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Social Cash Transfer Programme

Social Cash Transfer Programme

Background

According to the Integrated Household Survey (IHS2) of 2005 45% of households in Malawi live below the poverty line, 17% live below the ultra poverty line. People living below the ultra poverty line tend to suffer from chronic hunger during most of the year. As a result they tend to be physically weak, they also have sold or consumed their productive assets, given up investing in the future and often die of preventable illness.

It is estimated that approximately 500,000 households in Malawi are ultra poor. Of that group, 300,000 are ultra poor due to the structure of the household with few or no able-bodied adult household members. These households have either no household member who is fit for productive work or have a high dependency ratio, they are labour constrained. The situation is compounded by the effects of HIV and AIDS and other illnesses.

In terms of statistics, nearly 13% of the country’s 6.8 million children under the age of 18 have lost their parents or caregivers, many to HIV related illness. Almost 50% of children under the age of five are stunted and 21% of children under five are underweight. 26% of Malawian children are involved in child labour. Many children face multiple barriers to enrolment and satisfactory performance in school including: cost of school uniforms and materials, lack of concentration due to insufficient nutrition intake, withdrawal due to need for children to work at home and social exclusion.

Currently 4.2 % of the population are persons with disabilities, representing more than half a million of the population. Of this group, 58 % of the working group are unemployed as a result of the numerous challenges excluding them from mainstream society. For the disabled, life is a daily struggle to survive. They are largely excluded from essential services and they lack the protection of the family and community. This often leaves them at risk of exploitation and abuse. For children, 98% of disabled children are not in school as a result of lack of social and financial support. This compounds their situation in later stages of life as they remain poor and unable to access essentials of life.

The ultra poor and labour constrained households of Malawi urgently require social support interventions that will enable them to improve their livelihoods and protection against economic shocks, thereby increasing their opportunity for survival.

Social Protection has bearings on the Malawi Constitution under Articles 30, 37, and 43. Therefore the Government of Malawi has taken the responsibility to deliver meaningful social support seriously as demonstrated by prioritisation in the Malawi Growth and Development Strategy (MGDS) as its second theme. Under theme two, protecting the vulnerable is a sub-theme, with the long-term goal to improve the life of the most vulnerable.

Cash transfers are non-contributory transfers of cash targeted to selected beneficiary households. Their role is to provide social protection for households who are ultra poor and unable to establish a viable livelihood due to being labour constrained. The Malawi Social Cash Transfer Programme (SCTP) was designed to alleviate poverty, reduce malnutrition and improve school enrolment by delivering regular and reliable cash transfers to ultra poor households that are also labour constrained. The programmes are also designed to help close the gap between the ultra poverty line and beneficiary household (consumption) level. A pilot programme was implemented in Mchinji from 2006. A Cabinet directive in November 2006 endorsed the pilot in Mchinji and requested to roll the pilot out to 6 additional districts by end of 2008. As of January 2010, SCTS is currently being implemented in 7 districts in Malawi (Mchinji, Likoma, Machinga, Salima, Mangochi, Chitipa and Phalombe) with Mchinji being the only district implementing at scale. The programme currently has over 98,000 beneficiaries in 24,308 households. The targeted households are the most destitute in the country as they have a very limited asset base and are not able to meet their basic needs. These households also have no labour base and therefore are unable to earn productive income for expenditure on food, clothing, hygiene or education.

The SCTP does just this by supporting increases in household expenditures through delivery of a regular monthly cash transfer (impacts from an external evaluation are provided below). The programme will contribute to ultra poverty alleviation combined with investment in economic growth and social development. Evidence from an external evaluation* of the pilot programme indicate the following impact:
Short term economic impact includes:

  1. Beneficiary households are lifted above the ultra poverty line. This reduces Malawi’s ultra poverty rate in the pilot area by more than 50%.
  2. Increased access to credit for poor household who were previously left out.
  3. Strengthening of local markets.
  4. An economic multiplier effect experienced in villages and surrounding areas where transfers are received.

In the long term:

  1. Improved health and education of the children in beneficiary households is an investment in human capital and will contribute to sustained economic growth.

Social development has been advanced through:

  1. Reduction in chronic malnutrition as household food security and diversity increases.
  2. Increases in school enrolment, retention and performance.
  3. Decreases in child labour.
  4. Overall improved health of beneficiaries.

