Commission ready to boost cash support in humanitarian aid

Androulla Kaminara, Director, Africa, Asia, Latin America, Caribbean and Pacific, DG ECHO. [EURACTIV]

The European Commission is aiming to boost the proportion of humanitarian aid it hands out as cash. But most payments are actually made by banking cards very similar to regular ATM cards.

Among the beneficiaries could include some of the more than one million refugees in Uganda who have fled the conflict in South Sudan.

The policy direction was confirmed during a roundtable event – ‘Cash and non-cash assistance in humanitarian aid and development’ – convened by EURACTIV in Brussels on 21 November.

Androulla Kaminara, Director for Africa, Asia, Latin America, Caribbean and Pacific at the European Commission’s DG ECHO, told attendees that cash comprises just “six to 10%” of global humanitarian aid but, for the Commission, this figure rises to “just over 30%, and we are looking to get up to 35%”.

As well as those who have left South Sudan, refugees in countries including Afghanistan and Turkey were also mentioned by Kaminara as benefitting from the pro-cash policy.

The largest scheme of providing displaced persons with cash assistance so far is the EU-funded Emergency Social Safety Net (ESSN) supporting refugee families in Turkey with a debit card on which sums are transferred on a monthly basis. Kaminara said one million people benefitted from the scheme.

Factors driving the strategy include technological developments, particularly mobile-phone penetration; and the Commission says that cash is “more efficient” than other forms of humanitarian aid.

The European Union dispenses aid as either ‘real’ cash (in the local currency or, for example, US dollars) or via GSM or bank-cards.

Kaminara said: “In Somalia the penetration of GSM [mobile phones] can be even higher than in some EU member states.”

She pointed out that handing out cash is “not appropriate in all situations”, giving the example of war-zones where cash risks being “siphoned off”. She said there was “no evidence that cash is more prone to fraud than other humanitarian aid, such as blankets”.

Asked by a roundtable participant whether the 35% target was actually too low, Kaminara said: “It’s not possible to have a target of, say, 90%. There are certain humanitarian situations where it’s not actually possible to spend cash.”

An event participant who was also from DG ECHO described the global average figure of 10% as “ridiculous”, and that “a lot more needs to be done to shift that figure upwards”. He added that “evidence points to cash as the most efficient way of doing things.” He added: “The area where cash really comes to the fore is in the food sector.”

Ric Goodman of global development contractor DAI Europe was a panellist at EURACTIV’s roundtable. He said: “The world has a massive humanitarian caseload: 17 years is the average length of time that people are displaced. I wonder if there is a need for a more medium-term financing arrangement. The policy challenge is how to make the transition from short-term humanitarian needs to longer-term policy.”

Goodman said that giving refugees vouchers instead of cash typically creates the challenge of how refugees receive change from purchases.

Another panellist, Joel Le Turioner, who is the founder of AfricAgriConsult, specialising in providing development aid via electronic vouchers, highlighted his experience in delivering fertilisers to African farmers at competitive prices, without distorting the local market.

Both Kaminara and Goodman dismissed worries about aid recipients spending cash on alcohol or cigarettes. The former said: “We don’t ask ‘what are people going to buy?’. We do try to follow what they buy and if there is [any spending on items such as alcohol or cigarettes], it’s minimal, it’s not on a scale that should worry us.”

Goodman concurred, saying: “Frivolous expenditure is very minor. It should not be a concern.”

Technically speaking, the delivery mechanisms to provide aid are available, the policy challenge is the massive humanitarian workload, he concluded.

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