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Germany’s k6.8bn Funding at stake

 

Germany has warned it will withhold 10 million euro (K6.8 billion) for the Social Cash Transfer Programme (SCTP) from mid-2016 unless government provides evidence that it honoured its 10 percent counterpart funding for 2014/15 and 2015/16.

The German component of the programme helps 62 000 utra-poor Malawians in 11 000 households in seven districts to access food, medicine and school fees.

The districts are Nsanje, Chikwawa, Mwanza, Neno, Mzimba, Zomba and Mulanje.

Social protection  programmes  aim at helping poor people like this one
Social protection programmes aim at helping poor people like this one

The government of Malawi through the Local Development Fund (LDF) also funds SCTP in Thyolo, Dedza and Nkhata Bay.

Other districts where the programme has been implemented are Chitipa, Machinga, Phalombe, Mchinji and Likoma.

SCTP is being implemented by district councils and is supported by various development partners such as Unicef, Germany, European Union and Irish Aid. Irish Aid is implemented in Balaka.

The programme defines utra-poor as those households which barely eat or eat once a day, without or with poor shelter and those without household assets.

At the end of the four-year programme, the beneficiaries are expected to graduate from what they are today to another level where they can be self-sustaining in whatever they do in their households.

Head of mission and head of development cooperation at the German Embassy Katrin Pfeiffer said on Tuesday in an e-mail response her government cannot guarantee continued cash transfer payments in the seven districts beyond mid-2016 unless counterpart funding evidence   for 2014/15 and 2015/16 is presented.

Poverty in all shapes and sizes
Poverty in all shapes and sizes

The agreement obliges Malawi to pay K562.1 million ($916,275) for the two years.

Said Pfeiffer: “At the German-Malawian Government negotiations in October, government assured us that it will honour this bilateral counterpart funding agreement in both the past and the current financial year.

‘‘For 2014/15, the Malawi government had allocated 10% of the German funding to the SCTP, but actual disbursement into the programme fell short of this allocation,’’ she said.

But Ministry of Finance spokesperson Nations Msowoya said the Malawi government has fulfilled its part of the deal having disbursed K270 million ($440,288) this financial year which he said is six months into the new financial year.

Said Msowoya: ‘‘The figure represents more than 10 percent which is required adding that by the end of June, 2016 the figure will grow.’’

Msowoya also said apart from the K270 million, government’s contribution also includes salaries and office space.

He said in addition government also makes a lot of contributions to the programme such as office space, tax waivers which when quantified are quite huge sums. But he could not say if these were part of what constitutes part of counterpart funding in the agreement.

Pfeiffer said Germany has so far committed a total of 34 million euro (K22 billion) to the programme. Out of this amount 13 million euro (K8.8 billion) have been disbursed since 2012, supporting more than 28 000 households (110 000 individuals) with regular cash transfers.

She said 11 million euro (K 7.4 billion) ‘‘has been in effect this year to support 62 000 households until mid-2016 while 10 million euro [K6.8 billion]’’ was committed to Malawi in October 2015 to finance the programme from mid-2016 onwards.

Pfeiffer said her government is yet to receive evidence that Malawi has honoured its contractual agreement in 2014/15 and in 2015/16 for the German funding for the SCTP.

She said since 2015, Germany has also disbursed an additional 35 million euro (K23.64 billion) provided by the European Union, for cash transfers in the seven districts. But she said this funding has a separate arrangement.

The Economics Association of Malawi (Ecama) president Henry Kachaje said if government fails to live up to its commitment to the people it seeks to serve, then it has failed its core responsibility and is not fulfilling its governance mandate to the very poor in society.

He pointed out that the contribution to the social cash transfer is minimal considering that donors are shouldering the big chunk.

Said Kachaje: “We may be facing some severe financial challenges as a country, but there are some minimum basics that we must never fail to meet. Probably it is time we took some radical expenditure cuts for some non-critical essentials and channel the saved resources towards this noble cause.

‘‘It sounds immoral that Cabinet ministers can afford 1 000 litres of fuel from the national budget while the government fails to provide 10% contribution towards a social cash transfer programme. We seriously must question our priorities.”

He, therefore, said as a nation we must be grateful that hard-working citizens of other nations are still keen to help us through their governments who provide donations to the poor of our nation.

He said we must realize that it is our responsibility, not donors, to look after our brothers and sisters who are less fortunate, adding that it is the responsibility of government to ensure that the less privileged are being assisted.

“If for some reason, we cannot meet our required contribution to unlock donor support, then it is most unfortunate and regrettable,’’ he said.

The National Statistics Office (NSO) Integrated Household Survey of 2010, indicates that 24.5 percent of Malawians are ultra-poor and cannot afford even the basic minimum daily food requirement.

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