ISSUE 53 March 2012
Humanitarian Exchange Magazine
Coordinating cash transfers in the Horn of Africa
© Anna Ridout/Oxfam
Humanitarian organisations in the Horn of Africa are increasingly using cash and voucher transfers, particularly in areas of insecurity where access problems have led to a rethink of traditional ways of delivering aid. An estimated four million people in the region are now receiving assistance via cash or voucher programmes from a wide range of national and international NGOs, UN agencies and other humanitarian actors.
The sheer scale of the response and the number of agencies involved has brought coordination to the forefront of the discussion around cash transfer programming in the region. While technical coordination groups in the region are functioning well, these remain ad hoc and are not linked to the broader humanitarian coordination system. This article explores the need for coordination of cash transfer programming, examines what is working and what gaps remain and calls for high-level engagement and leadership to integrate cash transfer programming into humanitarian information systems and coordination frameworks.
What’s so special about cash?
Cash transfers are not a type of programming – they are a tool to achieve programme objectives. So why is there a need to pay special attention to coordinating cash-based responses?
First, cash transfers or vouchers allow beneficiaries to meet multiple objectives (food, shelter hygiene...) in one intervention. This makes it difficult to fit cashbased responses into existing sector-based coordination mechanisms, such as the Clusters. Second, cash transfer values in emergency responses often are not standardised, since they are calculated according to different, often agency-specific criteria and to meet various objectives. While this has been dealt with to some degree through the cluster system and technical coordination groups, this coordination is voluntary and rarely extends between sectors. When agencies implement different sector-based responses in the same community, the modality (e.g. in-kind, cash-for-work, vouchers or cash transfers), transfer amounts, frequency and targeting criteria are often radically different. This has the potential to cause tension within communities, in particular with those who are excluded from the programme – an issue that is probably exacerbated by the desirability of cash. If not properly addressed, this could reduce the effectiveness of programmes and even create security risks for beneficiaries and agency staff or partners. In these cases, inter-sector coordination and transparency are critical in order to maintain the ‘do no harm’ principle and respect the dignity of beneficiaries.
Third, cash-based programming emphasises the need to gather and analyse information in new ways, particularly information about markets. Agencies and donors are also increasingly regarding coordinated information analysis as a measure to mitigate risk, by ensuring that programmes can adapt to market fluctuations and do not have a detrimental impact on prices or the functioning of markets. Fourth, coordination provides a joint platform for negotiation and advocacy. In many contexts, cash is perceived to be more politically sensitive and higher-risk than in-kind assistance. This requires careful coordination with national governments, local authorities and implementing partners. Where key stakeholders, in particular governments, are sceptical and remittance agents. Joint negotiations usually give better rates on transfer costs and other services, as well as enabling agencies to share learning and experiences.
Coordination in the Horn of Africa
The scale of cash transfer programming in the Horn response has pushed humanitarian actors to look for new ways of coordinating both within and across sectors. There is arguably more coordination around cash transfers in the Horn of Africa than in any other previous disaster. There are technical working groups for the response in Kenya, Somalia, Ethiopia and South Sudan, along with government-level policy groups, inter-cluster coordination mechanisms and consortia of organisations implementing joint cash-based responses. While this article cannot go into detail about all of these, a few emerging trends arising out of the response are discussed below.
On a technical level, aid agencies in two consortia implementing cash transfers in Somalia are using a common monitoring and evaluation plan and tools in order to gather data on whether cash and vouchers provide a viable, effective and accountable large-scale response to the humanitarian crisis. While working in consortia is not new to large-scale emergency responses, this forum is unique in that it is the first time a joint monitoring framework for data collection has been put inplace for cash transfer programming.
Humanitarian actors in the Horn have also pushed for the use of online information systems and coordination groups. At the request of the technical working groups, an online mapping tool has been developed to track cash responses in Somalia. The tool tracks beneficiary numbers, modalities and transfer amounts, and aims to reduce overlap and identify potential risks resulting from poor coordination. The Inter-Agency Standing Committee (IASC) invited the Food and Agriculture Organisation (FAO) to a virtual inter-agency technical reference group for cash-for-work. At the time of writing this group is still in the start-up phase and its membership is restricted, so it is not yet clear what results it will produce.
At the policy level, an inter-cluster coordination mechanism for Somalia has been created. A full-time cash response coordinator has been hired under FAO, and each cluster was asked to establish a cash focal point reporting to the coordinator. Humanitarian actors recommended a similar mechanism for Kenya, but it has not yet been put in place. However, the Kenyan government has taken an active role and has created a sub-committee on cash-based responses under the Kenya Food Security Steering Group (KFSSG). The aim of the sub-committee is to improve the quality and effectiveness of cash-based responses to food insecurity in Kenya by coordinating information-sharing, acting as a review and steering body and developing guidelines. The group provides an inter-agency forum of NGOs, UN agencies and representatives from the government, including the Ministry of Livestock, the Ministry of Education and the Ministry of Gender.
Too much coordination, or not enough?
