84457 Reducing Poverty and Investing in People THE NEW ROLE OF SAFETY NETS IN AFRICA Experiences from 22 Countries OVERVIEW Photo credit: copyright © Andrea Borgarello / World Bank Cover photo credit: Dasan Bobo/The World Bank REDUCING POVERTY AND INVESTING IN PEOPLE: THE NEW ROLE OF SAFETY NETS IN AFRICA Experiences from 22 Countries The World Bank Africa Social Protection Strategy for 2012–22 highlights the need for a strong evidence base to inform the design and implementation of social protection programs in Africa (World Bank 2012a). Hence, since 2009, the World Bank has conducted compre- hensive social safety net assessments in 22 countries in Sub-Saharan Africa. The findings of these assessments and other studies of safety net programs were recently synthesized into a regional review. This review provides an assessment of the current status of safety net pro- grams in Africa and presents lessons on how they can be strengthened to better tackle poverty and vulnerability. Safety Nets as Tools for Poverty MAIN MESSAGE: The review finds that Reduction and Investing in the Poor social safety nets are on the rise in Africa, and Over the past two decades, Africa’s strong beginning to evolve from scattered stand- economic growth has paved the way for poverty alone programs into safety net systems. reduction. Between 1995 and 2008, the percentage Until recently, many African countries of the African population living in poverty fell approached social protection on a largely from 58 percent to 48 percent (World Bank 2011). ad hoc basis. But when the global economic Nevertheless, high poverty levels persist, especially crisis threatened recent progress in poverty in rural areas, and the gap between income groups in reduction, safety nets increasingly began to terms of human capital and access to basic services be viewed as core instruments for poverty is growing. In addition to chronic poverty—a reduction in the region. Social protection situation where households are not able to improve programming has started to develop from their living standard and move out of poverty over emergency food aid programs to one-off time—vulnerability is high because environmental, safety net interventions, and then to regular economic, individual, and governance shocks and predictable safety nets, such as targeted frequently affect many households. cash transfers and cash-for-work programs. In the effort to increase the momentum in the Some countries, such as Ghana, Kenya, progress toward sustainable poverty reduction, Mozambique, Rwanda and Tanzania, safety nets (for a definition see Box 1) are an now seek to consolidate programs into important tool in any country’s development national systems. There is progress towards strategy. The high levels of persistent poverty and articulating national social protection the increasing inequality suggest that in speeding strategies, which will serve as the basis up poverty reduction, targeted interventions such for effective safety net systems. But as our as safety nets, which provide regular and reliable support to poor households and help the poor review shows, there is still a long way to go. invest in productive and capital-forming activities, 1 2 Reducing Poverty and Investing in People BOX 1: Definition of Terms Safety nets refer to noncontributory transfer programs targeted in some way to the poor or vulnerable (Grosh et al. 2008). Safety nets aim to increase households’ consumption—either directly or through substitution effects—of basic commod- ities and essential services. Safety nets are targeted to the poor and vulnerable—that is, individuals living in poverty and unable to meet their own basic needs or in danger of falling into poverty, because of either an external shock or socioeconomic circumstances, such as age, illness, or disability. Social safety nets form a subset of broader social protec- tion programs along with social insurance and social legislation. Hence, social protection includes both contributory and noncontributory programs, whereas safety nets are noncontributory. may be important. Safety nets can also provide of countries have started to coordinate their separate additional support in times of crisis to those who are safety net programs into a national system. There is temporarily thrown into poverty and can help them also momentum throughout the region to rational- develop strategies to build their resilience and thus ize public spending to provide more adequate and avoid drawing down on their assets during times targeted support to the poorest. This effort responds of hardship. Hence, safety nets will be essential to the growing body of evidence indicating that to achieve the new World Bank goals including safety nets reduce chronic poverty and vulnerability reducing extreme poverty and boosting shared and promote inclusive growth. Impact evaluations of safety net programs in Africa show that safety prosperity. nets help households meet their basic consumption Until the recent urgency to strengthen safety needs, protect their assets, and enable them to invest nets for the poorest in the face of the global crisis in human capital. Moreover, recent research on the and repeated droughts, social protection has been productive aspects of cash transfer programs in Af- implemented only on an ad hoc basis in Africa. rica suggests that these effects may have the potential Over the past few years, in the wake of the global to boost well-being in the future through productive economic and food and fuel price crises, a number investments (see Box 2). The New Role of Safety Nets in Africa 3 BOX 2: Can Cash Transfers Boost Household Productivity in Africa? Most safety net programs focus on reducing current levels of poverty. However, they may also have the