Key messages and recommendations

1 Representing approximately one percent of Malawi’s Gross Domestic Product (GDP), social welfare is one of the least domestically funded sector of government.

Recommendation: In financial year 2018/19, the Government should at least maintain the ceiling for Vote 320 (Ministry of Gender, Children, Disability and Social Welfare), in real terms.

2 Although inadequate, budgets for social protection programs especially the Social Cash Transfer, have steadily increased, but funding mechanisms are heavily fragmented, with transfer levels to beneficiaries lower than regional averages.

Recommendation: The Government should gradually increase its share of the social protection budget for sustainability purposes, provide leadership in the harmonization of financing mechanisms and also periodically review transfer amounts in light of cost of living.

3 In the current year, the Government only budgeted resources to respond to child protection cases, with virtually nothing allocated to preventative child protection services, yet the latter is known to be cost-effective.

Recommendation: Government to increase allocations to child protection and ensure balance between financing of prevention and response programs in order to enhance effectiveness of budgets.

4 Despite a growing financial commitment to early childhood development (ECD), current investment levels fall short of delivering high quality services to all children by 2030.

Recommendation: Government should revise upwards the ECD ceiling for the 2018/19 budget to at least MK1.2 billion in order to improve supply and quality of ECD services.

5 Total budget allocation to disability has slightly increased in real terms compared to the previous year, with majority of resources (68%) going to wages and administration.

Recommendation: Government to increase the proportion of the budget for other recurrent transactions (ORT) for disability related programs within the MoGCDSW and subvented organizations.

6 Donor contributions to social welfare interventions are mainly off-budget.

Recommendation: The Government should strengthen its public finance management systems in order to create an enabling environment for resumption of on-budget support.

1

MALAWI

2017/18 Social Welfare Budget Brief

© UNICEF/Noorani

Investing in Social WelfareBuilding Inclusive, Productive, and Resilient Communities in Malawi

January 2018

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SOCIAL WELFARE

PART 1 INTRODUCTION

This budget brief assesses the extent to which the 2017/18 Program Based Budget (PBB) of the Government of Malawi (GoM) has prioritized social welfare and community development, from a child rights perspective. It is specifically focused on allocations to child protection, disability, early childhood development (ECD) and social protection, mainly under the Ministry of Gender, Children, Disability and Social Welfare (MoGCDSW) (Vote 320), Local Development Fund (LDF) (Vote 272) and selected subvented organizations (Vote 275). ECD is included in this brief because it is budgeted for under the MoGCDSW, although previously under the Ministry of Education.

PART 2 CHILD WELFARE CONTEXT

Although the Government of Malawi (GoM) has made steady progress to improve the well-being of boys and girls, there remains significant work to be done to ensure that all children learn, thrive and are protected. Specifically, the Government is faced with the challenge of reducing the high level of multi-dimensional child poverty, improving equity and coverage of social welfare services such as social protection, early childhood development (ECD), child protection and social assistance to children with disabilities.

Box 1: Violence against children statistics

• 71% of children aged three to four years old have experienced violent discipline, with 6% experiencing severe physical punishment.

• 33.7% of children under the age of five are living with a mother who is a victim of intimate partner violence.

• 46% of girls are married before 18 and 9% before 15.

• 42% of females and 66% of males experienced physical violence in their childhood.

Source: Malawi Violence against Children Survey (VACS), 2016; Malawi Demographic and Health Survey (MDHS), 2015

Approximately 63% of all children in Malawi are deprived in two or more essential services, such as education, nutrition and health.1 More than half of the Malawi population is living below poverty datum line Integrated Household Survey 3 (IHS3) (2010). About 95% of the country’s poor are located outside of urban centres, making poverty very much a rural issue. Children in Malawi are also exposed to various forms of abuse, neglect and violence affecting their well-being. The 2016 Violence against children survey (VACS) revealed that 42% of females and 66% of males experience physical violence in their childhood. It is estimated that 21% of females and 14% of males experience at least one incident of sexual violence before turning 18. Violence is commonly inflicted on children in the name of discipline, with around 70% of children aged 2 to 4 years old experiencing violent discipline. 1 UNICEF Malawi (2016), Child Poverty Study. © UNICEF/Gubb

