People queuing with their cash vouchers outside a bank in South Sudan. People queuing with their cash vouchers outside a bank in South Sudan. Photo credit: Dauda Koroma/Oxfam
Cash in conflict: cash programming in South Sudan
by Andreas Kiaby January 2017

South Sudan is facing increased violence, political chaos and a deepening economic crisis, resulting in widespread hunger and massive displacement. More than 4.8 million people are deemed severely food insecure. In a country that imports 80% of its food, has almost no formal financial institutions, 700% yearly inflation and a deepening crisis in law and order, humanitarian action is facing a true test of strength. Access is curtailed by armed groups, politics and impassable roads. Some areas can only be reached by helicopter or after more than six hours of walking from a landing strip. The hardest-to-reach areas require incredibly expensive food-drop programmes to meet even the most basic needs.

The World Humanitarian Summit pledged that we change people’s lives and end humanitarian needs. Ending need requires reinforcing local systems, anticipating crises and transcending the humanitarian – development divide. In the consultations around the Summit, cash transfer programming was highlighted as one of the strongest vehicles for doing this, but more concrete steps were left out of the final report.

In areas where markets are functioning, people say that they prefer cash rather than in-kind support because cash is more flexible and can be used to cover immediate needs to buy food, recover lost assets and prepare for hardship ahead, such as a lean or rainy season. South Sudan brings some clear suggestions on how cash-based programming can put action behind the words and show how local systems can be reinforced and resilience strengthened, while at the same time offering more concrete lifesaving support.

Implementing cash programmes

Cash transfers still constitute a relatively small proportion of humanitarian aid in South Sudan: currently 8% of the total funding of the Food Security and Livelihoods (FSL) Cluster goes through cash and voucher programming, mainly in internal displacement and refugee camps.

DanChurchAid (DCA) has been working with vouchers for food assistance in South Sudan for years, but in 2016 switched to unconditional cash transfers. The motives for doing so are that unconditional/unrestricted cash transfers are faster to set up, respond to a broader set of needs and are better suited to a situation where beneficiaries and traders frequently move. Equally important, unrestricted cash is DCA’s default modality as it best supports dignity and offers the greatest range of benefits. In 2017, DCA hopes to reach more than 60,000 people with this form of assistance.

DCA and its partners start cash transfer programmes by defining the needs of target populations together with the community, and then deciding whether people can buy what they need at reasonable prices, in the right quantities, at the right quality and in a safe manner. If the answer is yes, then the programme can move ahead. Community groups are established to help refine vulnerability and targeting criteria, and beneficiaries are identified and registered very much like any other distribution, with the slight addition that beneficiaries should be within an acceptable distance of markets. Regular discussion with key community authorities and traders’ unions ensures that traders do not increase prices to unacceptable levels, and that markets are stocked prior to a distribution. After distributions, local staff monitor prices and restocking trends, and check whether beneficiaries were able to spend the cash safely, and in a way that benefited the household. Community consultations determine when, where and over how many rounds the total grant will be distributed. The total grant is calculated as a percentage of the minimum expenditure basket, taking food, education and other expenses into account and adjusting for the target population’s existing coping strategies.

DCA and its partners use digital tablets to collect market data and conduct baselines on household food insecurity and how households use markets to meet their needs. In post-distribution monitoring beneficiaries are asked how satisfied they are with the distribution process, how they used the cash grant and whether it created any tensions or protection risks within the household or community. This data is analysed in near real-time through software such as Magpi, and if needed changes can be made before the next distribution.

In addition to distributing cash, humanitarian agencies are increasingly using vouchers for fishing kits, seeds and tools, shelter materials and other basic items, in part to encourage local traders to procure and move humanitarian assistance items. By agreeing with traders, who often have connections to trader networks in neighbouring countries, what, where and when to deliver goods, humanitarian agencies are relying on private entrepreneurship to deliver assistance. This frees up time and resources within humanitarian agencies to concentrate on targeting the most vulnerable, monitoring and community engagement.

People want cash, and spend it wisely when they get it

More than 90% of people asked in DCA surveys in South Sudan clearly said that they preferred cash to in-kind food assistance. Recipients echo many of the global arguments in favour of cash assistance – it allows for more choice; it can be saved and transported more easily during displacement; it can be used for more purposes. Almost all recipients spend their money on food and basic goods (soap, utensils), with smaller amounts going on smaller assets (animals), business investments, paying school fees and medical treatment. As in many global studies, there are very few reports of money being spent on alcohol or other anti-social expenditures, although there are often relatively large expenditures on things that are seen as having great social importance – such as sugar, because who would dream of not having sugar to sweeten a guest’s tea?

Markets matter

Markets matter: not in themselves, but because without markets, cash transfers make no sense. Cash transfer programmes are only appropriate if people can buy food, essential goods and services in the right quantities and qualities and in a safe manner. This requires at least a partially functioning market. Food security and livelihood organisations are working with the World Food Programme (WFP) to monitor markets and identify opportunities for a market-based response. Markets are assessed by looking at the number of traders, how often they restock, their ability to move goods between markets, price trends and the availability of key commodities.