potential to in- crease productivity and reduce poverty in the long term. Public works are considered productive even in the short term because, besides transferring income to disadvantaged households, they help create small community investments. Cash transfer programs (often conditional) can help poor families invest in the human capital of their children, for instance, through more regular school attendance. However, some groups of the very poor and destitute may not be able to par- ticipate productively in society and may use income support to purchase food and other necessities (the protective role of safety nets). Improving consumption could, however, be considered productive in itself; for instance, better nutritional intake helps children develop and improve their future prospects. Old-age support to grandparents in Kenya and South Africa is used to support the schooling of their grandchildren. Helping households become more productive is an increasingly important aspect of safety nets in Africa. This potential remains to be fully exploited, but some findings from impact evaluations and other research in a number of African coun- tries show promising results. Initial findings of this work show that even a small amount of regular income support—even without any conditions—can help households diversify livelihoods and increase their consumption of “goods” (such as investment in assets, human capital, and small enterprise development) and move away from “bads,” or negative coping strategies (such as reducing exploitive or risky employment and asset sales in times of distress). As such, safety nets can allow households to invest in higher-productivity, higher-return activities. Also, cash transfers were shown to boost the local economy through multiplier effects because beneficiaries spend transfers in the local market. Safety nets are needed in Africa both to support the poor and vulnerable to help them weather crises the poor and to help them weather shocks. Africa and to rise out of extreme poverty over time. How- has a long tradition of family and community-based ever, given the vast extent of poverty and vulnerabil- safety nets. As countries prosper, inequalities rise ity in Africa, safety nets cannot reach all of the poor. and social structures may erode as a result of shocks They need to focus on the extremely poor and on and economic and social change. In most African countries, government-led social safety nets are a specific vulnerable groups for maximum effect and relatively new phenomenon, but governments have affordability—not only helping protect them but also become aware of the need to provide safety nets for providing a ladder out of poverty in the longer term. Photo credit: Dasan Bobo/The World Bank 4 Reducing Poverty and Investing in People The Safety Net Experience in 22 African Countries Safety nets have evolved differently across Africa and efficient safety net systems. Safety nets are also in response to the specific political economy and being placed higher on government agendas. The sociocultural background in each country. Hence, review shows that about three-fourths of the coun- the policy frameworks, approaches, and institutional tries studied include safety nets as a component of arrangements that govern safety net systems are not their overall poverty reduction strategy and over half homogeneous across the continent. For instance, have prepared or are preparing a social protection middle-income countries (MICs) in southern Africa strategy (Figure 1). Experience from some African have strong government-led systems based on hor- countries, such as Rwanda, shows that clear action izontal equity, whereas in fragile states and low-in- plans with careful costing and implementation plans come countries (LICs), such as those in West Africa, are crucial for putting strategies into operation. In the social protection agenda tends to be more donor addition, advances in information and communica- influenced. Any measures to strengthen safety nets tion technology are quickly creating opportunities need to be designed in ways that take into account for African countries to adopt international best these context-specific factors. practices with regard to the use of management in- Despite this heterogeneity across the continent, formation systems, single beneficiary registries, and safety nets are taking hold as core poverty reduc- payment systems, among others. tion instruments. More and more African coun- tries are preparing social protection strategies to FIGURE 1: More than half of the countries have serve as the foundation on which to build effective prepared or are preparing social protection strategies (percent of countries) Social protection strategy 32% exists and is operational 45% Social protection strategy under preparation No social protection 23% strategy exists Although safety nets in Africa generally lack strong institutional homes and coordinating bod- ies, examples of robust implementation arrange- ments exist. Responsibility for government safety net programs is generally spread over a number of differ- ent ministries, such as the ministries of social affairs, women and family, and employment, as well as other cross-sectoral ministries that often lack significant political decision-making power within the govern- ment. The Ethiopia Productive Safety Net Program (PSNP) is, however, an example of how countries could create effective implementation arrangements that span multiple ministries. Meanwhile, fragmented donor support often leaves LICs with a host of small and isolated programs that lack coordination or a po- Photo credit: copyright © Andrea Borgarello / World Bank The New Role of Safety Nets in Africa 5 litical champion. For instance, both Liberia and