Addressing urban food security through electronic cash transfer in Kenya

By Sumananjali Mohanty

Sumananjali Mohanty has been working with Oxfam Kenya programme for the past four and half years, initially as the Urban Food Security and Livelihood Advisor (2009-2012) and currently as the Social Protection Advisor for the Country Programme. The author has 17 years of experience in development and humanitarian programming, in rural and urban contexts, in India and Kenya.

The author acknowledges the critical support of the partner organisations, Concern Worldwide, Mukuru Slums Development Projects, and Redeem Gospel Church and all the dedicated staff involved in the programme.

Special thanks are extended to Dr James Nyikal, the Permanent Secretary of the Ministry of Gender, Children and Social Development; Ms. Winnie Mwasiaji, the National Coordinator for Social Protection, and Ms. Anne Olubendi, the Economic Advisor to the Prime Minister’s Office.

The author also acknowledges the support of Ms. Nupur Kukrety (Global EFSL Advisor and Social Protection lead) and Ms Laura Phelps (Global EFSL Advisor and Urban Lead at Oxfam) for advisory support, and the support of the then Country Director of Oxfam, Philippa Crossland-Taylor. Thanks for the editorial support from Laura Phelps and Carol Brady in the case study development. My appreciation goes out for the Late Patricia Parsitau, the then Urban Coordinator who believed in my ideas and assured me of all the support. Last, but not least, warm thanks to the current Country Director of Oxfam, Mr. Nigel Tricks, for taking the social protection agenda of Oxfam to a higher scale.

This article describes a social protection case study in Nairobi in urban informal settlements. It is based on an Oxfam case study¹ with some updates.

The Nairobi urban cash transfer programme was designed in response to the Government announcement in January 2009 declaring the country’s food crisis a national disaster. The emergency was a slow-onset crisis triggered by significant rises in food prices. Whilst all major consumption items were available on the market, prices had rocketed with maize meal rising by 133%, beans by 96%, vegetables by 55%, and oils and fats by 77% between 2007 and 2008. The overall combined price of the basic needs basket of poor households rose by 63%, even though wages had not seen a corresponding increase, in fact falling by 21%. The price rises were due to a combination of factors including the global food price crisis, low food grain production, impact of the 2007-08 post-election violence and reduction of cross-border inputs.

Government statistics estimated that 9.5 million people were at risk of starvation, with 4.1 million reportedly from the urban informal settlements. While the government interventions concentrated on the arid and semi-arid districts in the country, the urban vulnerable groups remained untargeted, mainly due to inadequate monitoring of key indicators and hence lack of clear comprehensive data. In response to the food crisis, Oxfam GB and Concern Worldwide developed a joint proposal to address the urban crisis. The project objective was to improve the food and income security of the most vulnerable groups in the urban informal settlements. The expected outcomes included:

• establishment of a social protection programme for the urban poor
• development of a cash transfer system, and
• identification of appropriate emergency (slow onset) indicators for use in the urban context.

The project started in October 2009 in Mukuru and Korogocho informal settlements of Nairobi and ended in January 2012. The project had three phases - response, recovery and exit. The response phase involved monthly cash transfers to offer immediate relief to target communities being affected by the increase in food prices. In the medium term (recovery), households that needed alternative livelihood support to exit from long term cash transfers were linked to business entrepreneurship, skill building, micro-finance instit- utions, cash for work projects, etc. However, there were many households, especially those headed by the elderly, or the bedridden who were in need of regular cash transfers or social protection for the longer term. To ensure that such households were able to receive long term benefits, Oxfam engaged with the Ministry of Gender, Children and Social Development to invest in social protection for the urban poor and vulnerable population (exit phase). Concurrently Oxfam, with its Consortium partner, Concern Worldwide, also sought to influence key stakeholders to develop a coordinated and systematic monitoring approach for emergency indicators in the urban context.