Even in the deep bush people come together at established or impromptu marketplaces – sometimes even negotiating temporary ceasefires or crossing conflict lines to go to the market. In one county in Jonglei State, warring factions have agreed that children and women can cross conflict lines safely to shop at local markets. In another area, in Central Equatoria, warring tribes put their weapons aside to attend massive cattle markets. In Upper Nile State, different tribes from Sudan and South Sudan meet to trade and barter crocodile skins, dried fish, soap and grains, using several different currencies. While it is not always the case that markets survive despite conflict, it does show that a market-based approach to assistance can support local social cohesion. In many areas where we work, most households buy more than 60% of the food they eat at market.+Recent market assessments and post-distribution monitoring to be published on http://fscluster.org/south-sudan-rep.Markets are absolutely key to whether people have enough to eat, and are also significant places where they can come together peacefully.

Local markets function, but not always according to the standards defined in cash transfer guidance. There are often very few traders and the supply of goods is low or irregular. Traders generally report that the main constraints to increasing inventory include lack of financial capital, compounded by a lack of access to credit; customers’ low purchasing power; price variability dependent on seasonality (prices for some goods tend to rise during the rainy season due to reduced supply); and external shocks, such as flooding and conflict. Inflation and the sharp depreciation of the South Sudanese Pound (SSP) are also major concerns, for traders and their customers alike. Since the SSP was unpegged from the US dollar in December 2015 the South Sudan government has reported inflation of over 700%. Transport costs have also increased sharply due to the disruption of trade routes, and the conflict has created considerable difficulties in accessing fuel supplies.

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These blockages are preventing traders from stocking up on food and non-food items for their businesses. When traders do manage to stock goods, customers cannot afford the high prices. Although they are aware of demand in the market, traders lack the financial resources to resupply and customers lack purchasing power to buy goods in the market. Nevertheless, traders have shown willingness and creativity in responding to increased demand. By boat, motorcycle, truck or chartered plane, goods are transported or smuggled across national borders and conflict lines, often at night. Sometimes traders manage to deliver goods, at a profit, to places humanitarians often struggle to access, and often at a lower cost.

Direct cash transfers to traders can also support market functionality. In its programmes in Unity State, for example, some organisations have been giving cash grants to traders to help them cover rising transport costs, allowing them to bring more goods to the market. It may also be possible to cushion traders from the crushing effects of inflation by redeeming vouchers in US dollars, which gives traders access to hard currency to buy goods in neighbouring countries where the SSP has become too weak. In some areas, South Sudanese traders have resorted to buying cattle with SSP, and then transporting the animals to neighbouring countries where they are used as currency to buy goods and food. In general, organisations using cash or vouchers try to reduce the time between the exchange from US dollars to SSP and the actual distributions to minimise the amount the SSP drops in value.

Some things money can’t buy

Of course, some things cannot be bought with money. In a place like South Sudan, where basic services are few and far between, you cannot really buy access to healthcare or clean water. Money also usually cannot buy you protection from the gunmen and rampant violence that plague South Sudan. So, cash transfer programmes are by no means a silver bullet.

However, livelihoods and cash grants can help people towards better self-protection strategies. Women are using cash to invest in businesses, overwhelmingly in order to escape daily firewood collection. This takes all day from morning to night and can pose a major threat to women’s safety as they are forced to venture further into unknown territory. They move away from well-trodden routes and familiar bush into alien land and unknown people, uncertain who or what lies in their path. Based on our experience, many women who collect firewood said that they felt scared travelling further and further into the bush – sometimes for more than three hours from the point of the last collection.

Cash transfer programmes, indeed the whole monetary economy, are facing severe challenges. With a worsening economic crisis, there will be increased attempts by powerful elites and people with guns to capture the few resources that are left in the country – whether it is cash or in-kind. This requires increased engagement with community members, armed interlocutors and proximity to people in need to constantly analyse that assistance is not doing more harm than good. DCA and partners do this through regular community discussions as well as by asking specific questions in our post-distribution monitoring around security, access and conflict dynamics.

Local actors and the humanitarian system

Because of the massive logistical challenges and high costs of operating in South Sudan, most national and local actors find themselves as implementing partners of UN organisations or large NGOs. Many local actors find it difficult to access resources directly for their programmes, and do not have the necessary logistical pipelines to deliver assistance. However, they often have greater local access and acceptance in the communities where they work. This tension between those who have resources and those who are close to the people in need of them is not a new one. Cash might, however, be a disruptive power in this hierarchy, as it can be delivered quickly and cheaply by local actors. As an example, it will be much easier for a local church organisation with networks in Juba to transfer money to constituencies in Upper Nile than if the same local organisation were to buy and transport food. We are seeing local groups engage traders in border regions to deliver food using market networks rather than the traditional means of humanitarian assistance. With cash transfer programming picking up in scale and interest, it might be a refreshing question for humanitarian actors to ask ‘why not cash, and why not now’?

Andreas Kiaby is Head of Programme, DanChurchAid, South Sudan.