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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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Use of and application of conditions for cash transfers are relatively flexible. Conditional cash transfer programs in Sub-Saharan Africa apply conditions and monitoring with a level of flexibility not seen as frequently outside of the region. Many CCT programs in Sub-Saharan Africa use “soft” conditions, which impose no penalties for noncompliance. Even in programs that enforce hard conditions, most apply those conditions flexibly. For example, conditions may be applied only in locations with adequate supply-side infrastructure or in areas that receive additional supply-side investments. In some cases, only households that are judged capable of fulfilling conditions are required to abide by them. Conditions are often monitored less frequently than they are in other regions, and warnings and partial payment penalties are often applied when beneficiaries do not comply with conditions to ensure that benefits are not inappropriately kept from needy households.

Overview 7 This hesitancy to apply conditions in the traditional sense reflects valid concerns about the beneficiaries’ ability to fulfill conditions, the capacity of supply-side institutions to handle increased demand, and the programs’ capacity to monitor conditions. Once again, these issues are being tested by evaluations in the region, and they deserve further analysis.

New leapfrog technologies are used in cash transfer operations in Africa.

Cash transfer programs in Sub-Saharan Africa are investigating how to use advanced technologies to overcome traditional capacity constraints. Some of these technologies address challenges that are relatively unique to the region. Biometric identification can overcome traditional difficulties in identifying beneficiaries without appropriate documentation; point-ofsale devices or mobile phones can be used to transfer cash to nomadic or hard-to-reach beneficiaries; mobile phones may be used for data collection, social marketing, communication, or monitoring purposes; webbased management information systems may be able to integrate program databases across remote locations; and more. The possibility for technology to address capacity constraints in the region is still being investigated. Although there is excitement about the possibility of using advanced technologies, this excitement should be tempered with a realistic understanding of whether and how these technologies will deliver what they promise.

Institutional location and funding of CTs are both governmental and nongovernmental. Unlike the leading CT programs in other regions, almost half of the identified Sub-Saharan African programs were located outside government institutions, and one in two were funded entirely by nongovernmental funds. Although these programs have been valuable and generated important information, continuing this trend in the long run would be inefficient.

Programs that remain outside of domestic governments fail to capitalize on potential economies of scale needed for cost-effective implementation of targeting, registration, monitoring, and evaluation systems. Meanwhile, duplication of effort occurs as each program establishes its own systems and procedures. Impacts are limited and resources wasted, while portions of the potential beneficiary population may remain unsupported. The programs fail to develop capacity within government institutions, while they remain subject to the whims of donors and short funding cycles. They also face challenges of balancing domestic and external priorities.

8 The Cash Dividend Although weak macroeconomic conditions have often discouraged African leaders from funding major CTs or similar programs, certain signs suggest that increased fiscal space may be available for domestic funding of CTs in the medium to long term. Regional economic growth before the recent downturn, combined with stable macroeconomic policies, increased revenue collection, foreign investment, and potential natural resource revenues (if managed correctly), suggest that many countries may be increasingly able to fund CT programs, provided that they have the will to do so. Improvements in governance help make these goals more feasible.

That being said, many CT programs will continue to require external financing and support, and development partners can make important contributions by adopting long-term, coordinated approaches to funding cash transfers and supporting long-term capacity building and technical support for CTs.

Lessons Learned and the Road Ahead Much can already be learned from Sub-Saharan Africa’s experience with cash transfer programs. Evaluations of unconditional programs have found significant impacts on household food consumption (for instance, Miller, Tsoka, and Mchinji Evaluation Team 2007 for Malawi’s Social Cash Transfer Program; Soares and Teixeira 2010 for Mozambique’s Food Subsidy Program); nonfood consumption (for instance, RHVP 2009 for Zambia’s Social Cash Transfer); and children’s nutrition and education (including Agüero, Carter, and Woolard 2007 and Williams 2007 for South Africa’s Child Support Grant). A recent experimental evaluation found that a program for adolescent girls conditioned on their school attendance improved enrollment, attendance, and test scores in Malawi.

Unconditional transfers in the same program decreased early marriage and pregnancy among girls who had already dropped out of school (Baird, McIntosh, and Özler 2011). Another experimental evaluation of a conditional program in Tanzania found that a relatively large transfer conditioned on STI status helped keep adults from contracting STIs, thereby pointing to the potential of CT programs to help fight HIV (de Walque and others 2011).

This information is useful, but more needs to be learned. Results from evaluations already under way will continue to provide information on the usefulness of conditions in CT programs in Sub-Saharan Africa, the impact of paying transfers to female or male household representatives, Overview 9 and the impact of transfers when programs benefit from previous community investments or other coexisting successful programs.

Impact evaluations will provide important information for program design, but more can also be learned from case studies and experience sharing across programs. Knowledge gaps remain in key areas, including, among others, collecting data in settings with limited financial and human resource capacity, targeting individuals who may not be easily identified because of stigma or inaccessibility, dealing with soft issues related to conditions, using communities effectively, monitoring and coordinating among involved groups in limited-capacity settings, and coordinating donor funding while supporting government priorities and systems.

