ISSUE 54 May 2012

Humanitarian Exchange Magazine

Bigger, better, faster: achieving scale in emergency cash transfer programmes

by Breanna Ridsdel, the Cash Learning Partnership (CaLP)

UN Photo/WFP/Phil Behan
A beneficiary of a cash transfer programme in Niger
 

Cash-based programming is increasingly being used in major emergencies. Yet for a variety of reasons we are still not able to use cash transfers at scale. With a few exceptions, notably the recent response to the famine in Somalia, the majority of humanitarian cash transfer programmes have been implemented on a much smaller scale than equivalent in-kind programming. This article argues that three major areas still require concerted action: market assessment and response analysis, preparedness and coordination. It also makes the case that, in order to realise the full potential of cash as a response tool, the humanitarian community needs to find ways of working across sectoral boundaries.

Market assessment and analysis

While there is no standard definition of what ‘at scale’ means, there is general consensus that, in order to implement significant cash transfer programmes, humanitarian actors need a better understanding of markets. An increasing number of humanitarian actors are undertaking market analysis in emergencies, and many tools are available, ranging from trader surveys to full analyses such as EMMA (Emergency Market Mapping Analysis) and MIFIRA (Market Information and Food Insecurity Response Analysis).[1] However, there is a lack of consensus about what constitutes ‘good enough’ market analysis in the trade-off between quality of information and speed. Market analysis tools generally require significant financial investment, are time-consuming to implement, require skilled human resources and take time to produce results. For example, EMMA often takes weeks to organise and implement, requires significant funding, training and technical support and the results may come in too late to be factored into response decisions. As a result, many humanitarian actors are considering new ‘one-day’ market assessment tools. However, while these ‘quick and dirty’ tools may be adequate for small-scale programmes, they may not provide enough information to satisfy organisational or donor requirements for larger- scale or longer-term programmes that require greater financial commitments.

Markets are complex and dynamic; they can change rapidly, and different types of analysis are needed throughout the response cycle. Market analyses conducted during the programme design phase represent only a snapshot of a particular moment in time, and may not provide a sound basis for decision-making in the longer term. The most appropriate response to these challenges is not likely to be a single tool, but a range of tools and guidance on how to apply them in different contexts and at different stages of the project cycle. Aid agencies must also make better use of longer-term market information frameworks, both before and during an emergency.

Preparedness

Rolling out large-scale cash-based programmes in a timely way requires investment in preparedness. Despite the growing use of cash transfers in emergencies, most agencies have not yet included specific cash programming elements in their contingency planning documents. Response times would be significantly improved if national and regional actors collaborated to address these gaps. In particular, aid agencies, governments and donors should work together to establish criteria to determine when cash-based responses should be used, and what levels of market information would be required. Logistical preparedness measures, including dialogue with potential private sector partners, pre-authorisation of suppliers and contingency stocks, would also increase the speed of the response.

Aid agencies must also develop their familiarity with existing market information, such as that provided by the Food Security and Nutrition Analysis Unit (FSNAU) in Somalia and the Famine Early Warning System Network (FEWSNET). In addition to studying predictable trends, such as seasonal variations in commodity or labour markets, humanitarian organisations, donors and governments should gather baseline data to inform emergency programming. This information can be used, updated and expanded through additional analysis in the lead-up to a crisis or after a disaster. Humanitarian actors should also engage in discussion with those involved in collecting long-term market data, to identify what information is required to support humanitarian decision-making, agree on early warning and recovery indicators and include predictable market scenarios in contingency planning.

Working across sectors

Cash is inherently a multi-sector tool because it can be used to meet various needs at the same time. If the humanitarian sector is serious about using cash transfers at scale, we need to find ways to exploit, rather than limit, this potential. This means working across the sectors and clusters by which we organise humanitarian aid (e.g. food security, non-food items, basic services). Monitoring data consistently shows that beneficiaries use unconditional cash transfers to buy goods and services that meet needs across various sectors of aid, in combinations based on their household’s priorities. This flexibility offers the potential to deliver responses that meet a wide variety of needs, in a way that enables disaster-affected people to exercise choice and agency. However, this flexibility also poses a challenge to large organisations whose mandate limits them to a particular sector of response. In order to use cash transfers as a scaled-up response, agencies must accept and plan for the fact that beneficiaries will use cash to buy some goods and services outside of their mandated sectors of intervention. Additionally, in large multi-sector emergencies large agencies should consider whether a better approach would be to implement joint unconditional cash programmes that aim to meet needs across several sectors.

