When you think of humanitarian aid, you tend to think of distributing tents and flour, but often other things are also needed – children’s shoes or mattresses. Germany is therefore increasingly relying on cash payments to strengthen local markets and give people more freedom.
How does the cash assistance work?
Over 230 million people worldwide are dependent on humanitarian aid. This is due to disasters or conflicts that lead to crises when the national authorities are unable or unwilling to provide the necessary assistance. In order to be able to provide quick and efficient aid, donors, including Germany, are increasingly concentrating on cash-based humanitarian aid. These can be physical cash spend, prepaid card payments, or mobile money transfers that can be stored on devices such as smartphones. There are significant advantages to this approach.
On the one hand, the recipients can buy what they need most urgently – food, clothing, medication – in their area. Second, it gives the recipients decisive freedom of choice and restores their ability to act and saves them long waiting times at overcrowded distribution points.
In recent years it has been shown that cash-based humanitarian aid is also particularly efficient. The procurement of bulky goods, which then have to be transported and distributed and cause additional costs, is no longer necessary. Donations in kind can also often have a negative impact on local market prices, for example if grain or grain products suddenly become available in large quantities free of charge. Cash payments, on the other hand, can do a lot to maintain the local economy or give it new impetus.
For this form of humanitarian aid to be possible, the markets in the affected regions must of course function and sufficient goods must be available. This is checked in advance before cash payments are made.
More than 200 studies have now observed the remarkable efficiency and positive effects of cash-based humanitarian aid; this is an example Impact assessment of multipurpose cash assistance to Syrian refugees in Lebanon.
Another specific example is Somalia. Six million people in the country are dependent on humanitarian aid – a third of the population. The 2017 drought pushed many smallholders and ranchers into poverty. The Norwegian Refugee Council (NRC) currently provides many families there with cash. This includes Ayan Mohamed Said’s family of four. For the equivalent of 70 euros a month, she can buy bread, milk, vegetables, medicines and clothing for herself and her children.
Germany will continue to expand cash aid
In 2016, Germany joined other donors and aid organizations to volunteer Huge bargain to support a major international reform process aimed at making humanitarian aid more effective overall. A central pillar of this process is the targeted use of cash assistance. The Federal Foreign Office currently provides 20 percent of its humanitarian aid in the form of cash payments and plans to increase this proportion further in the coming years.