Cash supported income generation activities in Southern Sudan

By Emily Sloane and Silke Pietzsch

Emily Sloane was a Food Security and Livelihoods Trainee at ACF-USA supporting the evaluation of the project's income generating activities in Southern Sudan.

Silke Pietzsch is the Senior Food Security and Livelihoods Advisor at ACF-USA, supporting the Southern Sudan mission.

Many ACF Food Security and Livelihood team members have contributed to the overall success of the IGA project and its implementation. ACF USA would like to extend its sincere thanks to Mulugeta Handino (former ACF Food Security and Livelihoods Programme Manager and later Food Security and Livelihoods (FSL) Coordinator in Southern Sudan) for his creative thinking and approach to design and implement the programme. Additionally, Charles Lagu and John Bosco Wale, both ACF FSL Programme Officers, ensured the implementation of the day to day activities of the programme.

Southern Sudan has been greatly affected by decades of civil war and rebel movements. Even though the situation has improved since the signing of the Comprehensive Peace Agreement in 2005, parts of the country continue to experience episodes of mainly localised insecurity. This has led to marked population displacement and a disruption of livelihoods and markets. In addition, recurrent natural disasters, like floods and dry spells, continue to contribute to the fragility of people's water, nutrition, food and livelihood security. Although overall conditions seem to be improving, high prevalence rates of severe and global acute malnutrition remain a major cause for concern (see Table 1).

Table 1: Acute malnutrition prevalence in Southern Sudan (2003-2010)
	2003	2004	2005	2006	2007	2008	2009	2010
Twic
GAM %	33.1	21.3	30.7	28.7	25.4	22.6	22.8	24.1
SAM %	5.2	3.6	4.9	3.1	1.9	1.6	2.8	4.3
Gogrial West
GAM %	23	25.2	-	23.9	19	14.5	20.1	20
SAM %	3.6	3.8	-	4.2	0.9	1.7	2.4	2.7

Source: These figures are from a mixture of Goal, ACF and MICS surveys

Action Contre la Faim (ACF) has been working in Southern Sudan since 1985, and since 2002 in Warrap, initially responding to emergency and immediate needs of the population during the war. From 2005, ACF USA began also to focus on the recovery process and recurring seasonal emergency needs of the local population. ACF USA implements an integrated and multi-sectoral approach that links nutrition, food security and livelihoods, and water and sanitation activities to support the complex needs and underlying causes of malnutrition. Seasonal variations in malnutrition rates are significant, suggesting that food insecurity may be a contributing and underlying factor. Minimum levels of malnutrition all year around are high and are mainly influenced by water and sanitation problems and inappropriate child care practices.

Given that household food security in Southern Sudan is jeopardised by recurring difficulties in access to and availability of food, ACF USA implemented a project in 2008 to promote income generating activities (IGA) and small scale businesses in Twic and Gogrial West Counties of Warrap State. The project was funded by ECHO (European Community Humanitarian Aid Office). The main objectives of the project were to contribute to the reduction and prevention of acute malnutrition (see Table 1 for acute malnutrition prevalence rates 2003 - 2010 for both counties). The IGAs and small businesses promoted in this project, and the associated transfer of business and management skills, were intended to help households create sustainable income that would support access to food and stabilise livelihoods in the long term.

Project description

During the lead time to securing ECHO funding, the ACF USA Food Security and Livelihoods (FSL) team initiated the market feasibility study, to identify feasible activities, services and market gaps, and to support the selection and identification of the IGAs. The survey and data collation took 6-8 weeks. Families of children at risk of malnutrition were targeted as potential beneficiaries for the project.

