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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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• Tanzania Community-Based Conditional Cash Transfer. To increase access of the poor and vulnerable to basic services, to increase school attendance and health care visits of beneficiaries, to determine how a conditional cash transfer relying on community-driven development and functioning within a social fund can be effectively implemented, and to see how such a transfer can be used to lessen the impact of AIDS in communities.

• Zambia Kalomo Social Cash Transfer. To decrease poverty, starvation, and hunger of targeted households, and to generate information about the viability of a social cash transfer program in Zambia.

Source: Authors’ compilation based on various sources.

proportion of individuals with given vulnerabilities, and “soft” issues, such as capacity constraints. One country in which analytical work has been crucial in formulating a CT’s specific objectives is Senegal, whose conditional cash transfer (CCT) for orphans and vulnerable children (OVC) arose in response to report recommendations that community groups needed support to improve education and vocational training for OVC (Document de Cadrage Technique 2009). Kenya also relied on analytical work to focus the objectives of its first major CT, the CT for OVC.

In 2005, analysis determined that approximately 12 percent of Kenyan households were headed or maintained by orphans, whose school 78 The Cash Dividend attendance (among 10- to 14-year-olds) was markedly lower than that of nonorphans (Government of Kenya 2005). Because these OVC represent 30 percent of all poor children in Kenya, addressing their needs was vital for the country (World Bank 2009d).

Similar to some of the vanguard CCT programs in Latin America, some CCTs in Sub-Saharan Africa have objectives related to specific human capital objectives: Mali’s Bourse Maman and Nigeria’s Kano CCT for Girls’ Education focus on improving educational attainment of vulnerable groups, Eritrea’s Results-Based Financing (RBF) program focuses on improving health outcomes for mothers and children, and Nigeria’s COPE (In Care of the Poor) CCT and Tanzania’s Community-Based Conditional Cash Transfer (CB-CCT) have human capital objectives in both education and health care.

Other CTs in Sub-Saharan Africa are being used to address challenges more specific to the region. For instance, many Sub-Saharan African programs have objectives related to food security. Those objectives reflect the region’s relatively recently begun transition from emergency food aid to regular cash transfers and the recurrent extreme food insecurity confronted by many on the continent. Many programs, including several short-term cash-for-relief programs in Ethiopia, Kenya, Malawi, Swaziland, and Tanzania, have objectives related to ensuring the survival of beneficiaries or decreasing hunger for those in danger of malnutrition or starvation. Longer-term programs with such objectives include Kenya’s Hunger Safety Net Programme (HSNP), Mozambique’s Food Subsidy Program (Programa Subsidio de Alimentos, or PSA), Senegal’s Child-Focused Social Cash Transfer (CF-SCT) program, and Zambia’s Social Cash Transfer (SCT) program. Still other programs want to help households meet their food consumption needs while protecting their productive assets, such as the Direct Support component of Ethiopia’s Productive Safety Net Programme (PSNP-DS) and the Direct Support component in Rwanda’s Vision 2020 Umurenge Programme (VUP), or to encourage household productivity, such as Ethiopia’s PSNP-DS and Zimbabwe’s Protracted Relief Program.

Other CTs relatively unique to Sub-Saharan Africa are those that have been developed to combat HIV or the effects of the AIDS crisis.

Kenya aims to avoid the institutionalization of orphans and vulnerable children through its CT for OVC, and Senegal recognizes the vulnerability of OVC, particularly in regard to school desertion, in its CCT for OVC. Tanzania has a CCT that tries to slow the spread of sexually transmitted infections (STIs), HIV, and unintended pregnancies among young Design and Implementation of Cash Transfers in Sub-Saharan Africa 79 adults, with conditions specifically tied to recipients’ remaining free from curable STIs.

African CT objectives can reflect diversity within countries and over time. Given Sub-Saharan Africa’s extreme ethnic, economic, and cultural diversity, there is usually no one-size-fits-all program for all vulnerable groups in a country. Although ensuring that programs not become fragmented and incoherent is important, room must also be made for addressing the needs of different vulnerable groups within a country.

Kenya’s CT programs—the CT for OVC and HSNP—address two major vulnerable groups (OVC and people living in arid and semiarid lands) in ways that suit the groups’ differing needs. Likewise, Nigeria’s COPE CCT differs in objectives, targeted beneficiaries, and benefits across the 12 diverse states where it is being implemented. An altogether separate Nigerian CCT, the Kano CCT for Girls’ Education, directly addresses the lower education levels of girls in a limited area.

Several countries have found that combining a CT with a public works program suits their program goals. Ethiopia’s PSNP takes this form. A public works program alone would exclude households without any members able to participate in the labor force. By including a direct CT component in the PSNP-DS, the program is able to reach extremely vulnerable households that would be overlooked by the public works program. Rwanda’s VUP operates similarly.

