Issue 54 - Article 4

A deadly delay: risk aversion and cash in the 2011 Somalia famine

May 24, 2012
Degan Ali, Adeso
A woman shops using money provided by Adeso’s cash transfer programme in Somalia

There is immense potential for cash transfer programming to provide humanitarian relief at scale in times of crisis. By March 2012, $77 million in cash had been provided directly to beneficiaries in South Central Somalia, making this the largest emergency cash and voucher-based response ever implemented by NGOs anywhere in the world. However, as emergency conditions in the region deteriorated into famine in 2011, it took many months for the humanitarian community to employ cash transfers as an alternative to food aid.

Why was there a delay in using cash-based responses when evidence was available that cash transfers were a viable and effective option? This article argues that humanitarian community’s aversion to risk made them reluctant to use cash programming at scale early on, and that the delay resulted in avoidable deaths.

Cash transfer programming in Somalia – not a new approach

Somalia is one of the most challenging environments in the world in which to provide humanitarian aid. Conflict has raged for decades, there is no functional central government and many areas, including South Central Somalia, are controlled by armed militias. As a result, aid workers are constantly at risk, and gaining access to the most vulnerable is fraught with difficulties. Yet despite these challenges, Somalia is surprisingly well-suited to large-scale cash programming. Markets are robust and well-integrated and the country has sophisticated long-term market monitoring systems maintained by FEWSNET and FSNAU, providing data on essential commodities. Somalia also has a highly developed and reliable remittance system. Between $1.3 billion and $2bn in remittances is transferred to Somalia each year – even to those living in remote locations. Laura Hammond et al., Cash and Compassion: The Role of the Somali Diaspora in Relief, Development and Peace-building, Report of a Study Commissioned by UNDP Somalia, January 2011.  Most of these transfers are facilitated by money transfer companies called hawalas.

Cash transfer responses have been implemented in Somalia for the past nine years. The effectiveness of these responses has been documented in evaluations, showing that cash is a viable option for providing assistance. Acacia Consultants, Evaluation of Cash Relief Programme Implemented by Horn Relief. Commissioned by Novib/Oxfam Netherlands, 2004; N. Majid, I. Hussein and H. Shuria, Evaluation of the Cash Consortium in Southern Somalia, Oxfam GB and Horn Relief with AFREC, Development Concern and WASDA, 2007.  Cash is no longer a new tool in Somalia; the majority of local and international NGOs and UN agencies providing emergency assistance now use various types of cash transfer programming (unconditional cash grants, vouchers and cash for work).

Adeso, formerly known as Horn Relief, has been working in Somalia for over 20 years, and was one of the first adopters of cash transfer programming in the country. In 2003, Adeso warned of a looming crisis in Sool Plateau and proposed the use of cash transfers as a response. The problem was one of access: markets were well-integrated and food was available in the markets, but people lacked purchasing power and high levels of debt were causing shopkeepers to go bankrupt. Additionally, there was community acceptance and reliable money transfer mechanisms were in place. Although all of these factors created the ideal setting for using cash transfers, the discussion regarding whether to use this response mechanism quickly became politicised and contentious. Donors were concerned about the perceived risks (including diversion), and insecurity was cited as a reason not to pursue cash programming. In one instance, Adeso was accused of trying to incite war by ‘arming’ people with cash. Support from key humanitarian leaders, namely the Humanitarian Coordinator (HC) and others in the UN Office for the Coordination of Humanitarian Affairs (OCHA), was critical in getting the programme off the ground.

An inter-agency assessment led by OCHA eventually corroborated Adeso’s assessment of the crisis in Sool Plateau. Adeso then implemented an Emergency Cash Relief Program (ECRP), which provided $691,500 to 13,830 drought-affected households in Sool and Sanaag. Degan Ali et al., Cash Relief in a Contested Area – Lessons from Somalia, Network Paper 50, March 2005.  A post-distribution monitoring (PDM) survey undertaken by OCHA at the end of the project found that the cash grants had increased beneficiaries’ purchasing power, giving them access to food and other basic items which were readily available in the market. The PDM found that Adeso had a 97% success rate in targeting the most vulnerable. The experience in the Sool Plateau helped make cash transfers an accepted form of aid in Somalia.

Since 2003, Adeso has continued to advance the use of cash transfer programming in Somalia, and has been instrumental in providing training, advocacy, technical coordination and evidence to the humanitarian community. The number of organisations implementing cash programmes has increased substantially, as has their level of acceptance by donors and aid agencies. The Cash-Based Response Working Group (CBRWG) was established in 2007, and guidelines for cash transfer programming tailored to Somalia were developed in 2010. Horn Relief, Guidelines for Cash Interventions in Somalia, 2010,  Market analysis information from FSNAU has improved. The end result is greater institutional capacity and confidence about using cash within the NGO community.

If not then, when?

