Pathways to graduation: is graduation from social safety net support possible and why? Evidence from sub-saharan Africa

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1 Pathways to graduation: is graduation from social safety net support possible and why? Evidence from sub-saharan Africa Silvio Daidone Food and Agriculture Organization Luca Pellerano Oxford Policy Management Kigali, May 2014

2 Background Increasing number of developing countries adopting a range of social protection programmes Social cash transfers (CTs) are becoming increasingly popular in Sub-Saharan Africa, but there is very few evidence on their actual effects on graduation A theory of graduation is emerging but without a clear consensus concerning: i) its definition, ii) its scope Threshold graduation vs. sustainable graduation

3 Objectives We conduct a cross-country analysis on early effects of CTs on graduation We analyse: 1. Productive role of CTs 2. Conditions for graduation

4 Countries and programmes Country CT Programme Baseline survey Ghana Kenya Livelihood Empowerment Against Poverty (LEAP) Cash Transfers for Orphan and Vulnerable Children (CT-OVC) Follow -up survey Lesotho Child Grant Programme (CGP) Zambia Child Grant Programme (CGP) Unconditional programmes Different target populations Similar but not identical objectives Rural population

5 Poverty dynamics Zambia CGP Source: AIR (2013)

6 When graduation is not the objective of social CTs Absence of explicit reference to graduation Short-term CTs impact evaluations Likelihood of graduating: changes in livelihood strategies that show the household is on a pathway towards increasing its productivity, income diversification and resilience to shocks

7 Impact on food security Food security asked about in different ways across countries. All, however, positive. Zambia Kenya Ghana Lesotho Inadequate least 1 month NS Months with sufficient food NS Months some shortage +++ Months extra shortage Eats more than one meal a day +++ Food security scale NS Is not severely food insecure +++ Better off than 12 months ago +++ Child smaller meal Child fewer meals than needed Child sleep hungry NS

8 Impacts on productive activities Zambia Kenya Lesotho Ghana Agricultural inputs Agricultural tools +++ NS NS NS Agricultural production + NS ++(1) NS Home production of food NS +++ NS Livestock ownership All types Small ++(2) NS Non farm enterprise (NFE) +++ +FHH NS NS 1) Maize and garden plot vegetables 2) Pigs

9 Impacts on labour allocation adults Zambia Kenya Lesotho Ghana Agricultural/casual wage labor NS Family farm NS +++ Non farm business (NFE) NS NS Non agricultural wage labor +++ NS NS NS children Wage labor NS NS NS NS Family farm NS (1) NS NS 1) Older boys No clear picture on child labor (but usually positive impacts on schooling) Shift from casual labour to own farm

10 Impact on social networks and risk coping strategies Zambia Kenya Ghana Lesotho Negative risk coping Pay off debt NS Borrowing NS NS Purchase on credit NS NS NS Savings Give informal transfers Receive informal transfers NS +++ Qualitative results: Re-engagement with social networks, re-investing in alliances and social security Allow to participate, to mingle again Increase in savings, paying off debt and credit worthiness

11 Why do we observe such differences across AND within countries? Household characteristics Market characteristics Program characteristics

12 Households Characteristics: Demographics Ghana LEAP Kenya CT-OVC Over to to to to to to to to 14 Under 5 Lesotho CGP Zambia CGP Over to to to to to to to to 14 Under population (%) Males Females

13 Households Characteristics: Labour Capacity Lesotho Zambia # members in the hh share of dependents in hh hh members <=5 yrs old hh members <=17 yrs old adult members (>17 & <60) members in hh >=60 years old Share of households orphan living elderly skip generation (no adult members) labour unconstrained moderately labour constrained severely labour constrained

14 Market Characteristics The level of market integration (proxied by closeness to road, etc) is one of the sampling criteria for the qualitative studies In a number of countries, where markets were more developed there was more impact on changes in livelihood strategies and productive investment In Owendo district (Kenya) household agricultural economic investment amongst OVC-CT beneficiaries was far more significant, a reflection of the wider availability of land, livestock and labour and the prevalence of sugar cane cash cropping

15 CTs also affect local economies (spillovers) Kenya (Nyanza) Ethiopia (Abi-Adi) Zimbabwe Zambia Kenya (Garissa) Lesotho Ghana Ethiopia (Hintalo) Nominal multiplier Real multiplier

16 % or per capita income of poor Program characteristics: Value of transfer 40 Widespread impact Selective impact Ghana LEAP (old) Kenya CT-OVC (big) Burkina Kenya CT-OVC RSA CSG Lesotho CGP (base) Ghana LEAP (current) Kenya CT-OVC (small) Zim (HSCT) Zambia CGP Zambia MCP Malawi SCT

17 Program characteristics: indexing 3,000 Kenya CT-OVC erosion of transfer 2,000 1, Flat amount in Zambia, varies by # children in Ghana and Lesotho

18 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 # of payments # of payments Program characteristics: Predictability of payment 6 5 Ghana LEAP 1 Zambia CGP Payments for Lesotho CGP resemble Ghana LEAP

19 Program characteristics: messaging In Lesotho the messaging of the programme was strictly followed by beneficiaries CGP funds should be used in the interest of children The top-up grant component should be use to increase agricultural production Instructions most of the time are received at the pay point Instructions were being reinforced by the watchful community representatives, chiefs and the wider community

20 Conclusions: What policy implications for graduation? Graduation is generally not the objective of CTs in the African region However they can contribute to putting beneficiaries on a pathway towards graduation One way is by incentivizing engagement in productive activities and creating social capital There is large variation in the type and magnitude of impact on productive activities across programmes and within countries

21 Conclusions: What policy implications for graduation? 1. Sustainable Graduation is not a credible promise for many segments of traditional CT beneficiaries population more research needed on the importance of starting conditions and other hhld characteristics (education, access to credit, risk preferences) 2. Sustainable Graduation is not a credible promise in absence of conducive market conditions They only marginally constitute a motor of growth in and of themselves 3. Still, under these conditions, Sustainable Graduation can be facilitated by specific CT design features

22 Challenges Ahead: Refining the Notion of Graduation 1) Short Term vs. Long Term 2) Fixed Term Programmes (Donor supported) vs. National System (Government owned) 3) Urban vs. Rural 4) While some households will graduate from Extreme Poverty, they will never graduate from Social Protection -> There should be a continuum of different social protection instruments available as people move progressively out of poverty -> From social assistance to social insurance and private insurance