Given the positive impacts from the pilot programme, Government wishes to scale up the programme to eventually cover all ultra poor and labour constrained households.**

* Miller, Tsoka and Reichert (2008 & 2009).

**Pending passing of the Social Support Policy and subsequent realization of increased financial resources, the programme could be scaled up in current 7 districts in fiscal year 2010/11 and 6 new districts per year thereafter.

a. Overall Goal/Impact:
To improve the well-being of members of all ultra poor and labour constrained households and promote investment in human capital in terms of nutrition, health, education, shelter, and through creation of productive assets.

b. Project Purpose / Outcome
To extend coverage of the Social Cash Transfer Programme to all ultra poor and labour constrained households in all districts of Malawi, in an effort to ensure that the household income/expenditure exceeds the national ultra poverty line and reduce inequality.

c. Objectives / Results

  1. To lift 300,000 labour constrained households with a population of 1.3 million people out of ultra poverty.
  2. To contribute to the economic development of the country through an economic multiplier effect.
  3. To contribute to the social development of the country through investment in human capital (i.e. health, nutrition, education of children in beneficiary households).

d. Output
At household level, the expected outcomes are:

  • Improved food security.
  • Improved access to shelter and other non-food basic needs.
  • Economic shock resilience.
  • Increased school enrolment, attendance, retention and performance of all children including orphans and children with disabilities.
  • Improved health and nutrition of the target group of households.
  • Increased access to health services and improved health-seeking behaviours.
  • Mitigate the impact of HIV and AIDS on beneficiary households.
  • Increased levels of employment and participation in community development activities.
  • Increased accumulation of household assets and reduced need for emergency aid.
  • Reduced levels of delinquencies and child abuse such as child labour, exploitation and early marriages.
  • Reduced incidence of gender-based violence.
  • Reduced number of beggars.
  • Decrease stigmatization and discrimination of beneficiaries.

On aggregate level, the expected outcomes are:

  • Reduced household ultra poverty from 17% to 7% by 2015.
  • Increased progress towards achieving the MDGs 1,2,3,4 and 8 by 2015.
  • Increased economic growth in the short term through improved access to credit, strengthened local markets and increased labour demand in local community.
  • Increased long term economic growth by investment in human capital (health and education of children).
  • Improved overall health status of the country.

e. Activities
1. Galvanize political and financial commitment to sustain the SCT over 10 years.
2. Mobilize financial resources to scale up the programme nationwide.
Scale 7 current implementing districts up to full coverage of ultra poor and labour constrained households in 2010/2011.
3. Build government capacity at national and district levels to ensure quality management of this programme at scale.
4. Scale up by rolling out the programme to 6 additional districts per year.
5. Maintain and strengthen programme monitoring to measure achieved results against planned activities.
6. Ensure sound IMS and financial management systems

Estimated number of households covered and total programme costs per fiscal years 2010/11 to 2015/16


Fiscal year

Households covered

Annual costs in USD

Annual cost in MK

2010/11

83,231

13,278,281

1,965,185,588

2011/12

151,057

27,205,131

4,026,359,388

2012/13

229,420

43,783,139

6,479,904,572

2013/14

270,557

56,761,568

8,400,712,064

2014/15

304,534

65,122,439

9,638,120,972

2015/16

304,534

68,520,168

10,140,984,864

Direct beneficiaries: All members of households who are ultra poor households and at the same time labour constrained. A household is defined as labour constrained when it has no able bodied household (HH) member in the age group 19-59 who is fit for work (households consisting exclusively of the elderly, children, chronically ill, disabled persons) or when a HH member who is fit for work but has to care for more than 3 dependents (dependency ratio of more than 3). Approximately 65 percent of current beneficiaries are children, nearly 80 percent of whom are orphans. An estimated 18 percent of current beneficiaries are elderly (65+)*. The total number of beneficiary households at scale in 7 pilot districts is estimated to be approximately 83,000 households. At national scale an estimated 1.3 million beneficiaries would be reached including 871,000 children in 304,534 households.
Indirect beneficiaries: Members of the surrounding community are relieved from overwhelming social burdens as former ultra poor households now have a reliable income and adequate access to food. Beneficiary households have been observed to share some of the money (namely with needy relatives), give loans and provide employment (through hiring of casual labour) to other non-beneficiary households. Additionally, local business owners and traders have experienced an increase in customers and therefore business profits. This results in growth in the local economy and strengthening of the local market.
* The Programme has aligned with the definition of elderly within the National Policy for Older Persons in Malawi, therefore scale up will include 60 years of age and above as elderly and the anticipated % of elderly beneficiaries will increase.

