How social grants benefit children

There’s some interesting evidence of the impact of social grants, contained in an article by Kristin Palitza of IPS, looking at the recent increases in the social grants in South Africa, recently announced by Finance Minister, Pravin Gordhan. The article focuses on the impact of the extension of the Child Support Grant to children up to the age of 18, as well as small increases in the size of that grant and the Old Age Pension.

But what is interesting is research highlighted by Josee Koch of the Regional Hunger and Vulnerability Programme as well as David Neves, from the Institute for Poverty, Land and Agrarian Studies of the University of the Western Cape. Koch and Neves refer to studies that show that, contrary to what some skeptics might say:

• Social grants are an investment, not a waste of money: “For every Rand (0.13 dollars) you pay out in social grants, you gain three Rands (0.4 dollars) in local economy,” Koch is quoted as saying.
• Social grants are used wisely by recipients: “Although concerns about the misuse of cash transfers keeps coming up, all our evidence suggests that it’s not true,” Neves says in Palitza’s piece. This is backed up by solid data. According to Koch as quoted in the article: “Children whose parents receive the CSG are on average two centimeters taller than those who do not.” This shows money is spent on food, not on alcohol or gambling.
• And finally, the article points to research showing that social grants do not make people idle and lazy: “households that receive a pension have a 12 percent higher work participation rate, Koch explains, which points to the fact that cash transfers free up family members to look for work.”

Helping the poor access financial services

Across the world, over 170 poor people receive regular payments of money, or cash transfers, from governments. Now a new study outlines how governments could use these payments to help include the poor access financial services they have largely been excluded from until now.

The report, called “Banking the Poor via G2P Payments” was produced by the UK’s Department for International Development (DFID) and CGAP –  an “independent policy and research center dedicated to advancing financial access for the world’s poor.” (G2P means government to person.)

Genrally, governments deliver payments to people in cash (such as over the counter at a post office or other delivery point), or through electronic cards that only allow the person to withdraw money, but nothing else. The CGAP paper reports that governments could make life a whole lot easier for poor people by adopting electronic cards that give people access to basic financial services such as bill payments, deposits, and withdrawals.

Governments who currently pay social grants in could save a lot of money by switching to electronic payments. And a switch to a more financially inclusive service would save poor people time and money, and enable them to manage their finances more productively (for example, instead of having to travel to a fixed pay point to withdraw cash, they could use the card to pay for purchases at a local store — or transfer money to relatives in other places.)

Existing programmes in Brazil, India, Mexico and South Africa are proving the benefits of such an option.  According to the report’s authors,”a growing body of evidence shows that financial services enable poor people to better withstand shocks, build assets, and link into the wider economy as fuller economic citizens.”

A more comprehensive outline of the report can be found here.

And you can download the full report here.

Poverty and social protection in the news

Training workshops in Reporting on Poverty, Food Security and Social Protection have been held in Zambia, Tanzania, Botswana and Malawi. The workshops were organised by FrayIntermedia, and sponsored by the Regional Hunger and Vulnerability Programme (RHVP), with funding from UKAid.

FrayIntermedia and RHVP offered a prize for the best article or broadcast report produced and published within one month of each workshop. So far, prizes have been awarded for Zambia and Tanzania.

The prize winner for Zambia is Nebert Mulenga, for his article, “Social Cash Transfer: Passage out of Poverty?”, published in The Times of Zambia.

A PDF of the text of his article can be downloaded here: Mulenga social cash transfers. It’s also available online here, but the Times of Zambia website can be slow to load.

The prize winner for Tanzania is Simon Mkhina, for his article, “Agricultural revolution, a politicized campaign in Tanzania”, published on www.tanzaniasnews.net.

Unfortunately only one prize could be awarded, but special mention must also go to Chelu Matuzya, for an article in the Business Times: “The absent-present saviour for Tanzania’s economy”. You can download a scanned copy of Chelu’s article here:

Mnaku Mbani of the Business Times also entered a story — but here we would like to highlight a recent story of his, not submitted as it was published too late for entry. It is about the banking sector in Tanzania, and illustrates how a business and technology-related story can also cover and reflect issues related to poverty. You can read it online here.

On that same note, it is also worth reading another article by Chelu Matuzya, on Tanzania’s Kilimu Kwanza – agriculture first – policy. You can find it here.

Another person who submitted an entry is Lutengano Haonga. His report is on Africa News, titled Tanzania Should Revisit Agricultural Subsidy.

