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Dependency * Traditional Safety Nets * Sustainability * Cash or in-kind? * Targeting * Impact
Dependency
1. Will beneficiary households ever graduate?
Due to the fact that this scheme targets incapacitated households, households without any or only limited self-help potential, the likelihood that any of these households will graduate soon, is very low. Nevertheless, there are two types of graduation that can take place. The first one is an intergenerational graduation, meaning that children who are now able to attend school on a regular basis, will be able to engage in employment later on. These children will take on the responsibility of caring for the households in the future and the households will then be in a better position to graduate. The second type of graduation is mainly due to household structure changes, meaning that a new household member who is fit to work joins the household or that a household member who was sick, recovered from an illness after getting treatment and is now fit to work again. Through a biannual retargeting process, those household changes are recorded, as well as new incapacitated households have a chance of joining the scheme as well.
2. Doesn’t the scheme create any disincentives for households?
The amount that households receive per month is only enough to permit them to have a second meal per day. It thus supplements the little that households can obtain on their own with their limited capacities and is certainly not an incentive to refrain from productive work. Most of the beneficiary households have invested part of their transfers in livestock or agricultural supplies at some point of time, showing that households have a strong interest in generating extra income and engaging in small productive activities. Social transfers of this type should therefore always complement other sources of income but help to avoid negative coping strategies. The level of transfers is a question needing careful consideration and testing.
Traditional Safety Nets
3. Doesn’t the scheme weaken traditional social safety nets?
This argument supposes that extended families and communities are still functioning as social safety nets ensuring the survival of ‘incapacitated’ households and individuals. However, most recent research activities show that the target group does not receive substantial support from relatives or from communities. The fact that there is a significant number of one-person households in the scheme shows that traditional safety nets are not performing anymore, partly due to high poverty rates and the HIV/AIDS pandemic. The ‘traditional’ social safety nets are overstretched and the increasing family and community obligations undermine the already weak capacity of most households to deal with risks. In that sense, permanent and reliable transfers to the incapacitated poor are an important contribution to take a heavy load from the capacitated poor households. We suppose that the scheme further helps to strengthen community coherence as beneficiary and non-beneficiary community members are now in a position to assist each other reciprocally. The study on the 'Impact of Social Cash Transfers on Informal Safety Nets in Kalomo District, Zambia,' available from this webside, further sheds light on this issue.
Sustainability
4. Is the scheme too donor driven?
The initial phase of designing the cash transfer scheme and getting it started has been donor driven. However, measures have been put in place in order to increase ownership on the part of the Zambian government. The cash transfer scheme is now embedded in the draft Social Protection Strategy, which forms the basis for the Social Protection Chapter in the new National Development Plan 2006-2011. Government has also budgeted for the cash transfer scheme for the first time in 2007 and has committed US$ 350,000 for transfers and administrative costs. The Ministry of Community Development and Social Services is implementing the scheme at all levels and has consequently availed staff to the scheme. The Ministry has also become active in advocating for the scheme and raising awareness among other ministries and other stakeholders.
5. Is there an exit strategy?
Since most households won’t be in a position to graduate from the program in the short-term and are dependent on regular and reliable support, the scheme as such is not intended to gradually fade out over time. Once it has been proven that the approach is feasible, efficient and effective, the pilot project should be integrated into a national program and should become part of government services to the most destitute households. At least for the time period where incapacitated households keep on multiplying due to the severe impact of the HIV/AIDS pandemic on household and community structures, government support should not cease.
6. Is the scheme sustainable? In the first place, it should be mentioned that the Social Cash Transfer Scheme was designed as a pilot in order to test one possible approach to Social Protection for the most incapacitated households in Zambia. For the scheme to be sustainable, government commitment and long term donor commitments are indispensable. Government has shown readiness to commit funding through the present budget line and through the integration of cash transfers into the National Development Plan chapter on Social Protection. A number of donors have also expressed commitment to cooperate with the government in this area. Further advocacy activities for reliable funding remain, however, one of the priority areas for the future.
Cash or in-kind?
7. Is there any difference between Cash and In-kind Transfers?
Even though both concepts arise from the same principle of supporting extremely poor households, they do differ in many regards. First and foremost, cash transfers have the advantage of permitting beneficiaries to use the money flexibly on their own priority needs unlike in-kind transfers that prescribe to the beneficiaries what to consume. In that sense, cash transfers empower beneficiaries to make their own choices and don’t give them the feeling of being patronized. Cash transfers also inject cash into local markets and the community, whereas handouts may even distort prices and disadvantage local markets. Although the costs for setting up a cash transfer scheme might in some cases be higher, the running costs are definitely much lower due to the minimal logistical costs.