a. Impact on other Government projects and activities
In addition to income support, target group households require access to a number of social and economic services like basic health, nutrition, sanitation, education and agricultural extension. Some require home-based care, HIV and AIDS services, rehabilitation services and/or psycho-social support. Many of the beneficiary households may have experienced limited or restricted access to these services given their monetary status prior to SCT Programme. It has been observed that utilization of such services greatly increases after cash transfers when beneficiaries have money to access. The District Social Support Committee (on district level) and the Community Social Support Committee (on community level) have the task to link beneficiary households to these services. They use the monthly meetings at pay points to inform beneficiaries how to access these services and refer households that experience specific problems to the respective programmes/service providers.

b. Impact on business sector
A recent economic impact evaluation of the Mchinji SCT Programme was recently released demonstrating positive impacts on local markets and businesses. It was found that SCT beneficiary households spend their cash at local markets thereby increasing revenue for local business owners and traders. Additionally, beneficiaries are given increased access to credit as business owners report lending to SCT households with the confidence that credit will be repaid.  Business owners also confirmed that “the SCT has strengthened the local market by providing a steady source of customers and cash into villages where they had once been scarce.” The SCTS has also had an impact on the demand for labour as beneficiary households now have cash to hire more casual labour outside of the household.

c. Impact on the community (Poverty and Social Impact)
Results from an external evaluation of the SCTS (March 2007-March 2008) illustrate the significant positive impacts in intervention households compared to the control households including:

  • decreased prevalence of underweight children compared to baseline (10.5 percentage point difference);
  • improved food security (greater food stores and increased agricultural production) and daily meal intake (fewer missed meals and fewer days without adequate food);
  • better nutrition and diet diversification including increased consumption of meat, fish, dairy and oil;
  • increased school enrollment (4.9 percentage point difference);
  • self-reported improved school attendance (0.9 percentage point difference for mean number of days absent) and performance;
  • improved health for adults and children (including higher healthcare expenditures);
  • increased asset accumulation including productive assets like livestock and farming inputs;
  • decreased child labour (10.7 percentage point difference); and
  • improved housing quality among beneficiary households.

Additionally, persons living with HIV/AIDS (PLWHA) have experienced significant impacts including improved access to treatment as they can now reliably afford transport to and from the hospital/clinic. Beneficiary PLWHA have reported experiencing improved response to treatment. They are now able to follow treatment recommendations to diversify their diet to meet the recommended daily nutritional intake.

d. Impact on the environment  (Provide Environmental Impact Assessment (EIA) results)
N/A

e. Indicate, if any, Cost-Benefit Analysis Results

Calculations for cost of scale up are based upon an average monthly transfer per beneficiary household of MK 2,368 [USD16] (MK 28.416 per year) [USD192] and an administration/operation cost amounting to MK 4,884 [USD33] per household (14.5% of total costs). The average annual cost per household is MK 33,300 [USD225]. Upon full scale up (estimated by June 2015) the annual costs for the following fiscal years remain at the level of MK 10.1 billion [USD68.5 million]. Assuming a GDP for 2015/16 of MK 740 billion [USD 5 billion], the programme costs will amount to 1.4% GDP. Evaluation results indicate that the pilot programme is cost effective in achieving the impact described above (sections 3.d, 5.b and 5.c).

US Dollar to Malawi Kwacha exchange rate,  1USD=148MK.

Sustainability can be achieved through a partnership and commitment of resources from government and development partners.

Administration of the SCT programme at current levels is fully funded until October 2010 with financing from the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM). Government is expected to provide MK 148 million [USD1 million] in fiscal year 2010/2011 and continue to allocate funding for this programme in the coming years. The German Government has pledged support in the amount of MK 2.7 billion [EURO 13million] from 2011 and UNICEF will continue support of MK 37 million [USD2.5 million] per year towards SCTS. These contributions can help maintain current administration of the programme in 7 districts covering 29,000 households.