Congratulations to the winners and to everyone for their great stories. Watch this space over the next two weeks for more news of the winners from Malawi and Botswana, and links to some of the articles and reports submitted.

Making the most of remittances

Thanks to Duncan Green’s blog From Poverty to Power, for alerting us to an interesting article by Sanou Mbaye, on remittances to Africa. Mbaye argues that despite all the gloomy news, Africa’s macroeconomic performance has improved dramatically since the 1990s. And he says a big factor in that is remittances — money sent home by Africans now living and working overseas.

According to Mbaye: “…a study commissioned by the Rome-based International Fund for Agricultural Development indicates that more than 30 million individuals living outside their countries of origin contribute more than $40 billion annually in remittances to their families and communities back home. For sub-Saharan African countries, remittances increased from $3.1 billion in 1995 to $18.5 billion in 2007, according to the World Bank, representing between 9% and 24% of GDP and 80-750% of ODA [overseas development assistance].”

Of course the value of these remittances has probably dropped quite a bit thanks to the global economic downturn over the last year or two. But still, remittances play an important role.

But none of this is really new. What is interesting, is Mbaye’s argument that African countries need to adapt their banking and regulatory systems to be able to get the most benefit out of these remittances. Governments need to introduce measures to prod banks and financial services companies to reduce the costs of transferring money across borders, and make it easier for people to send and receive cash.

He looks at three different strategies being followed – in the Anglophone, Lusophone and Francophone countries, and points to lessons to be learnt from these.

Focus on Millennium Development Goals

The International Policy Centre for Inclusive Growth (IPC-IG) has released the latest edition of its publication, Poverty in Focus.

This edition is titled The MDGs and beyond: Pro-Poor Policy in a Changing World. It’s a joint effort between IPC-IG and the Institute of Development Studies in the United Kingdom.

This new publication reviews the experience of the Millennium Development Goals (MDGs) to date and asks what needs to be done to achieve the goals by 2015. The guest editors are Andy Sumner (Institute of Development Studies Sussex) and Claire Melamed (ActionAid) . The issue has a foreword by Lord Mark Malloch-Brown.

You can download the full publication here.

The articles in the publication assess the experience of the Millennium Development Goals to date. They look at what can be done to boost progress towards meeting the goals. They ask whether some of the goals, or the approach to meeting the goals, need to be adjusted, and they look beyond the 2015 target to ask what is needed beyond that date.

Particularly interesting is an article by Sakiko Fukuda-Parr of The New School in New York. Fukuda-Parr argues that most governments’ Poverty Reduction Strategy Papers (PRSPs), wrongly assume that economic growth and development will trickle down to benefit the poor. She says that countries should not adopt the MDGs as inflexible targets, but should adapt them to national circumstances. Central to this is that governments should focus specifically on pro-poor economic growth and pro-poor social investments.

Important in all of this, is to ensure that the poor are empowered and able to participate in designing and implementing measures to reduce poverty, she says.

Cash transfers boost girls’ school attendance

A recent study by the World Bank shows that cash transfers paid directly to teenage girls have a powerful impact in boosting their school attendance.

The study looked at a two-year cash transfer programme in Zomba, Malawi, which paid small amounts of money to teenage girls aged 13-22, as well as slightly larger payments to their parents. The girls received between US $1-$5 a month, and the parents $4-$10 a month.

The study found that thanks to the cash transfers, school drop-outs reduced by about 40 percent – or almost by half.

According to the research report, drop out rates are high among teenage girls in Malawi, because of the high cost of secondary school.  In addition to this, girls in Malawi tend to marry young and once they get married, they stop attending school.

The research found that the cash transfers boosted school attendance, whether or not attending school was a condition of receiving the grant.

Interestingly, another research paper on the same cash transfer programme found that girls who participated in the programme, were more likely to delay the onset of sexual activity. Thus, there are likely to be other benefits, such as reduced rate of teenage pregnancy and HIV.

The research was undertaken by Berk Özler, a senior economist with the World Bank’s Development Research Group, Sarah Baird of The George Washington University and Craig McIntosh of the University of California, San Diego.

Proven and affordable ways to fight poverty and hunger

A recent article in the magazine Newsweek, praises social cash transfers as a way of reducing the gap between rich and poor. The article appears in the Newsweek magazine dated December 7th 2009, and is written by Mac Margolis.

Margolis looks at the example of Brazil which, he says, had already in 2008, met the Millennium Development Goal of halving poverty by 2015. In the process, since 2003, Brazil has lifted 21 million citizens out of poverty.

