Beyond survival: why cash is key to Gaza’s recovery

After more than two years of Israeli bombardment, a fragile ceasefire has opened the door for a coordinated humanitarian surge in Gaza. The world’s attention is rightly focused on scaling food and in-kind assistance to stave off famine and meet overwhelming basic needs.

Yet, as agencies rush to move goods, we should remember what Gazans have consistently told us throughout the crisis: when given the choice, they prefer cash for its flexibility to cover a wide range of unpredictable needs. Amid bombardment and blockade, limited digital transfers were among the few forms of aid that could reach some households, allowing them to buy food and medicine through what remained of local markets.

As Gaza begins a slow and uncertain recovery, cash should remain a core pillar of the response. It is the fastest and most adaptable form of assistance, able to keep pace with a volatile access environment where routes and regulations shift daily. Delivered digitally, cash can reach people wherever they are, regardless of the number of trucks permitted to enter Gaza on a given day.

Experience delivering cash assistance has shown what’s possible when families have the power to decide for themselves. Cash enables them to rebuild, helps restore local markets, and strengthens the social fabric on which recovery depends. Three lessons from implementing cash and voucher assistance (CVA) stand out on why CVA is critical to jumpstarting recovery in Gaza.

1. Cash accelerates market recovery and strengthens local systems

In every major emergency where markets still function at even a minimal level, cash does double duty: meeting household needs while jumpstarting local economies. Across crises, evidence consistently shows that cash is the fastest and most efficient engine of local recovery. Cash assistance goes beyond meeting basic needs, as it stimulates markets, strengthens local systems, and multiplies economic impact far beyond direct recipients.

In Yemen, research found that every dollar of multipurpose cash assistance generated between $2.29 and $2.56 of economic activity, amplifying impact through local market linkages. As recipients spent cash locally, traders restocked, transporters resumed operations, and suppliers extended credit, demonstrating how cash can revive markets even amid active conflict.

In Sudan, recent market analyses show that traders and suppliers in conflict-affected areas were willing and able to scale up in response to rising demand from cash programmes, provided they also received targeted support. Combining household transfers with business grants and supply-chain interventions improved trader liquidity, stabilised essential goods availability, and fostered private-sector readiness to respond to future humanitarian demand.

Together, this evidence paints a clear picture: cash fuels market recovery by creating local demand for critical goods and services, supporting smaller local vendors to restart and rebuild businesses. It moves through local markets, multiplying its value as it goes, strengthening rather than bypassing the systems on which sustainable recovery ultimately depends.

Since the ceasefire, market vendors in Gaza have reported that low purchasing power is the main constraint affecting trade volumes for most basic items. Price levels for most basic items have dropped more than threefold since August 2025. Vendors of basic items say they could easily accommodate an increase of up to 20% in demand, without increasing prices or causing delays in restocking times. Expanding cash distributions is key to scaling up such supply in local markets.

2. Cash empowers conflict-affected families, restoring agency, dignity and social networks

During the war, Gaza’s social fabric has been stretched to the breaking point. Reciprocal support among households – a cornerstone of resilience in many crises – has largely collapsed, with households forced to prioritise their own day-to-day survival. Mercy Corps’ teams in Gaza explain that the war has forced families into isolation, and even close kinship ties have been fractured. Yet, as the context shifts from acute survival to a fragile recovery phase, restoring dignity, trust and social connections will be essential to rebuilding lives and communities. Cash assistance can play a crucial role in this process. Beyond material outcomes, cash contributes to the social fabric that underpins recovery. By giving families the ability to make their own choices, meet diverse needs, and gradually re-engage in local economic and social life, it helps lay the groundwork for renewed reciprocity and social solidarity over time.

In South Sudan, research found that cash helped households participate in reciprocal support systems, pooling funds for group farming, schooling, or small business recovery. Liquidity strengthened horizontal ties and reduced disparities by enabling poorer households to remain active contributors within their communities. The same research found that households who were able to share resources with others experienced better food security outcomes later.

In Yemen, multipurpose cash assistance enabled households not only to meet their own needs but also to share with relatives, repay debts and support others, keeping informal safety nets active. Households with stronger social networks were more food secure and confident in their ability to cope with future shocks.

In Lebanon, cash assistance helped preserve social capital, allowing neighbours and small businesses to support one another after the Beirut Port blast and during economic collapse. Conversely, where cash assistance was absent, social networks eroded and recovery slowed.