Mad- relief (Figure 4). These shock response mecha- agascar have more than five different public works nisms tend to be weak, inflexible, and unpredictable. programs, each operated by different donor organiza- Moreover, very little information is available about tions and government agencies. the effectiveness of food distribution and emergency The results of this review show that few African relief programs that are common in West Africa (for countries have well-planned safety net systems that are capable of taking a strategic approach FIGURE 3: Various Types of Safety Net Programs to reducing poverty and vulnerability (Figure 2). (percent of countries) Instead, a multitude of interventions exist that are 100% fragmented, typically donor driven, and together do 90% 95% 91% not effectively target the poor. In LICs, for example, 80% in West Africa, safety nets are focused on emergency 82% 77% relief and food-related issues. Few provide continu- 70% 68% ous support to the large number of chronically poor, 60% 59% 59% although such programs are more common in MICs 50% 55% (such as in South Africa, Botswana, and Swaziland) 40% because of the prevalence of social assistance and 36% social pension programs in those countries. Look- 30% ing across countries, we find that the most common 20% kinds of programs are school feeding programs, 10% 14% public works programs, in-kind emergency and 0% nonemergency programs, categorical transfer pro- Poverty targeted cash transfers Categorical transfers Other in-kind transfers Emergency programs Social care services General subsidies Fee waivers Micro-finance School feeding Public Works Programs grams, and general subsidies (Figure 3). National poverty-targeted cash transfer programs are not common, although some of the significant number of small programs are currently being expanded. For example, Rwanda is expanding the coverage of the Vision 2020 Umurenge Program, and in Kenya, the government is bringing five cash transfer programs FIGURE 4: Focus of Safety Nets Programs into the National Safety Net Program. (percent of countries) 100% FIGURE 2: Coordinated Safety Net Systems are Uncommon (percent of countries) 90% 95% 80% 82% 70% 14% 60% System of Social Safety Network programs exists 50% System in progress 40% 45% 36% 50% No system 30% 20% 10% 0% Country has program(s) Country has program(s) Country has program(s) Lacking long-term, development-oriented focused on the focused on the focused on the chronically poor/ temporary poor/ categorically safety nets, many LICs and fragile states still re- chronically food shock a ected/ vulnerable/ act to crises and disasters by providing emergency insecure repeatedly food insecure special groups 6 Reducing Poverty and Investing in People example, in Benin, Burkina Faso, Cameroon, Mali, the poor (Table 1). In practice, safety nets in Africa and Mauritania). Countries are increasingly looking use a wide range of targeting mechanisms and often to the positive experience of the risk-financing com- combine more than one — 57 percent of programs ponent of Ethiopia’s PSNP. combine at least two methods. Evidence shows that, More monitoring data on safety net programs in in some cases, community-based targeting can iden- Africa would help assess their effectiveness. In gen- tify the poorest households for safety net support. A eral, little is known about the effectiveness of safety key question is how well African safety nets are able net programs in Africa, and lack of basic program to identify and reach the poor and vulnerable, es- information systems and data is a crucial weakness. pecially those in extreme poverty and vulnerability, Many countries do not have accurate administrative given data and capacity constraints. Improving the data on the number of beneficiaries reached and extent to which safety nets can reach the poor also benefit levels provided by each of the programs. Pro- depends on political viability. grams that distribute food, for instance, in response TABLE 1: Safety nets in Africa use a wide range to emergencies, particularly lack data. The body of of targeting mechanisms (percent of programs) evidence from impact evaluations of African safety net programs is however growing quickly. Many Af- Targeting method Frequency rican governments, together with the World Bank Multiple 57% and other donors are working actively to improve Geographic 49% the impact evaluation evidence base from safety net Self-targeted 32% programs. Community-based/validated 30% Coverage of the poor and vulnerable by exist- Categorical 26% ing safety net programs is low, although growing PMT/means-tested 20% in some countries. Taken together, each country’s Universal (excluding subsidies) 12% safety net programs cover only a very small share of the total number of poor and vulnerable people. For With better analysis of safety nets, in part from example, in Benin, the net coverage rate of all safety safety net assessments, several countries are on a net programs is estimated to be only about 5 to 6 path toward developing more effective safety net percent of the poor. In Kenya, estimates show that systems. Our review suggests that 36 percent of the cash transfers reached about 9 percent of the poor countries analyzed are building a system whereas half population in 2010, but the government is planning still need to make more progress (Figure 2). A num- to expand coverage so that by 2018, 17 percent of the ber of countries are actively increasing the effective- poor will be reached. The exception is universal so- ness and the scale of their existing programs, includ- cial pensions programs common in southern Africa, ing some that are relatively well targeted (such as the which cover a large share of the elderly population. programs run by