How cash transfers in Somalia could evolve into a national social safety net

Internally displaced persons settlements in Baidoa town, Somalia. Photo by: Sara Jerving / Devex

BAIDOA, Somalia — On the outskirts of the city of Baidoa, in southwestern Somalia, lies a tent city of small dome shelters that have been cobbled together with branches, plastic tarp, pieces of cloth, and old grain bags, held in place with a random assortment of string.

The shelters are home to Somalis, many of them farmers and pastoralists, who have come to Baidoa in search of humanitarian aid in response to the regional drought that has persisted for two agonizing years in the region.

The current crisis has displaced more than 1.4 million people, with displacement flows hitting a peak last March, when more than 290,000 people left their home. But people continue to trickle into the camps and the weather forecast doesn’t look promising. The next rainy season, which starts in April, is expected to bring below-average rainfall. This means that for the majority of people already in the camps, a return home is not likely in the near future. To help keep these populations alive, the humanitarian sector has leaned heavily on cash transfers. This can include direct transfers of cash to cell phones through mobile money, vouchers, or a bank card.

In Somalia, cash transfer programs scaled up last year to a level likely never before seen in the country, Johan Heffinck, head of for the European Commission’s European Civil Protection and Humanitarian Aid Operations Somalia office, told Devex. Around 3 million people, which is about one-quarter of the population, are receiving some type of cash assistance, he said. The World Food Programme, for example, had about 10 percent of their food aid as cash-based transfers in 2015 and that number has now risen to about 60 percent, said Liljana Jovceva, head of programme for WFP’s Somalia office.

Amid massive displacement over the past year, the humanitarian sector began to better coordinate its cash transfer distribution, creating alliances and working groups to ensure that organizations weren’t duplicating efforts.

Ultimately, some in the humanitarian sector have their sights set on seeing the program evolve into a national social safety net that would provide assistance to vulnerable Somalis beyond the current food crisis. This could lay the groundwork for future crises, allowing the sector to scale-up quickly during the next emergency.

A bumpy start

After their 25 goats died of starvation and thirst, Khadiyo Mohamed and her family came to Baidoa in search of support. Having to sell their land, and their donkey, which they used for transport, they walked for seven days. Her husband died soon after, from an unknown disease. She now lives with her five children in a dome shelter that has a width of about 8 feet. The only thing keeping her family afloat is the $87 she receives on her phone each month from Save the Children International. She uses it to buy food, but also to pay off the debt that she incurred from food costs at the onset of the drought after her goats died.

Cash allows people to buy what they need most, rather than prescribing for families what is important. For Mohamed, one of her priorities is paying off her debt. She still owes $10.

Transferring cash is also more efficient than distributing actual food, said Calum Mclean, global thematic coordinator for cash and basic needs for ECHO. In Somalia, around 80 percent of cash transfer funds actually reach the beneficiary. In-kind food aid is closer to 60 percent, he said.

With help from cash transfers, Hassan Affey Ali has started a sewing business in the Buuloduuf displacement camp. Experience his story here.

Cash transfers work well in Somalia, because the private sector is functioning despite the ongoing conflict. This is largely because of the country’s dependence on food imports, which ensures there are relatively consistent markets to buy food and other items. In crises such as those happening in South Sudan and Yemen, where markets currently aren’t functioning, cash transfers don’t work as well, said Mclean.

At the onset of the food crisis, the distribution of cash in Somalia was done in a somewhat haphazard way. There was little coordination on cash delivery among NGOs, leading to overlaps in the distribution of cash.

“We would see an absence of coordination in some settlements. There would be two or three partners working on the same settlement,” said Kassim Mohamed Adam, head of the Norwegian Refugee Council’s Baidoa office.

As a result, the Somalia Cash Working Group, co-chaired by WFP and ADESO, was established in February. This group mapped out the various cash transfer programs in the country and began to improve coordination among the organizations that distribute cash. The group aims to “streamline the design, development, and implementation of cash-based interventions and improve strategic direction.”

ECHO also created an alliance of organizations, including the Norwegian Refugee Council, Concern Worldwide, Danish Refugee Council, Cooperazione Internazionale, Save the Children International, and ACTED, aimed at coordinating the cash transfer response to ensure uniform standards among alliance members and prevent overlap.

This month, the alliance evolved into a consortium, which will now operate under one contract, said Heffinck. This is aimed at increasing coordination and simplifying the administrative structure.

Despite enhanced levels of coordination, there are still overlaps and other hurdles, said Heffinck. One of these includes ensuring that organizations agree to distribute the same amount of money. The Somalia Cash Working Group has recommended a monthly rate for distributing cash, based on a minimal expenditure basket and cost of living throughout the country. But not all of the cash-distributing organizations have agreed to these figures, said Heffinck.

The humanitarian sector also has a vision of creating a central database of information on cash transfers. This could include data from the cash distributing organizations, such as the names of cash recipients, number of people that are receiving cash, GPS location, for which period they are receiving cash, among other information. This could help to identify overlaps and coverage gaps, said Heffinck.

A national safety net?

The humanitarian sector, in many ways, had to scale this system up from scratch last year in response to the food security crisis, said Heffinck. Transforming the system into a national social safety net is a way to prevent the humanitarian sector from having to repeat this again during the next crisis. A safety net would aim to keep a group of households that are chronically food insecure or vulnerable on a cash transfer program, said Heffinck.

"This is probably the best preparedness action we can create in view of the next crisis," he said.

In the Lower Juba region of Somalia, ADESO and ACTED have already been taking a “social safety net approach” to their cash transfer program, distributing unconditional cash to 5,000 families, in conjunction with livelihood strengthening and diversification, disaster risk reduction, and preparedness programming.

In order to expand a safety net to a national level, organizations, including ECHO and ADESO, are taking steps forward, such as designing the technical details of a national safety net, finding donors, and creating donor coordination and technical facilitation teams. A social safety net could also save money for donors who invest upfront in a national program and then could end up spending less on future humanitarian responses, said Deqa Saleh, cash and social protection advisor at ADESO.

“Whatever savings remain, because it costs less money for a safety net program, then organizations can now look at transformation in terms of development,” she said. “The funding that goes to Somalia is very humanitarian focused, but that could switch to development.”

Administering the social safety net would ultimately be the responsibility of the Somali government, said Heffinck. But this could take some time, as the government currently doesn’t have the capacity or the funds.

“Having government ownership will be too ambitious in the short term,” said Jovceva. But in the meantime, the government should be fully onboard with the policy framework around the social safety net, she said.

For mothers like Khadiyo Mohamed, who lost her livestock, land, and her husband during the drought, it will be a while before she is back on her feet again. Her husband was the farmer in the family. When the food crisis passes, she will have to save up for another plot of land and then learn how to farm it, or find some other form of earning money. A social safety net could have the potential to serve as a buffer for families like hers in reclaiming their lives.  

Editor’s note: The Norwegian Refugee Council facilitated Devex's travel and logistics for this reporting. However, Devex maintains full editorial control of the content.

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About the author

  • Headshot sarajerving

    Sara Jerving

    Sara Jerving is Devex's East Africa Correspondent based in Nairobi. She is a reporter and producer, whose work has appeared in The Wall Street Journal, the Los Angeles Times, Vice News, Bloomberg Businessweek, The Nation magazine, among others. Sara holds a master's degree in business and economic reporting from Columbia University Graduate School of Journalism where she was a Lorana Sullivan fellow.