Real-time Learning on Cash-Preparedness within the 2022 Horn of Africa Drought Response
The study, to be released on 12 October 2022, aims to elucidate what it takes to be effectively prepared for drought response using cash and voucher modalities and facilitate the incorporation of lessons from previous drought crises into the current response. The study is to be undertaken in a way that feeds into the ongoing drought response so that the process and findings enrich CVA programming within the current response and increase understanding of what is, and what isn’t possible, in terms of lead time from when funding is received to when it reaches the intended recipient.
The study’s main objective is to demystify what is feasible in terms of lead-times for scaling-up cash responses to slow onset disasters and outline what it would take for organizations to be effectively prepared to achieve them.
What are the main determinants of CVA response lead-times?
Here is what you told us:
- Targeting:
Targeting is the single biggest factor in a timely response.
Quality targeting takes time. There’s a trade-off to be made between speed, risk and quality. The fact that speeding up the response time will increase inclusion and exclusion errors needs to be accepted
Some of the progress made:
- Using existing lists, such as Kenya’s Enhanced Single Registry can make it quicker. However verification still needs to take place so doesn’t mean an immediate response.
- SAGAL are exploring using categorical targeting which is simpler and quicker.
- The standardisation of approach by the Joint targeting guidelines by the National Disaster Risk Management Commission (NDRMC) had reduced confusion.
- Financial Services:
Partnerships with Financial Service providers needed to improve efficiencies
More work needs to be done to bring the FSPs on board with humanitarian response timelines and processes. Digital payment infrastructure and mobile money penetration is still weak in some areas such as rural communities in Ethiopia. Collaboration with FSPs could also help to improve the reach of payment systems.
Some of the progress made:
- Most agencies now have framework agreements with Financial Service Providers (FSPs)
- Some organisations (such as WFP) are exploring linking their internal systems and with those of FSPs, for example through APIs, which increases quality/data protection and may decrease lead times.
- Coordination:
Coordination still needs tightening
There has been a lot of progress made on CVA coordination but better sharing of information is still needed. Particularly, easy access to information on where agencies are working would avoid overlaps and time needed for decision-making.
Some of the progress made:
- The Somalia HDX dashboard is updated every 2-3 months showing where people are working and the sub-national CWGs share information when requested. This type of coordination can help avoid overlaps at the district/town level.
- Transfer Values:
Clarity around harmonised Transfer Values is a low hanging fruit
Harmonising transfer values were a significant recommendation from previous drought evaluations. A lack of harmonised values is still delaying transfers in some countries and where harmonised transfer values exist, they are not always used.
Some of the progress made:
- CWGs have an MEB guidance even if the transfer value recommendations are not always clear or adhered to
- Somalia has made big strides since 2017 with MEB and Transfer Values being periodically updated by the Somalia CWG. Household Economy Analysis (HEA) work has been completed, using gap analysis between income and expenditure to set regional transfer values. Work on implementing it is underway.
What is an acceptable lead time?
The consensus for achievable acceptable time between receipt of funds from donor and it being available to spend by recipients was 14 days. The aspirational acceptable time was 3-5 days.
Transfer Values
The CWG has set harmonised transfer value based on MEBs. Most agencies aren’t abiding by them. Reasons cited are: they’re not updated frequently enough to reflect price changes; they don’t reflect local prices; there’s not enough warning given to include changes in donor proposals; they don’t reflect the sector aims of specific projects; they’re not easily accessible / understood.
Financial Service Providers (FSPs)
Most agencies have agreements with FSP now, removing the causes of delays in 2017. More work needs to be done to bring the FSPs on board with humanitarian response timelines and processes. Greater innovation from the FSPs would be welcomed.
Targeting
Targeting is given a main factor in determining lead times of cash transfers. Using existing lists, such as Kenya’s Enhanced Single Registry can make it quicker. However verification still needs to take place so doesn’t mean an immediate response.
There’s a trade-off between speed, risk and quality. Implementors and donors are risk averse. The fact that speeding up the response time will increase inclusion and exclusion errors needs to be accepted.
Learning from 2011 and 2017 drought
A lot of the lessons that have been learnt are the easier ones.
Coordination
There’s a need for more coordination and formalisation of how agencies can collaborate on needs assessments and market monitoring. Better sharing of information of where agencies are working would reduce overlaps.