Investing in community-level models such as Group Cash Transfers (GCTs) in Sudan takes this principle further. By transferring resources directly to volunteer-led local responders who operate community kitchens, clinics and evacuation services, GCTs empower grassroots groups to serve their own communities. In doing so, they help restore not just individual agency but collective capacity, rebuilding trust between citizens, local organisations, and the civic institutions meant to support them. Cash, in this sense, is not only an instrument of survival, but also a tool for building dignity, solidarity and local agency. As Gaza enters a fragile rebuilding period, prioritising community-based cash models that channel resources directly to emerging local responders could help meet basic needs while laying the foundations for collective recovery.

3. Cash supports the economic and psychosocial building blocks of sustainable recovery

Cash assistance enables families to preserve and rebuild the resources they need to recover and regain control over their lives in the long term. Across fragile and conflict-affected settings, research shows that timely transfers prevent the sale of productive assets, enable strategic investments and future planning, and safeguard human and social capital.

In Iraq, recipients of cash transfers retained asset values hundreds of dollars higher than non-recipients, despite worsening economic conditions. Families used the transfers to repay debt, purchase livestock, and invest in tools or small businesses, anchoring the foundations for future income.

We also know that crises like the one in Gaza force people to devote most of their mental energy to day-to-day survival, leaving little bandwidth for future-oriented planning. Research in Iraq corroborates extensive evidence that cash assistance reduces immediate stress, freeing up cognitive space for recipients to consider longer-term strategies, such as investing in livelihoods, education, or productive assets. In Iraq, receiving cash improved participants’ perceptions of both present vulnerability and future security, which likely translated into greater ability to plan, adapt and pursue more stable sources of income.

These findings show that cash assistance is not only a lifeline in the immediate term but also a catalyst for sustainable recovery. For humanitarian actors working within constrained budgets, this makes cash a strategic investment. Investing in sustainable recovery today can reduce the need for prolonged aid tomorrow, helping families rebuild with dignity while ensuring that limited resources achieve longer-term impact.

What will it take to get cash right in Gaza?

Cash will be indispensable to Gaza’s recovery, but it is not a panacea. It doesn’t pave roads, fuel bakery ovens, or stock pharmacies. In the near term, large-scale in-kind assistance will remain critical, as many essential items for winterisation and reconstruction, such as tents, tarps, mattresses, blankets, concrete and pipes, remain unavailable in local markets. This reflects the severe constraints facing Gaza’s commercial pipeline, where commodity types remain tightly restricted. Vendors, therefore, have limited ability to restock or respond to household demand for these essential items.

In this context, cash should be viewed as a complementary tool: it enables households to meet basic and diverse needs through local supply chains, while laying the groundwork for market recovery once access restrictions begin to ease. As the commercial track gradually opens and markets regain capacity, cash assistance can play an increasingly central role in driving recovery and reconstruction.

Delivering cash at the speed and scale required will demand careful navigation of multiple operational and ethical challenges. Targeting will be a first test: needs far exceed available funding and ensuring that assistance reaches the most vulnerable while minimising tensions will require transparent, community-informed processes. Liquidity constraints will continue to shape what is feasible, as cash itself can become a scarce commodity when banking systems collapse and brokers impose spiraling withdrawal fees. Offering cost-efficient transfer mechanisms, such as e-wallets, that enable digital payments will therefore be critical, while also supporting those with limited digital literacy to access and use the technology. Analysis has also shown that funding cash transfer programmes at a large scale is the best way to reach the most people at the lowest cost.

The way cash is delivered also matters. It must reach people safely, fairly, and without exposing them to new risks. Data breaches and inflationary pressures are real. Electricity outages and connectivity gaps can interrupt digital payments especially in the most damaged areas, such as North Gaza, while safety concerns, especially for women and marginalised groups, may limit who can safely access assistance. Each of these challenges requires proactive mitigation: layered verification systems, data-protection protocols, diversified payment channels, and robust market and protection monitoring.

Partners can build safeguards needed to manage these risks. This includes direct e-wallet transfers, which remove the need for the recipient to reach the financial service provider. Done right, cash can help Gaza’s families move from survival to recovery, rebuilding their lives with dignity and choice.

Alex Humphrey is a Senior Researcher at Mercy Corps. He leads mixed-methods research to improve humanitarian response in crisis-affected contexts, with a focus on cash assistance and household food and economic security. His work bridges evidence, policy and operational practice to drive more effective, locally grounded assistance.

Chiara Genovese is a senior cash advisor with eight years of experience on cash and voucher assistance (CVA) design, implementation and monitoring in Lebanon, Palestine, Yemen and Somalia. She has extensive expertise in CVA programming in contexts of high inflation, reduced market functionality, displacement and protracted crises. Chiara is an advocate of raising the voices of affected populations, recognising their agency and putting them at the centre of the decisions that affect their lives.