the Tanzania Social Action Fund, However, the coverage of poverty-targeted programs Ghana’s Livelihood Empowerment against Poverty in many MICs is still limited. To achieve their goals program, and Kenya’s Cash Transfer Program for Or- at a reasonable cost, safety nets need to be well tar- phans and Vulnerable Children) (Box 3). In a handful geted, cover the identified groups, provide adequate of countries, such as Rwanda and Tanzania, sustain- benefits, and be flexible enough to adjust to chang- able and more institutionalized programs are starting ing needs and to respond to the types of shocks that to appear, backed by influential ministries such as the are now being addressed in many countries. ministries of finance, economy, and planning. Also, Targeted programs are still not widely available more countries are moving toward building safety in Africa. Poverty-targeted programs are rare and net systems and programs that are predictable and mainly practiced in small and new pilot initiatives, are flexible enough to respond to crises (for exam- with only 20 percent of the programs reviewed using ple, Cameroon, the Republic of Congo, Guinea, Mali, some form of means testing (based on actual con- Mozambique, Niger, and Senegal). Ethiopia’s PSNP sumption income) or proxy means testing to target has long been a pioneer in this respect. The New Role of Safety Nets in Africa 7 BOX 3: Examples of African Safety Net Programs Ethiopia’s Productive Safety Net Program (PSNP) was launched in 2005 to transform the historic food aid-based system into a more predictable safety net that produces productive assets in poor communities. The PSNP provides cash and food transfers to food-insecure households through labor-intensive public works for households with able-bodied members (80 percent) and direct transfers to households that are unable to fulfill a work requirement (20 percent). Estimated annual transfers per household are equivalent to about 40 percent of their annual food needs. The PSNP reaches more than 7 million people, or about 10 percent of the population, and implements about 34,000 small works projects per year. The PSNP’s public works have rehabilitated over 167,000 hectares of land and 275,000 kilometers of stone and soil bund em- bankments and have planted almost 900 million seedlings, all of which will help to mitigate the effects of future droughts. Rigorous evaluations of this program have confirmed that it has made significant transfers to the poor in times of need. Ghana’s Livelihood Empowerment against Poverty (LEAP) Program is a social cash transfer program that provides cash and health insurance to extremely poor households across Ghana to alleviate short-term poverty and encourage long-term human capital development. Eligibility is based on poverty and having a household member in at least one of three demographic categories: a single parent with an orphan or vulnerable child, an elderly poor person, or a person with an extreme disability who is unable to work. LEAP started in a trial phase in March 2008 and, as of June 2013, 71,000 households are enrolled. Beneficiaries receive bimonthly cash transfers of between US$4 and $8 per month. An impact evaluation is currently ongoing. The objective is to scale up LEAP to 1 million households over the next three years. Kenya’s Cash Transfer for Orphans and Vulnerable Children (CT-OVC) was initiated in response to concerns about the wellbeing of orphans and vulnerable children, particularly AIDS orphans. The objectives of the program are to encourage the fostering and family retention of children and to promote their human capital development. Eligible households, which are those who are poor and contain an OVC, receive a flat monthly transfer of US$21. The program reached 150,000 households, including 495,000 OVC across the country as of June 2012, about 24 percent of the estimated number of households with OVCs. Impact evaluations have found significantly higher expenditures on food and health services among beneficiary households. The impact of the program on schooling is concentrated on the secondary level, where enrollment was increased by 9 percentage points and children from beneficiary households were less likely be behind a grade and more likely to progress to the next grade. Rwanda’s Vision 2020 Umurenge Program (VUP) combines public works (50 percent), cash transfers (20 percent), and microfinance loans (30 percent) to targeted poor households in the poorest sub-districts. Managed by the Ministry of Local Government, the public works encompass land productivity and irrigation, mainly terracing, ditches, small dams and forestry, as well as construction of roads, school classrooms, and health centers. Wages are set at the district level and vary by project type but with a guideline that they should be less than or equal to the market rate for similar work. As of 2009, wages averaged about US$1.50 per day. As of FY2010/2011, the government spent about 0.7 percent of the national budget on VUP public works and employed 522,856 people, half of whom were women. This is equivalent to about 5 percent of the national population. VUP public works were found to have reduced extreme poverty in the areas covered by the program. South Africa’s Social Grants is the largest cash transfer program in Sub-Saharan Africa. It includes several types of means- tested grants targeted to the older people, poor families with children, foster families, people with disabilities, and war veterans. Roughly 15 million people receive a social grant, or about 30 percent of the national population. The child sup- port grant (CSG) reaches about 10 million people, while the old age grant, which applies to poor people over 60 years of age, reaches about 2 million