This is remarkable, considering that in many parts of Africa, not only are we unlikely to meet this Millennium Development Goal, but are actually moving backwards, with levels of poverty increasing.

Margolis talks about a range of measures implemented by the Brazilian government, including economic reforms, and an aggressive drive to get children out of the workplace and into school. This move, which began in the early 1990s, is now paying off, as children from poor families are able to get much better jobs and earn higher pay than they would have without the benefit of education.

But very importantly, Margolis also praises Bolsa Familia, a social cash transfer programme in Brazil, that gives a monthly allowance to poor families, as long as they keep their children in school and regularly visit health facilities.

Margolis says this programme has proved effective in helping the poor, while costing very little — less than half of 1 percent of GDP.

A Costed Programme to End Child Malnutrition

Save the Children recently released a report, outlining a plan of action to fight child hunger. According to Save the Children, the period from conception to a child’s second birthday is crucial for development. If the child is malnourished during this period, she or he will suffer permanent damage.

The guide, called Hungry for Change, outlines a costed, eight-step package for improving the diets of pregnant women, and children under the age of two. The package includes:

• breastfeeding support and promotion,
• micronutrient supplementation and deworming,
• nutrition-friendly agriculture and livestock policies,
• safety neds and social cash transfers,
• fortified foods,
• education on nutrition and hygiene,
• reducing risk, early warning and response,
• treatment of severe acute malnutrition.

When it comes to social cash transfers, the report says that such transfers have been shown to have a positive effect on children’s diets. In Swaziland, a six-month cash transfer programme improved dietary diversity in young children, while an emergency cash safety net programme in Niger in 2008 enabled families to buy better quality foods.

It is crucial though, that transfers should reach children early in life – so Save the Children recommends the use of age-criteria when deciding who gets such grants, rather than means testing. Ideally, such cash transfers should be given to women, because when women have more control over family resources, this ensures the greatest impact on child nutrition. The value of transfers should be around one third of household consumption. They should be provided regularly — such as once a month.

Unlike the case of Brazil’s Bolsa Familia, Save the Children caution against attaching conditions such as school or clinic attendance, as in many low-income countries, schools and clinics are few and far between.

So, what is the cost of the eight steps the guide outlines? Save the Children estimate that the package would cost a total of US$127 per year for each child under the age of two, and US$47 for each pregnant woman. This works out at an average of 1.63% of GDP for most of the 8 poor countries focused on in the report.

Poverty and social transfers in Zambia

RHVP recently hosted a SADC parliamentary forum workshop on poverty and social transfers. Gelson Tembo, of the department of Agricultural Economics and Extension Education at the University of Zambia, presented a paper that gives an excellent overview of poverty and social transfers in Zambia.  Here is a summary of his presentation:

Extent of Poverty in Zambia

Zambia has a population of 11.5 million people. Of these, 64 percent are classified as poor, and 54 percent as extremely poor. But this is split unevenly between rural and urban areas. In rural areas, 80 of people are poor, while the figure is 35 percent in cities and towns.

In urban areas unemployment is the biggest problem, while people in rural areas depend on agriculture – and when this does not deliver, people generally have little else to fall back on.

Agriculture and poverty

Most smallholder farmers have small pieces of land, and so can’t generally earn a sustainable income from their farms. Only a tiny proportion of smallholder farmers produce more maize than they need for themselves and their families, and many don’t even produce enough for their own families, so need to buy extra maize.

According to Tembo, the government often fails to take this into account and so its policies can add to poverty and hunger. For example, the Food Reserve Agency (FRA) as well as private business, usually tries to buy up all the surplus maize from rural areas. This goes to urban areas where it’s sold to millers who sell the maize meal at high prices. So nothing is left for rural people to buy. Also, this practice creates problems for poor people in the cities, who would prefer to buy grain and take it themselves to small, cheaper mills for grinding.

Two categories of poor households

In Zambia, vulnerable households are grouped into two categories:

Low Capacity Households: Low capacity households are those that are just managing to get by and support themselves. But their situation is risky and they could easily fall further into poverty, especially if they experience a shock such as drought or flood, or the loss of a breadwinner.

Incapacitated Households: Incapacitated households are those that are incapable of supporting their own needs. They tend to be headed by elderly people, who care for many dependents; or they are child-headed.

In Zambia, about 200,000 households (or 10 percent of the population) have been classified as being critically poor and incapacitated. Sixty (60) percent of critically poor and incapacitated households are caring for orphans and vulnerable children (OVC), and around 20 000 households are child-headed.

