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The changing landscape of cash preparedness: Time to adjust

When drought strikes, we’d all like to see money flowing seamlessly, at the push of a button, from donors, through the system and onto communities in crisis. As we call for change, we need to understand what is possible and the hills that still need to be climbed.

4 October 2022 — By Sapenzie Ojiambo, Karen Peachey

Mareya Ibrahim, a cash transfer beneficiary, is able to buy groceries.

Evaluation after evaluation in the Horn of Africa, over the years, have said that drought responses are late – it’s rare that the need for faster action isn’t one of the recommendations. But with no benchmark of what is actually possible, this begs a question – how fast can a response realistically be?

With predictions of a 5th consecutive season with low rainfall, the drought in the Horn of Africa is deepening. Millions of people are already affected and things look set to worsen. Humanitarian agencies and civil society organisations of all shapes and sizes are responding and some government shock responsive systems flexing in an attempt to alleviate massive needs that continue to grow.

In Kenya, Ethiopia and Somalia, the use of cash and voucher assistance has a relatively long and solid track record. CVA has been used at scale since the Somalia drought response in 2011-2012; social protection systems are expanding; there is widespread use of mobile money; and a CVA aware humanitarian community exists.

Given all that, when drought strikes why do we not see money flowing seamlessly, at the push of a button, from donors through the system and onto communities in crisis?

This report was published by the CALP Network in October 2022.

Sadly, to get from A to B, there is huge complexity in between. Happily, there are good, practical, ideas for ways things can be speeded up – both in the short and longer term. Of course, it’s not just about speed, it’s about getting the right support to the right people, whoever, and wherever, they are as fast as we can.

With the situation in the Horn declining, a real time study commissioned by the CALP Network took a rapid look at these issues. More than 200 practitioners joined a discussion from across three countries. Here’s what they said.

Where are we now?

In an ideal world, it would take hours or days between receiving funds from a donor to getting it to recipients. Currently, in practice, it takes from 7-21 days in Kenya, 14 to 30 days in Somalia, and one to two months in Ethiopia (where government approval processes add to the time).

Good news, everyone agrees that times can be reduced. Most think it’s feasible to aim for lead times of between 3-5 days in Kenya, 7-14 days in Somali and a month in Ethiopia. Interestingly, lead times didn’t vary by agency type but by the degree to which they have certain operational processes in place.

What needs to happen?

We need to update our thinking on cash preparedness!

To achieve these lead times there’s a need for an existing and verified beneficiary list, a shock-responsive feature in existing programmes and strong relationships with financial services providers (FSP). Alongside that, organisations’ administrative, logistical, and financial processes need to be effective and proactive.

With that an appetite to focus on harder to reach populations is imperative to ensure we are reaching those most at risk.  While longer lead-times, more resources, and higher risk thresholds might be required – with advance planning, creativity and, critically, stronger partnerships realistic approaches could be developed in advance of crises.

Lists, risks and relationships

Given the frequency of humanitarian action in the Horn, growing social protection programmes and the many development programmes that exist – there is no shortage of lists of people who are in need or who are receiving support. So why are lists such an issue?

The evidence shows that lists are often not up to date and/or lack coverage and so exclude people affected by a particular crisis. List maintenance is not easy, and requires time and resources – investments that are not often made when a response is not happening. If a response requires going to new areas, targeting new populations, or accessing hard-to-reach areas or invisible populations – new registration processes will be needed and costs will increase. This gives us an immediate tension between coverage and cost.

With investments in preparedness, there are ways to improve both timeliness and there’s potential for efficiency gains. There is scope to change the way we manage lists using nifty innovations to validate them or working by with governments, FSPs and other humanitarians to gather and verify information.

While the focus is often on strengthening systems, an overarching issue in all this is the need to build new relationships and develop effective partnerships. This has always been part of preparedness but its centrality needs to be underscored – especially as there are changes in the ways of responding, the actors involved, and opportunities and challenges faced.

Stronger partnerships and collaboration needed

Working together, donors and agencies can mainstream shock responsive and crisis modifier mechanisms into their work – allowing speedy reallocation of funds, not just for response, but for work on lists and other CVA preparedness actions.

With the growth in the use of CVA, financial service providers have become a central actor in humanitarian response but true partnerships often remain elusive. Stronger partnerships will enable more innovative and effective ways of working, opening doors to address some of the more substantive issues of targeting and coverage of CVA programmes.

National social protection programmes, particularly social registries, are growing quickly in the Horn. In a few areas they are starting to displace the need for humanitarian organisations, though new needs are emerging in other areas. All this requires closer working relationships with government ministries and other stakeholders.

The changing landscape of CVA preparedness also requires that humanitarian agencies work better together to understand different targeting approaches, assess existing lists, and figure how to serve hard to reach and invisible populations more effectively. There’s need for bold action to reduce the time and resources devoted to targeting exercises, so more resources land in the hands of people in crisis.

In summary opportunities are there for the taking! We need to:

  • Take bold action to change ways of working so more resources land in the hands of people in crisis.
  • Make tough choices. We can reach hard to access communities and speed up response times, but there are risks and resource implications.
  • Have honest conversations about the risks and the financial and contractual limitations that can disincentivise change.
  • Develop new skills to engage with the changing nature of preparedness.
  • Invest in strong relationships to maximise the possibilities presented by growing social registries and evolving financial services
  • Take collective action to ensure we achieve response-wide progress.

The CALP Network has published a new report ‘Lists, risks & relationships. The changing landscape of cash preparedness: Real time learning from the Horn of Africa‘.

As part of the research behind the report, three real time learning events were held with over 200 people in May/June in Ethiopia, Kenya and Somalia.

This report is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of CALP and do not necessarily reflect the views of USAID or the United States government.

In the main image – Mareya Ibrahim, a cash transfer beneficiary, is able to buy groceries. Credit – Khadija Farah/Oxfam, February 2022.