8. Isn’t cash more prone to corruption and abuse?
Cash can be easier spent on alcohol or gambling than other in-kind transfers. However, even experiences with in-kind transfers have shown that some households very often resort to converting them into cash as well, which exposes them equally to abuse. Up till now, our monitoring and the evaluation demonstrate that hardly any cases of abuse are known. This can be explained by the fact that households really require the cash and thus use the transfers for their essential needs. The fact that the majority of the household heads are female and elderly might also play a role. In terms of corruption and extraction, cash is a lot easier to trace, verify and account for than in-kind transfers. The scheme has established a comprehensive internal monitoring system so that instances of fraud are easily traceable and can be reacted upon in time. The monitoring and evaluation rounds furthermore did not reveal any cases of deduction.
9. Isn’t it very likely with cash that only one person and not the entire household might benefit?
It is often alleged that food hand-outs automatically benefit the entire household, whereas cash transfers might be easily abused by the household head. Our monitoring and evaluation, on the contrary, has shown that all household members have benefited from the transfers so far.
Targeting
10. Are you ever really ‘incapacitated’?
An incapacitated household in this scheme is defined as a household with no productive household member present or with a dependency ratio that is 300 and above. The dependency ratio is the ratio of dependents to productive members of a household, multiplied by 100. Whether someone is fit to work, hence a productive member, is not always easy to determine and definitely leaves some room for interpretation. Some of the criteria that help the CWACs to assess whether someone is incapacitated are: 1) children under 19, 2) elderly above 64 or 3) 19-64 year olds who are chronically sick, disabled or schooling. It is of course possible for an 18 year old to help with agricultural work after schooling or for a 65 year old to help organize or manage the sale of bakery goods. The scheme assumes, however, that these household members are not productive enough to take care of an entire household.
11. Why do we have a 10% threshold?
Several research studies, among others “The Incapacitated Poor in Zambia”, have shown that approximately 10% of all households in Zambia are incapacitated. This number is of course averaged and percentages differ across communities, districts and provinces. More research will be carried out this year to determine the exclusion error of the cash transfer scheme and to look into regional differences. The 10% cut off point however serves also practical purposes: it helps to avoid that the entire community is considered vulnerable and targeted and it also makes it easier to budget and plan for the scheme. Despite the 10% threshold, Community Welfare Assistance Committees (CWACs) are always asked to fill in application forms for all households which they consider as potential candidates for the scheme. A closer analysis in the evaluation of how many are rejected in the end due to the 10% ceiling leads to an exclusion error of 6%. However, it needs to be noted that not all CWACs followed the instruction to include all deserving households on the list, knowing that only 10% of them will be targeted in the end.
12. Isn’t community based targeting prone to nepotism and favoritism?
While community based targeting has the advantage of basing the targeting on an exact and detailed picture of beneficiary households, it can be prone to nepotism and favouritism. In order to prevent such from happening, the scheme’s targeting & approval mechanisms has checks and balances. All application forms are screened by the village headman, an Area Coordinating Committee ( ACC) representative, the District Social Welfare office and the District Welfare Assistance Committee (DWAC). During the meeting at district level, two CWAC members are present in order to answer any questions, give details and also disclose whether any headmen or CWAC relatives could have been included on the list of beneficiaries. Committee and community members as well as other stakeholders also have a chance to exclude a household at a later stage by providing the necessary information that disqualifies this particular household through the confidential form.
Impact
13. Are 10 US$ a month really sufficient?
The US$10 amount is based on the price of a 50kg bag of maize that enables the beneficiary household to have a second meal per day. The assistance has to be meaningful enough but not too high as to bring conflicts in the community as well as compromise the financial sustainability of the scheme, once the scheme is extended nationwide and completely adopted by the Zambian government. Households with children get a child bonus of $2.5, reflecting that households with children usually have higher expenses. For the sake of simplicity so that the scheme remains manageable and controllable, the amount is irrespective of the number of children. The monthly cash transfer has to be adjusted though over time in order to keep pace with inflation. During drought years, there might also be the need to either adjust the amount temporarily or to supplement the cash transfer with additional in-kind transfers.
14. How do you really make an impact with K40,000 / K50,000 (US$10 / US$12.5) a month?
K40,000 are quickly spent and for some of us it might be hard to believe that K40,000 offer any kind of relief to the beneficiary households. It is therefore truly amazing to see how much beneficiary households make out of this small amount. Through intensive monitoring and the evaluation of the Kalomo scheme we know that almost all households manage to save or invest a good portion of the cash transfer and that besides food, other consumption items are bought as well. The evaluation has shown that the cash transfers are likely to have had a positive impact on the health and nutritional status of beneficiary households as well as on their coping mechanisms.