Low-Capacity Households

It is the job of the Department of Community Development (DCD) of the Ministry of Community Development and Social Services (MCDSS), to implement social protection programmes aimed at low-capacity households.  These include: the Food Security Pack, the Micro-bankers Trust, and the Public Works Programme.

Food security pack

The targeted food security pack (FSP) was established in 2000 and has nation-wide coverage. The main aim of the FSP is to reduce poverty and malnutrition by improving crop production and household food security.

It does this by, among other things, promoting crop and enterprise diversification, promoting farming methods that help to restore soil fertility and productivity, and training NGOs, farmers and traders in business-related skills.

The FSP is meant to benefit a group of smallholder agricultural households considered to be vulnerable but viable. The FSP is implemented by a local NGO, the Programme Against Malnutrition (PAM), under a broader umbrella of the Community Welfare Assistance Committees (CWACs).

The planned target group for the FSP is 200,000 households per year for three to five years. But because of poor funding, the target has never been met – both in terms of what’s provided as part of the pack, and the number of beneficiaries covered.

The largest number of beneficiaries the programme has ever reached in a single year was 150,000 (in 2003/4) and this has fallen much lower in recent years (to around 40 000 beneficiaries in 2005/6, for example).

The Micro-Bankers’ Trust

The Micro Bankers Trust (MBT) operates in 25 of the country’s 72 districts. It gives low-capacity households access to micro-credit facilities.

Public Works Programme

The Public Works Programme (PWP) gives work to the unemployed poor households until they are able to find employment.

Critically poor, incapacitated households

The Department of Social Welfare (DSW) is charged with reducing hunger, extreme poverty and destitution among incapacitated households. Major initiatives under the DSW include the Public Welfare Assistance Scheme (PWAS) and social cash transfers (SCTs).

The Public Welfare Assistance Scheme

The PWAS is a nation-wide programme and is one of the government’s major Social Safety Net initiatives.  The PWAS assists the most vulnerable households through educational support, health care support, social support and repatriation of stranded persons.  Community committees called the Community Welfare Assistance Committees (CWACs) are responsible for identifying vulnerable households and allocating resources to them.

Major target groups include aged persons, disabled people or the chronically ill, single-headed households, orphans and neglected children, displaced people or disaster victims, and others that are genuinely unable to support themselves.

Social Cash Transfers

Social cash transfers (SCTs) are seen as a priority in least-developed countries such as Zambia. In Zambia, pilot SCT schemes have been in existence since 2003. Their main aim is to reduce extreme poverty among the poorest 10 percent of households with insufficient or no labour capacity.

The first pilot scheme began in Kalomo in 2003. Pilot schemes have since spread to four other districts – Chipata, Katete, Kazungula and Monze.

Except for Katete, all other pilot SCT schemes use a community-based targeting system, facilitated by community structures of the PWAS. In Katete, the SCT scheme gives cash transfers to those aged 60 years or older. The Ministry of Labour and Social Security (MLSS) has expressed interest in implementing and scaling up the Katete old-age pension scheme.

In all these schemes, the cash transfers given to the households are not meant to lift them out of poverty, but merely to get them out of extreme poverty by allowing them to afford an extra meal each day. The specific amounts given to beneficiary households varies according to the nature and size of the household, and across pilot districts.

The MCDSS, donors and civil society have agreed on the need to scale up the pilots to the rest of the country. This will be done in phases, and so that each province will have at least one district participating in the scheme. The current plans are to scale up the scheme to 10 additional districts by 2013.

Cross-cutting issues

The social protection sector faces a number of challenges, which hamper its ability to deliver its services in an effective and efficient manner. The three kinds of challenges relate to financing, coordination, and monitoring and evaluation.

Financing

Generally, funding to the social sector in Zambia is poor, and it is usually one of the first to be downsized in case of budgetary difficulties. Within the sector, allocations towards key social protection interventions, such as the Food Security Pack, and the PWAS have been declining over time. Until 2008, the government did not provide any financial support towards the SCT schemes. While the donors provided all the funds for the schemes, their lack of clear long-term commitment further discouraged government support.

It has been the government’s view that it would be beyond its means to implement the scheme without donor support.

Coordination

Recently, the sector players formed the Social Protection Sector Advisory Group (SP-SAG) as a way to strengthen social protection coordination. This is a very high-level forum with poor links to provincial, district and community actors. This has resulted in a weak and inconsistent flow of information from the top to the grass root actors.

