The World Bank has advised Malawi to invest in adaptive safety measures to cushion its citizens from pangs of economic hardships. This is contained in the World Bank's recent Malawi Economic Monitor (MEM), a bi-annual report that provides an analysis of economic and structural development issues.
The Bretton Woods institution says Malawi needs to invest in social protection and to continue building on the strong foundations laid over the last two decades. This will assist Malawi respond quickly and effectively to the ever-changing environment.
"The social protection system has highlighted its capacity to protect a larger share of households more effectively against a wider range of shocks," the report reads.
According to the bank, Malawi's economic underperformance from 2023 will continue throughout 2024. The country's gross domestic product growth is estimated to decline from an already devastating 2.6 percent last year to 2 percent.
The consequences of this drawback in economic growth have been worsened by an El Niño induced drought which has led to food insecurity in the country, thus propelling poverty. It has been noted that there has been a fall in the production of maize, which is the staple food for Malawi, grown by 9 out of 10 farming households.
The government declared a state of disaster in March as the country entered its dry season with very low food stocks. This means that about 40 percent of the population is likely to need food assistance and this is with reference to the previous drought affected years.
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The challenge comes in where the social protection sector remains divided among several different line ministries that handle different tasks and this complicates coordination.
In an interview, Centre for Social Concern Economic Governance Programme Officer Agness Nyirongo said the current safety nets are insufficient to address the widespread and deep-seated poverty in the country.
"To address these challenges and ensure that safety nets effectively protect Malawi's most vulnerable populations, several key actions are recommended such as expanding coverage and reach, increasing funding and investment, fostering programme integration and coordination, building adaptive capacities, strengthening community engagement and ownership and promoting economic opportunities and resilience," she said.
In a separate interview, Economics Association of Malawi President Bertha Bangara-Chikadza said given the current socio-economic and environmental challenges, implementing and strengthening adaptive social safety nets is one strategic approach to building resilience among Malawi's vulnerable population.
She said this should be done cautiously to avoid exacerbating a dependence syndrome.
"The country's root causes of poverty are well known. Still, though well intended, most solutions such as social safety nets exacerbate poverty and pile fiscal pressure because they encourage the unconditional transfer of free resources. Rather, households must learn to earn a living through hard work," she said.
Earlier this year, President Lazarus Chakwera launched an appeal for $447 million as a means of raising funds for a comprehensive response.
