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Dispelling cash transfer myths in Africa

Dispelling cash transfer myths in Africa
Source: International Food Policy Research Institute (IFPRI)
Date: 08-11-2018 Time: 01:11:32:pm

Unconditional cash transfers paid to vulnerable populations as regular, predictable income support is now an established programmatic strategy to combat poverty and social exclusion and build resilience to shocks in Africa.

However, despite evidence which points towards the transformative impact of cash transfers, common myths hinder the development of these programs. These myths undercut potential improvements in well-being and livelihood strengthening among the poor, which these programs can bring about in sub-Saharan Africa, and globally, according to a new study.

New research by the Transfer ProjectMyth-busting? How research is refuting common perceptions about Unconditional Cash Transfers in Africa, co-authored by International Food Policy Research Institute’s (IFPRI) researcher, Audrey Pereira, uses rigorous evidence to help dispel these myths.

The latest figures suggest that every African country has at least one social safety net, while the average country has 15 programs which cover 10 percent of the population. Social safety nets are integral to achieving Sustainable Development Goal 1—ending (extreme) poverty in all its forms by 2030.

This goal requires the continued advanced understanding of how to optimize program design and delivery.

There is a broad evidence base showing the benefits of unconditional cash transfers in Africa and elsewhere. Notwithstanding, programs often face public pressure and political scrutiny for a set of predictable critiques.

For example, opponents of cash transfers often claim recipients will spend the money on alcohol or tobacco, or lament that “free money” will make them lazy or dependent, causing them to stop working.

Another common critique, particularly for child grant programs, is that women will increase fertility to gain or continue eligibility for programs. Although these claims may represent personal ideology, when voiced, they can be detrimental to the sustainability, financing and scale-up of programs.

The study published recently in the World Bank Research Observer tackles these critiques head on, using data from eight rigorous evaluations of large-scale Government unconditional cash transfers in Africa conducted under the Transfer Project. The article investigates six perceptions, that cash transfers: 1) induce higher spending on alcohol or tobacco, 2) are fully consumed (rather than invested), 3) create dependency (reduce participation in productive activities); 4) increase fertility; 5) lead to negative community-level economic impacts (including price distortion and inflation), and 6) are fiscally unsustainable.

The authors present evidence refuting each claim, leading to the conclusion that these perceptions – insofar as they are utilized in policy debates – limit the range of feasible tools that governments can consider to reduce poverty and support inclusive growth. There are numerous barriers to leveraging the full potential of social safety nets in settings of widespread income poverty—ideology and misinformation do not need to be among them.

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