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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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Interest in CTs is not limited to high-level discussions: potential beneficiaries express appreciation for the programs as well. Some early programs, often administered by international NGOs, asked beneficiaries whether they preferred to receive cash or food transfers. Overall, results 44 The Cash Dividend Figure 2.5 Africans Who Believe That Helping the Poor Should Be a Top National Priority, 2008 and 2009 share of all responses (%) 58% 16% 20 15% 9%

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Source: Afrobarometer database, http://next.pls.msu.edu/index.php?option=com_content&view=article&id=132 &Itemid=80.

Note: Total is less than 100 percent because other responses were allowed. A total of 27,713 people responded.

Respondents were from Benin, Botswana, Burkina Faso, Cape Verde, Ghana, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mali, Mozambique, Namibia, Nigeria, Senegal, South Africa, Tanzania, Uganda, Zambia, and Zimbabwe. All surveys were conducted in 2008, except for the surveys in Zambia and Zimbabwe, which were conducted in 2009.

pointed to the potential role for CTs. For instance, an evaluation of Save the Children Canada’s cash and in-kind transfer program in Isiolo district, Kenya, found that recipients preferred cash to in-kind transfers because of cash’s greater fungibility (O’Donnell 2007).

That said, beneficiary endorsement of CTs is not unqualified. After the purchasing power of CTs in Ethiopia’s PSNP deteriorated significantly, most beneficiaries preferred receiving food over CTs. Food transfers ensured that they could meet minimum consumption needs in a situation of critical food insecurity (Sabates-Wheeler and Devereux 2010). On the whole, it appears that beneficiaries often appreciate receiving cash, provided that benefits are adjusted to keep pace with inflation.

The Dramatic Increase in African Cash Transfer Programs after 2000 Interest in CTs has already translated into program implementation, with a multitude of CTs under way throughout most areas of the region (see figure 2.7).

The Rise of Cash Transfer Programs in Sub-Saharan Africa 45 Figure 2.6 Consideration of Cash Transfers by Governments or Donors in SubSaharan Africa as of 2010

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Source: Authors’ representation.

Note: Countries with no known dialogue surrounding CTs at the time of the study were the following: Benin, Cameroon, Chad, the Comoros, Gabon, The Gambia, Guinea, and Guinea-Bissau. Countries in which CTs have been discussed, planned, or implemented were as follows: Angola, Botswana, Burkina Faso, Burundi, Cape Verde, Central African Republic, Democratic Republic of Congo, Republic of Congo, Côte d’Ivoire, Equatorial Guinea, Eritrea, Ethiopia, Ghana, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda, São Tomé and Príncipe, Senegal, the Seychelles, Sierra Leone, Somalia, South Africa, Sudan, Swaziland, Tanzania, Togo, Uganda, Zambia, and Zimbabwe.

Of the ongoing programs highlighted in this review, most began after

2000. A graphical depiction of the initiation and duration of some of Sub-Saharan Africa’s CTs illustrates how the number of CT programs has increased rapidly within the past few years (figure 2.8). This growth reflects the global increase in CTs around the world since 2000.

46 The Cash Dividend Figure 2.7 Sub-Saharan African Countries’ Experiences with Cash Transfers, 2010

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Source: Authors’ representation.

Note: Countries in which only conditional CT programs were identified were the following: Eritrea, Ghana, Mali, Nigeria, and São Tomé and Príncipe. Countries in which only unconditional CT programs were identified were as follows: Botswana, Burundi, Cape Verde, Central African Republic, Democratic Republic of Congo, Republic of Congo, Côte d’Ivoire, Lesotho, Liberia, Mauritius, Namibia, Rwanda, the Seychelles, Sierra Leone, Somalia, South Africa, Sudan, Swaziland, Togo, Uganda, and Zimbabwe. Countries that were identified as having had both conditional and unconditional CT programs were as follows: Burkina Faso, Ethiopia, Kenya, Malawi, Mozambique, Niger, Senegal, Tanzania, and Zambia. Countries with no known CT programs were as follows: Angola, Benin, Cameroon, Chad, the Comoros, Equatorial Guinea, Gabon, The Gambia, Guinea, Guinea-Bissau, Madagascar, and Mauritania.

Trends in Cash Transfer Implementation in Sub-Saharan Africa:

Strategic Issues This section of the chapter sketches several general typologies that can be used to understand CT programs in Sub-Saharan Africa.

The Rise of Cash Transfer Programs in Sub-Saharan Africa 47 Figure 2.8 Start Dates and Durations of Sub-Saharan African Cash Transfer Programs, 1990–2010

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These Middle Africa programs are typically shorter-term projects that are donor financed and delivered through multiple groups within and outside of the government. The proliferation of implementing agencies reflects the vacuum in state-led CT programs, in part because of the weak institutions in charge of social protection in Sub-Saharan Africa. Domestic commitment to social protection in many of these countries is weaker than that found in the first group, although it appears to be on the rise in many of these countries (Niño-Zarazúa and others 2010).