people. According to household survey data, social grants make up over 60 percent of the income of the poorest 20 percent of recipient households, with child grants being the largest contributor. Children who were enrolled in the CSG at birth completed significantly more grades of schooling and achieved higher scores on a math test than children who were enrolled at the age of six. These effects were particularly significant for girls. Enrollment in the CSG reduced the likelihood of illness among children by 9 percentage points. The main effects on adolescents were reduced sexual activity and teen pregnancies and less drug and alcohol use. Source: World Bank (2012b) 8 Reducing Poverty and Investing in People Well-targeted safety nets are affordable in Af- For instance, in Cameroon, estimates indicate that rica, especially if inefficient universal and categor- it would cost only 0.5 percent of gross domestic ical spending can be reduced and redirected to the product to provide an adequate safety net to half extremely poor and to specific vulnerable groups the chronic poor. and if fragmented programs can be harmonized. In • General subsidies are costly mechanisms for re- most African countries, especially LICs, spending distributing income and often do not benefit the on social safety nets is low in comparison to other poor, as is true, for example, of the fuel subsidies countries in the world (Table 2). in Cameroon, Mauritania, and Sierra Leone and • In LICs, because poverty is high and government the Farmer Input Support Program in Zambia. income low, attracting donor funds to support the Reducing poorly targeted programs and subsidies safety net agenda will continue to be vital in both can make fiscal space for more effective and bet- the short run and the longer run. With the excep- ter-targeted safety nets. Likewise, well-performing tion of universal programs such as old-age bene- safety nets providing support to the most vulner- fits and general subsidies, donors finance a large able groups can be important mitigating mech- share of safety nets in Africa‒–for example, over anisms to facilitate reform of expensive general 80 percent of safety net spending in Burkina Faso, subsidies. Liberia, Mali, and Sierra Leone (Table 2). • Growing natural resource discoveries across Af- • In MICs, however, current public budgets are suf- rica (see World Bank 2013) are likely to provide ficient to provide adequate support to the poorest. additional fiscal space for safety nets. Photo credit: Claudia Rodriguez Alas/The World Bank The New Role of Safety Nets in Africa 9 TABLE 2: Cost and Financing of Safety Nets in Africa Spending on Safety Nets Percent   (percent of GDP; incl. government of total Percent financed by Notes and donor spending) government Excluding Including General spending Government Country general general subsidies (excl. (excl. Donors Years subsidies subsidies only subsidies) subsidies) Benin 0.3 0.9 0.5 1.1 35 65 Ave. 2005-10 Ave 2009/ Botswana 3.7 3.7 0.0 9.5 100 0 10-2012/13 Burkina Faso 0.6 1.3 0.7 <1.0 20 80 Ave. 2005-09 Cameroon 0.2 1.6 1.4 1.5 23 77 Ave. 2008-10 Ethiopia 1.2 a 1.2 a 0.0 . 0 100 2009 Kenya 0.8 0.8 0.0 1.0 29 71 2010 Lesotho 4.6 4.6 0.0 8.0 2010/11 Liberia 1.5 1.5 0.0 4.4 6 94 Ave. 2008-11 Madagascar 1.1 1.1 0.0 5.0 . . 2010 Mali 0.5 0.5 0.1 . 40 60 Ave. 2006-09 Mauritania 1.3 3.2 1.9 4.6 62 38 Ave. 2008-13 Mauritius 4.4 5.2 0.8 9.0 . . 2008/09 Mozambique 1.7 3.1 1.4 . 38 62 2010 Niger . . . 1.0-5.0 33 67 Ave. 2001-06 Rwanda 1.1 1.1 0.0 . . . 2010/11 Sierra Leone 3.5 5.6 2.1 13.1 15 85 2011 South Africa 3.5 . . . . . 2010 Swaziland 2.1 2.1 0.0 . . . 2010/11 Tanzania 0.3 0.3 0.0 1.0 . . 2011 Togo 0.5 1.3 0.8 1.8 25 75 Ave. 2008-10 Zambia 0.2 2.1 1.9 . 25 75 2010/11 Average 1.7 2.2 0.6 4.4 32 68 . Ave. LICs 1.1 1.7 0.6 3.7 27.5 72.5 . Ave. MICs 2.7 3.2 0.7 7.0 49.3 50.7 . Ave. Established 3.9 4.5 0.4 9.3 100 0 . systems Ave. Emerging 1.5 1.7 0.2 2.8 28 72 . systems Ave. Early stage/ No 1.0 2.1 1.0 4.5 26.4 73.6 . plans Ave. ECA 1.8b 1.8b . . . . Latest 2008-10 Ave. LCR 1.1 c 1.1 c . . . . 2010 Ave. MNA 0.7 6.4 d . . . . Latest Sources: Country safety net assessments, Silva et al. (2013), Woolard and Leibbrandt (2010), World Bank (2012b), World Bank (2012c) Notes: Numbers may not add up due to rounding errors. The spending data presented include donor financing except general budget support but excludes funding by the private sector. a Only includes PSNP and does not include spending on other safety net programs. b Government spending only, includes subsidies in very rare cases, where data is available, latest year 2008-11. c Year 2010 for 10 countries in Latin America and the Caribbean. d Latest year available for 11 countries in the Midde East and North Africa region. Spending includes general subsidies and ration cards. 10 Reducing Poverty and Investing in People Moving Forward to Strengthen Safety Nets in Africa Data collection and the monitoring systems that such as Malawi’s Zomba cash transfer program or support safety net programs need to be improved Mali’s Bourse maman, larger programs, such as those systematically across Africa. Basic and core data on in Ethiopia, Kenya, and Tanzania, are now benefiting the number and type of beneficiaries reached and in- from impact evaluations. formation about program outcomes and impact are Harmonizing and coordinating safety net pro- imperative to improve the design and coordination grams into a coherent system should be a priority. of programs, to keep decision makers informed, and Within a given country, a small number of coor- to attract financial resources and donor support. The impact of safety nets on poverty and welfare indica- dinated and well-functioning programs can effec- tors, where known, has generally been positive