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BUDGET BRIEF

PART 3 POLICY, INSTITUTIONAL AND STRATEGIC FRAMEWORKS

The GoM has put in place several policies and strategies on social protection, gender, disability, children and ECD. Unfortunately, these have not been accompanied by requisite institutional frameworks and resources to ensure their full implementation. For example, in 2017/18 far less than MK1 billion has been allocated to child protection, yet the GoM estimated that MK7.5 billion will be required per year to implement child protection interventions outlined in the National Plan of Action for Vulnerable Children (NPA-VC). Some of the social welfare policies approved by the government do not have robust institutional frameworks to drive their implementation. To illustrate this point, there is no dedicated structure to coordinate the delivery of ECD services. As of November 2017, only the post of director of child affairs was established, while there is also no legally binding law to enforce ECD standards outlined in the ECD policy.

Box 2: Recently adopted Social Welfare Policies and Plans

National ECD Policy, (2006 and revised in 2016)

Child Protection and Justice Act (CPJA) (2010)

National Plan of Action for Vulnerable Children (NPA-VC) (2015)

Violence Against Children Response Plan (2015)

Malawi National Social Support Program (MNSSP II) (2017)

Disability Act (2012)

National Child Policy (Finalized 2017, pending Cabinet approval)

To implement these policies and plans, sufficient human, technical and financial resources should be mobilized and equitably allocated to benefit all children, especially the most deprived and marginalized.

© UNICEF/Amos Gumulira

More than half of the Malawi population is living below poverty datum line. (IHS3, 2010)

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SOCIAL WELFARE

Key Takeaways

• There is a mismatch between development of social and child welfare plans and their full implementation.

• Lack of financial, human, and technical resources has been cited by several stakeholders as the main reason for the slow implementation of approved child welfare policies and plans.

The yawning gap between the making of policies and their full implementation was echoed by the Committee on the Rights of Child (CRC). Following the GoM’s presentation of the 3rd, 4th and 5th State Party Reports in 2016, the CRC highlighted the need to increase the budget for the MoGCDSW as well as to give greater priority to other social sectors such as health and education. The CRC also encouraged the GoM to finalize the development of the National Child Policy.

PART 4 SOCIAL WELFARE BUDGET

In the current financial year, the budget for the ‘Social welfare and community development’ sector2 experienced a modest increase in real terms. A total budget of MK 47 billion was allocated to social welfare and community development in 2017/18 up from MK37 billion in 2016/17, which is a 29% increase in nominal terms and 9% in real terms. The sector share is equivalent to 3.62% of the total government budget and about 1% of the gross domestic product (GDP) of Malawi. However, the creation of the Ministry of Civic Education, Culture and Community Development (MoCECCD) at the middle of 2016/17 is one of the reasons behind this fairly significant increase in the sector budget. The new ministry was allocated MK876 million in 2016/17, which shot up to MK4.5 billion in 2017/18.

Despite this increase, social welfare is among the least prioritized functions of government. The amount of resources going to social welfare and community development is approximately 4 times less than the budget allocated for debt repayment costs. In 2017/18, education received the highest share of the budget, at 18% followed by debt repayment at 14% as shown in Figure 1.

2 In this budget brief ‘Social welfare and community development’ budget is defined as the sum of allocations to MoGCDSW, MoCECCD, Local Development Fund, Kachere Rehabilitation Centre and Malawi Council for the Handicapped (MACOHA).

Figure 1: Share of Social Welfare Budget in Relation to Other Sectors

Source: UNICEF based on data from PBB, 2017/18

Education 18%

Social Welfare & Community Development 4%

Health 10%

Agriculture 15%

Debt repayment 14%

Other 39%

18%

4%

10%

15%14%

39%

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BUDGET BRIEF

PART 5 COMPOSITION OF THE SOCIAL WELFARE AND COMMUNITY DEVELOPMENT BUDGET

The Local Development Fund (LDF) account for 78% of the social welfare budget, with Ministry of Gender, Children, Disability and Social Welfare (MoGCDSW) consuming 9.61%, Ministry of Civic Education, Culture and Community Development (MoCECCD) 9.57% and the remainder allocated to subvented organizations. Figure 2 shows resources allocated to social welfare related ministries, departments and agencies (MDAs).

