Calls by local leaders and experts for increased social spending to protect vulnerable households from climate-related disasters have taken renewed urgency as data shows shrinkage under declining donor support. Speaking during a panel discussion on the sidelines of the launch of the Public Finance Review recently, Fumukazi Kamgundanga of Rumphi district warned that floods, droughts and cyclones are pushing poor households deeper into vulnerability. “History and even this report, shows that adjustment policies affect the poor most,” she said.
“That is why social protection must be scaled up.” However, recent budget trends point in the opposite direction. According to a 2025/26 Unicef Malawi Social Protection Budget Brief, allocations to flagship on-budget programmes—the Social Cash Transfer Programme and the Climate-Smart Enhanced Public Works Programme (CSE-PWP)—fell from 3.7 percent of the total government budget (1.2 percent of gross domestic product-GDP) in 2024/25 to 2.7 percent (0.8 percent of GDP) in 2025/26. Unicef attributes the decline to Malawi’s high exposure to reductions in donor funding.
The brief warns that anticipated funding cuts and uncertainty among traditional donors have already forced unexpected reforms to flagship programmes, threatening gains made over the past decade in expanding coverage, improving food security, strengthening resilience to shocks and advancing human capital development. Structural dependence remains has persisted. Over the past five years, government financing has averaged just five percent of social cash transfer costs, effectively covering one district—Thyolo—out of 28, with the remaining 95 percent financed by donors through the Malawi Social Protection Multi-Donor Trust Fund and Germany.
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Policy analysts argue this model is no longer viable. The policy note ‘No Time to Waste: Policy Options for Malawi’s Recovery’ jointly published by the World Bank and United Nations Malawi proposes gradually increasing domestic financing, targeting a rise in government contributions to social cash transfer from five percent to 15 percent and to CSE-PWP from three percent to 10 percent by 2027, supported by improved revenue mobilisation and expenditure efficiency. In a written response, Chipo Gondwe, World Bank Group Malawi senior social protection specialist, said reforms in the Malawi National Social Protection Policy (2024/29) launched last year must also diversify funding beyond donors.
“Malawi needs to deliberately rebalance from a system where over 90 percent of social protection is donor-financed,” she said. “This includes engaging the private sector, leveraging innovative financing such as payment-for-ecosystem-services models through climate-smart public works, and improving programme efficiency and coverage.” Both the World Bank and traditional leaders have also flagged the absence of a Social Protection Act as a critical gap. From an institutional perspective, Mwapata Institute executive director William Chadza said recent coordination reforms outlined in the national social protection programme provide a foundation for scaling up.
“The pooling of funds through the Multi-Donor Trust Fund has helped harmonise coverage,” Chadza said, adding that the establishment of high-level steering and technical committees and the rollout of a Unified Beneficiary Registry are improving targeting and reducing duplication. As climate risks intensify and donor funding tightens, the evidence points to a narrowing window for action.
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