This paper analyses the impact on the local economy of an emergency cash transfer
programme in rural Malawi. The results are of interest given the growing use of cash
transfers as development aid as well as the increasing popularity of such transfers as a
form of social protection across Sub-Saharan Africa. Using a form of social
accounting matrix, we find that there are widespread benefits for regional economy as
a whole (with multiplier estimates of 2.02 to 2.45) and for certain groups in particular.
Small farmers and small businesses gain particular advantage as this is where poorer
households’ purchases are focused; education and health also benefit. Such payments
can also help to support the regional economy during the most “lean” periods of the
year.