Budget to MoGCDSW and MoCECCD modestly increased in real terms. The allocations to the MoGCDSW increased by nearly one billion from MK3.6 billion in 2016/17 to MK4.5billion in 2017/18, which constitute a 26% increase in nominal terms and 7% in real terms. The Social Cash Transfer Program (SCTP) budget, which trebled from MK650 million in 2016/17 to MK1.5 billion in 2017/18, is the main reason for this increase. When the national budget was tabled in Parliament in May 2017, the MoGCDSW had been allocated MK3.3 billion. Following a public outcry from stakeholders, the budget was later revised to MK4.59 billion. As a share of the total budget, the allocation to the MoGCDSW marginally increased from 0.32% of the national budget to 0.35%. The MoCECCD was allocated almost the same amount as MoGCDSW, which amount to 10% of the total social welfare and community development sector budget.

Figure 2: Allocations to Social Welfare MDAs in MK Millions

Source: UNICEF, based on data from PBB 2017/18

0

10,000

20,000

30,000

40,000

50,000

Allo

cati

on

s in

MK

mill

ion

s

2016/17 2017/18

24%

31,465

3,635

37,440

4,582

4,599

MoGDCSW MoCECCD MACOHA

Kachere LDF

Figure 3: Allocation to MoGCDSW as % of Total Government Budget

Source: UNICEF, based on data from PBB and Appropriation Bill, 2017/18

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

2014/15 2015/16 2016/17 2017/18

0.35

0.75

0.320.35

Perc

enta

ge s

hare

of

tota

l nat

iona

l bud

get

© UNICEF/Pirozzi

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SOCIAL WELFARE

With the exception of the LDF budget, which is entirely treated as development expenditure, the majority of social welfare resources are for recurrent budgets. In 2017/18 financial year, 97% of the budget for the MoGCDSW are for recurrent costs, with only 3% being capital budget. The proportion of the recurrent budget for the ministry increased by four percentage points from 93% in 2016/17. Budgets for Kachere and MACOHA are entirely for recurrent costs, majority of which being wages and salaries. The budget for the MoCECCD is 51% recurrent costs, as shown in Figure 4.

Key Takeaways

• If LDF resources (which are sourced from the World Bank) are taken out, allocations to social welfare would barely reach 1% of the total government budget.

Figure 4: Composition of Social Welfare budgets

0% 20% 40% 60% 80% 100%

54,347

101,700

Recuurent Capital

MACOHA

Kachere

LDF

MoCECCD

MoGDCSW

100%

100%

100%

49% 51%

97% 3%

Source: UNICEF, based on data from PBB and Appropriation Bill, 2017/18

PART 6 ANALYSIS OF ALLOCATIONS TO SPECIFIC SOCIAL WELFARE ISSUES

6.1 Social Protection

The social protection budget is increasing at a steady rate, although insufficient to meet demand for social assistance from communities. The Social Cash Transfer Program (SCTP) and the Public Works Program (PWP) are the two social protection programs financed through the Program Based Budget (PBB). Together, they received MK32 billion, which is two times what was allocated in 2016/17 in nominal terms and 1.7 times in real terms. The allocation to the two programs amount to 2.44% of the total government budget and 0.65% of GDP. The social protection budget takes up nearly 67% of the entire budget for the social welfare and community development sector, with the SCTP alone taking slightly over a third of the budget for the MoGCDSW. The PWP accounts for 52% of the social protection budget. There are however a lot more resources for the SCTP which are off-budget.

Figure 5: Social protection budgets (2013-2017)

Source: UNICEF, Based on data from PBB

0

5,000

10,000

15,000

20,000

25,000Public Works Program-LDF

SCTP Total

SCTP -LDF

SCTP-MoGCDSW

2013/14 2014/15 2015/16 2016/17 2017/18

SCTP-MoGCDSW

SCTP Total

SCTP-LDF

Public Works Program - LDF

MK

(mill

ions

)

2013/14 2014/15 2015/16 2016/17 2017/18

7,967 2,080 18,150 13,650 17,015

250 320 2,578 2,378 15,290

0 0 2,228 1,728 13,740

250 320 350 650 1,550

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BUDGET BRIEF

resources left over to support coordination meetings, capacity building, knowledge management, monitoring or evaluation. UNICEF estimates that the minimum financial requirement is MK2 billion. The government’s contribution is only 4.7% of the social protection budget, and even lower if other off-budget donor contributions are taken into account.