The preparation work began in March 2008, with the signed ECHO funded project effective in May/June. The programme was presented and introduced to the local authorities, community leaders and the SSRRC¹ who were requested to provide a list of 600 potential beneficiaries, according to the targeting criteria. Criteria included households with children involved in ACF USA's Outpatient Therapeutic Feeding Programmes (OTPs), vulnerable households made up of internally displaced people (IDPs) or returnees, and vulnerable host population households. A two day general informational training for these households was held in both Gogrial West and Twic Counties. The training covered the ACF food security and global malnutrition strategy, along with the rationale behind and purpose of IGAs and their correlation with food security and reduction of malnutrition. In addition, the basics of how to run a small business and the basic principles of IGAs were discussed. Interested persons were invited to form groups and develop simple business plans, from which 77 groups were selected (see Table 2 for suggested businesses). These represented 301 households in Twic and Gogrial West Counties, in Warrap State. Of the final beneficiaries, 63% were women and 38.5% were OTP beneficiary families.

Table 2: Businesses in Gogrial West and Twic Counties suggested during Business Plan Development
Product-related business	Service-related business
General store	Restaurant
Food stuff/petty trade	*Bar
Clothing	Tea shop
Household supplies	*Lodge
Tools (agricultural & household)	Repairs
*Brewery/local alcohol	Transport
Bakery	Tailoring
Butchery	Beauty salon
Fish market	Livestock auction
*Tobacco	Communications
*Firewood selling	Photocopy shop
Grass selling
Flour mill

* Services that were not accepted by ACF USA as feasible or acceptable businesses for this programme.

ACF USA chose to use cash to support the IGA groups and households. During the market survey, it was assessed whether all materials needed to carry out proposed businesses were available locally. Additionally, given the diversity of the planned business activities and of the necessary equipment, the total transfer was not expected to have an inflationary impact on the market.² Potential programme participants were consulted on the security situation and confirmed that they were not afraid that distribution of cash would lead to insecurity. Hence, cash grants totalling 300 Sudanese pounds (SDG) (106 Euros)³ per group member were dispersed in two instalments. Due to the absence of a banking system, the cash was distributed in envelopes by ACFUSA. Between instalments, a first round of post distribution monitoring was implemented, to follow up on groups' expenditure, and ensure it complied with the business plan and was socially acceptable. A small number of especially promising and well performing groups received a third round of grants of an additional 150 SDG (53 Euros) per group member, after additional follow up.

Regular monitoring activities throughout the implementation period ensured that the money was being used appropriately. This allowed ACF USA staff to provide ongoing technical support to households and groups as they developed their businesses. At the end of the ECHO funded programme (March 2009), the businesses were still under development and an evaluation would have been premature. Progress was therefore reviewed in October 2009 and again in August-September 2010⁴.

Evaluation of the project

The results of the baseline survey in March 2009, ongoing programme monitoring activities and the final evaluation process completed in September 2010, have contributed to the overall evaluation of the IGA project. There have been two main components of the evaluation: the final follow up survey, which focused largely on quantitative data, and focus group discussions and interviews, which focused more on qualitative information from the beneficiaries and involved groups and stakeholders. Baseline and follow-up surveys provided insight into trends in income, expenditures, mid upper arm circumference (MUAC) measures, coping strategies and food security status of project participants. No control group was included in the monitoring activities but the project was evaluated according to OECD⁵ Development Assistance Committee (DAC) evaluation criteria.^6,7

The project activities and measurable indicators were based on two hypotheses:

Hypothesis 1: Promotion of income generation can actively contribute to an improved nutritional status measured through the proxy indicators of household dietary diversity, food consumption and expenditure on food.

Hypothesis 2: Promotion of IGAs through cash grants ensures that appropriate equipment is acquired and improves ownership through active decision making.

Key findings of the evaluation and lessons learnt

Since January 2009, average household income among project beneficiaries increased by 32% in Warrap State. Average earnings from participants' small businesses also grew by 25-30% throughout the state (see Figure 1). It appears that gains in revenue from agriculture and livestock, rather than business, were mostly responsible for the higher incomes. However, IGA earnings most likely facilitated investment in agriculture and livestock, and hence had an indirect but important role in the improved livelihoods of beneficiary households.

