Cash transfers: a ray of hope – a project supported by Swiss development cooperation
The humanitarian situation in north-eastern Nigeria has deteriorated dramatically in recent years. At the end of 2022, over three million people in the north-eastern states of Borno, Adamawa and Yobe (BAY states) did not have access to adequate food and were dependent on humanitarian aid. “The people in this region are exhausted and disheartened,” says Moise Makuta, country director of Action contre la faim (ACF) in Nigeria.
The main reason for the crisis is the ongoing violence. Different factions of the Islamist Boko Haram are fighting each other and the army. The civilian population is suffering from suicide attacks, kidnappings and rapes. Millions have fled the violence in recent years. “People in rural areas flee to the cities and leave their fields behind,” says Makuta. “So, food production is declining and exacerbating the existing food insecurity.”
Credit cards for the most vulnerable
In response to the severe crisis, the ACF started a cash and voucher assistance project supported by SDC in Yobe state. It identified 10,000 women and men from 2,000 highly vulnerable households in two local government areas. They each received a 'credit card' which stores their biometric data and can be used to obtain goods or cash in local shops.
Each month, they are credited with NGN 5,000 (about CHF 10). "With the card, we reconnect needy people to the local markets," says Makuta. The cards work even under the most challenging conditions – as long as there are customers. The participating shops receive a small commission for this service from the ACF.
Past experiences with humanitarian interventions have shown that distributed food is often sold in local markets because the beneficiaries prefer cash. "People have different priorities, and not everyone has the same needs," Makuta explains. He observed that once people had dealt with their immediate hunger, they started to pay off the debts they had accumulated during hard times. This is an important step to regain social recognition and be accepted as a reliable customer.
Others use the money to start a small garden to grow their own vegetables. As part of the project, about 350 families were given a once-off payment of NGN 50,000 (about CHF 100) to set up their own business such as a food stall or a small shop. "Once people are no longer just focused on surviving, they can work miracles," says Makuta. Free healthcare and awareness programmes addressing a balanced and healthy diet are further important components of the project.
Cash pays off
Cash and voucher assistance (CVA) has gained significant ground in humanitarian aid in recent years. In 2021, it accounted for USD 6.7 billion which amounts to about 19 per cent of global humanitarian spending. Switzerland is part of a group of countries which, in 2019, officially recognised the advantages of CVA as an effective and people-centred humanitarian assistance strategy. "CVA is also a matter of dignity," says Roberto Lang, programme officer for Nigeria at SDC. "It gives back people a measure of autonomy."
Feedback from beneficiaries shows that household nutrition has improved, according to Makuta. There were only isolated cases of misuse. The entire community as well as key decision-makers in a particular area were roped in at the outset so that no one would be envious of the beneficiaries. The criteria for selecting the beneficiaries were jointly defined and factored in age, disability, and whether someone was pregnant or had just lost their home. "There is solidarity in our society and people usually take care of their neighbours," Makuta notes.
However, cash transfer projects are not just socially demanding, they are contingent on political and technical frameworks. This was illustrated at the beginning of the year when the government announced that old bank notes would be withdrawn from circulation and exchanged for new ones. The true objective, however, was to transform Africa's most populous country with 224 million citizens into a cashless economy.
The poorly planned reform was a disaster, partly because the infrastructure for digital transactions was not sufficient, and where it was available, large sections of the population had no access to it.
The project managers were able to find short-term solutions with commercial banks. Last July, the funding for this one-year crisis intervention concluded. "We are now working closely with the local government and hope that it will be able to continue the programme as a form of social security for the most vulnerable populations," says Makuta.