Stakeholders are currently working to align the SCT Programme with the financing modalities of the Local Development Fund. This will help facilitate consistent funding flows down to district implementers while also ensuring that resources intended for the community actually reach the community. Additionally this set up will allow for both development partners and Government to contribute funding to the SCTP through the pooled mechanism. As the LDF is based around District Development Plan/Annual Investment Plan activities, funding will be consistent with Local Council planning, thereby ensuring sustainable resources for implementation activities.

In addition, reliable and predictable implementation of SCTP nationwide will reduce the need of humanitarian and emergency responses as households will be better equipped to endure unexpected economic shocks. Such a program can ease spending of future fiscal resources on emergencies and generate sustainability of livelihoods on the household level. The government can therefore save resources allocated to disaster risk response in the future and increase the commitments elsewhere.

In line with the decentralization policy in Malawi, the programme is managed by Local Councils who receive assistance, guidance and supervision from National level. The Ministry of Development Planning and Cooperation provides leadership and coordination of technical assistance to the design and implementation of SCT Programme. The Ministry of Gender, Children and Community Development houses the National Social Cash Transfer Management Unit which provides support to and oversees the District level implementation of the programme. Key task team coordinators to report to the PS through the Deputy Director for Child Development and thereafter the Director. The Deputy Director for Child Development should be responsible for the day-to-day management and oversight of the programme and he/she should oversee the work conducted in three task forces. These three Task Teams are led by task team coordinators who oversee and draw upon a team with membership from various ministries.

On district level, the programme is implemented by Secretariats which are supervised by District Commissioners and Social Support Committees of the Local Councils. The District Secretariat consists of a Coordinator and a number of Social Welfare Assistants. They receive assistance from officers of various line Ministry departments in the Assembly as well as NGOs and civil society. This multi-sectoral Social Support Committee (SSC) act as trainers of the Community Social Support Committees (CSSC). The Secretariats also closely cooperate with the District Finance Departments which are responsible for the delivery of transfers.

At the Community level, under the AEC, a CSSC is nominated and is trained to conduct the targeting of potential beneficiary households. Upon approval, the CSSC provides follow-up and communication to SCTS beneficiaries. Extension workers and civil society provide support and verification on eligibility of beneficiary households. They also provide backstopping support to the CSSC in terms of communication and referral of beneficiaries to additional social, economic and health interventions in the area.

Project M&E framework
An internal monitoring system is in place to monitor progress towards achievement of the SCT programme objectives. Monthly monitoring is conducted by the district SSC in collaboration with the district M&E coordination committee members under the guidance of the district M&E officer. A continuous monthly monitoring report (MMR) is compiled. The report focuses on monitoring of implementation issues including activities and outputs and is financed out of the SCT budget.

The compiled report is forwarded through the Councillor to the National Management Unit who compiles comments into a summary that is presented to the SSTC. It is also the responsibility of the National Management Unit to provide feedback to each District Assembly within a reasonable time frame. The district level monitoring also includes Rapid Appraisal Surveys (RAS) which focus on specific issues of quality of targeting, impact of transfers on school enrolment and attendance, and assessing beneficiary use of cash transfers. The RAS is not included in the SCT budget but financed through a formal request/proposal made by the district.

Additionally quarterly monitoring is undertaken by national level M&E team, with coordination from the National Management Unit (MoGCCD). The monitoring visit includes verification of the information included in district MMRs as an auditing exercise. It is envisaged that each implementing district will be visited once each quarter and follow up visits are made as necessary. Reports are generated by each visit and follow up undertaken where necessary.

District stakeholders also compile reports on quarterly summaries that highlight programme progress, achievements, challenges and actions. Additionally, each quarter a meeting is called to join national and district level stakeholders together to discuss progresses, challenges, achievements and to solidify follow up support from National level.

The programme will also be externally evaluated to examine long-term impacts and achievement of programme objectives. It is planned that this evaluation take place every 3 years after the pilot stage has finished and the programme has been scaled up.