Recent evaluations of the SCTP have shown positive impacts on the material well-being of children. In particular cash transfers have contributed to increased food security, household consumption, school enrolment and ownership of both agricultural and non-agricultural assets. Concerns have, however, been raised by stakeholders about the size of the transfer amount, which is not responding to changes in the cost of living. On average, households receive MK7,000 per month (or about US$10), which is low in light of the cost of a basic food basket in Malawi. The average in most African countries is US$20. Suggestions have been made by stakeholders for the GoM to periodically adjust transfer amounts in order to account for inflation and also factor in seasonal variations.

The budget for the SCTP, which is currently a flagship social protection program of the GoM, has significantly increased in the current year. The total SCTP budget has increased by 543% in nominal terms and 444% in real terms from about MK2 billion to MK15 billion. Out of this amount slightly over MK13 billion is from the LDF, sourced from the World Bank. The increase in World Bank contributions to the SCTP budget via the LDF, reflects growing stakeholder appreciation of the effectiveness of cash transfers, amidst mixed views on the PWP.

The Government’s contribution to the SCTP also increased, but remains insufficient to meet even its basic commitment. The government allocation to the SCTP, via the MoGCDSW, doubled in real terms from MK650 million in the previous year to MK1.5 billion in the 2017/18 financial year. The GoM is responsible for covering the full costs of cash transfers to all eligible households in one district (Thyolo), which is approximately 18,000 households. However, the MK1.5 billion allocated in 2017/18 only covers cash amounts, with no

© UNICEF/Noorani

Figure 6: Government contribution to the SCTP

Source: UNICEF, based on data from PBB and Appropriation Bill, 2017/18

0

500

1,000

1,500

2,000SCTP, Government, Real Value

SCTP-Government, Nominal Value

2013/14 2014/15 2015/16 2016/17 2017/18

SCTP- Government, Nominal Value SCTP, Government, Real Value

MK

(mill

ions

)

196278 287

527

1,311

1,550

650

350320250

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SOCIAL WELFARE

Key Takeaways

• Despite continued increase in Government budgets, social protection programs are largely donor funded, effectively compromising their sustainability. The Government should increase its contribution to the SCTP from the MK1.5 billion in 2017/18 to about MK2.5 billion in 2018/19.

• Social protection programs such as the SCTP are greatly needed, but their coverage remains very limited and transfer levels are low. The Government is encouraged to ensure transfer levels take into consideration inflation trends.

Social protection programs in Malawi, including the SCTP, are largely donor funded. Nearly 90% of the social protection budget reported in the PBB, mainly under the LDF, have been mobilized from the World Bank. Donors are financing cash transfers in all districts, except one, which the Government is responsible for. A cumulative US$168 million has been committed by development partners for the SCTP between financial years 2012/13 and 2017/18. Mainly as a result of donor contributions, the reach of the SCTP increased from 7 districts in 2009 (reaching 150,000 individuals) to 18 districts in 2016 (reaching 700,000 individuals) (Figure 7). The goal for financial year 2017-18 is to scale up the SCTP to all districts in the country, with donors financing 27 out of 28.

Financing modalities of social protection programs in Malawi are highly fragmented. Currently, funding channels for the SCTP vary by the funding source. Whilst one donor is channelling its contribution through the Reserve Bank of Malawi, another is using the Local Development Fund and others 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.3 The frequency of distribution of cash transfers also varies depending on source of funds. The MNSSPII outlines strategic actions to design and implement harmonized social protection financing and expenditure systems in order to improve efficiency and effectiveness of expenditures.