Cash transfer programs are not a panacea. They are not always an appropriate tool, they cannot address all vulnerabilities or problems, and they face steep challenges to their effective implementation. Nevertheless, excitement over the potential use of CTs in Sub-Saharan Africa is not unmerited. Experiences—many relatively successful—reveal that the question is not whether cash transfers can be used in the region, but how they should be used, and how they can be adapted and developed to meet social protection and development goals. Cash transfers may well prove to be an important tool for addressing the region’s development, poverty alleviation, and human rights aspirations.


1. The total is 134 if programs with unofficial sources or unclear 2009 start dates are included.

References Agüero, Jorge, Michael Carter, and Ingrid Woolard. 2007. “The Impact of Unconditional Cash Transfers on Nutrition: The South African Child Support Grant.” Working Paper 39, International Poverty Centre, Brasília.

Baird, Sarah, Craig McIntosh, and Berk Özler. 2011. “Cash or Condition?

Evidence from a Cash Transfer Experiment.” World Bank, Washington, DC.


de Walque, Damien, William H. Dow, Rose Nathan, Carol Medlin, and RESPECT Study Team. 2011. “Evaluating Conditional Cash Transfers to Prevent HIV and Other STIs in Tanzania.” PowerPoint presentation, World Bank, Washington, DC, May 4.

10 The Cash Dividend Duflo, Esther. 2003. “Grandmothers and Granddaughters: Old-Age Pensions and Intrahousehold Allocation in South Africa.” World Bank Economic Review 17 (1): 1–25.

Miller, Candace, Maxton Tsoka, and Mchinji Evaluation Team. 2007. “Evaluation of the Mchinji Cash Transfer: Report II—Targeting and Impact.” Center for International Health and Development, Boston University, Boston, and Centre for Social Research, University of Malawi, Zomba.

Quisumbing, Agnes R., and John A. Maluccio. 2000. “Intrahousehold Allocation and Gender Relations: New Empirical Evidence from Four Developing Countries.” FCND Discussion Paper 84, Food, Consumption, and Nutrition Division, International Food Policy Research Institute, Washington, DC.

RHVP (Regional Hunger and Vulnerability Programme). 2009. “Impact of Social Cash Transfers on Household Welfare, Investment, and Education in Zambia.” Wahenga Brief 17, RHVP, Johannnesburg. http://www.wahenga.net/node/223.

Soares, Fábio Veras, and Clarissa Teixeira. 2010. “Impact Evaluation of the Expansion of the Food Subsidy Programme in Mozambique.” Research Brief 17, International Policy Centre for Inclusive Growth, Brasília.

Williams, Martin J. 2007. “The Social and Economic Impacts of South Africa’s Child Support Grant.” Working Paper 39, Economic Policy Research Institute, Cape Town, South Africa.

CHAPTER 1 Cash Transfers An Effective Means to Promote Equitable Growth and Protect the Poor in Sub-Saharan Africa?

Over the past decade, interest has increased around the world in the use of cash transfers (CTs) as a means to promote inclusive growth.

Although many of the most well-known CT programs are based in Latin America or parts of Asia, experience with the programs has not been limited to these regions. Increasingly, cash transfers have been used in Sub-Saharan Africa. A growing interest in the use of CTs and the lessons that can be learned from them has led to this comprehensive review of the experiences of Sub-Saharan African countries with these programs. This book synthesizes the results of that review for the benefit of development practitioners working in Sub-Saharan Africa and around the world.

The Recent Increase in Cash Transfers around the World The use of CT programs has steadily increased around the globe, and these programs now exist in countries in Africa, Asia, Central Europe, and Latin America. The rise of CTs coincides with the quiet revolution, a term used to describe the rapid increase in social protection programs on development agendas around the world (Barrientos and Hulme

12 The Cash Dividend

2008b). As of 2008, Barrientos and Hulme estimated that cash transfers benefited 150 million households throughout the developing world.

The proliferation of CTs is a phenomenon that has arisen within the global south, where countries have created programs that suit their own unique needs (Hanlon, Barrientos, and Hulme 2010).

Increased Interest in Cash Transfers in Sub-Saharan Africa In part, cash transfers arose in Sub-Saharan Africa as recognition grew that some other types of aid were not effectively achieving their goals. For example, emergency food aid was responding to famines, but it was failing to contribute to food stability. Over time, the chronically poor became increasingly dependent on food aid. Such trends became a major concern in countries such as Ethiopia, whose emergency food aid cost an average of US$265 million from 1997 through 2002, reaching more than 5 million people each year (Hoddinott n.d.). Other Sub-Saharan African countries with early experiences with CTs, such as Malawi, had also faced this problem and turned to cash transfers.

Increasing migration, urbanization, and the evolution of traditional family structures have also weakened traditional safety nets in SubSaharan Africa. Individuals who formerly would have been cared for by family members have increasingly been left to fend for themselves.

The ability of informal safety nets to protect individuals has weakened considerably in the face of increased demands brought on by the HIV/ AIDS crisis. Certain groups—especially orphans and vulnerable children (OVC)—have been especially vulnerable to these changes.

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