To what extent have unconditional cash transfers been used in East and Southern Africa, and what can be learnt from these schemes? This report was commissioned by the United Nations Children’s Fund as part of a review of social protection measures reaching vulnerable children. It summarises findings from a survey across 15 countries, and from case studies in four countries, drawing out lessons learned with a particular focus on reaching the most vulnerable children (MVC).
Some of the world’s poorest people live in East and Southern Africa, where they face the consequences of HIV and AIDS coupled with chronic poverty and deteriorating food security. Childhood poverty is a major concern, as over half of the population are children. In this context there is a growing interest in unconditional cash transfers to benefit the MVC because: The response to support AIDS orphans is seen as inadequate; recent studies highlight the positive impacts of transfers on children; food and clothing handouts can create dependency; and regular cash injections can contribute to pro-poor growth and poverty reduction.
Before looking at how unconditional cash transfers work and how they can be scaled up, it is important to establish whether they reach and benefit children. We should consider that:
- Cash transfers are put to diverse uses: Food, groceries, household items, services, assets, income-generation, social costs and savings. Much of this spending benefits children, and there is little evidence that it is ‘misused’.
- Cash transfers affect people’s status in the community and relations between beneficiaries and non-beneficiaries. If the eligibility criteria are transparent and generally accepted, these problems are minimised.
- Programmes providing free resources risk creating dependency. However, some programmes in this study are targeted at economically inactive people as a response to dependency. Transfers to the economically active were too low to meet basic consumption needs, and the beneficiaries need to generate supplements.
- Given limited public resources, it seems sensible to target transfers at the most needy. This is expensive and difficult to achieve, and is potentially divisive. A universal transfer to an easily identifiable vulnerable group may be optimal.
- State-run cash transfer programmes are often located in government departments with little managerial capacity or bargaining power within government. Programmes need to be well managed to prevent corruption and ‘leakage’.
Programme approaches are reviewed and recommendations are made on how to maximise the impact of transfers on children:
- It is not necessary to target schemes at children in order to benefit them: By targeting the poorest households, vulnerable children are reached. Linking cash transfers with the delivery of basic services is problematic, as these services are often inaccessible or low quality.
- To increase the positive impact on the MVC, payment levels should be index-linked with price variations and a basket of goods. Schemes should be accessible to the poorest and supported by information and monitoring systems.
- Key approaches for reaching the MVC are universal social pensions, transfers to the poorest households, and child support grants.
- Programmes should be scaled up. There is a trade-off between high impact, holistic, well managed local programmes, and the need for broader coverage. The need for good management should not be underestimated, and should be budgeted for.
- Cash transfers should be part of comprehensive social protection programmes supporting the incomes of the poor while reducing their expenditure, building their assets and improving the quality of services.
Partnerships should be built with governments and non-governmental organisations for effective delivery. Support for cash transfers should be seen as a long-term commitment and a ‘social contract’, not as a fashionable new development instrument.