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

Figure 7: Coverage and Reach of the SCTP

Source: UNICEF, Based on data from PBB

0

5

10

15

20

25

30

2006-7 2009-10 2016-17 2017-180

300,000

600,000

900,000

1,200,000

1,500,000

Number of districts

Number of households targeted Number of individual beneficiaries

No.

of

hous

ehol

ds a

nd in

divi

dual

s re

ache

d

Dis

tric

ts r

each

ed

1

7

18

28

8,00030,000

170,000

320,000

40,000

150,000

700,000

1,500,000

© UNICEF/Noorani

A cumulative US$168 million has been committed by development partners for the SCTP between financial years 2012/13 and 2017/18.

Note: 2017/18 figures are projections

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BUDGET BRIEF

Key Takeaways

• In order to tackle the growing problem of violence, it is important for the government to increase its investments in preventative services. There is need to allocate resources to preventative child protection programs.

• Without timely, relevant and disaggregated child protection data and statistics, it is difficult to effectively plan and budget for child protection. The Government is encouraged to dedicate resources to child protection data and information systems.

6.2 Child Protection

Child protection ranks among the lowest priorities of the MoGCDSW, as budget allocations heavily favor response rather than prevention services. In financial year 2017/18, the government only allocated resources to responding to child protection cases, with virtually nothing for prevention programs.4 The ‘Probation and Rehabilitation Services’ (Vote 70.02) is the only child protection specific budget allocation. Analysis of performance targets under this vote shows that the focus is more on response than prevention. This means that the funding burden for prevention programs is placed on development partners and non-governmental organizations (NGOs). A child protection resource mapping exercise conducted by the MoGCDSW and UNICEF in 2015 also showed that 82% of available resources were for mitigation, with only 4% going to prevention.

4 Child protection interventions are either preventative or responsive, with the former aiming to minimize occurrence of abuse and violence of children whilst the latter is reactive.

Figure 8: Allocations to Child Protection

Source: UNICEF based on data from PBB, 2017/18

0

100

200

300

400

500

600

700

800

MK

(M

illio

ns)

Allo

cati

on

s

2016/17 2017/18

116.31

111.9

636.52

Probation and Rehabilitation Services, nominal

Primary Child Protection Services

The Government should however be commended for increasing the budget for probation and rehabilitation services. The allocation to this vote increased by 4.6 times in nominal terms and 3.6 times in real terms from MK116 million in 2016/17 to MK637 million in 2017/18. Some of the child protection-related outputs to be achieved under this budget line include number of people trained in case management and psychosocial support, the number of destitute people5 to be assisted through repatriation and other forms of social assistance as well as number of juvenile offenders to be rehabilitated. With the exception of targets on gender based violence, there is no specific performance target on preventing violence against children in the 2017/18 PBB. It is also not clear whether the budget allocated to tackling gender based violence will benefit girls who oftentimes disproportionately bear the brunt of sexual abuse and other forms of violence.

5 This refers to people who are stranded and come to social welfare for support. Trafficked children from other districts who are rescued or abandoned are included in this definition.

82% of available resources were for mitigation, with only 4% going to prevention.

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SOCIAL WELFARE

The ECD budget for 2017/18 is entirely for recurrent transactions, with no capital budget. The lack of capital budget for ECD means that there will not be construction of new ECD facilities. Currently, 55% of eligible children have no access to ECD facilities and other services. Thus, it will not be possible for the MoGCDSW to increase the supply and coverage of ECD services beyond encouraging enrolment in existing centers.

Key Takeaways

• In per-capita terms, allocations to ECD are too low to increase coverage and improve quality of ECD services.

• Improving the supply of ECD services will require investments in both recurrent and capital budgets. The Government should increase allocation to ECD to at least MK1.2 billion.

6.3 Early Childhood Development (ECD)

ECD is a development priority for the GoM, budgeted for under the MoGCDSW. In 2017/18, ECD has been allocated MK 600 million, which is MK200 million increase from the 2016/17 original allocation. This is equivalent to 50% increase in nominal terms and 26% in real terms. Despite this progress, allocations are still insufficient to ensure all eligible children have access to ECD services by 2030, which is GoM’s goal. On a per child basis, ECD spending amounts to MK325 for each of the 1.6 million children currently accessing services each year, which is simply impossible to deliver universal and quality services. Due to lack of disaggregation of data, it is not clear how the ECD budget will be shared amongst districts in order to establish geographic equity of allocations.

