NAIROBI — The humanitarian sector should aim to deliver aid in the most cost-effective, efficient ways, and this can be reached through unconditional cash transfers, argued panelists in Devex’s recent webinar on the use of cash transfers in crisis responses. The delivery of in-kind food aid can result in aid recipients selling the food in local markets, often at a discount to the original value, because what was given to them wasn’t what they needed at the time, they said.
The humanitarian sector significantly scaled up the cash transfer program in Somalia during the ongoing drought. Some in the sector hope that cash transfers could eventually evolve into a national social safety net.
Cash transfers have become an increasingly popular tool in the past few years by the humanitarian sector. In settings such as Somalia, there was a huge scale up in the use of this type of aid distribution over the past year in response to the food security crisis. An estimated 3 million people in Somalia are receiving cash transfers.
Adeso, a Nairobi-based charity, has been implementing cash transfers in East Africa since 2002. Over the years, the organization has worked to improve its delivery, Deqa Saleh, cash and social protection advisor at Adeso, said during the webinar. For example, the organization has found that using community-based targeting methods has been the most effective in identifying appropriate cash transfer recipients.
Adeso co-chairs the Somalia Cash Working Group with the World Food Programme’s Somalia office. The group, which was revived early last year in response to the food security crisis in the country, has been working to ensure greater coordination among agencies and organizations that are offering cash transfers in areas such as consistency on the value of the cash transfers they are distributing, monitoring and evaluation efforts, and market-data and assessments, among other efforts, said Saleh.
Cash transfers offer an opportunity to accelerate the humanitarian reform agenda agreed on in the Grand Bargain at the World Humanitarian Summit in 2016, Owen Barder, vice president and senior fellow at the Center for Global Development, said during the webinar. This agenda includes streamlining aid, reducing overhead costs, giving more control to beneficiaries, working better with governments, and reducing duplication, among other goals.
“Cash is potentially a disruptor that changes how we do humanitarian aid and gets us beyond some of these institutional obstacles that’s stopping us from introducing the reforms that I think we all accept need to be introduced,” he said.
One of the challenges is getting donors on board with the idea of cash transfers and convincing humanitarian organizations to change their ways, Barder said. Key to convincing donors is emphasizing the evidence-base around cash transfers that show they are more cost-effective.
“At the moment, it’s hard to get everyone to move together for a different system,” he said.