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«DIREC TIONS IN DE VELOPMENT Human Development Public Disclosure Authorized The Cash Dividend The Rise of Cash Transfer Programs in Sub-Saharan Africa ...»

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Scale of coverage remains very different between middle-income and low-income CT programs. Within a given country, the middle-income CTs typically cover a wide range of vulnerable groups and a significant portion of the population. In contrast, the low-income and fragile CTs often cover a very limited part of the population and only certain vulnerable groups, such as OVC. The widespread coverage of middle-income CTs is often achieved through near-universal targeting (that is, categorical targeting) of vulnerable groups, such as the elderly, whereas low-income and fragile CTs often use more detailed proxy- or community-based targeting methods to identify beneficiaries.

To coordinate benefits across the country’s various CT programs, middle-income programs often use centrally coordinated registration and information systems. Management information systems for lowincome and fragile CT programs are usually more ad hoc, unconnected Table 2.5 Selected Cash Transfers by Program Focus Long-term focus Short-term focus

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Source: Authors’ representation.

Note: Total of program percentages can exceed 100 percent because some programs have both an ex ante and an ex post role. Sample size of 111 includes only those CTs for which the program could be clearly classified into a protective, preventive, or promotive rationale. Programs directed to individuals in distress are considered protective because the program is responding to a specific adverse shock to the beneficiary. Programs targeting vulnerable groups such as orphans, widows, or the poor are considered preventive because they are not responding to a specific shock to the household. Programs with the words human capital or livelihood development in the name or program objectives are considered promotive. Programs can be classified in multiple categories if objectives suggest classification is appropriate.

to other programs, and often of worse quality than those of the middleincome programs. (Some of the newest CT programs in low-income countries promise to be exceptions to this rule.) The middle-income CTs that are part of a larger system aim to provide complementary benefits to various groups. For instance, Botswana’s Program for Destitute Persons covers children with terminally ill parents who cannot care for them, and its Orphan Care Program covers these children once they become orphans. Theoretically, communication between the two programs should ensure that newly orphaned children do not fall through the cracks (BFTU 2007).4 Reflecting their typically pilot or stand-alone nature, most of the reviewed programs in the low-income CT group had fewer than 50,000 estimated beneficiaries, and they typically covered individuals or households within a limited geographic area. The middle-income CTs covered 58 The Cash Dividend larger numbers of beneficiaries. The largest of the middle-income CT programs was South Africa’s Child Support Grant, which covered approximately 8.8 million children; South Africa’s entire grant system reached more than 13 million beneficiaries in 2008/09 (SASSA 2009).

In contrast, the largest cash transfer in the low-income CTs was Ethiopia’s PSNP-DS, which covered approximately 1.2 million beneficiaries and was many times larger than most other CTs in low-income countries. Other exceptions to the typically small low-income CTs included Mozambique’s Food Subsidy Program and the Democratic Republic of Congo’s Emergency Cash Grants for Ex-combatants. Panel a in figure

2.11 illustrates the wide range of beneficiaries and households covered in selected CTs in Sub-Saharan Africa. Panel b illustrates that the average number of beneficiaries per program was smallest in lower-middleincome countries and fragile states. CT programs in low-income countries had an average of more than 100,000 beneficiaries per program, although this number is skewed by the PSNP-DS. This average, though still much larger than the lower-middle-income and fragile averages, is still almost seven times smaller than the average number of beneficiaries in the upper-middle-income country CT programs.

Although most low-income CT programs cover just a small percentage of the population, middle-income programs provide benefits to sizable groups. South Africa’s grant system reaches approximately 27 percent of the population,5 and Namibia’s CT program covers 12 percent (Levine, van der Berg, and Yu 2009). Swaziland’s Old Age Grant reached 6 percent of the population in 2006/07 (RHVP 2007).

Exceptions to this rule do occur, however. In addition to Ethiopia’s PSNP-DS, a few other low-income CT programs cover or hope to cover significant portions of the population. In terms of their target populations, Kenya’s HSNP plans to reach 40 percent of the poorest households in selected districts (HSNP n.d.), and its Cash Transfer for Orphans and Vulnerable Children Project expects to cover 50 percent of extremely poor OVC by 2012 (World Bank 2009b). Mozambique’s Food Subsidy Program reached 15 percent of poor elderly Mozambicans in 2006 (Ellis 2007). Although coverage of those programs’ target populations is not as high as Mexico’s Oportunidades or Brazil’s Bolsa Família, which covered 72 percent and 84 percent of the countries’ poor populations (Johannsen, Tejerina, and Glassman 2009), respectively, the expected coverage is still substantial, particularly in light of unique challenges the programs face in identifying, enrolling, and maintaining beneficiaries.

–  –  –

Source: Authors’ representation.

Note: Ethiopia’s PSNP-DS reached approximately 1.2 million individuals in 242,383 households in 2010.

Mozambique’s Food Subsidy Program reached 287,454 individuals at the end of 2008. Numbers are based on most recent data available. Sample for average number of beneficiaries per program is 19 for upper-middleincome countries, 9 for lower-middle-income countries, 15 for low-income countries, and 8 for fragile states.

