Donors, Malawi sign multi-donor Social Protection Trust Fund

Malawi government officials and donor partners

The country’s donors and government have mobilised resources and established one of the largest efforts for social protection that Malawi has seen in years.

Dubbed the Malawi Social Protection Multi-Donor Trust Fund, it will harmonise social protection financing in Malawi.

Among others, it will enable the Malawi Government provide unconditional cash transfers to the most vulnerable Malawians and deliver cash for work to households at risk of extreme hunger.

The initiative took Malawi, the United States and Iceland governments, World Bank and other partners more than a year of discussions to strengthen and expand the country’s social protection culminating into the establishment of this fund.

Besides supporting millions of Malawians, the Social Protection Fund plays an important role as part of Malawi’s debt sustainability plan as it moves toward an Extended Credit Facility with the International Monetary Fund (IMF).

The US government through its development agency USAID, is contributing K4.5 billion ($4.4 million), to kick-start the Fund and support Government to scale up and strengthen existing shock responsive safety nets and their delivery systems.

A proud beneficiary of the social cash transfer programme captured in this WFP file footage

The Iceland Government has contributed about K2 billion towards the Fund.

Speaking during the signing ceremony in Lilongwe, US Ambassador David Young described the Fund as a milestone people should be proud of in the evolution of Malawi’s integrated and shock-responsive social protection system.

He stated that it lays the foundation for increased donor harmonization and creates a platform for policy dialogue, meaning that more of its funding will go directly to the people who need it the most.

“With the investment from the U.S. government and other partners, the trust fund will continue supporting nationwide investments in social cash transfers for the most vulnerable Malawians—those who struggle to feed their families, including families with elderly or disabled persons.

 “It will significantly expand a cash for work program that provides temporary jobs that enhance Malawi’s climate resilience with forest and soil restoration, watershed recovery, and other climate-smart enhanced public works.  It will also strengthen productive and economic inclusion interventions that support livelihoods and help Malawians achieve self-reliance,” said the Ambassador. 

Young noted the program will ensure accountability and increase cost-effectiveness and efficiency by investing in E-payments, improving Malawi’s national social registry, and unifying a beneficiary registry system as data will inform program decisions and will be used to track progress and results.

Putting pen to paper: The donors captured in this photo courtesy of the US Embassy Public Diplomacy section

The US Envoy pledged his government’s support for a continued partnership to work together in changing lives for good in making the shared vision of a wealthy and self-reliant Malawi a reality.

Finance Minister Sosten Gwengwe hailed the initiative which will ensure a well-coordinated approach in the implementation of social protection programmes in Malawi with donors putting resources in one basket.

He was upbeat more people in extreme poverty will be reached out through programmes such as social cash transfer.

“It is a good thing because instead of administratively dealing with disjointed donors; this fund all will be done under one basket, one administration and the processes will be streamlined”

World Bank Country Manager Hugh Riddell said the bank and other partners expect a more transparent and accountable implementation of the Fund on the part of Malawi government for it to achieve its intended purpose.

“The World Bank is committed as we administer this Trust Fund but also in all of our work to help government build its institutions, stronger transparency and accountability measures”.