Household Expenditure

Patterns of household expenditure did not change dramatically between 2009 and 2010 (see Figure 2). Beneficiaries in 2010 were paying a slightly larger percentage of their income on medicine, school and food. As incomes were higher on average by 2010, many were able to spend substantially more on these necessities than in early 2009.

Household Dietary Diversity Score

The Household Dietary Diversity Score (HDDS) attempts to capture the quality of diet by counting the number of different food groups which have been consumed in the household in the past day. The data for 2009 and 2010 shows there were fewer instances of 'poor' and 'fair' diets throughout Warrap State in 2010. However, there was a significant reduction in 'good' diets with the greatest diversity in Twic County. This may have been seasonally influenced, given the timing of the final survey. Nonetheless, the vast majority of respondents had 'medium' or 'good' HDDS scores, which is a positive finding, especially in the context of Southern Sudan.

MUAC

Overall, 94% of beneficiaries reported that their household food security has improved since early 2009. This claim is supported by MUAC⁸ data, which indicated a marked improvement in the nutritional status of beneficiaries' children. Over half (54%) of children in Warrap State had MUAC measurements of 135 mm or above in Sept 2010, indicating that they were well nourished (as compared to 24% at the time of the baseline). Meanwhile, just 3% of children in Twic had a MUAC of 110 mm or less in 2010, indicating severe malnutrition (no baseline available). Given the seasonality and the fact that the final follow up survey took place at the height of the hungry season, when a decline in nutritional status is usual, these results are especially interesting and heartening.

All OTP mothers who were targeted as beneficiaries of the IGAs confirmed in discussion groups that their children had not been readmitted to the OTPs since they started their respective businesses. This might reflect seasonal impacts (food security and disease patterns), but may also reflects the observed impact of greater income allowing improved access to nutritious foods.

Coping Strategy Index

The Coping Strategy Index (CSI) is a standard tool for assessing the relative food security of a given household. Since the CSI was not included in the baseline, a modified version was used in the follow-up. This included questions about the period prior to the IGA project, in addition to current behaviour patterns. The potential scores within this adapted CSI⁹ ranged from 35 (most food insecure) to 0 (least food insecure). The data suggested a general improvement in food security among beneficiary households throughout Warrap State since the start of the IGA project. The average CSI score in GWC dropped from 10.9 to 8.9 between 2009 and 2010, while in Twic the reported change was more dramatic, from 17.2 to 12.2 (See Figure 4).

Hunger Levels Ranking

This component of the follow-up evaluation asked respondents to rank their households' hunger at different points during the IGA project, including before the project began, one month after receiving the first grant, one year after the grant and the present day. Although the data are subjective and relied on recall, the general trend seems to suggest that almost all households are less hungry than they were in late 2008, and that the food security situation has improved considerably. Again, these data are impressive when one considers that information was gathered at the peak of the hunger season in Southern Sudan.

Implementation

Targeting

Targeting criteria for the intervention were based on ACF-USA's experience in Southern Sudan and the understanding that returnees, IDPs and the local host population are among the most vulnerable members of the population. The idea of targeting mothers/caregivers of malnourished children (as identified in the Outpatient Therapeutic Feeding Programme) was a deliberate effort to directly link and integrate food security and livelihood activities with ACF-USA's nutrition programming. Although the SSRRC provided an expedient means to mobilise and gain access to the community, reliance on SSRRC during the targeting process may have compromised ACFUSA's independence and neutrality as there may have been some political influence over choices of beneficiaries. Additional time and resources would have been required to implement a fair and equitable community based targeting process within the project timeframe.

