Social Transfers : a southern African perspective Nicholas Freeland 2009 FANRPAN Regional Policy Dialogue Maputo, 31 Aug – 4 Sept 2009

What is RHVP? A regional programme for southern Africa funded by DFID (now UKaid) and AusAID Phase 1 ran from July-05 to Sept-08; Phase 2 will run to Sept-10 Seeks to address the prevalence of chronic vulnerability in the SADC region Promotes a shift from emergency relief (primarily food aid) to long-term, institutionalised social protection 2

3 interlinked components 3

Social protection: shifting the development paradigm Traditional (the poor are the problem): Focus development on economic growth Wait for economic growth to reduce poverty Residual interim safety nets Donor (expensive) emergency assistance where necessary … IS NOT WORKING (in Africa) Emerging (the poor are the solution): Provide comprehensive social protection Social protection will help to generate economic growth This will reduce poverty and the cost of social protection Reduced emergency assistance, freeing donor resources

The case for social transfers: multi-dimensional impacts

Busting the myths about social transfers Cash is not wasted on “anti-social behaviour” Cash transfers do not create laziness and dependency Cash transfers do not fuel inflation (in functioning markets) Cash transfers are affordable, even in LICs 6

Virtuous spiral 7

Lesson 1: Not a new concept in Africa Culture of sharing Long tradition of informal systems at community & family level But many informal systems have eroded Migration HIV/AIDS Some have survived, even thrived Burial Societies And a few have been revived Chiefs’ fields initiative, Lesotho 8

Lesson 2: Donor support is not a pre-requisite (and may even be an impediment!) Political will and commitment are pre-requisites for comprehensive and durable social transfer schemes Where social protection initiatives are home grown and are driven by national stakeholders, they are much more likely to be adopted and sustained 9

Lesson 3: Evidence, evidence & more evidence (a donor preoccupation?) More justification: Poverty reduction no longer seems to be sufficient Now need to prove broader impacts – economic growth, agricultural productivity, etc Risk that we are moving away from the core objectives Could a broader definition be counterproductive? More evidence: Double standards - why Africa? The macro evidence “Catch 22” In future: evidence through implementation not experimentation 10

Lesson 4: Too many pilots (not enough on-budget Govt programmes) 11 What’s wrong with pilots ? Limited coverage & impact Pilot or experiment? Ownership Provide limited evidence on scaling-up Open to political influence NOT social protection

Lesson 5: Favour categorical targeting (esp where >50% of population are poor) 12

Lesson 6: Social protection is affordable (even in LICs) ILO, Africa (2005) $18 to all >65 and disabled - 0.3% to 1.0% of GDP $9 to all < % to 6.5% of GDP What is the current spend on chronic poverty and emergency assistance? How effective is it? Base programmes on affordability not need Target for exclusion, not for inclusion Think progressively – have a roadmap Innovative ways of increasing revenue Balance cost against benefits – view as an economic as well as social investment What is the cost of not doing anything? 13

Proportion of vulnerable people protected by the input subsidy 14