Approximately 250,000 Malawian households, or 10 per cent of all households in the country, are ultra poor or labour constrained. A labour-constrained household is one with no adult fit for productive work or one with more than three dependents per fit adult – a household in effect that cannot benefit from labour-based interventions and whose members are unable to fend for themselves. More than 60 per cent of the members of these households are children, 80 per cent of them orphans. A typical household of this category consists of a grandmother and grandchildren who have been orphaned due to AIDS.
Since 2004, UNICEF has advocated for a social protection programme and especially for a social cash transfer scheme to be integrated into national development plans (such as the Malawi Growth and Development Strategy) and into the plans and budgets of funding mechanisms (such as the Global Fund) as a way to reduce poverty in the poorest households and at the same time boost school attendance so that the cycle of poverty can be interrupted for future generations.
Strategy used and actions taken
Early in 2006, at the request of the government’s Department of Poverty and Disaster Management Affairs, an international consultant was hired to coordinate the design and testing of a cash transfer scheme that would use a multi-stage participatory process to target beneficiaries among Malawi’s labour-constrained ultra poor households. The Mchinji district was chosen as the pilot district for the scheme and the District Assembly as the implementing agency.
Between April and August, procedures for targeting and approval of beneficiaries, delivery, training and monitoring were elaborated and documented in a Manual of Operations and in Guidelines for Internal Monitoring. UNICEF invested in the capacity development of officers at all levels, national, district and community, providing equipment and on-the-job training.
The scheme provides for a direct monthly payment in cash to the beneficiary households. There are three transfer options depending on household size. All options include an education bonus to encourage school enrolment and attendance and to discourage child labour and premature drop outs. Transfers are calculated as follows:
1. Each adult (up to four adults per household) is given MK600 per month
2. Each primary school going child (up to three children) is entitled to MK 200 per month
3. Each secondary school going child (up to three children) is entitled to MK400 per month
The average monthly transfer to a household is MK1700 (US$12).
Preliminary results of the pilot scheme indicate that it is having its effect: Children are returning to school, households are investing in items to generate cash, and both households and communities are reaping a psychological benefit as the dependence of the ultra poor diminishes.
In November 2006, the Office of the President and Cabinet officially endorsed the Mchinji Pilot Social Cash Transfer Scheme and decided to scale it up to six additional districts. UNICEF, which played a significant role in advocating and supporting the implementation of the scheme, is a member of both the social protection steering committee and the technical working group that oversee it at the national level.
The Social Cash Transfer Scheme targeting poor households and providing incentives for children’s school attendance is now integrated into the Malawi Growth and Development Strategy. Malawi is one of the first countries in sub-Saharan Africa to have implemented this form of social protection programming.
The lessons learned through the pilot project – its feasibility, affordability and impact – reaffirm the experience of cash transfer programmes elsewhere: It is possible to target poor households with cash subsidies, and these subsidies do improve the lives of children, as intended, in a positive manner. The Government of Malawi, and development partners, can build upon the lessons of the Mchinji district to scale up this programme as a core component of the country’s social protection.
In the next stage of the programme, linkages to other social services, such as health and social workers, will be made to leverage the cash transfer and help ensure children are accessing these services. Through the cash transfer, extension workers and community organizations can work together to identify children in need of home-based care, psychosocial support and other types of follow-up.
An external evaluation of the social cash transfer scheme is ongoing. The evaluation is expected to take a year, with the final report expected in mid-2008, by which time the cash transfer scheme will have covered some 3,000 beneficiary households.