Sharing experiences of cash transfers in southern Africa

Cash transfers are increasingly popular with governments, donors, and non-governmental organisations as a way to support vulnerable groups. This approach to social protection takes many different forms. The agencies and organisations that implement such programmes can learn from each other’s experiences.

Social protection programmes, which include cash transfers, aim to reduce vulnerability to hunger and deprivation by providing people with predictable resources and supporting their livelihoods. For example, giving people cash can ensure their food consumption does not fall and prevents them from having to sell their assets.

The Regional Hunger and Vulnerability Programme, based in South Africa, reviewed 20 case studies of cash transfer programmes under their Regional Evidence Building Agenda. These case studies came from Lesotho, Malawi, Mozambique, Swaziland, Zambia and Zimbabwe. These provide examples of social protection in southern Africa, from small short-term projects to long-term national programmes.

Some cash transfer programmes seek to protect older people, such as the Swaziland Old Age Grant. Others target ‘destitute’ groups, identified using different criteria. Some programmes focus on people facing seasonal food shortages; others encourage the increased use of farm inputs to improve crop yields. Cash transfers can also be used to improve education and health. This helps to stop the transmission of poverty between generations.

The researchers looked at some of the features common to all the programmes.

• Coordination: this varied widely between programmes, from national programmes coordinated by a single ministry to short-term projects run by donors and non-governmental organisations.
• Targeting: programmes use different criteria to decide who should benefit. In many cases, however, this process increasingly involves participatory consultations in local communities.
• Cost effectiveness: this can be judged in part by the efficiency of delivery (it costs an average of US$1.30 to transfer US$1 of cash), and in part by the end result (for example, sustainable improvements in food security).
• Market effects: cash and food transfers have both deliberate and unintended market effects. For example, during food shortages, cash can cause a rise in staple food prices, with negative impacts on the welfare of net food purchasers.
• Asset protection and building: cash transfers provide insurance against selling assets (for example Lesotho’s burial societies) and help to build some assets, such as health and education services.

Many social protection programmes in southern Africa have been successful, demonstrating good organisation, good coordination and innovation. Common weaknesses include unstable funding and a lack of continuity, the limited impact of small projects, and a lack of motivation in government schemes. Cash transfers to selected community members can also divide societies in places where everyone considers themselves poor.

The researchers identify several lessons.

• The current popularity of cash transfers does not mean that it is always the best way to provide social protection. For example, food transfers probably works better than cash for school feeding and for providing AIDS patients with proper nutrition.
• Complex targeting processes using alternative indicators of the most vulnerable people can be divide societies and communities: categorical targeting (for example by age for a social pension) seems more likely to work on a national scale.
• Innovative ways to deliver cash transfers have considerable future potential, including the use of smartcards, mobile ATMs (cash dispenser machines) and mobile phones.

Source(s):
‘Introduction: Themes and Patterns’, Case Study Briefs, Regional Evidence Building Agenda, RHVP: Johannesburg, by Frank Ellis, 2007 (PDF) Full document.
‘Regional Lesson Learning from the Case Studies’, Case Study Briefs, Regional Evidence Building Agenda, RHVP: Johannesburg, by Frank Ellis, 2007 (PDF) Full document.

Funded by: UK Department for International Development (DFID); Australian Agency for International Development (AusAID)

id21 Research Highlight: 24 March 2008

Further Information:
Frank Ellis
School of Development Studies
University of East Anglia
Norwich, NR4 7TJ
UK

Tel: +44 1603 592807
Fax: +44 1603 451999
Contact the contributor: f.ellis@uea.ac.uk

School of Development Studies, University of East Anglia, UK

Regional Hunger and Vulnerability Programme
20 Girton Road
North Park, 3rd Floor
Parktown
2193, Johannesburg
South Africa

Tel: +27 11 6425211
Fax: +27 11 4843855
Contact the contributor: rhvp@rhvp.org

Wahenga - Regional Hunger and Vulnerability Programme

Other related links:
'Can social safety nets contribute to poverty reduction in Africa?'

'Is cash the best way to assist poor and vulnerable people?'

'Social cash transfers in Africa: conditional or unconditional?'