The Rise of Cash Transfer Programs in Sub-Saharan Africa 51 Middle-income CTs began earlier and have a longer-term focus than most low-income CTs. As can be seen by the arrows in figure 2.8, most of the middle-income CTs were established earlier than the low-income and fragile CTs. The middle-income CT programs are established programs with long-term duration; the low-income and fragile CT programs are often projects of limited duration, or they provide benefits for a limited time before beneficiaries are expected to move out of the program.

Many of them simply address emergencies. Others hope to become largescale, permanent programs, and they are working to this end.

The objectives of the middle-income CTs often focus on assisting individuals in poverty, whereas the objectives of the low-income and

fragile CTs focus on combating food insecurity, responding to emergencies, or building human capital. Even semantics for the programs vary:

middle-income CTs are often referred to as cash grants, and low-income and fragile CTs are referred to as cash transfers or social cash transfers.

The middle-income CT programs are often part of rights-based social assistance systems that have their base in systems established in the colonial era. In Namibia and South Africa, the countries’ cash grant systems are a carryover from earlier welfare systems that provided fairly generous benefits to the minority ruling group while giving smaller grants to members of the majority population.3 Despite the obvious flaws of these systems, the programs generated an expectation that the government had a responsibility to provide support to vulnerable members of society. When rights and privileges were extended to all citizens or residents in an equitable manner, the early cash grants generated a greater demand for social protection systems and paved the way for large-scale CTs. This experience created an expectation that governments should provide minimum protection for citizens. In South Africa, the government holds that its constitution has mandated the right to social security. Provided it is able to do so, the government must provide social assistance to vulnerable groups without other means of support (Republic of South Africa 2004).

For more information about the South African system, the largest in the region, see box 2.2.

Sub-Saharan Africa’s CTs can be divided on the basis of their expected duration. For the purposes of the review, CTs were considered short term if they lasted a year or less; all other programs were classified as long term.

Admittedly, the long-term designation also includes midlength programs.

Although not ideal, the terms are used for illustrative purposes.

Programs were also classified according to their focus, which was determined primarily by the CTs’ stated objectives and, to a lesser extent, 52 The Cash Dividend

Box 2.2

The South African Grant System The extensive coverage of South Africa’s grant system provides an illustration of the cash grant systems often present in upper-middle-income countries in Sub-Saharan Africa. The South African system cost 3.2 percent of GDP in 2007/08 and reaches a significant proportion of the population—13 million of South Africa’s most vulnerable people—either directly or indirectly. It includes an Old Age Pension, a Disability Grant, a Care Dependency Grant, a Foster Care Grant, and a Child Support Grant. Other less prominent grants in the system include the Grant for Carers of the Aged, the War Veterans Grant, and Social Relief of Distress. Specific information about the major grants is provided in the accompanying table.

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by the program components. Within longer-term programs, most CTs were focused either on poverty and food security objectives or on human capital investments. Those programs that focused on human capital investments tended to be CCT programs, whereas the programs focused on poverty and food security usually involved unconditional transfers.

Most short-term programs focused on addressing crises brought on by natural disasters, such as famines or floods, or human-caused disasters, usually as a result of conflicts. Short-term CTs that focused on natural disasters often had a food security focus, because such disasters typically have a major impact on food security (see table 2.4).

Figure 2.9 shows that, as expected, wealthier countries (with their concomitant rights-based social assistance systems) implement long-term programs.

These programs had a poverty or food security emphasis.

Lower-middle-income countries (excluding fragile states) also tend to implement long-term CT programs. Approximately three out of four lower-middle-income CT programs were long term, and most had a food security or poverty focus. Still, almost one in four CTs in this group was short term and addressed natural disasters. In low-income countries (excluding low-income fragile states), half of programs were long term and half were short term. Most short-term programs focused on natural

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Source: Authors’ representation.

Note: The sample size is17 for upper-middle-income countries, 13 for lower-middle-income countries, 40 for low-income countries, and 22 for fragile countries. Sample size is limited to programs that could be classified into one of the categories.

The Rise of Cash Transfer Programs in Sub-Saharan Africa 55 disasters. Over half of programs in fragile states were short term, and all these short-term programs addressed human-caused disasters. Table 2.5 provides a list of selected CTs classified according to this framework.

Program ownership and reactive or proactive focus have gone hand in hand. Another fundamental difference between the two groups is that of ownership: middle-income CT programs are almost exclusively based in government institutions and are domestically funded, whereas lowincome and fragile CT programs are often seated outside of the government and are supported by donors. Low-income and fragile CTs can often be characterized as donor driven. Their fragmented nature and patchy coverage reflect the lack of domestic ownership and coordination of many of these programs.

Unsurprisingly, middle-income CTs and low-income and fragile CTs tend to focus on different roles of social protection. Figure 2.10 shows how middle-income CTs focus on the ex ante preventive and promotive roles of social protection. Low-income and fragile CTs in the region have a larger protective focus, meaning a greater percentage of the programs are responding to shocks once they have already occurred. These findings illustrate that wealthier countries are more successful in proactively confronting risks; lower-income countries are reacting to crises ex post. This trend coincides with the patchy, short-term implementation of CT programs in lower-income countries, and it reflects those programs’ reliance on donors who select priority crises for intervention based on the donors’ own institutional mandates and priorities.

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