Making CVA humanitarian assistance work better – seven big themes for 2023

As the year started, many of us were breathing a sigh of relief feeling the worst of the COVID-19 pandemic was coming to an end. As the year progressed, major new crisis struck adding to the many ongoing crises around the world. In February, the invasion of Ukraine caused mass displacement and sent aftershocks around the world as food and fuel prices rose, exacerbating economic and political uncertainty in many countries. Rains failed in the Horn of Africa with famine warnings coming late in the year; unprecedented floods left much of Pakistan underwater, and much, much more.

At the end of 2021, we reflected on 6 big themes in this blog. Reading it again now, it’s striking how much of the commentary remains very current, albeit with some progress on most points. So rather than focusing on what changed this year, let’s also look at some of the big themes ahead for 2023.

1. People centred design and decision making – a north-star for progress

Across the humanitarian sector, organisations have vision statements and objectives that talk of putting people at the centre. While progress is being made, we still need to do better.

Cash offers the potential for greater choice and dignity for people in crisis than some other forms of assistance, but programme design determines the degree to which that’s achieved. All too often, organisational needs and choices result in sub-optimal design from a recipient perspective. As a result, poor programme design can occur and lead to (for example):

• People’s preferences are not informing the choice of payment modality
• Poor communication with communities about who is being targeted, why, the duration of assistance or the amount of assistanceleads to confusion and frustration
• Poor coordination with other cash actors and relevant authorities leads to inefficiencies
• Untested payment technologies are piloted on vulnerable communities.

In many cases, internal policies, donor compliance requirements, payment infrastructure limitations, legal constraints and other organisational factors can limit options and contribute to these decisions. These things can be changed, albeit some will require a long-term perspective and interagency efforts.

Whatever the issues, tackling them with a people centred design focus will lead to better results.

2. Time for a new road map for cash

The evidence is clear that in most situations people in crisis prefer cash to in-kind assistance. Evidence also shows that cash could be a much larger percentage of overall assistance if it was used when and wherever appropriate. Logically therefore, the use of cash should continue to grow in 2023 and beyond.

However, new research, highlights that while the use of cash is growing, the pace of the increase is slowing. It also shows there is no single means by which we will see substantial growth. Going forward we need to be looking at questions related to prepositioning of stocks; tied aid; business models; different financing models and more. Combine this with the fact that many global policy commitments related to CVA are coming to an end – possibly even the Grand Bargain – and we see a risk that there could be some slip back in the use of CVA. This is not something that recipients of aid would want to see.

The issues that need addressing are clear as outline in this blog and CALP’s new policy brief. In 2023, we need a new roadmap for cash to drive collective priorities and achieve systemic change.

3. Locally led response – tackling the tensions

While painfully slow, there does seem to be some creeping momentum on the question of locally led response within the overall humanitarian system and within the CVA space more specifically. In 2022, the CVA and locally led response working group was active, membership broadened and engagement increased. At the same time, local leadership and engagement of local actors is one of the key principles underpinning the new cash coordination model.

At the same time, we saw increasing references to a potential tension between locally-led response and the increasing scale of some cash responses. This perceived tension could be used to limit progress on both agendas – with arguments that CVA at scale threatens locally led response and that local actors do not have the capacity to manage large scale responses.

As flagged in the 2021 Global Humanitarian Assistance Report, while an increase in the use of CVA was reported by all types of humanitarian actors reported, the data couldn’t tell us the degree to which delivery by national actors had increased. As noted in last years’ blog this is because (i) national actors are currently less likely to contribute to international data collection systems and (ii) where national actors work as implementing partners, their role is often invisible in reporting systems and data is reported by the lead agency.

As we head into 2023, more needs to be done to:

• Ensure greater visibility and recognition of the work of national actors
• Work towards increasing the scale of locally led CVA response
• Make changes to the humanitarian system to enable the above.

4. Cash and the environment

From small beginnings, discussions about CVA and the environment are growing. With interest rising, we’re hoping for an explosion of action in 2023.

Linked to this, nascent work has progressed in terms of cash and anticipatory action. This work is highlighting structural questions for the humanitarian system.

With support for anticipatory action sitting in the development budgets of most donors, we need to figure out how to work better with development colleagues. We also need to see whether aid budgets can be adjusted in order to enable more effective ways of working.

As well as looking at how CVA is used to mitigate or respond to disasters, we need work out how to minimise the climate and environmental impacts of CVA. Questions about local procurement and the use of block chain are two questions that jump to the fore in this discussion, but they are not the only points by any means.

With climate emergencies on the rise, it is estimated that climate action and disaster risk reduction, climate-related disasters could double the number of people requiring humanitarian assistance to over 200 million each year by 2050.  These stats cannot be ignored. We need to accelerate action and look for every opportunity to take forward commitments on the climate charter.

5. Cash is cash is cash – CVA and other financial flows

Whichever way we label it, whichever budget it comes from, whichever agency or government ministry delivers it – cash is cash from a recipient perspective.

With progress being made about the connections between CVA and social protection, in 2023 we need to look at how CVA links with other financial flows such as anticipatory action (see above).

The more cash is used in both humanitarian and development assistance, the more questions arise regarding the efficiency of funding flows, current business models and the way we organise ourselves.

While 2023 is unlikely to produce a eureka moment, it seems clear we’re on a path that requires a fundamental discussion about that elusive bridge between humanitarian and development action.

6. Data and technology

The sirens should be sounding loud on the need to improve data management.

2022 was a wake-up call for many with, for example, ICRC hit by a huge cyber attack. It currently feels as if awareness and understanding is growing but practical action is lagging.

We see exciting use of existing and new technologies with huge possibilities to improve aid. On the flip side, the piloting of new tech on vulnerable communities remains a big concern – this holds true for CVA as well as in the humanitarian system more broadly.

In 2023 we need more candid conversations – with Chatham House rules if needed – to agree how to address priority risks. We need to act fast to avoid data risks and becoming an avoidable scandal.

7. Cash Coordination

Last but by no means least, we need to keep a sharp eye on cash coordination.  In May 2022, the IASC approved a new model designed to make cash coordination more predictable and effective across the system.

In 2023, changes outlined in the agreed transition plan will start to take place. As things progress, we need to monitor and ensure the planned changes  deliver as intended. One issue is clear – the new coordination model will require leadership and specific financing if actors are to fulfil the responsibilities outlined.

The success of the new model depends on all involved, not just those in designated leadership roles. We should also be ready to accept that, as with anything new, there will be need to adjust as we go along.

There are, of course, many other issues that need to move forward.

With needs growing and resources under pressure, we need more effective and efficient aid. CVA has a huge role to play in delivering better humanitarian assistance. A clear road map to tackle priority issues will help. We look forward to moving this forward as a collective in 2023.

In the main image – IFRC supported Afghan Red Crescent to distribute Cash-Based Assistance for Shelter to over 1600 households that were affected by Earthquakes in Paktika province. Credit: IFRC/Meer Abdullah. October 2022.