Development Dialogue 2018 | Social cash transfers: the risk of Malawi’s donor dependence by Roeland Hemsteede

Social cash transfers are becoming more popular, especially in regions such as sub-Saharan Africa. But what happens when the government does not support these programmes? Roeland Hemsteede shows that in Malawi, the dependence on donor funding and lack of government buy-in pose a risk to hundreds of thousands of people whose livelihoods depend on these transfers.


Direct cash transfers to the poor and vulnerable are rapidly gaining popularity around the world, reaching 750 million to 1 billion people, including many in sub-Saharan Africa. They typically aim to improve the welfare of beneficiaries as well as to increase their investment in human capital (Arnold, Conway, & Greenslade, 2011).

Malawi’s Social Cash Transfer Programme (SCTP) targets the ultra-poor and labour constrained and reaches 10% of the population. Currently, it reaches 276,063 beneficiary households with a total of 1,159,691 members. While national leadership is seen as essential to development processes, the SCTP bears all signs of being donor-driven, with limited buy-in from Malawi’s political elites. This jeopardises the long-term future of the SCTP. This blog explores some of the causes and consequences of this limited buy-in.

SUPPORTING MALAWI´S SOCIAL CASH TRANSFER PROGRAMME

The funding landscape for the SCTP is highly fragmented (Hemsteede, 2017). Donors fund the transfers in 27 out of Malawi’s 28 districts, while the Government of Malawi (GoM) funds the remaining district. This GoM funding is the result of one donor requiring 10% counterpart funding, yet its provision has been irregular. Several other development partners provide technical assistance to the two GoM ministries that are involved.

WHY THE DEVELOPMENT COMMUNITY LIKES THE SCTP

The development community sees the SCTP as the ‘golden boy’ of social protection in Malawi. It is generally well run and the impact evaluations are positive (Handa, Mvula, Angeles, Tsoka, & Barrington, 2016). The GoM realises that donors like the programme, which contributes to its reluctance to finance it; after all, many programmes that donors are less interested in also need funding. Meanwhile, the donors are happy to retain strong (financial) control over the cash transfer, not least because of the ‘cash gate’ scandal.

‘Cash gate’, a large corruption scandal uncovered in 2013, strongly damaged donors’ confidence in Malawi’s public finance management. As a result, many donors felt that providing direct budget support was no longer acceptable, but project support was still an option. The SCTP was such a project, as much of its finances are managed by an independent consultancy firm that is hired by one of the donors. Moreover, the idea that the money directly went to beneficiaries appealed to donors. As a result, funding for the SCTP increased, but the system operates almost completely in parallel to the government’s own systems.

PERCEPTION OF POLITICS

Politicians in Malawi, who ultimately control budget allocations, are less enthusiastic. In my interviews with them, they frequently voiced the opinion that money should rather go to the ‘productive poor’ and that cash transfers were not a good solution—an opinion also held by others (Hamer & Seekings, 2017; Kalebe-Nyamongo & Marquette, 2014).

Members of Parliament also often criticised the SCTP’s implementation, arguing that as representatives of the people, they should have a role in the targeting of beneficiaries, and that it bypassed government’s systems, making it hard for them to maintain oversight. All this contributes to a situation whereby some politicians feel that they don’t own the SCTP and that it is a ‘donors’ thing’.

THE IMPORTANCE OF NATIONAL OWNERSHIP

My data point to at least three major reasons why national ownership of the SCTP should be important.

  • It is essential to ensure the sustainability of the cash transfers.
  • Leadership is essential for domestic and international resource mobilisation.
  • As part of Sustainable Development Goal 17, the Paris Declaration, and the Accra Agenda for Action, governments should lead their development priorities.

In the case of the SCTP, however, the development community drives the programme by controlling the funding and technical knowledge. The two involved ministries: the Ministry of Gender, Children Disability and Social Welfare, and parts of the Ministry of Finance, Economic Planning and Development, appear strongly committed to the programme, but their hands are tied by the lack of resources.

CONCLUSION

The SCTP resulted from a strong push by development partners, who funded its creation and expansion. They strongly influenced its design and the decision to create parallel structures for managing the SCTP. Malawi’s political establishment meanwhile feels little ownership over the programme. Without this sense of ownership, they are unlikely to ensure the sustainability of the SCTP. This poses a risk to the hundreds of thousands of people whose livelihoods depend on the SCTP if donors reduce their funding in the future.


References
Arnold, C., Conway, T., & Greenslade, M. (2011). DFID Cash Transfers Evidence Paper. Policy Division Papers.
Hamer, S., & Seekings, J. (2017). Social protection, electoral competition, and political branding in Malawi (No. WIDER Working Paper 99/2017).
Handa, S., Mvula, P., Angeles, G., Tsoka, M., & Barrington, C. (2016). Malawi Social Cash Transfer Programme Endline Impact Evaluation Report. Chapel Hill.
Kalebe-Nyamongo, C., & Marquette, H. (2014). Elite Attitudes Towards Cash Transfers and the Poor in Malawi. Research Paper 30. Retrieved from http://publications.dlprog.org/EliteAttitudesCTs.pdf

This blog article is part of a series related to the Development Dialogue 2018 Conference that was recently held at the ISS. Other articles forming part of the series can be read here and here.


About the author:

Profile RoelandRoeland Hemsteede is a PhD student at the University of Dundee in Scotland, United Kingdom. In his research he explores how power relations at the national and international level affect the design and implementation of cash transfer programmes in Malawi and Lesotho. Previous blogs on this subject have been published on SocialProtection.org and can be found at http://socialprotection.org/learn/blog/authors/author/1338/latest-posts. Roeland obtained his Master degree (by Research) in African Studies from Leiden University in 2013 and took several extra-curricular courses focussing on the political economy of development at the International Institute of Social Studies in The Hague in 2012/13.

 

Comment anonymously or log in