While there is a great deal of coordination and collaboration around cash transfers in the Horn, key gaps remain. First, coordination is reactive rather than strategic, and usually has not taken place at the decisionmaking stage. Generally, coordination mechanisms arise after agencies have separately done their response analysis and decided to implement cash programmes, and they are attended by technical staff, not decisionmakers. Thus, the current coordination mechanisms do not foster harmonised programming, and fall short in managing the potential risks caused by different transfer amounts or the use of multiple modalities in one target community (although they can help to mitigate the consequences to some extent).
Second, while cash transfer coordination mechanisms are effective and functional, they are often ad hoc and usually sector-based. This has given rise to numerous different coordination bodies – in Nairobi alone there are at least six – with no clear lines of communication between them. Since attendance by technical staff at the coordination meetings is usually not overseen by senior managers, it often does not result in systematic information-sharing between or even within organisations. Additionally, it is not clear how the technical and policy-level groups should work together.
The ad hoc nature of these groups also means that, in most cases, their sustainability depends on individual, as opposed to institutional, commitments. The experiences of the Cash Learning Partnership (CaLP) and other coordination groups in this and other emergencies, for example in Haiti, Pakistan and Côte d’Ivoire, have shown that having a dedicated field-based coordinator or focal point adds value and ensures the institutional knowledge and continuity of these mechanisms; however, there is no systematic consideration of this need by donors or implementing agencies. Without funding for such a role, coordination groups have collapsed.
Third, while technical coordination groups are effective at gathering and sharing information relevant to cash transfer programming, such as market assessments, there is no systematic integration of that information into humanitarian reporting frameworks. This is further hampered by the sector-based organisation of humanitarian information systems.
Finally, none of these forums has captured the substantial experience of social protection programmes in the region. This reflects the general isolation of humanitarian coordination mechanisms from longer-term programming. Many humanitarian stakeholders in the region are now calling for advocacy and dialogue with donors and governments on how to carry over the gains achieved and protect beneficiaries from future disasters.
Where do we go from here?
The market-based and cross-sectoral nature of cash transfers in humanitarian response is pushing humanitarians to find new ways of working. This has implications not just for cash transfer programming, but also for the way we do humanitarian response as a whole, because cash transfers are challenging the boundaries and sectors by which we organise ourselves. While there is clear evidence that there are substantial advantages in having forums for information-sharing around cash transfers, there has been little dialogue or evidence gathered as to the best ways of doing this. Given that practitioners assert that current ways of working are not adequate, where do we go from here? 
There is a growing recognition that coordinated collection, analysis and information-sharing on markets should not be limited to cash transfer programming but needs to be systematically integrated into humanitarian coordination systems and information frameworks from the outset of a disaster response. Donors and implementing agencies must ensure that market analysis is routinely used to inform the consideration and selection of response options, and make greater investment in gathering baseline market data. Moving this process forward will require strong leadership and further research. The cluster system may not provide the most effective solution, and new ways of working may need to be found.
We have yet to see a truly multi-sector coordinated response to a crisis, with different agencies working together across sectors to meet the diverse needs of affected people through a combination of resource transfers (cash, inkind or both) and other critical services. Yet it is not so farfetched to imagine that this could be possible. The effective coordination of humanitarian response, whether in-kind, cash-based or a combination thereof, should not be limited by agency mandates or our own habits of working. The sector-based classification of beneficiaries’ needs is an artificial construct. In reality, people do not categorise their needs into sectors or view them in isolation from each other. By challenging the traditional barriers of sector-based responses and coordination, cash transfers are providing us with both a tool and an opportunity to build ways of working that recognise the dynamism of local market systems and reflect the diverse reality of people’s needs in a crisis or after a disaster.
Breanna Ridsdel works in Communications and Advocacy for the Cash Learning Partnership (CaLP), a consortium of international NGOs raising awareness of and promoting best practices in the use of cash transfer programming in humanitarian response. For more information and resources, see www.cashlearning.org.
 The plan and tools are available online at www.cashlearning.org/where-we-work/somalia-cash-and-voucher-monitoring-group.
 The Cash Learning Partnership maintains another virtual reference group, an email-based discussion forum with more than 600 active members from NGOs, UN agencies and academic and research institutes.
 At the time of writing it is too early to draw lessons about the effectiveness of this inter-cluster approach, but in 2012 CaLP will be conducting a review of the different coordination mechanisms in the Horn.
 This theme came out strongly from CaLP’s Fifth Global Learning Event on cash transfer programming, held in Nairobi in November 2011, and again at the Cash and Risk Conference in Copenhagen the following month.
Featured in this issue
- The crisis in the Horn of Africa
- Managing the risk, not the crisis
- Coordinating cash transfers in the Horn of Africa
- How Ethiopia’s Productive Safety Net Programme (PSNP) is responding to the current humanitarian crisis in the Horn
- Improving drought management systems in the Horn of Africa
- How reciprocal grazing agreements can increase the resilience of pastoralists
- Mitigating the impact of drought in Moyale District, Northern Kenya
- Humanitarian response in conflict: lessons from South Central Somalia
- Neutrality undermined: the impact of counter-terrorism legislation on humanitarian action in Somalia
- The impact of UN integration on aid worker security in Somalia
- Conflict and deteriorating security in Dadaab
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