Coordinating cash transfers in emergencies

As the number of actors implementing cash transfers in emergencies and the scale of cash programmes continue to increase, so does the need for coordination around cash transfer programming. This is one of the biggest obstacles to large-scale cash programming.[2] At a technical level, coordination has usually been dealt with by cash transfer working groups (CTWGs). In practice, these working groups have often acted as a ‘mini-cluster’ on cash and vouchers, collecting and sharing information about programmes and working to harmonise important programming elements, such as cash-for-work rates, targeting criteria and monitoring frameworks. CTWGs have also provided a forum for joint advocacy initiatives and a platform for negotiations with private sector actors involved in the delivery of payments. However, most technical working groups have been established underneath or in connection with the Food Security Cluster, thus significantly limiting their reach in terms of inter-sector coordination. In addition, technical coordination in most recent emergencies has been largely focused around cash-for-work. This has succeeded in harmonising wage rates, for example, but has been much less effective in coordinating unconditional transfers.

In terms of general coordination, the sector-based nature of the humanitarian coordination system makes it particularly difficult to maintain an overall picture of cash programming. In several recent emergencies, notably in Pakistan in 2010 and Somalia in 2011, this has been dealt with through the creation of inter-cluster cash coordination mechanisms. However, these mechanisms have taken a long time to create, and have not provided genuine opportunities for joint assessments or complementary decision-making. This problem has been compounded by a lack of clarity, and in some cases lengthy negotiations, on who should take the lead, in particular among the UN agencies. Coordination bodies have been created on an ad hoc basis, without clear time frames or resources and with no clear plans for managing the transition from emergency to recovery programming.

An additional complication is that the agencies that have taken the lead on inter-cluster coordination have also been implementing cash transfer programmes of their own, which has meant that their roles and priorities in terms of coordination and making policy decisions have not been clear. For example, if the lead agency believes that cash for work is the most appropriate modality, how does that affect their ability to make strategic decisions around unconditional cash transfers? Furthermore, agencies with sector-specific mandates may find it difficult to lead inter-sector coordination.

Cash coordination mechanisms are isolated from the overall humanitarian response and have not yet been integrated into humanitarian reporting, mapping or information frameworks. One solution would be for a non-implementing agency such as OCHA to take the lead on addressing inter-cluster coordination for cash transfer programming. Such an agency should work with existing leaders from within and outside of the UN system, including CaLP, to synthesise lessons learned and develop and trial more systematic approaches.

Finally, the substantial experience of national governments, long-term development actors and private sector service providers, in particular those involved in social protection programmes, has been under-represented in humanitarian coordination around cash transfers. Working with other actors, in particular the private sector, requires new ways of coordinating aid and new lines of communication; the cluster system may not be the best platform for achieving this in the long term.

Lessons learned and ways forward

Cash transfer programmes are still relatively small-scale, and to some extent we have been able to mould them to our usual ways of working. However, it is clear from recent experience and research that, in order to effectively programme with cash at scale, concerted efforts must be made to improve our ability to work with markets, increase preparedness and establish effective coordination around cash transfers in emergencies.

Cash transfers have often pushed humanitarian organisations to work with new partners, and this trend will continue as cash-based programmes in emergencies grow in quantity and scale. Humanitarian agencies need to collaborate with governments, donors and long-term market actors to deepen their knowledge of existing market information frameworks, establish baseline data to support emergency programming and increase preparedness to engage with markets from the early stages of a disaster response through to the recovery phase.

In order to realise the full potential of cash as a large-scale response tool, humanitarian actors, in particular those bound by their mandates to a particular sector, must learn to accept the flexible nature of cash and work together to implement multi-sectoral responses. In order to achieve this, substantial progress must be made in improving coordination around cash transfers from the outset of an emergency. Learning from recent emergencies must now be integrated into the humanitarian reform agenda at the highest levels, so that cash coordination mechanisms become timely and systematic, are allocated the necessary resources, have effective leadership and are properly incorporated within the overall humanitarian coordination system.

Breanna Ridsdel was the Communications and Advocacy Officer for the Cash Learning Partnership (CaLP) from December 2010–March 2012.


[1] A recent CaLP research study listed more than 40 tools and resources for various types of market information, including 11 different models/tools for response analysis. S. Sivakumaran, Market Analysis in Emergencies, CaLP, 2011.

[2] Lois Austin and Jacqueline Frize, Ready or Not? Emergency Cash Transfers at Scale, CaLP, 2011.

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