By Mcloyd Chilangiza:
Malawi is facing rising economic and social pressure as declining donor support exposes its heavy reliance on foreign aid for social protection and humanitarian programmes, The Daily Times can reveal.
An analysis of Treasury documents indicates that, over the past five years, donors have funded 95 percent of Malawi’s social protection budget, supporting more than 3.5 million people.
However, government spending remains low, at 0.9 percent of gross domestic product (GDP), below the regional average of 2 percent.
In the 2026-27 financial year, the social protection budget was cut from K217 billion to K123 billion, leaving a K94 billion gap.
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This has prompted the United Nations Children’s Emergency Fund (Unicef) to estimate that about one million ultra-poor people could lose support as a result of declining donor contributions.
According to Unicef, funding levels have declined across key programmes, with the Social Cash Transfer Programme down by 14 percent, the Climate Smart Enhanced Public Works Programme (Mtukula pa Khomo) down by 57 percent and the Urban Public Works Programme down by 35 percent.
Humanitarian operations are also under strain, according to the World Food Programme (WFP), which warns that it may suspend operations within five months unless it secures $34.82 million.
This would affect programmes, including school feeding for over 500,000 learners and refugee aid for more than 62,000 people, following a 60 percent reduction in refugee support funding.
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Economics Association of Malawi President Bertha Bangara-Chikadza has told this publication that reduced donor support threatens vulnerable households, economic activity and public services.
She called for stronger domestic resource mobilisation and diversification through agriculture, tourism, manufacturing and mining.
Another economist, Paul Kwengwere, described the decline in aid as a structural shock.
He called for reforms, including the full rollout of the Unified Beneficiary Registry linked to national identity cards to eliminate cases of duplication and ghost beneficiaries.
“The era of grant-led development is drawing to a close and Malawi needs to face the reality. Policymakers must realise that aid is volatile, cyclical and dictated by geopolitics [that are] outside the country’s control,” Kwengwere said.
Synod of Livingstonia Development Department Executive Director Kane Sakala said while social protection programmes were important, many beneficiaries of social cash transfers remained trapped in poverty despite long-term support.
“My research on the Asset-Diversification Paradox shows that households with diversified assets absorb shocks better than those [that are] relying on cash alone,” Sakala said.
Meanwhile, Ministry of Finance, Economic Planning and Decentralisation Senior Deputy Director for Poverty Reduction and Social Protection Dalitso Kalimba—speaking during a dialogue session on inclusive social protection measures held in Lilongwe last week said the government was finalising a Social Protection Legal Framework that was aimed at strengthening coordination, governance and accountability across programmes.
He said the framework was intended to improve institutional arrangements and promote more consistent service delivery nationwide.
The shrinking aid comes as the country continues to recover from floods that affected more than 368,000 people, further straining humanitarian resources.
At the same time, the World Bank has revised the international poverty threshold from $2.15 per day (about K3,765) to $3.00 per day (about K5,253) under updated purchasing power parity calculations.
The revision places about 75.4 percent of Malawians, or 15.8 million people, below the poverty line, up from 71.7 percent a decade ago.
The country’s social protection programmes currently support about 21.3 percent of the population.