but tively and feasibly meet the needs of the poorest, mixed. More and more impact evaluations are be- as happens in Rwanda. Also, African governments, ing undertaken, thereby contributing to a growing with the support of international donors, should body of evidence on safety net programs in Africa. continue to prepare social protection strategies that Although in the past most impact evaluations have link, consolidate, and harmonize programs and put been for small donor pilots for research purposes, the strategies into operation. Photo credit: copyright © Andrea Borgarello / World Bank The New Role of Safety Nets in Africa 11 Safety nets should be built on the basis of strong operational tools to ensure effective program im- plementation and monitoring and establishment of institutional and coordinating bodies in charge of organization and planning. Basic operational tools, such as beneficiary registries, targeting methods, payment systems, and monitoring and evaluation systems, provide a platform that enables programs to deliver support effectively to targeted groups. More work is needed to understand how exist- ing food-based programs and their infrastructure should play a part in new and improved safety net systems in Africa. These systems need to be built during stable times so that they are ready and can respond quickly to crisis. Establishing such systems takes time. Most countries in Africa (including Benin, Cameroon, Mauritania, and Sierra Leone) did not Photo credit: Arne Hoel/World Bank have safety nets capable of effectively responding to the recent global crises but had to resort to ineffi- cient and expensive universal handouts. More accurate targeting of African safety net programs is likely to involve a combination of tar- geting methods that together can distinguish the appropriate households and individuals. Which targeting approach is chosen will depend on the pro- change. Ethiopia, Kenya, Mozambique, Rwanda, and gram’s objective and the institutional capacity of the Tanzania are moving to harmonize programs for en- implementing agencies, and the approach will have hanced efficiency and coverage. to be customized to the particular poverty profile The role of safety nets in the context of sub- and political economy of the country in question. sidy reform and use of mineral resource proceeds Household-level income and consumption data are should be further explored with the unique polit- often not precise enough to be reliable as the sole ical economy of each country in mind. In moving basis for identifying those most in need. Assessing forward with efforts in Africa to rationalize public the targeting accuracy of programs is important, ir- spending for better reaching the poorest, safety nets respective of which targeting method is used. are an important mitigating aspect that countries Programs that are well targeted and are serving may want to have in place. Careful political econ- the poor effectively should be scaled up, whereas omy considerations are important when balancing ineffective programs should be gradually phased tightly targeted programs with other investments out. As mentioned previously, because of Africa’s that can benefit a wider set of people and contrib- widespread poverty and vulnerability, safety nets ute to improved social outcomes. As more and more cannot reach all the poor but need to focus on the African countries are benefiting from newfound poorest and most vulnerable to ensure maximum in- mineral resource wealth,1 getting the balance right fluence and affordability. The allocation of safety net between effectively targeting those funds to the spending on scattered emergency programs shows poorest through safety nets or other investments in that, typically, neither donors nor governments have social services and building both a fiscally and po- focused on safety nets for addressing long-term litically sustainable social protection system will be chronic poverty. This situation is now starting to especially important. 12 Reducing Poverty and Investing in People Implementing the Vision: What Can Other Countries Learn? Countries need to pursue the reform agenda most • Develop and put into operation a safety net strategy. suitable to their context. One size does not fit all. This strategy should assign clear institutional re- The path of safety net development and reform sponsibilities for safety net programs and policies should be based on careful analysis of each country’s with specific roles and responsibilities for involved specific needs and challenges. Our review develops ministries and agencies. The strategy should be a typology of countries to help translate the experi- used as the basis for building strong financial ence of the 22 reviewed countries into practical rec- and political support for the safety net agenda. It ommendations for other countries. should also be embedded in the country’s broader The following recommendations apply to coun- poverty reduction strategy. tries that are classified in the typology used in this • Build key organizational tools for safety net pro- review as “early stage or no plans” because they grams, such as a basic monitoring system, identifi- have no solid plans for a national safety net system cation and targeting mechanisms, and a payment or no adequate programs in place.2 (Mainly this system that can channel transfers from the coun- group consists of LICs and fragile states, but it also try’s various programs to the targeted poor and includes some MICs whose main form of income re- vulnerable groups. distribution is through general subsidies.) Photo credit: Arne Hoel/World Bank The New Role of Safety Nets in Africa 13 • Coordinate scattered donor support. Safety net de- (This group consists mainly of LICs