Linking program components and objectives is imperative. A necessary, but not sufficient, condition of a successful CT is that the program’s components align with the program’s objectives. When components align with program goals, they work in a complementary fashion, expanding the program’s potential effects. Obviously, programs that aim to provide cash to combat food insecurity should have different components than those that aim to encourage human capital investment in education or health or those that have specific goals of improving households’ productive capacity. When confusion arises regarding whether CT components are appropriate, the objectives provide direction for the program. For instance, Ethiopia’s PSNP has had to work to maintain an appropriate balance between its development and welfare components; its stated objectives help provide direction and lessen confusion about the program’s role. Objectives also provide a clear measure by which the program can be assessed.

Specific program components are outlined in the following sections, with attention paid to those most crucial to the success of any CT.

Although program features will differ depending on the CT’s objectives, 80 The Cash Dividend each program must address the following major components, which serve as key foundations on which to build. Any well-designed CT will have well-thought-out targeting, payment, monitoring, and evaluation systems.

Other design components are included in the following summaries as well, where experiences have shown that their alignment with program objectives is important to the CT’s success.

Targeting Features of Cash Transfers in Sub-Saharan Africa A CT program’s objectives should guide who should be selected as program beneficiaries. If objectives focus on poverty, impoverished households or individuals are the program’s ideal beneficiaries. If food security is a primary objective, households vulnerable to food insecurity should be targeted. If human capital investment is the program’s main focus, the individuals who would benefit the most from improved investment in human capital (or who could provide the greatest benefit to society)— typically certain children—are targeted. However, deciding who the ideal beneficiaries is often easier than ensuring that benefits are distributed to those individuals.

A program’s targeting system is the method it uses to select beneficiaries or households to be included in the program. Targeting can be completed using geographic locations; basic demographic or categorical indicators, such as gender or age; community members (such as committees or entire villages); means-tested information about household income; proxy means methods that use indicators related to poverty or well-being;1 or self-targeting, when potential beneficiaries must apply for a program on their own (Coady, Grosh, and Hoddinott 2004b). Targeting is used to focus funds to maximize their effect, given resource limitations. When targeting is analyzed, inclusion and exclusion errors are typically reported in light of the ideally targeted beneficiary or household. An inclusion error occurs when a program provides benefits to an ineligible person. Exclusion errors occur when eligible beneficiaries are not allowed in the program; such errors often reflect constraints on the program’s budget. Exclusion errors may also arise from failures of program implementers to adequately communicate benefits and procedures when self-targeting is involved. Programs try to minimize both types of errors, though a trade-off is often inherent between the two. For more information on the issues involved in targeting and additional references, see box 3.2.

Design and Implementation of Cash Transfers in Sub-Saharan Africa 81

Box 3.2

The Targeting Dilemma and Additional References on Targeting Whether CT programs should be targeted has been an ongoing debate. At one extreme lie those who believe that targeting is inappropriate: transfers should be universally provided to all of a country’s citizens. To universalists, targeting has not been successful as a redistributive mechanism, and it can generate only limited budget support. Those in favor of targeting believe it can achieve its goals. They also believe that universal benefits are not a feasible objective (Grosh and others 2008). Although universality is a philosophical ideal, most policy makers accept that universality cannot currently be achieved in most Sub-Saharan African countries and that some degree of targeting must be used. Therefore, the debate regarding targeting of CTs in Sub-Saharan Africa lies between those in favor of near-universal transfers and targeted transfers.

Near-Universal Transfers Some policy makers favor universal or near-universal transfers to certain portions of the population. Such transfers are also known as categorical transfers, because they are based on simple categorical criteria, such as age or disability. Many of the transfers focus on protecting people from risks related to their life stage, including risks in childhood, adulthood (disability), or old age (European University Institute 2010). Those in favor of categorical targeting point out that it is administratively simple. When compared with more restrictive targeting methods, categorical targeting more easily generates broad-based political support. Communities may also be more likely to support categorical targeting as a motivation for providing benefits to certain groups, such as the elderly or OVC, over others (Slater and Farrington 2009).

Categorical targeting is also appropriate to those who consider social protection a basic human right that should be guaranteed by the state to its citizens.a Many of the middle-income African countries, such as Botswana, Mauritius, Namibia, and South Africa, approach their CTs from this framework, and they have legislation supporting their social grants system. According to this view, denying certain individuals transfers may be a violation of their human rights.

Despite their advantages, categorical transfers are subject to greater errors of inclusion (White and others 2009), and they tend to place greater demands on (continued next page) 82 The Cash Dividend

Box 3.2 (continued)

the domestic budget because individuals receive benefits regardless of their economic need. A final problem with categorical transfers is that needy individuals who do not meet basic eligibility criteria may not receive necessary support if the social protection system fails to cover all potentially needy groups (European University Institute 2010).

More Restrictive Targeting Methods Those in favor of more strictly targeted transfers (or poverty targeting) point out that stricter targeting can decrease inclusion errors. Poverty targeting can support multiple needy or vulnerable groups, and targeted transfers can be more progressive than near-universal transfers. Programs with poverty-related targeting can save money by providing transfers to a smaller portion of the population, thereby making better use of limited resources (White and others 2009).

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