Apart from insufficiency of allocations, budget execution challenges are also apparent. For instance, in financial year 2016/17, the ECD allocation was not transferred from Treasury to MoGCDSW until as late as the second half of the financial year. Furthermore, during the mid-year budget review, the original 2016/17 ECD budget (MK400 million) was revised downwards to MK333 million, yet there is huge demand for ECD services.

© UNICEF/d’Elbee

11

BUDGET BRIEF

Approximately 68% of all resources allocated to disability issues are for wages, salaries and administration. This means that there are very few resources available to purchase goods and services required by children and other people with disabilities. As the MoGCDSW acknowledged in the 2017/18 PBB, the increased cost of the above mentioned equipment has resulted in little or no support being given to people with disabilities especially to enable them to go to secondary and tertiary education levels.

Key Takeaways

• Unless Government increases the ORT budget to cover issues such as assistive devices, educational supplies and other goods and services, people with disabilities will have difficulties in accessing essential services.

• Public budgets should contribute to the creation of opportunities for all people regardless of physical or other status to learn, thrive and be protected.

6.4 Disability

Total budget allocations to disability have slightly increased in real terms, compared to the previous year. In 2017/18, the GoM allocated MK1.29 billion to disability issues, with the Malawi Council of the Handicapped (MACOHA) receiving MK750 million, Kachere Rehabilitation Centre6 MK456 million and MK79 million allocated to disability mainstreaming under the MoGCDSW (Figure 9). The combined allocation constitutes an 18% increase in nominal terms and 0.64% in real terms from the previous financial year budget of MK1.08 billion. The allocation to disability mainstreaming under the MoGCDSW which increased from MK12 million to MK79 million account for this increase.

But allocations to Malawi Council for the Handicapped (MACOHA) and Kachere Rehabilitation Centre decreased in real terms. In nominal terms allocations to MACOHA increased by 16% from MK650 million to MK750 million, but decreased in real terms by 2.3%. The allocation to Kachere Rehabilitation Centre increased by 12% in nominal terms, but decreased by a higher margin of 4.9% compared to MACOHA.

6 The primary mission of MACOHA is to empower persons with disabilities by providing rehabilitation programs and services and promoting public interest to achieve an inclusive society whilst that of Kachere is to provide medical rehabilitation to people who have recently acquired physical disability.

Figure 9: Budget Allocations with Regard to Disability

Figure 10: Composition of disability budgets

Source: UNICEF, based on data from PBB, 2017/18 Source: UNICEF, Based on PBB, 2017/18

0

300

600

900

1200

1500

MK

(M

illio

ns)

Allo

cati

on

s

2016/17 2017/18

418.5

12.28

650.0 750.8

456.0

79.24

Disability mainstreaming (Vote 71.03, MoGCDSW)

Kachere Rehabilitation Centre (Vote 275)

Malawi Council of the Handicapped (Vote 275)

Salaries and Admin 68%

ORT 32%

68%

32%

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SOCIAL WELFARE

Key Takeaways

• To enhance sustainability, GoM should increase its contribution to social protection budgets, harmonize financing mechanisms and ensure transfers are adjusted in line with inflation.

• The Government should work with development partners to strengthen public finance management systems so as to create conditions for resumption of on-budget support to social welfare programs.

PART 7 HOW IS THE SOCIAL WELFARE AND COMMUNITY DEVELOPMENT SECTOR FINANCED?

© UNICEF/Gubb

The majority of investments in the social welfare sector are provided by donors. At least 72% of social welfare and community development resources reported in the PBB, including funds for public works and SCTP, are financed by development partners, including the World Bank through the LDF. The social protection sector accounts for the majority of external resources.

In 2015, an estimated 91% of child protection resources in Malawi were financed by Non-state actors, according to a Child Protection Resource Mapping Exercise undertaken by UNICEF.7 Currently, most of the funding for social welfare is mainly off-budget, due to diminished donor confidence in public institutions following theft of public resources uncovered in 2013.

7 The mapping analyzed information from 37 organizations. Out of these, 14 were Government Ministries and Departments, 15 Local NGOs, 5 International NGOs and 3 FBOs.