but also some velopment in this group of countries will continue MICs.) to depend on donor support, at least in the me- dium term. With the long-term view of moving • Continue to reform existing categorical, univer- toward a coordinated system of safety nets, these sal, and ad hoc food emergency programs to make countries must begin harmonizing the funding them more effective and efficient tools for reducing given and approaches taken by donors, guided poverty. Improving poverty targeting is especially by the government’s safety net strategy and the important. For instance, social pension programs establishment of underlying systems. In postcon- could be more cost-effective if they were targeted flict countries, establishing government systems only to elderly people and people with disabil- to track and monitor existing donor programs can ities who are also poor, and grants for orphans offer a practical foundation for government inter- and vulnerable children should target only chil- ventions and can build country ownership in low- dren in poor and vulnerable families. Efforts to capacity and fragile contexts. reallocate universal subsidies and expensive ad hoc emergency programs toward better-targeted • Develop a few key safety net programs that are and development-oriented safety net support based on a careful analysis of the country’s needs. should continue. This small number of key safety net interventions should (a) provide regular support to people in • Continue scaling up a few key relatively well-tar- chronic and extreme poverty and (b) be able to ex- geted programs. Experience from the 22 countries pand and contract to provide assistance to poor and shows that a small number of complementary and vulnerable households in the case of emergencies well-coordinated programs are often sufficient for or seasonal fluctuations in income and consump- meeting the needs of the poor. Which programs tion. Which programs are chosen and how they are are selected will vary by country, but they should implemented should be based on the country’s pov- provide regular support to chronically poor fami- erty profile, the experience of pilot programs, and lies or individuals and be flexible enough to scale feasibility studies. Particular efforts should be made up and down to provide shorter-term or repeated to develop robust targeting methods for these pro- support to poor groups in response to shocks. As grams so that, when the programs are considered these programs are being scaled up, they should functioning well and when the political economy be continuously assessed to ensure that vulnera- and fiscal resources allow, they can be scaled up to ble groups are being adequately supported. It may become efficient national programs. However, this also be appropriate to supplement these core pro- expansion does not necessarily have to take place grams with smaller complementary programs and right away. Other existing smaller programs should services that focus on helping beneficiaries engage be strengthened, especially to gather basic monitor- in productive and promotive activities, such as in- ing data to inform decisions about their future. vesting in the health and education of children. • Countries with generous general subsidies and with • Continue harmonizing and consolidating fragmented emergency aid programs should consider reallo- safety net programs. Even if countries have prepared cating some of these funds to more targeted inter- safety net or social protection strategies, they also ventions. Moreover, because human development need to prepare well-costed action plans. While the outcomes tend to be poor in this group of coun- core programs are being implemented, these coun- tries, policy makers should seek to establish syn- tries should continue to harmonize and consolidate ergies between safety nets and health, education, the objectives and operational tools of their various and nutrition interventions. programs. Unique beneficiary registration systems should be explored to reduce duplication and over- The following recommendations apply to countries lap. The capacity to develop robust information sys- that are classified as “emerging” because their safety tems, monitoring and evaluation systems, and pay- net systems are in the process of being developed.3 ment systems will need to be strengthened or built. 14 Reducing Poverty and Investing in People • Coordinate donor funding and technical assistance receiving sufficient support. Within the existing into one collective financing envelope or “basket.” budget, it is entirely possible to refine the targeting As occurred in Ethiopia, such coordination can mechanisms used by universal and categorical pro- minimize duplication and maximize effectiveness grams to provide adequate support to the poorest as a first step toward the government taking over families and individuals within these groups. financing of the safety net system in the medium • Continue harmonizing and consolidating frag- to long term. To build sustainability, countries must mented safety net programs. As in countries with secure a medium-term funding envelope from do- emerging systems, more effort is needed even in mestic sources. Donor support and technical assis- this group of countries to integrate the individual tance are likely to remain important in the short programs into one national system. This effort and medium run to strengthen systems and scale up programs. may require policy makers to reduce the number of existing programs by assessing their individual The following recommendations apply to countries targeting effectiveness and impact vis-à-vis other that are classified as “established” and that already interventions within the safety net system. have a national safety net