Cash Transfers in Latin America and Africa: An Overview

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Cash Transfers in Latin America and Africa – an overview

Brasilia, 26 March 2012

Fabio Veras Soares – IPC-IG (UNDP/SAE/IPEA)

Uganda-Brazil Study Tour on Social Development

International Policy Centre for Inclusive Growth (IPC-IG)

CCT programmes in Latin America

Conditional Cash Transfer programmes have been adopted by a variety of countries in Latin America… with different designs… and for different reasons…

Common features: targeting, cash transfers paid to women, and conditionalities (health, education, plus…)

Double objective: poverty alleviation and stop intergeneration transmission of poverty

Beyond commonalities:• Differ with regard to the emphasis in the two objectives and with

regards to... … its place in the social protection system: permanent welfare

policy or short-term safety net

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CCTs in Latin America: an overview

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CCTs in Latin America: an overview

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CCTs in Latin America: an overview

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CTs Africa: an overview

• Before the 2000’s Social Cash Transfers were restricted to middle-income countries – old age pension and/or child support grant in South Africa, Mauritius Namibia and Botswana… expect for PSA in Mozambique… early 1990’s.

• In the 2000’s with the Livingstone declaration pilot CT programmes start being implemented mostly in Eastern and Southern Africa (Zambia, Kenya, Malawi, Lesotho)… but also some pilots in Ghana, Nigeria, and Senegal.

• Many doubts about whether CCT could work in SSA: concerns about dependency, administrative capacity, feasibility of having conditionalities, local inflation…

• Focus on vulnerable groups

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CTs in Africa: an overview

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Old age grants and (C)CTs: LA and Africa

Latin America: old age grant + CCT Some countries in Latin America do not have a non-contributory

social pension and have attached them to CCT programmes… e.g. Paraguay ; El Salvador; Ecuador and even Oportunidades in Mexico which evolved into 70+ programme…

Africa: old age grants + SCT Middle income countries had non-contributory pensions

(Mauritius, South Africa, Namibia, Botswana)… and even low income like Mozambique with PSA…

However, focus in demographic criteria based on high dependency ratio have been prevalent in most Social Cash transfer in Africa. In practice it has led to the implementation of Social Pensions in many countries…

Alternative model: Orphans and Vulnerable Children (Kenya OVC-CT)

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Transfers as share of total expenditures of benef. families

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CCTs in Latin America: impacts

• Improved food consumption (quality) and food security of beneficiary households; but nutrition puzzle.

• Increase in the share of expenditure in child-related goods (e.g. child clothing)

• Increase in school attendance and fall in drop-out rates, specially for pupils in secondary education

• Fall in poverty (poverty gap) and inequality – particularly where the programme covers large segments of the population and transfer is not very low

• No evidence of sizable negative impacts on labour market participation, some positive in rural areas… possibly due to…..some evidence of productive impacts: part of the transfer is invested in livestock and small business– Mexico and Paraguay.

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SCTs in Africa: Impacts

• Community targeting seems to work fine when combined with other mechanisms (categorical and geographical targeting)

• Improved food consumption (quality – away from tubers towards dairy products) and food security of beneficiary households (Mozambique and Kenya);

• Increases share of expenditures with health (Kenya)• Increase in school attendance for secondary students and for those who face

higher costs in primary education; (Kenya)• Fall in the proportion of children who are behind in terms of age-for-grade

indicators (Kenya) – starting school at the right age.• Some evidence of positive impact of the transfers on asset accumulation:

ownership of agricultural tools and livestock. (Malawi)• Households reduced participation in low-skilled activities outside the

household, such as agricultural wage labour and ganyu work, generally associated with vulnerability in Malawi .

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Uganda: Social Assistance Grant for Empowerment (SAGE)

Focus on high dependency ratio (many children, specially OVC, elderly, and disabled) and in old age grants.

Pilot to phase to assess implementation and short-term impacts.

It can benefit from experience of other countries, specially Kenya, Zambia and Malawi and it can benefit other programmes too through its own evaluation:

Can the transfer value make a difference… consumption/food security and other outcomes?

Targeting and deliver mechanisms are working? Are there impacts on human capital and productive

investments (value of the transfer)?

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CTs challenges in Africa

How to integrate with other interventions – food security, employment programmes, OVC support, access to health and education?

Use of the registries for the consolidation of MIS as well as a planning tool to improve social policies as a whole.

Attention to outcomes of the mixed models that combine Social Cash Transfers and predictable public works – Ethiopia, Tanzania (TASAF), Rwanda and Mozambique.

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References

Latin America:• Conditional Cash Transfer Programmes: The recent experience in Latin America and the Caribbean

http://www.cepal.org/cgi-bin/getProd.asp?xml=/publicaciones/xml/6/45096/P45096.xml&xsl=/dds/tpl-i/p9f.xsl&base=/mujer/tpl/top-bottom-estadistica.xslt

• Conditional Cash Transfer Programmes and Gender Vulnerabilities: Case Studies of Brazil, Chile and Colombia http://www.ipc-undp.org/pub/IPCWorkingPaper69.pdf

AFRICA:• Impact Evaluation of the Expansion of the Food Subsidy Programme in Mozambique

http://www.ipc-undp.org/pub/IPCPolicyResearchBrief17.pdf• Covarrubias et al. (2012). ‘From Protection to Production: Productive Impacts of the Malawi Social

Cash Transfer’, Journal of Development Effectiveness. Forthcoming.• Ashu et al. (2012). The Impact of Kenya’s Cash Transfer for Orphans and Vulnerable Children on

Human Capital. Journal of Development Effectiveness . Forthcoming.• Handa et al. (2012). ‘Targeting effectiveness of Social Cash Transfer Programmes in Three African

Countries’, Journal of Development Effectiveness. Forthcoming.• CT-OVC Evaluation Team (2011). The impact of the Kenya Cash Transfer Program for Orphans and

Vulnerable Children on household spending. Mimeo.• García and Moore (2012). The Cash Dividend – The Rise of Cash Transfer in Sub-Saharan Africa.

World Bank. • IPC-IG Poverty in Focus: Cash Transfers – Lessons from Africa and Latin America http://www.ipc-

undp.org/pub/IPCPovertyInFocus15.pdf For More info on Impact Evaluations : http://www.cpc.unc.edu/projects/transfer

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Many Thanks

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