Due to the human, financial and/or physical assets necessary to successfully establish and manage an IGA, the most vulnerable members of the population may struggle with this type of project more than beneficiaries who are slightly better off. They are particularly vulnerable towards the beginning of the project, before their businesses are producing net income, and when faced with small or large-scale shocks. The project could have included some type of safety net for these people, perhaps facilitating access to their basic household needs during the first few months of their businesses' development. Besides socio-economic and nutrition targeting criteria, motivation should be accorded top priority in the selection of beneficiaries for IGA projects. Motivation was seen as critical in terms of ownership and sustainability in the latter stages of IGA implementation. Efforts to inspire and encourage this were redoubled at various steps during the project cycle, e.g. at trainings, while drawing up business plans, and when issuing instalments of cash transfer.

Preparation of the business plan could have posed a major obstacle to participation, given the low literacy rates in rural Southern Sudan. This proved easily overcome as the majority of the groups had someone to help articulate their business plan. Many stated this helped them think through the process, planning and investment required for their business to succeed.

Training is a powerful tool for building up the capacity of both staff and beneficiaries. Sufficient resources should be devoted to ensuring that training is relevant to beneficiaries' needs and effectively presented. The specific needs of those with no prior business experience must be taken into account when planning trainings on business management.

Timeframe

The initial allocated timeframe (12 months under the ECHO contract) was not sufficient to fully implement the programme. The market feasibility study was completed before the ECHO contract was signed and before the implementation officially began. It was important to allow at least six months after the project end before undertaking an evaluation to ensure that IGAs could mature and develop to a measurable extent. Hence, 12 months is a feasible timeframe for mobilisation and start up of an IGA intervention, providing the 12 months can be fully used. However, a final follow-up evaluation should always be conducted after an additional six to twelve months. On this basis, the optimal timeframe for an IGA programme is 18-24 months.

Table 3: Household Dietary Diversity Score (HDDS), 2009 and 2010
	County	1-3 HDDS (Poor)	4-6 HDDS (Fair)	7-9 HDDS (Medium)	10-12 HDDS (Good)
Mar-09	GWC	1.9%	38.5%	51.9%	7.7%
	Twic	0%	36.4%	31.8%	31.8%
Average		0.9%	37.4%	41.8%	19.7%
Aug-10	GWC	0%	17.9%	75%	7.1%
	Twic	0%	43.5%	43.5%	13%
Average		0%	31%	59%	10%

 

Cash transfer

The distribution of cash rather than in-kind support was designed to foster flexibility, choice and decision making among beneficiaries. Splitting the cash transfer into two instalments proved an effective means of risk management and motivating IGA groups to spend money appropriately.

Cost effectiveness is measured by cost per beneficiary. In the initial proposal, an overall amount of 78,300 euro¹⁰ was allocated to the ACF USA IGA programme in Warrap State. According to the initial budget allocation, the per-participant cost (based on 301 participants) would be 260.13 euro. As each cash grant was 106 euro, 154.13 euro were earmarked to effect the transfer and programme implementation, i.e. support costs made up 59 % of the allocated budget. This apparent imbalance should be judged within a project context of extensive capacity building and other preparations needed to launch this programme over a wide geographic area in the logistically challenging environment of post-conflict Southern Sudan.

The amount of income created compared to the investment made is also a measure of cost effectiveness of a programme. As the follow-up survey clearly shows, both overall and small business- related incomes of project beneficiaries increased considerably during the course of the project. The average business owner earned 362 SDG in GWC and 562 SDG in Twic in July 2010. Using a conservative extrapolation and accounting for income fluctuations based on monthly earnings of 100 SDG for the first eight months, 200 SDG for the next six months and 300 SDG for the final six months of the programme, this provides for a total income of 3800 SDG, or 1233.37 Euros, per IGA. This translates into a substantial return on investment of 374%.

It was not possible to compare the cost effectiveness of an equipment/in-kind intervention with a cash transfer intervention. Such a calculation would need to take account of the flexibility and psychosocial impact of the two interventions. There is little doubt that a cash transfer programme provides for more dignity than an in-kind transfer programme.

