Risk aversion and cash in the 2011 Somalia famine

Degan Ali, Executive Director of Adeso, spoke on Monday about risk aversion and cash in the 2011 Somalia famine, and hindrances to effective decision-making. Ali joined seven other humanitarian practitioners and academics who took part in a public event organized by the Overseas Development Institute to discuss new learning and issues associated with cash transfer programming. The event marked the release of Issue 54 of the Humanitarian Exchange Magazine, New Learning in Cash Transfer Programming, in which Ali authored an article.

“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,” explains Ali. “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.”

On July 20th 2011, the UN declared a famine in parts of Somalia, with almost 3 million people in need of immediate assistance in the Southern regions alone. In her article, Ali explains how despite attempts in March and April 2011 by Adeso and other agencies to support the use of cash transfers at scale early on, the vast majority of cash transfer responses were not implemented until September 2011. Despite evidence of cash’s ability to meet relief needs effectively in Somalia and the absence of traditional alternatives such as food aid, debate went on for months over the perceived risks of using cash.

“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,” adds Ali.

Nearly a year after famine was declared in Somalia, the situation in the country remains fragile, with 2.5 people still in humanitarian emergency and crisis, according to recent FSNAU reports. Continued, and even scaled-up, humanitarian support is therefore needed to avoid a reversal of the gains made in the past eight months. Much can be learned from last year’s response, particularly as evidence from early monitoring reports shows that the cash response was effective in increasing the quantity of food consumed and its diversity, in reducing the use of negative coping strategies, and in reducing debt.

“The experience of Adeso and other aid agencies proves beyond a doubt that cash-based programming can be used at a large-scale to assist people affected by crisis, even in insecure environments,” explains Sarah Bailey, Research Officer at the Humanitarian Policy Group.

Reflections on the cash response therefore offer opportunities to improve humanitarian decision-making and funding. “As highlighted in Degan Ali’s article,” adds Bailey, “donors and aid agencies have a responsibility to take risks related to humanitarian action seriously, including the dire risks related to inaction and delay when a major crisis is underway. The experience in Somalia underscores that the humanitarian community must promote a culture of risk awareness and mitigation – and not one of risk aversion.”