COVID-19 and Cash Transfers in MENA: What’s Possible?
Some of the most complex and protracted humanitarian crises in the world are in the Middle East and North Africa (MENA) region. These crises were already suffering from funding shortfalls and worsening vulnerabilities. Now, like the rest of the world, people in MENA – both host and refugee/displaced populations – are facing the ramifications of a complex pandemic.
We asked the leads of Cash Working Groups from countries across the region what impact the COVID-19 pandemic was having, how they were responding, and about the challenges and opportunities for using cash assistance. There is already impressive work taking place and here’s what we learned:
The consequences of the crisis are just beginning to be felt and are playing out differently across the region. In Yemen, for example, the Cash Consortium of Yemen (CCY) has published an analysis of the likely impacts of COVID-19 on the humanitarian situation and on the humanitarian cash response. Many countries see cash as a critical part of planning an effective response although COVID-19 has introduced additional complexities around delivery caused by a number of aspects of this crisis. These include impacts on access, the financial ecosystem, the supply chain and market functioning, livelihoods, and in thinking through what funding is needed to manage the pandemic.
The biggest problem shared across all contexts is an increased difficulty in access. In Yemen, for example, an already difficult operating environment due to conflict and travel restrictions between the warring north and south, new restrictions have now been placed on movement between governorates. These additional restrictions compound the challenge of accessing and expanding coverage to newly vulnerable populations. Access issues have also affected recipients’ ability to receive and use cash assistance. In Turkey, people under 20 and over 65 years have to adhere to a full curfew, limiting their access to markets and ability to receive assistance. In another context facing a similar challenge, a position paper has been developed to help facilitate access to Financial Service Providers (FSPs) and help mitigate access issues.
In many contexts, actors are exploring digital channels to support remote delivery for safer delivery. In Jordan, alongside mobile money, other innovative approaches such as money exchanges, door-to-door distributions, or direct home delivery by local shops are being explored. However, at the opposite end of the spectrum, the Central Bank of Libya is yet to provide clear direction to FSPs on the use of digital delivery mechanisms for cash assistance to refugees.
In some countries, the lack of liquidity in the system has already meant a scarcity of bank notes, difficulties in withdrawing cash and bank defaults. Countries with underlying economic and financial weaknesses such as Yemen run the risk of financial system collapse. In 2018, $3.35bn flowed into Yemen in remittances contributing to 12.44% of GDP but as COVID-19 restrictions are imposed, decreased economic activity has resulted. Many Yemeni migrants, for example, across the border in Saudi Arabia, are losing their livelihoods so that remittances are already falling short of normal levels. Furthermore, the remittance network itself is under pressure and may struggle to continue operating throughout this crisis without additional support. This reveals a need to assess FSP capacity, functioning and need for possible support.
Supply Chain & Market Functioning
Restrictions in place around COVID-19 are affecting supply chains and the functioning of, and access to markets. Gaza, for example, has just two points of crossing and is almost entirely dependent on imports for survival. There is a very real risk of border closure, disruption to the supply chain and a consequent severe lack of availability of goods and even physical cash in some cases. This poses a perplexing question – how can we support markets in highly import dependent economies when border closures have become the norm?
In Libya, the absence of imports has already resulted in prices skyrocketing and a shortage of goods. From the humanitarian perspective, increasing volatility means more frequent monitoring of markets and food prices. In some cases, adjustments must also be made to the Minimum Expenditure Basket (MEB) to reflect needs specific to this crisis such as additional hygiene items. All these factors impact the recommended cash transfer value.
The economic impacts of this crisis are likely to far outstrip the public health impacts, with some estimating that up to half a billion people globally will be pushed into poverty. The widespread loss of livelihoods and employment for daily wage workers in the region has left a gap in how people will be able to meet their basic needs during the crisis. In Jordan, while there is a lack of work opportunities, basic needs support is being provided by humanitarian organizations and in coordination with the Government. In Turkey, the Emergency Social Safety Net (ESSN) continues to cover the needs of approximately 1.8 million recipients. Humanitarian organizations are also planning to expand coverage to include newly vulnerable households that are not being covered by the ESSN programme. In some countries, government employees are facing substantial delays in salary payments with a devastating impact on people already caught between the economic difficulties from conflict multiplied by the COVID crisis. There remains a need for greater linkage and alignment between the humanitarian cash response and existing social protection systems, as well as planning with development actors for longer term economic recovery.
Funding and the Humanitarian Response Plan
Finally, a number of Cash Working Group Leads have voiced the need to contribute to ongoing updates of the Humanitarian Response Plans (HRP) in accordance with current realities and priorities related to the COVID-19 crisis. They want to see flexibility in expanding the plan for greater coverage of populations and areas not currently targeted, and to adjust activities to address potential risks and challenges. A first-step in providing the needed support is guidance on a CVA response plan for COVID-19 that covers humanitarian needs analysis, response approach and coordination. The overall response would benefit from increased coordination with multiple stakeholders including government and its relevant line ministries and funds, and with the WASH and health clusters. A good example of such coordination is Libya which has initiated work on sectoral analysis, activities and risk mapping. Another major ask was the support for advocacy with donors to increase funding and expand CVA programming. There is also a need to start planning and building-in early recovery and exit strategies into the current COVID-19 response.
The challenges posed by the COVID-19 pandemic across a region where crises are already highly complex are daunting. By sharing examples of what is being done and the learning being generated we hope we can help find ways of overcoming common problems faster and more effectively.
Main image: Oxfam has supported families in the town of Sar Qala, Iraq, who are in need of cash and food assistance, using the Red Rose cash card programme. Credit: Amy Christian/Oxfam