Cash transfers: a ray of hope

The humanitarian situation in north-eastern Nigeria has deteriorated dramatically in recent years. At the end of 2022, over three million people in the north-eastern states of Borno, Adamawa and Yobe (BAY states) did not have access to adequate food and were dependent on humanitarian aid. "The people in this region are exhausted and disheartened," says Moise Makuta, country director of Action contre la faim (ACF) in Nigeria. "Their situation has been deteriorating for over ten years and growing levels of distress have stretched the capacities of international humanitarian aid."

The main reason for the crisis is the ongoing violence. Different factions of the Islamist Boko Haram are fighting each other and the army. The civilian population is suffering from suicide attacks, kidnappings and rapes. Millions have fled the violence in recent years. "People in rural areas flee to the cities and leave their fields behind,” says Makuta. "So, food production is declining and exacerbating the existing food insecurity."

The climate crisis has also led to an increase in extreme weather events. Over 600 people died in floods last year. And in 2021, a terrible cholera epidemic ravaged the northern part of the country. "Many young people have lost hope. They become fatalistic and fall prey to the extremists," observes Makuta.

In response to the severe crisis, the ACF started a cash and voucher assistance project (see box) supported by the SDC in Yobe state. It identified 10,000 women and men from 2,000 highly vulnerable households in two local government areas. They each received a 'credit card' which stores their biometric data and can be used to obtain goods or cash in local shops. Every month they are credited with NGN 5,000 (about CHF 10). "With the card, we reconnect needy people to the local markets," says Makuta. The cards work even under the most challenging conditions – as long as there are customers. The participating shops receive a small commission for this service from the ACF.

Past experiences with humanitarian interventions have shown that distributed food is often sold in local markets because the beneficiaries prefer cash. "People have different priorities, and not everyone has the same needs," says Makuta. He observed that once people had dealt with their immediate hunger, they started to pay off the debts they had accumulated during hard times. This is an important step to regain social recognition and be accepted as a reliable customer.

Others use the money to start a small garden to grow their own vegetables. As part of the project, about 350 families were given a one-time payment of NGN 50,000 (about CHF 100) to set up their own business such as a food stall or a small shop. "Once people are no longer just focused on surviving, they can work miracles," says Makuta. Other important components of the project are free health care and awareness programmes about a balanced and healthy diet.

Feedback from beneficiaries shows that household nutrition has improved, according to Makuta. There were only isolated cases of misuse. The entire community as well as key decision-makers in a particular area were roped in at the outset so that no one would be envious of the beneficiaries. "We explained to everyone what we were planning and that our resources were limited," says Makuta. The criteria for selecting the beneficiaries were jointly defined and factored in age, disability, and whether someone was pregnant or had just lost their home. "There is solidarity in our society and people usually take care of their neighbours."

However, cash transfer projects are not just socially demanding, they are contingent on political and technical frameworks. This was illustrated at the beginning of the year when the government announced that old bank notes would be withdrawn from circulation and exchanged for new ones. The actual objective, however, was to transform Africa's most populous country with 224 million citizens into a cashless economy.

The poorly planned reform was a disaster partly because the infrastructure for digital transactions was not sufficient, and where it was available large sections of the population had no access to it. "All of a sudden, we were faced with a situation where we could no longer pay out money to the project’s beneficiaries because the systems failed and there was no cash available," recalls Makuta.

The project managers were able to find short-term solutions with commercial banks. In July, the funding for this one-year crisis intervention will conclude. "We are therefore working closely with the local government and hope that it will be able to continue the programme as a form of social security for the most vulnerable populations," says Makuta.