and social protection sys- • Continue strengthening the effectiveness of target- tem in place.4 (These countries are mainly MICs.) ing, monitoring and evaluation systems, grievance • Strengthen the existing safety net and social protec- systems, and payment systems. This effort includes tion system to ensure that it is reaching the extremely incorporating information technology for better poor. Even when countries have well-established management, accountability, and governance of programs, some gaps can remain, with some mem- programs and linking program eligibility and reg- bers of the poorest and most excluded groups not istries to national identification databases. Photo credit: Sarah Farhat/The World Bank The New Role of Safety Nets in Africa 15 An Agenda for Learning Strong monitoring and information systems The World Bank is contributing to this learning are necessary elements of the safety net learning agenda by promoting and facilitating knowledge agenda, but they will need to be complemented by generation and sharing. The Bank is helping gen- analysis based on nationally representative sur- erate new knowledge through new analytical work. veys and rigorous impact evaluations. Although Currently, more than 20 World Bank–supported im- this basic information is critical and generated only pact evaluations are ongoing in the social protection through program monitoring systems, it is only a sector in Africa, and several more are in the planning part of the necessary information and will have to stages. Moving beyond the 22 safety net assessments included in this review, future country-level assess- be complemented by other types of data and analy- ments should cover the broader social protection sec- sis, such as (a) data collection and analysis through tor, including contributory social insurance and labor representative household surveys of how safety net market programs. Many opportunities for South- benefits reach households and (b) impact evalua- South learning exist within and beyond the conti- tions and testing of various delivery mechanisms nent. The World Bank is already actively supporting and program features for closing knowledge gaps this kind of exchange of knowledge through the an- and providing more information of what works for nual South-South Learning Forum on social protec- safety nets in Africa. Potential areas for future evalu- tion and by supporting initiatives such as the recent ation and research in Africa, some already ongoing, Communities of Practice on cash transfers among re- include the productive aspect of safety nets, the rel- searchers and implementers and bilateral study tours ative effectiveness of conditional and unconditional and visits. Nineteen countries regularly meet in the cash transfers, and synergies between climate change Community of Practice for cash transfer programs in and social protection. Africa, and another nine countries will soon join. Photo credit: Emily Weedon Chapman/The World Bank 16 Reducing Poverty and Investing in People References Grosh, Margaret, Carlo del Ninno, Emil Tesliuc, and Azedine Ouerghi. 2008. For Protection and 1 Monchuk, Victoria (2013). “The New Role of Safety Promotion: The Design and Implementation Nets in Africa for Poverty Reducation and Investing of Effective Safety Nets. Washington, D.C.: in the Poor: Experiences from 22 Countries” World Bank, Washington D.C. The countries reviewed are World Bank. Benin, Botswana, Burkina Faso, Cameroon, Ethiopia, Silva, Joana, Victoria Levin, and Matteo Morgandi Ghana, Kenya, Lesotho, Liberia, Madagascar, Malawi, (2013). Inclusion and Resilience: The Way Mali, Mauritania, Mauritius, Mozambique, Niger, Forward for Social Safety Nets in the Middle Rwanda, Sierra Leone, Swaziland, Tanzania, Togo and Zambia. East and North Africa. MENA Development Report. Washington, D.C.: The World Bank. 2 During the spring meetings in April 2013, the Devel- opment Committee endorsed the World Bank Group’s Woolard, Ingrid and Murray Leibbrandt. (2010) new goals of reducing the number of people living on “The Evolution and Impact of Unconditional less than US$1.25 per day of purchasing power parity Cash Transfers in South Africa.” Southern Af- to 3 percent by 2030 and boosting shared prosperity by rica Labour and Development Research Unit, focusing on the bottom 40 percent of the population. University of Cape Town. 3 It is estimated that over the next 10 years, some 30 Sub- Saharan African countries will be dependent on World Bank. 2011. “Africa’s Future and the World mineral resources (over 20 percent of exports), not Bank’s Support to It: Africa Regional Strategy.” counting oil and gas exports (World Bank 2013). World Bank, Washington, D.C. 4 Among the 22 countries, this group includes Be- World Bank. 2012a. Managing Risk, Promoting nin, Burkina Faso, Cameroon, Liberia, Madagascar, Growth: Developing Systems for Social Protection Malawi, Mauritania, Sierra Leone, Togo, and Zambia, although countries can change groups over time. in Africa—The World Bank’s Africa Social Pro- tection Strategy, 2012–2022. Washington, D.C.: 5 Among the 22 countries, this group includes Ethiopia, Ghana, Kenya, Lesotho, Mali, Mozambique, Niger, World Bank. Rwanda, Swaziland, and Tanzania, although countries World Bank, 2012b. “Europe and Central Asia So- can change groups over time. cial Protection Database.” 6 Among the 22 countries, this group includes Botswana World Bank, 2012c. “Latin America and the Carib- and Mauritius, although countries can change groups over time. bean Social Protection Database.” World Bank. 2013. “Securing the Transformational Potential in Africa’s Mineral Resources.” Pow- erPoint presentation, World Bank, Washington, D.C., February. Photo credit: Kavita Watsa/The World Bank THE WORLD BANK