The evolution of cash transfers in Somalia

HARGEISA, Somaliland — Recurring drought and ongoing insecurity have left large swaths of the Somali population in consistent need of humanitarian assistance. Increasingly, that assistance has been in the form of cash transfers. Somalia has one of the most active mobile money markets in the world, which has facilitated the expansion of mobile money cash transfers as a practical and efficient tool for the humanitarian sector in recent years, alongside other cash programs, such as vouchers. While the programs have been used in Somalia since 2003, it wasn’t until famine warnings in 2017 that the humanitarian sector massively scaled up this type of aid. Within four months of the alert being issued, more than 3 million people were reached with cash transfers each month. Now, as the country faces another year of poor rains, with 2.2 million people expected to be in crisis or emergency levels of food insecurity through September, cash transfers will again play a significant role in the humanitarian response. Devex spoke with organizations providing cash transfers in Somalia about how delivery has evolved in recent years — including through better coordination and changes in how beneficiary data is managed — and the potential for the work to eventually evolve into a national social safety net. “We need to standardize our procedures — by putting in place a cash consortium, with one contract, one legal agreement, essentially we are forcing that to happen.” --— Alessandro Bini, director of the Somali Cash Consortium Increased coordination While there have been several cash working groups in Somalia over the years, none were operational at the onset of the drought in 2016. A group was reactivated in February 2017, creating a forum for cash actors to discuss challenges and best practices. It has also helped cash actors avoid duplication and fill in gaps where assistance is needed. “We are now seeing the large cash actors share more information about their planned assistance — not just assistance they’ve already achieved — and then adapting programming to avoid areas where other agencies are planning to operate,” said Kaitlyn Scott, program manager of the Somali Cash Consortium and Cash Working Group co-chair. While the Cash Working Group brings all cash actors together, on a smaller scale some INGOs have worked to standardize their delivery of cash transfers. In 2017, the Cash Alliance — now the Somali Cash Consortium — was formed between several major implementing INGOs that were funded by the EU’s humanitarian arm, ECHO. The consortium is hosted by Concern Worldwide and has a management unit with four full-time staff members. Under the early iteration of the alliance, ECHO had individual contracts with each organization. Now, under the consortium, there is just one contract that covers all of the organizations, leading to coordination in areas such as targeting clients, transfer values, messaging to communities, reporting and scheduling of transfers. “It’s been a key step in saying: We need to do things in the same way. We need to standardize our procedures,” said Alessandro Bini, director of the Somali Cash Consortium. “By putting in place a cash consortium, with one contract, one legal agreement, essentially we are forcing that to happen.” One area that could still use more coordination, according to humanitarian actors, is harmonizing the amount of money given to beneficiaries. While some donors base transfer values on the Somalia Minimum Expenditure Basket, which is updated monthly, others use different methods. Additionally, donors might interpret the same minimum expenditure basket differently. When the humanitarian sector transfers different amounts of money it can raise concerns in communities over fairness or questions about whether an organization is pocketing the cash, Scott said. ECHO and the U.K. Department for International Development have agreed to coordinate transfer values, but other donors, such as the United States Agency for International Development, have not, yet. Data protection The EU’s new data privacy rules, the General Data Protection Regulation, or GDPR, went into effect last year. This pushed European actors in Somalia to change the way they handle beneficiary data. It’s been complicated because the rules are open to interpretation, said Rory Crew, finance and systems director at the Somali Cash Consortium. “It [GDPR] really forces us to sit down and plan what we are going to do with that data in the long-term.” --— Rory Crew, finance and systems director, Somali Cash Consortium One interpretation is that the rules apply to data collected by an EU-based INGO, no matter where it’s held or who the data relates to. Another is that it applies to EU-based INGOs in cases where the data is held in the EU or is about EU citizens. A third is that it only applies to EU citizens, either residing within the EU or elsewhere. If an organization decides GDPR applies to their beneficiaries, informed consent is required, which includes telling beneficiaries why data is collected, how it is stored, and who it will be shared with. Data must also be kept current. “It really forces us to sit down and plan what we are going to do with that data in the long-term,” Crew said. Adjusting to GDPR requirements has been time-consuming. In 2018, ECHO asked the Somali Cash Consortium to share cash transfer beneficiary data with the World Food Programme, to avoid duplication of beneficiaries. It’s taken over a year and a half, and at least 500 staff hours, to write GDPR-compliant data protection agreements — and the process is ongoing, Crew said. As a solution, the organizations are working on implementing software that would check for duplicates among beneficiaries without extracting actual data, said Emmanuel Odongo, program policy officer for cash-based transfers at WFP Somalia. Moving forward, it will be easier to implement GDPR compliance with new programs rather than integrating it into existing programs, Crew said. The consortium is also reducing the amount of data it collects and splitting data sets. “Our biometric, registration and M&E data are held on different systems. If one is lost, corrupted or hacked, the others are unaffected,” he said. Evolving into a national social safety net As part of an effort to reduce the need for large-scale humanitarian responses at the onset of crises, the World Bank is considering funding the creation of a national social safety net pilot program in Somalia, using cash transfers. The project is still under preparation and pending approval from the bank’s board. The idea is that a targeted, vulnerable portion of the country would receive a consistent flow of cash throughout the year, not just during emergencies. When an emergency hits, the program would be scaled up. Separately, a donor working group — which includes participation from donors such as the EU, Germany, United Kingdom, United States, and World Bank, among many others — has set up a technical assistance facility that is examining the possible parameters of a longer-term social safety net, including targeting approaches, triggers that would lead to a scale-up of the program in times of crisis, and the appropriate amount of money to transfer. The federal government of Somalia recently finalized a social protection policy, which a safety net would fall under. It is hoped the government would eventually take ownership of the implementation and funding. “It will take some time before we are there. In the intervening time, the INGOs have a strong role to play in developing the system, the policies and doing the early implementation of it,” Scott said. Editor’s note: The Somali Cash Consortium facilitated Devex's travel and logistics for this reporting. 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