Data are limited to those programs for which information was available.

Low-income CT programs may become more similar to middle-income CT programs. Despite the major differences seen across the two groups, some low-income countries appear to be headed down a similar path as that followed by the wealthier countries in the region. Leaders in these countries increasingly recognize the need for social assistance to ensure the survival of vulnerable groups and to support economic development and growth. Major CT programs have been launched in low-income countries, some with significant domestic support and ownership, such as Ethiopia’s PSNP, Ghana’s Livelihood Empowerment against Poverty, Kenya’s Cash Transfer for Orphans and Vulnerable Children and HSNP, and Rwanda’s VUP. Some of these programs are planning, or have achieved, significant coverage, and they have invested in strong monitoring systems. They are based in government institutions that are working to build capacity for implementation, and they are intended to last beyond a single project cycle or funding tranche.

This trend is visible in figure 2.12, which shows the current and anticipated scale of CT programs. The identified middle-income CTs are exclusively large scale. Many low-income CTs have been started as small The Rise of Cash Transfer Programs in Sub-Saharan Africa 61 Figure 2.12 Scale of Africa’s Cash Transfer Programs by Countries’ Income Classification

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Source: Authors’ representation.

Note: Panel a includes only programs whose scale could be determined; future CTs are included only if their future form could be clearly determined. Sample size is 119 for past or current programs (24 for upper-middleincome countries, 12 for lower-middle-income countries, 50 for low-income countries, and 33 for fragile states).

Sample size is 54 for anticipated future programs (25 for upper-middle-income countries, 9 for lower-middleincome countries, 11 for low-income countries, and 9 for fragile states).

62 The Cash Dividend pilots that provide benefits to a limited number of beneficiaries. Those pilots are typically undertaken for one of two reasons: (a) to test and evaluate whether a CT will work in the given setting (that is, for research purposes) or (b) simply to test systems and components before a largescale rollout. Of programs that currently exist in lower-middle-income and low-income countries, all pilots are expected to transition either to niche or to large-scale programs. Most programs aspire to future coverage that is national or large scale, reflecting a growing focus in the region on establishing national social protection systems in which CTs are expected to play a major role.

Only slightly more than 1 in 10 programs (out of all programs) have niche-like goals. These niche programs, even after reaching full scale-up, extend benefits to only a limited number of individuals or households.

Such households have unique characteristics not common to much of the population, allowing a side-scale targeting of a limited number of people.

An example of such a niche program is Nigeria’s Kano Conditional Cash Transfer for Girls’ Education, which provides benefits to girl students in one state. The smaller percentage of niche programs projected for the future also reflects the short-term nature of many niche programs, such as emergency transfers to victims of a crisis. However, new niche programs probably will be developed in the future to address new crises as they arise.

Focus of Most Programs on Vulnerability Rather Than Poverty Notwithstanding their major differences, the middle-income and lowincome CT programs exhibited certain commonalities, as well as other areas in which no clear distinctions could be seen. First, most CTs in SubSaharan Africa can be classified as transfers given to specific vulnerable groups, rather than poverty-targeted social assistance (see figure 2.13). A higher percentage of low-income CTs (in low-income and fragile states) focus on vulnerability criteria than do middle-income CTs, but the majority of all CTs focus on vulnerabilities rather than simply on poverty.

Vulnerability-focused CTs protect at-risk groups, such as orphans, the elderly, or the HIV-affected, from specific shocks. They usually do not explicitly focus on the individuals’ actual poverty levels. Such programs target individuals who may or may not be poor at the time, with transfers aiming to decrease beneficiaries’ vulnerability to adverse shocks.

Other CT programs in Sub-Saharan Africa provide poverty-targeted social assistance, which seeks to help the extremely poor without regard to the specific problems to which beneficiaries may be vulnerable. Such The Rise of Cash Transfer Programs in Sub-Saharan Africa 63 Figure 2.13 Focus of Programs by Countries’ Income Classification

–  –  –

Source: Authors’ representation.

Note: Sample size is 114. This number is less than the total number of identified programs because of limited information about some programs.

programs have targeting mechanisms that focus on poverty indicators, and program goals also focus on poverty. Lower-middle-income CT programs took this focus most frequently; very few programs in low-income countries—and none in fragile states—gave exclusively poverty-focused transfers. Approximately one in four upper-middle-income countries implemented programs with a mixed (poverty and vulnerability) focus;

the percentage of programs with a mixed focus was lower for all other groups.

The tendency to focus on vulnerabilities rather than poverty may reflect, in part, the high poverty rates and deep poverty gaps throughout the region. There are concerns that CTs targeting a certain percentage of the poor will face opposition from those not targeted by the program but who perceive themselves (or others) as poor people in similar need of transfers. When the majority of the population is poor or nearly poor, poverty-based targeting may exclude individuals from a program on the basis of a few cents difference in income or expenditure. Given high 64 The Cash Dividend poverty headcounts and small differences between the lowest income or consumption deciles, for instance, the concern is that poverty-focused transfers will be met with opposition because many people believe that coverage should reach a greater percentage of the poor population.

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