The exact number of active IGAs is unknown, since the follow-up survey focused on a sample only. However 80% of the survey's respondents were still in business in September 2010. The 'group element' of this project seems extremely positive with respect to sustainability and inter-group support and coordination, e.g. setting up rotational savings programmes, relieving others of workload during family emergencies, division of labour, sharing technical experiences. A few groups had diversified into more profitable activities (e.g. from tea shops to restaurants). Others had expanded to encompass more goods and services, with different group members responsible for separate aspects of the business (e.g. one member running a tea shop, while two managing an adjacent restaurant).

On reflection, this experience has shown how 'time is money'. The sooner a population can get back to an active and productive life with freedom and dignity, the better and more cost effective the intervention. Programmes with a significant psycho-social impact that boost dignity and self value may ultimately be the most cost effective type of intervention, regardless of agency expenditures on mobilisation, training, support, verification and follow-up.

Key recommendations

IGAs should continue to be promoted as a measure to support household food security and contribute to the prevention of malnutrition. It is important to ensure that market feasibility studies and sufficient time for identification, mobilisation and training of the community are given to improve IGA ownership and sustainability and allow for maturation of the various businesses. Key proxy indicators should be monitored in a timely and comprehensive manner.

Planning should ensure that businesses whose profits are dependent on seasonal factors are given time to develop before that season begins. Projects should also be planned so that procurement of necessary materials can take place when prices are relatively low.

Steps should be taken to maximise the rates of success of IGA programme beneficiaries. This may mean modifying targeting criteria to ensure that beneficiaries have the capacity and assets necessary to facilitate some resilience to shocks. It may also require building some kind of safety net into the project design to support particularly vulnerable households in meeting basic needs during the early phases of IGA development.

It is important to factor in additional trainings for IGA members into the planning of future IGA projects, so that needs that arise throughout the project can be addressed. Providing training on profit management, marketing and conflict resolution should be considered.

Generally speaking, the people of Warrap State are ready, willing and able to embark on IGA projects. Non-governmental organisation (NGO)-supported small business development efforts, supported by cash transfers, can succeed in Southern Sudan, despite the numerous contextual challenges (e.g. limited infrastructure, low education levels and localised instability). Over the long term, cash-grant supported IGA programmes can be extremely cost effective interventions to contribute to the fight against malnutrition, and the longer term development of both beneficiary households and the broader society.

For more information, contact: Silke Pietzsch,
email: spietzsch@actionagainsthunger.org

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¹SSRRC: Southern Sudan Relief and Rehabilitation Commission, is a body established by OCHA, IOM and the Government of South Sudan (GoSS), responsible for establishing linkages and coordination of humanitarian action at a local level.

²Standard market monitoring during the project implementation did not show any inflation of commodity prices.

³Exchange rate during the programme implementation was 1 EUR= 2.83 SDG

⁴The final follow up survey in September 2010 took place at the height of the hungry season, which might have biased some results as this is the most food scarce time of the year.

⁵Organisation for Economic Co-operation and Development

⁶OECD DAC criteria for evaluation are appropriateness, coverage, coherence and coordination, efficiency, cost effectiveness, sustainability, accountability and transparency, flexibility. http://www.oecd.org

⁷Please see the full evaluation report for more details and results of the DAC criteria. See contacts at end of the article.

⁸Although ACF in Southern Sudan has recently changed its MUAC standards to the new WHO standards, this report will follow the old MUAC guidelines in order to facilitate comparison with the baseline data. Unfortunately, no data were available from the baseline in Twic County

⁹During the survey, some confusion about one element of the CSI was observed ("limiting intake by adults so that small children can eat"; the most serious type of coping strategy, according to the standard CSI template). Since it is customary for adults in Warrap State to serve small children first, this might have biased the responses. The results of this particular element of the survey have not been incorporated into the final CSI score analysis.

¹⁰This included all costs associated with the programme - not just the cash grants.