The UN declared a famine in Somalia in July 2011. However, nearly a full year before the announcement there was evidence of a looming food crisis in the Horn of Africa. In August 2010 FEWSNET issued forecasts of adverse climatic conditions, with short rains in the eastern sector of the East Africa region likely to be below normal, and in November 2010 it forecast worsening food security. As documented in a joint report by Oxfam and Save the Children, further warnings were issued in December 2010 (calling for pre-emptive action) and in January and March 2011, indicating that the food crisis would worsen further should the March–May rains fail. Oxfam and Save the Children, A Dangerous Delay: The Cost of Late Responses to Early Warnings in the 2011 Drought in the Horn of Africa, 2012.  By February 2011, it was clear that a major food crisis was looming in Somalia with the failure of the Deyr rains, rising grain prices and limited humanitarian access. During this period, FSNAU and FEWSNET conducted a market analysis in Somalia and reviewed ten years of cash transfers against market behaviour. The results suggested that cash transfers were a viable form of assistance in southern regions to meet immediate food access needs. FSNAU and FEWSNET, ‘Somalia Market Analysis System & Decision Making’, 18 November 2011.

The World Food Programme (WFP), the largest responder to food assistance needs around the world, suspended its activities in South Central Somalia in January 2010 following increased security threats by Al-Shabaab. By February 2011, this region was at the epicentre of the looming famine. In the absence of large-scale food aid, the humanitarian community urgently needed to find an effective alternative way to provide life-saving assistance to almost a million people. Cash transfers were the only form of assistance that aid agencies could provide to increase access to food and other basic necessities quickly and on the scale required to avert a famine.

During March and April 2011, Adeso engaged in informal discussions with UN agencies, donors and INGOs urging them to support the use of cash transfers at scale. In April 2011, the CBRWG, which Adeso chairs, submitted a letter and a briefing on cash transfer programming to the Humanitarian Coordinator. These efforts to advocate for large-scale cash programming went unanswered. Adeso then called a meeting of INGOs operating in South Central Somalia to form a consortium to develop a large-scale cash programme. Of the nine INGOs invited only four agreed to participate in the consortium.

While the official famine declaration in July 2011 triggered large pledges of humanitarian funding, the vast majority of cash transfer responses were not implemented until September 2011. In the interim, aid agencies, donors and the humanitarian leadership debated what constituted acceptable levels of risk. The discussion of cash transfer programming focused on defending the decision to use cash, overshadowing its well-established track record of meeting relief needs effectively. The issues debated were:

  • Funding cash at scale: some NGOs were reluctant to put forward large proposals for unconditional cash grants due to concerns about whether donors would support cash programming on this scale in Somalia.
  • Risk of support to terrorism: the presence of Al-Shabaab has influenced aid delivery significantly. Key donor countries such as the US, the UK and Canada have declared the group a terrorist organisation, making the humanitarian community even less willing to take risky decisions. US anti-terrorism legislation includes the possibility of prosecution, a risk that some NGOs are unwilling to take.
  • Inflation: despite the market analysis provided by FSNAU, many aid agencies were concerned that markets would not respond to the large influx of cash, and that inflation would ensue.

The perceived risks associated with cash transfers meant that many donors were ill-prepared to fund programmes at scale, despite the lack of other viable alternatives in South Central Somalia. Only once the first few donors signed on did others come forward. There is no doubt that the long debate on cash transfer responses and the hesitation in funding them delayed the humanitarian response, putting hundreds of thousands of lives at risk.

The system is broken

The famine in Somalia has raised questions about the effectiveness of the humanitarian system as a whole. Despite clear indicators of the severity of the crisis and the inability to deliver food aid, the international community waited until famine was declared in July 2011 to scale up the response. Cash programming eventually featured prominently in relief efforts in the Horn of Africa, and was an important contributor to the quick downscaling of the famine to a less serious emergency. Despite a proven history of effectiveness in the region, the decision to use cash was more a result of the right personalities and a lack of alternatives than any assessment of the efficacy and appropriateness of cash in meeting basic needs.

The Somalia experience also demonstrates weaknesses in the humanitarian funding system. Once famine was declared, the cash consortium raised over $40 million in the space of three months. Yet had the situation remained at emergency levels and not been upgraded to famine, donors might not have been willing to take that risk, especially given the absence of endorsement from key humanitarian leaders. These questions must be addressed if we are to tackle the systemic challenges to integrating large-scale cash-based programming in humanitarian aid delivery. If the presence of a looming famine, the absence of large-scale food aid as a viable option, the existence of good evidence to support large-scale cash programming and the capacity to implement it did not persuade agencies and donors that it was the right time to take a risk, there will never be a right time.

The Somalia experience shows that many of the barriers to using cash programming at scale are not based on a lack of evidence or experience, but on a lack of leadership in the face of the risk aversion that characterises humanitarian decision-making. When lives are endangered, the humanitarian community needs to act quickly and effectively. To do so, we need courageous leaders who are willing to take risks. The potential for large-scale cash programming to alleviate a food security crisis and to enable empowerment is immense, but the intense reluctance to take risks is a serious hindrance. Doing what is right must triumph over doing what is ‘safe’.

Degan Ali is Executive Director of Adeso.


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