Using Disaster Risk Financing to Build Adaptive Social Protection for Climate Shocks in Malawi
In the face of drought, the Government of Malawi used adaptive social protection to support the resilience of over 100,000 households.
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The Government of Malawi (GoM) put in place a mechanism that enables its flagship unconditional cash transfer program — the Social Cash Transfer Program (SCTP) — to scale up response to additional beneficiaries when shocks occur. Making the SCTP shock-responsive is a key strategic pillar of the government’s disaster risk financing (DRF) strategy. The SCTP scalable mechanism was first implemented during the 2021-2022 rainfall season in three initially selected districts (Blantyre, Ntcheu and Thyolo). It covered 74,000 poor and vulnerable households that would be eligible to receive a cash transfer in the event of a shock, and, in fact, a drought and compounding shocks resulted in a payout for the households. In 2022-2023, the mechanism was expanded to cover over 100,000 households in six districts; the long-term goal is to make it a nationwide mechanism.
Disaster Risk Financing and Social Protection
Combining DRF and adaptive social protection can help governments build the resilience of the poorest and most vulnerable households. Adaptive social protection assists the chronic poor during ordinary times through core social protection programs and expands assistance in response to a crisis or shock by providing additional cash for existing beneficiaries (vertical expansion) and/or by adding additional beneficiaries to the program (horizontal expansion). DRF is the process of developing and implementing a sustainable strategy to cover the costs of responding to future disasters. By combining DRF with adaptive social protection systems, governments can safeguard livelihoods, potentially helping to break the cycle of poverty and vulnerability that disasters often perpetuate.
Building Scalable Mechanisms
Support to develop the SCTP scalable mechanism in Malawi was provided by the World Bank through the Social Support for Resilient Livelihoods Project (SSRLP). This mechanism is well-aligned with the main objectives of the SSRLP to improve resilience among the poor and vulnerable population and to strengthen the national platform for safety nets in Malawi. The Finance, Competitiveness and Innovation Global Practice’s Crisis and Disaster Risk Finance team, with funding from the Global Shield Financing Facility (formally the Global Risk Financing Facility, funded by the United Kingdom and Germany), provided the technical expertise that supported the GoM in the design, implementation and financing of the mechanism.
First Year Results
- A scale-up was triggered in Ntcheu based on the early season rainfall index.
- The capacity-building task force also recommended a scale-up in Thyolo and Blantyre based on the evidence review process.
- The implementation of the mechanism followed the steps outlined in the Scalable Handbook.
Lessons Learned from Malawi
The initial year of implementation provided several important lessons for stakeholders in Malawi and for others considering similar approaches elsewhere:
- The implementation of an adaptive safety net requires strong government ownership and multisectoral cooperation.
- Pre-established rules and financing helped speed response.
- It requires time and effort to build delivery systems that can provide rapid emergency assistance to households.
- Global expertise is needed to design a well-functioning mechanism that uses remote sensing data.