Many African governments are struggling to meet the Millennium Development Goal
(MDG) targets on poverty reduction. Most of the countries started with very high rates
of poverty at the baseline, such that halving the proportion of the poor by 2015 remains
a daunting challenge. The poor and vulnerable groups continue to experience shocks
resulting from the international economic crises and exogenous factors and are
experiencing difficulties in getting out of poverty. Most of the countries do not have
well-designed safety net or social protection programmes which could have reduced
vulnerability and increased resilience against socio-economic shocks. Yet, social safety
nets or social protection programmes have been shown to have positive impact on
poverty reduction and in reducing economic inequality.
Poverty is one of the development challenges in Malawi with more than half of the
population described as poor. Most of these poor households experience shocks of
different kinds including agricultural related, economic, health and demographic shocks.
These shocks negatively affect the livelihoods of poor people in Malawi. Government of
Malawi (GOM) and World Bank (2007) note that pervasive risks and vulnerability to
shocks are the main causes of poverty in Malawi, resulting in significant movements of
households out and into poverty even where incomes have not changed substantially.
The main shocks that affect a large proportion of the poor include drought, price
volatility, illness and deaths.