MoGCDSW acknowledges that there is non-prioritisation of disability issues in most national programmes. Moreover, Local Authorities are currently operating without earmarked disability budgets.

6. DECENTRALIZATION OF SOCIAL WELFARE BUDGETSSocial welfare budgets remain largely centralized despite the drive towards fiscal decentralization in Malawi. In FY2019/20, for example, the ECD budget under the MoGCDSW (MK803 million) was 21 times the district ECD budget (MK38.1 million). Districts face a huge workload for social welfare services in the areas of ECD, child protection, gender and disability, among others. For instance, the response to violence and abuse, including case management, psychosocial support and specialized

For the first time, the Government allocated funds to the Disability Trust Fund, to the tune of MK200 million.

FIGURE 12 Composition of Allocations to Disability and Albinism


0 20 40 60 80 100

Houses for PwAsImplentation of the Action Plan for PwAs

Malawi Against Physical Disabilities-MoHDisability Fund

Disability Head Quarters - MoGCDSW MACOHA Kachere Rehabilitation Centre

2016/17

2017/18

2018/19

2019/20 8% 5%18%26%

17% 18%64%

16%

12% 54%

25%

34%

59%

16%11%14%

aftercare is the function of the District Social Welfare Officer (DSWO) at local level.

The FY2019/20 allocations to primary child protection services significantly differed by District Council – ranging from a mere MK300,000 in Balaka to MK8.8 million in Salima, as shown in Figure 13. These figures are extremely low to respond to the child protection needs at district level. District budgets for child protection and ECD are drawn from ORT allocations to the ‘gender sector’ – which is divided between gender and social welfare functions (mainly ECD and child protection). The decision on how much to allocate to child protection out of the ‘social welfare’ ORT funds rests on the DSWO.

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Social welfare ORT transfers are too low to meet the demand. In FY2019/20, a total of MK463 million was allocated to Gender (MK231.5 million) and Community Development (MK231.5 million) through the National Local Government Finance Committee (NLGFC). The total allocation is mere 4.8% higher than the FY2018/19 approved allocation of MK441 million, then slashed down during the mid-year revision to MK273 million. Compared to the approved FY2018/19 allocation, the ORT transfers increased by only 5%. On average, each District Council receives MK7 million per year or MK583,333 (US$780) per month for gender and social welfare related issues. Hence, the resourcing of social welfare structures at the local level remains extremely limited. The transfers to gender and community development represent 1.4% of total ORT transfers to Local Councils as shown in Figure 14.

KEY TAKEAWAYS

The resourcing of social welfare structures at local level is crucial to improve service delivery in communities. This will require the Government to revise upwards the ceilings for social welfare programs in line with district needs.

In parallel, there is need to review the resource allocation formula for the gender sector to better respond to district-specific deprivations.

FIGURE 13 Primary Child Protection Services Budget in FY2019/20 by District

Source: 2019/20 NLGFC Consolidated PBB for Local Authorities

0

2

4

6

8

10

Salima

Dowa

Rumphi

Chiradzu

lu

Mbelwa

Blantyre

Mangochi

Thyolo

Likoma

Chikwawa

Ntchisi

Lilongwe

Neno

Mchinji

Dedza

Nkotakota

Chitipa

Ntcheu

Machinga

Karonga

Mulanje

Phalombe

Kasungu

Balaka

MK,

mill

ions

0.3 0.3 0.40.6 0.7 0.7 0.8 0.8 0.9

1.2 1.3

2.12.6 2.7 2.9 3.0 3.0

3.3 3.4

4.34.5

8.8

3.8

1.7

0

100

200

300

400

500

ORT transfers to Social Welfare

2019/202018/192017/182016/170.0

0.3

0.6

0.9

1.2

1.5

Social Welfare ORT % of Total ORT to Local Councils

FIGURE 14 Trends in Social Welfare ORT Transfers to Local Councils

MK,

mill

ions

Perc

enta

ge (%

)

Source: NLGFC (2019)

400 399

273

463

The resourcing of social welfare structures at the local level remains extremely limited.


International and World Vision. However, due to lack of data and weak coordination, it is difficult to capture all NGO and donor funding to this area. Notwithstanding its importance, over-reliance on donor support for social welfare is not sustainable in the long term given the unpredictability of such funding.

Given the unpredictability of donor support over time, it is crucial for the Government to devise financing strategies for social welfare programs such as the SCTP. Malawi can learn from other Governments in the region that have progressively managed to increase the share of domestic funding for their safety net programmes, such as Zambia. According to Beegle et al. (2018), lessons from these countries suggest that it is possible to (i) increase the level and strengthen the sustainability of financial resources; (ii) identify the most appropriate mix of domestic, foreign, public, and non-public funding sources; and (iii) deploy a flexible financing strategy to respond to shocks and crises.

KEY TAKEAWAYS

The financing of social welfare programs needs an equitable mix of domestic and external sources of financing. In the short term, there is need to enhance efficiency through harmonization of financing mechanisms, for programs such as the SCTP.

In the long term, developing a financing strategy for social protection is crucial in transforming Malawi’s social protection system.

7. FINANCING OF THE SOCIAL WELFARE SECTOR The financing of social welfare programs in Malawi is heavily dependent on external resources, some of which being loans. Currently, Government’s contribution to the SCTP stands at 7% with the rest coming from donors. The main funders of the program are the KfW (7 districts), the European Union (7 districts), the World Bank (11 districts), the Irish Aid (2 district), with the Malawi Government covering the remaining district and the UN offering technical support. In addition, 92% of the ECD budget for FY2019/20 will be funded by the World Bank under ‘Investing in early years’ project.

There are significant off-budget resources for social protection, child protection and ECD. For instance, UNICEF committed MK202 million (off-budget) for thematic support for child protection in 2019/20. A budget scoping study on ending child marriage (2020)17 revealed that about three-quarters of ending child marriage programs in Malawi are externally funded through off-budget means. The study highlighted that the majority of the child protection resources are spent through NGOs and United Nations agencies, notably UNICEF, UNFPA and UN WOMEN. The main development partners financing child protection in Malawi are: Canadian Fund, Norwegian Government, Dutch Ministry of Foreign Affairs, European Commission, SIMAVI, Gates Foundation, USAID and the Department for International Development of the United Kingdom (DFID). Key international NGOs (INGOs) with comprehensive programmes on child protection are: Save the Children, Plan

17 Government of Malawi (2020). Public Spending on programmes and interventions to end child marriage.

© UNICEF

B U D G E T B R I E F 2 019 / 2 0 15

ACKNOWLEDGEMENTS This budget brief was produced by Tapiwa Kelvin Mutambirwa under the overall guidance of Alessandro Ramella Pezza and Nkandu Chilombo. Useful comments were received from Afrooz Kaviani Johnson and Veronica Avati from Child Protection Section and Bob Muchabaiwa and Matthew Cummins from the ESARO Office.

For more information, contact:

UNICEF MalawiP. O Box 30375Lilongwe

Beatrice Targa Chief of Social Policy [email protected]

Alessandro Ramella PezzaSocial Policy and Economic [email protected]

for every child, resilient

communities

www.unicef.org/malawi

UNICEF MalawiPO Box 30375Lilongwe, Malawi.Tel: +265 (0)1 770 770Email: [email protected]

2019/20 social welfare budget brief malawi...social welfare5 was allocated a total of mk65 billion...

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