In October 2008 civil society organizations established a civil society social protection platform, under the auspices of the Grow Up Free From Poverty (GUFFP) coalition. This was meant to improve their bargaining power in the SP-SAG. But the mandate of the platform is not yet clear as some prominent civil society organizations have not yet subscribed to the platform. So the sector still lacks effective civil society participation.

Monitoring and Evaluation

The Zambian social protection sector lacks a coherent monitoring and evaluation system. Most of the interventions have not been evaluated to shed light on their efficiency and cost effectiveness.

Impact of Social Cash Transfers

Nevertheless, some studies have been undertaken to assess the impact of the social cash transfers. The research has found that:

The SCTs helped raise households’ consumption spending per capita, by 50-80 percent. The greatest increase has been in non-food related spending.

In Chipata, beneficiary households were 30 percent more likely to invest in micro-enterprises than they would have been had they not participated in the scheme.

In the rural areas of Kalomo and Kazungula, beneficiary households in these two districts owned three times more small livestock than they would have had they not been beneficiaries of SCTs.

When it comes to school enrolment, beneficiary households were actually worse off than if they had not benefitted from the scheme. The only exception is Kalomo, where boys in beneficiary households were 6-8 percent more likely to be enrolled than they would have been had they not belonged to beneficiary households.

School attendance rates for children who were already enrolled in school improved only in the urban scheme, which also had a benefit related to school attendance.

Conclusion

According to Tembo, given existing poverty levels, Zambia needs an effective and well-coordinated social protection system. He says that the government should give the social sector as much importance in the budgeting process as all other sectors.

Experience from the pilot SCT schemes demonstrates that it is possible to use social transfers to positively influence the lives of incapacitated households with long-term implications.

A good model for a social pension in Zambia

Since 2003, the Zambian government has been running a set of pilot social cash transfer schemes. The first pilot began in Kalomo, and the schemes have since spread to four other districts – Chipata, Katete, Kazungula and Monze.

The aim of the pilots is to test which model could best form the basis of a national social protection system.

Most of the pilots cash transfer projects use a community-based targeting system, aimed at a small percentage of households identified as living in extreme poverty.

The pilot being run in the Katete district is different from the others, as it transfers money to everyone over the age of 60 years, thus creating a form of social pension.

Help Age International has published a brief outlining the perceptions of recipients, their families and the community towards the pension, and the impacts which have been observed on areas such as nutrition, health, education and the local economy.

It also outlines the practical benefits and challenges of implementing the scheme.

Older people interviewed as part of the study described a range of ways in which the relatively small pension had improved their lives. Top of the list was having more money to buy food, and recipients and non-recipients alike highlighted the nutritional impact of the pension. The researchers found that the pensions helped the entire family, and had a huge impact on children – boosting their nutrition and school attendance.

The Help Age study finds that, while there are still some technical glitches to iron out, the model being used in Katete is popular, administratively simple and cost-effective – making it a good option for scaling up to national level.

You can download the full brief on the Katete research from Wahenga.net and from the Help Age site.

Social protection crucial as children feel the heat

In a new report on the impact of climate change on children, Save the Children has identified social protection in the form of cash grants to poor and vulnerable people as a key way to help communities cope and adapt.

The report, called Feeling the Heat, was released on Thursday Nov 5 at the Barcelona Climate Change talks.

According to the report, up to 175 million children a year will be hit by natural disasters linked to climate change. The researchers warn that climate change will “exacerbate the leading causes of death of children, including diarrhea, maluntrition and malaria.”

Feeling the Heat argues that plans to adapt to climate change must take into account the specific needs of children. This includes the need to boost health, water and sanitation systems in the poorest countries. Early warning systems for disasters are also crucial, the report says.

Emergency safety needs and long-term social protection in the form of cash transfers, are named as critical measures to help people cope with shocks and to reduce child mortality. Such measures should be specifically aimed at assisting children under five and pregnant and lactating mothers, the report says, as these “have the potential to tackle malnutrition brought about by climate change.”

You can download the full report here.

Focus on women to fight hunger

In an article on NGO Pulse, Charlotte Sutherland argues that efforts to fight hunger should focus on women – and that we need to move away from food aid, to enabling poor and vulnerable people to produce more of their own food.

Sutherland, a research manager at Consultancy Africa Intelligence, argues that women are a good starting point for food production initiatives because they tend to put their families ahead of themselves.

Focusing on the role of women, Sutherland argues that communities need help with a range of measures to give communities the tools to “tackle disasters before they strike.” this includes building of wells, irrigation programmes, and stockpiles of food and medicine. Just as crucial, is ensuring that women have secure land and property rights. This in turn would help women to access credit, technical input, training and education.