World Bank for raise of safety nets allocations – The Times Group

By Benadetta Chiwanda Mia

The government has been urged to increase spending on social safety nets to enhance effectiveness in addressing socio-economic challenges Malawians are facing.

World Bank Malawi Social Protection specialist Massimo Sichinga pushed for increased allocation to the interventions from domestic resources, as 95 percent of resources for social protection programmes came from external sources.

He pointed out that the government’s allocation to safety nets is around 0.8 percent of gross domestic product (GDP) while the regional average stands at approximately 1.2 percent.

He was speaking on the sidelines of the Association of Business Journalists (ABJ) annual general meeting (AGM) in Mangochi at the weekend, held under the theme ‘Economic Resilience: Unpacking Malawi’s Path to Recovery in the Aftermath of Ravaging Exogenous Shocks’.

Sichinga stressed the importance of increased governmental support, saying it would help cushion many Malawians from pangs of poverty.

“Social protection programmes in Malawi have been instrumental in helping the poorest and most vulnerable households meet basic needs and improve their livelihoods.

“Key indicators show improvements in food security and educational outcomes for those receiving cash transfers,” he said.

Sichinga also pointed out that the introduction of e-payment methods has facilitated regular cash transfers, enhancing their reliability.

He then called for a review of the existing policy framework to incorporate emerging issues in social protection.

The government is using a 2012 policy.

“We urge a revision of both the policy and the strategy guiding implementation to ensure they are up-to-date and comprehensive.

“Coordination among different government institutions in implementing social protection also needs improvement as it is currently somewhat fragmented,” he said.

The July 2024 World Bank Malawi Economic Monitor emphasised the need for reallocation and efficiency gains within the existing national budget due to ongoing fiscal pressures.

But economist Edward Chilima expressed concern over the feasibility of increasing spending on social protection programmes given the government’s limited fiscal space.

“Looking at the meagre resources that we are able to raise, vis-à-vis investment development needs, and also in view of the high debt repayment, the government doesn’t have much choice,” Chilima said.

“On paper, it sounds reasonable to have a higher allocation towards social protection, but we need to be realistic. Given the limited fiscal space, the focus should be on development,” Chilima added.

The World Bank is currently implementing 30 projects in Malawi with a total investment of $3.55 billion, financed through the International Development Association and the International Finance Corporation

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