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BUDGET BRIEF

Key Takeaways

• The Government should periodically monitor the impact of fiscal decentralization on the delivery of social welfare services.

• The Government should ensure adequate resources are allocated to sub-national social welfare structures for them to be responsive to children’s issues.

PART 8 HOW DECENTRALIZED IS THE BUDGET?

PART 9 POLICY AND BUDGET EXECUTION ISSUES

b) Naming and classification of programs

The naming and categorization of programs and sub-programs under the PBB for MoGCDSW reflect overlaps. For example, issues of child protection are in two programs, named in almost the same way. These are ‘Community and child development’ (Vote 70) and ‘Child development and protection’ (Vote 99). The use of the word ‘development’ in almost all program headings is also confusing. Such categorization of programs and outputs makes it difficult to track budgets to specific programs over time. The MoGCDSW should probably consider merging program 70 on ‘Community and Child Development’ and program 99 on ‘Child Protection’. Another challenge is that interventions that could fall under one category, such as child protection, appear in more than one program area.

Government resources for the social welfare and community development sector are largely centralized. This is in spite of the growing trend towards fiscal decentralization. In financial year 2017/18, a total of MK132 billion for personnel emoluments (PE) will be transferred to Local Councils. From this amount, it is estimated that MK6.5 billion will go to Agriculture, MK92.3 billion to education and the remaining MK32.2 billion to health. Budgets for ECD, child protection, disability mainstreaming and social protection have not been devolved. Only MK420 million will be transferred to Local Councils for programs related to gender equity and equality. Out of this amount, MK139 million is for adult literacy.

a) Link between plans and budgets

Social welfare plans are not always linked to program based budgets, effectively creating implementation challenges. Many child-focused policies and plans highlighted earlier have not found full expression in government budgets. Examples include the National Response Plan to attacks on People with Albinism, National Plan of Action for Orphans and Vulnerable Children and National Action Plan on Gender Based Violence. This, unfortunately, is the case, even in situations where the plans have been costed.

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SOCIAL WELFARE

Key Takeaways

• Alleged budget execution challenges require further examination by the MoGCDSW and Ministry of Finance to determine the extent of the problem and subsequently devise ways to address the same.

• Given restricted fiscal space, the challenge for the GoM is to maintain current levels of social welfare spending in real terms and to reorient expenditures towards high impact interventions.

c) Budget execution, financial reporting and accountability

Budget execution challenges have been observed in the implementation of some social welfare programs. These include delayed disbursements, which are sometimes not always aligned to cash flow requests. A case in point is the ECD budget for 2016/17 which was not disbursed to the relevant ministry until as late as the second half of the financial year after budget approval. On this issue, some stakeholders have argued that delayed disbursements arise from late and sometimes less comprehensive financial reporting and accountability by respective social welfare ministries and departments.

Glossary of Terms

Approved Budget Estimates The budget as approved by Parliament

Budget Outturn Actual expenditures by an MDA over a given period.

Development (Part I) Share of the budget for long term public investments contributed by donors.

Development (Part II) Share of the budget for long term public investments from domestic resources.

Economic Classifications Budget classification based on economic inputs.

Gross Domestic Product Total value of goods and services produced by a country in a given year.

Nominal change Changes in budget allocations which do not factor in inflation.

Other Recurrent Transactions (ORT) Budget for day to day items such as office supplies, fuel, utilities, routine maintenance and other operations.

Personnel Emoluments (PE) Salaries, wages, allowances and other staff entitlements.

Public Expenditure Tracking Survey A research methodology for assessing the flow of resources from treasury to where they are used, at facility level, to see if resources are used for intended purposes and in the right way.

Real change Changes in budget after adjusting for inflation

@MalawiUNICEF

UNICEF MalawiUNICEF House, Airtel ComplexPO Box 30375LilongweMalawi

Tel: +265 (0)1 770 770www.unicef.org/malawi

For more information, contact:

Edward ArchibaldChief, Social Policyearchibald@unicef.org

Bob Libert MuchabaiwaSocial Policy & Economic Specialistbmuchabaiwa@unicef.org