Project Indicators

Monitoring Indicator

Time bound targets

Means of verification

Ultra poverty level

Ultra poverty level decreased by 50% by 2015 (national)

IHS3, WMS

School enrolment

Primary school enrolment increased from 83% to over 90% in one year on programme (beneficiary households)

External evaluation, internal monitoring

School absentee levels

TBD (beneficiary primary school age)

External evaluation, internal monitoring

Under-five stunting level

Stunting in under 5 year olds decreased by 1-5% by 2015 (beneficiary households)

External evaluation

Under-five underweight level

Underweight level decreased by 15-20% in one year on programme (beneficiary households)

External evaluation

Food store levels

90% report food stores of over 1 month (beneficiary households)

External evaluation, internal monitoring

Food/meal intake

50% report taking 3 meals per day (beneficiary households)

External evaluation, internal monitoring

Meal composition

80% report intake of 3 additional food groups per week (beneficiary households)

External evaluation, internal monitoring

Child labour level

15% decrease in children sent to work outside the home (beneficiary households)

External evaluation

Productive asset possession

90% report possession of 2 or more productive farm assets [i.e. hoes, sickles, etc.] (beneficiary households)

External evaluation, internal monitoring

Reported sickness in children

Decrease episodes of illness in children by 10% over one year (0-17 years, beneficiary households)

External evaluation

Reported sickness in adults

Decrease episodes of illness in adults by 10% over one year (beneficiary households)

External evaluation

Housing quality

50% report improved housing conditions (beneficiary households)

External evaluation, internal monitoring

Economic multiplier (in communities of SCTS implementation)

TBD

External evaluation

Project component

Key Activities

Time Frame

Galvanize political and financial commitment to sustain the SCT Programme.

  1. Create awareness among policy makers, legislators and development partners about the social and economic impact of SCT.

2010 - 2015

Mobilize financial resources to scale up the programme nationwide.
Scale 7 current implementing districts up to full coverage of ultra poor and labour constrained households.

  1. Appeal to the World Bank to include SCT in the upcoming Country Assistance Strategy (2011-2015) and to join financing the scheme through a grant or directly through budget support.
  2. Appeal to the EU to incorporate Social Cash Transfers in their next Country Programme and to contribute financial support either through budget support or earmarked budget-lines.
  3. Further advocate with DfID and other development partners for future funding in support of the SCTP in the context of the national Social Support Programme
  4. Organise quarterly donor briefings and updates

Fiscal year 2010/2011

Build government capacity at national and district levels to ensure quality management of this programme at scale.

  1. Conduct leadership and organizational training for the SCT Management Unit.
  2. Conduct capacity assessment in new SCT districts to identify gaps.
  3. Carry out capacity building exercises in all SCT districts and establish the SCTP in new districts based on best practises.
  4. Organise quarterly meetings with all SCT districts to ensure cross-fertilization of knowledge and experience in SCT programming and implementation.

Fiscal years 2011/2012, 2012/2013, 2013/2014, and 2014/2015.

Scale up by rolling out the programme to 6 additional districts per year.

Roll out SCTP to following districts:

  1. Mulanje, Nsanje, Chikwawa, Nkhata Bay, Balaka, Chiradzulu
  2. Karonga, Zomba Rural, Thyolo, Rumphi, Dedza, Kasungu
  3. Ntcheu, Mwanza, Neno, Mzimba, Nkhotakota, Blantyre Rural
  4. Lilongwe Rural, Ntchisi, Dowa, Mzuzu City, Zomba Urban, Blantyre Urban, Lilongwe Urban

 

2011/2012

2012/2013

2013/2014

 2014/2015

Maintain and strengthen programme monitoring to measure achieved results against planned activities.

  1. Establish grievances guidelines in SCT manual to improve community/beneficiary level monitoring of programme
  2. Provide training to district M&E Coordination Committee and CSSC  
  3. Train existing and new district officers in basic computer skills to improve report writing.

2010/2011

 

2010/2011, 2011/2012, 2012/2013, 2013/2014, and 2014/2015.

Ensure sound Information Management System and financial management systems

  1. Establish a functional and efficient SCTP database at national and district level linked to each other
  2. Support training and implementation of IFMIS in SCT districts
  3. Design and install a national Social Protection database.

 

2011/2012

 

 

2012/2013, 2013/2014, and 2014/2015.