Localisation
Larger agencies have lost their humanitarian response capacities, but national NGOs have not. Localisation increases speed.
Solutions, to come!
What is an acceptable lead time?
The group suggested that between 2 weeks and 1 month was an acceptable lead time between funds receipt from donors and it being available by recipients. If it was new recipients, in new areas, a month was needed as targeting takes time.
Targeting
Targeting is the single biggest factor in a timely response. Doing quality poverty targeting takes time. SAGAL are exploring using categorical targeting which is simpler and quicker. The Single Registry isn’t available yet and few people are able to share lists due to data protection rules, and internal/donor processes.
Transfer Values
Harmonising transfer values were a significant recommendation from previous drought evaluations. Somalia’s made big strides since 2017 with MEB and Transfer Values being periodically updated by the Somalia CWG. Household Economy Analysis (HEA) work has been completed, using gap analysis between income and expenditure to set regional transfer values. Work on implementing it is underway.
Work with Financial Service Providers
Most agencies now have framework agreements with Financial Service Providers (FSPs), removing another significant cause for delays in 2017. WFP are using an online portal to make payments through mobile money (something we’re hoping to dig into more) and are exploring linking their SCOPE system and the FSPs through APIs, which increases quality/data protection and may decrease lead times.
Access
Access was a big area of focus. Both in how to run programmes in areas you cannot access and the speed at which is it possible to target in those areas. In some cases, fully remote programming is possible but needs donor approval. NRC is exploring partnering with businesses to enable access.
Coordination
The Somalia cash community has made progress in coordination. The HDX dashboard is updated every 2-3 months showing where people are working and the sub-national CWGs share information when requested. This type of coordination can help avoid overlaps at the district/town level. However, the data being collected isn’t always forecasted and doesn’t include transfer values and timings.
Deduplication
Another perennial topic in Somalia, though research indicates that double dipping is very uncommon. NRC has been trialling using their M&E teams to deduplicate between programmes based on name, location and phone number. Doing this between agencies is difficult because of data protection. IOM and WFP have managed to sign a data sharing agreement to deduplicate in one programme. A couple of things we’re hoping to learn about it.
Solutions, to come!
What is an acceptable lead time?
The consensus was around 2 months. Longer than Somalia and Kenya respondents. Longer time reflected the larger population size, bigger country and greater distances between communities. Secondly, a greater prevalence of physical cash distributions and digital payments infrastructure isn’t feasible in lots of rural areas.
Targeting and access
Once again we heard the biggest determinant of lead times (between funds receipt from donors and it being available by recipients) was the time it takes to target. Community Based Targeting (CBT) requires multiple trips to cabales, often they are far from each other and far from roads.
Solutions considered included: using existing lists (done when possible), categorical/geographical targeting (little appetite). The standardisation of approach by the Joint targeting guidelines by the National Disaster Risk Management Commission (NDRMC) had reduced confusion.
Digital payments infrastructure
There was extensive discussion on this. Ethiopia is improving their mobile money/banking systems, but a lot of rural communities are still served using physical cash payments which is a slow process.
Mobile phone ownership was low and FSPs often have quite bureaucratic processes.
Solutions considered included: working with the GSMA on improving mobile money systems in the country.
FSPs familiarity with the humanitarian sector
Many FSPs aren’t familiar with cash transfer programming making for inefficient relationships.
Solutions considered included: FSPs to attend targeting and sensitisation sessions. A national + sub-national CWG workstream looking at collaboration with FSPs. Potential for boilerplate agreements with FSPs to standardise and streamline processes. Training FSP staff on humanitarian processes and cash transfer principles.
Transfer Values
This was discussed a lot during the Key Informant Interviews (KIIs) but came up less during the workshop. A lack of harmonised values was still delaying transfers. Where transfer values were harmonised, they weren’t always used.
Contextual data
Collection and sharing of contextual data could be improved. The CWG will shortly be publishing a strategy covering this. There is a need for coordinated cash feasibility assessments, market and market price assessments and FSP coverage mapping. Ethiopia is a large country, with a large population so coordination at a sub-national level would likely be useful.
Authorities
Getting approval for programmes can take time.
Solutions considered included: through CWG systemise the approaches taken to authorities for approval to speed up the process. Seek more broad approvals from the National Bank for withdrawals, so it doesn’t have to be repeated.
Solutions, to come!