The case for cash in responding to humanitarian crises in Malawi

A plethora of evidence indicates that, where markets are functioning, cash is a highly effective modality for providing food security assistance to crisis-affected populations - say the International Humanitarian NGO coalition in Malawi, in this policy brief.

Cash assistance in Malawi has been shown to be flexible, adaptable and scalable, with the ability to respond to multiple needs. When compared to food aid, cash is frequently preferred by affected communities, and tends to be more cost-effective. Additionally, cash has a documented multiplier effect; it is able to stimulate local markets, support economic recovery and enhance the resilience of households and communities in the aftermath of a disaster. Additional benefits in terms of nutrition and child-related impacts have also been noted.

Careful design is needed for cash assistance

In order to be effective, evidence shows that cash assistance must be properly designed in accordance with recipients’ needs and preferences, and underpinned by a good understanding of markets and a strong monitoring system that enables the cash value to be adjusted in line with price fluctuations so as to maintain recipient purchasing power.

In light of this evidence, the INGO Cash Consortium in Malawi commits to always prioritising cash over in-kind food aid, except in cases of evident market failure. It encourages other humanitarian organisations, Government agencies, and relevant stakeholders to do the same.

In addition, the Consortium recommends that:

• All cash and voucher assistance is designed in accordance with global and national standards so as to best fulfil the needs of the disaster-affected population. This includes adjusting cash values over time in order to maintain recipient purchasing power in the face of price fluctuations and changes in income patterns and/or seasonal expenditure.

• Continued investment is made in research on markets, livelihoods and the minimum expenditure basket, as well as in sectoral and multi-sectoral needs assessments, and strong market monitoring systems.

• Efforts are made to move away from manual cash payments to integrated e-payment systems. This will require public and private investment in better digital payment products, business models and infrastructure.

• Linkages are enhanced between emergency cash assistance and existing social protection schemes to build resilience and support the transition from humanitarian to development goals.

• Cash and voucher assistance design takes into account appropriate gender analysis and child safeguarding and protection considerations in order to avoid risks and maximize the potential benefits for children, women and men.