Saturday, July 31, 2010

Conditional cash-transfer programs for Africa

Conditional cash–transfer (CCT) has been hailed as Brazil’s most progressive and successful social protection or anti poverty program. Cash transfer is conditional on a household – typically those with children and young family members – using health, education or other services that policymakers consider of public interest.

The number of people who benefit from these program in the developing countries is large and growing, making CCT a valued tool for fighting poverty. In Brazil CCT covers approximately 12 a relatively modest budgets (less than 0.5% of GDP). Indonesia is currently working to replace an unconditional cash transfer program currently reaching 19 million households with a CCT program.

CCT is becoming fashionable and Africa is not being left behind. In 2008, Ghana launched CCT though its Livelihood Empowerment Against Poverty (LEAP). The program aims to reach one-sixth of the extreme poor within five years. The National Poverty Eradication Programm (NAPEP), with funds from the Heavily Indebted Poor Countries (HIPC) initiative, has launched Nigeria’s In Care of the Poor (COPE). COPE provides cash transfers to extremely poor and vulnerable households, on condition that adult members attend training sessions, keep their children in school and utilize health services.

In 2007, the government of Sierra Leone launched a pilot cash transfer programme, the Social Safety Net (SSN), which targets the elderly with no other means of support.

In Mali, a pilot CCT program was launched in Mopti and Kayes, two regions in Mali with the lowest school enrollment, with support from UNICEF. Modeled on Brazil’s CCT, poor households receive $ 10 a month on condition that children attend school a least 80 % of the school year.

In the case of Brazil, with effective targeting, CCT has been effective in addressing structural poverty. Most importantly, CCT can provide a veritable windfall in human development where basic social services are available but demand is weak.

Developing national conditional cash–transfer programs will pose a number of challenges in African countries where poverty is so widespread, state capacity to deliver basic social service is low and heavily dependent on foreign aid.

A more cautious approach is therefore necessary for Africa. More modest programs that target early childhood education, maternal and child health among poor households would yield the highest human development dividends.

Considerable resources, institutional as well as human capacity, will be needed for targeting beneficiaries as well as building the capacity for program delivery. These investments must be balanced with sustained commitment to sustained investments in expansion of high quality education and health services.

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