Understanding urban vulnerability

A number of assessments contributed to Oxfam’s understanding of urban vulnerability in Nairobi. The Kenya Food Security Steering Group (KFSSG) carries out two food security assessments every year, post short rains and post long rains to analyse the food security situation in the different livelihood zones in the country. The Integrated Food security Phase Classification (IPC) tool is used as the analytical framework for situational and response analysis. The short rains assessment of 2009 showed that Nairobi informal settlement residents were highly reliant on the market as the major source of all their household food (90%) and non-food needs. It was also established that approximately 30% of the population were unable to cover their basic needs while 80% of households reported purchasing food on credit from local vendors. In addition, there was little opportunity for urban food production so that access to food was highly dependent on cash exchange. All the 17 basic food commodities were available in the market. Food insecurity in the Nairobi urban area was therefore due to reduced access rather than availability.

A study undertaken by Oxfam GB, Concern Worldwide and Care International in Kenya² highlighted that comprehensive and disaggregated data on the food security and nutritional status of the poorest residents of urban informal settlements was either scanty or non-existent. Key indicators in the urban areas were not reliably or systematically monitored in a coordinated fashion, which made it very difficult to identify an emergency food security situation within a context of extreme chronic poverty. The study recommended an appropriate and coordinated emergency response in urban areas, and development of emergency indicators.

Groups that were found to be particularly vulnerable in the Nairobi urban area included female-headed households, the elderly, households with chronically sick individuals, and households with orphans and other vulnerable children (OVC). According to the World Bank study of 2006, although over two-thirds (68%) of adult slum dwellers were economically active, the unemployment rate was high (26%). Furthermore, 49% of young people aged 15-24 years in poor households were reportedly unemployed. Unemployment amongst the youth stood at around 2.5 million (2006) and was held to be one of the key factors behind the increasing levels of insecurity and violence in the informal settlements, the postelection violence of early 2008 being one manifestation of this. Disaggregating by gender, women were found to be almost five times more likely to be unemployed than men; the unemployment rate was 49% among women compared with 10% among males. A high proportion of the females were engaged in micro-enterprises. The most common micro-enterprises found in the informal settlements fall into the following broad categories:

• retailing and food services, including trading/hawking/kiosks and food preparation and sales (informal trading)
• small manufacturing/production, construction, and repair of goods (popularly known as jua kali)
• general services such as hairdressers, laundry, transport, medicine, photo studios
• entertainment services, including bars, brewing and pool tables.

The regular cash transfer enables children to
access education if they are not required to work

Informal trading and jua kali are of particular importance in Nairobi’s informal economy. A study carried out in 2004 showed that the streetvending sub-sector had a daily capital stock value of 70 million Ksh (approx $864,684 USD). However, there has been a steady attrition of street trading activities over the last few years, with kiosks being demolished by the City Council as a way of improving Nairobi’s image. The jua kali sub-sector involves manufacturing, repair and provision of services across a number of trades - welding, metal work, vehicle mechanics, carpentry and construction work. It serves residents both in the informal settlements and formal housing areas, as well as the formal business sector.

The prevalence rates of chronic malnutrition are higher in Nairobi’s informal settlements than the national rates - almost one in two children compared to one in three nationally. Malnutrition is caused by chronic food insecurity and higher rates of morbidity and mortality due to more limited access to quality health care, poor and expensive water and sanitation, overcrowding and inadequate care practices.

The 2006 World Bank study showed that average monthly per capita income among poor households was 2,776 Ksh (Approx $34 USD) with the median monthly amount being 2,444 Ksh (Approx $30 USD). The ‘very poor’ wealth group typically has an annual average income of 20,000 to 40,000 Ksh (approx $247 - $494 USD). In comparison, the income required to cover basic needs is about 60,000 Ksh (approx $741 USD) leaving a deficit of 40,000 to 20,000 Ksh. Very poor households typically purchase 90% of their food, as they have limited opportunity for food production. This leaves this group extremely vulnerable to price increases.

To cope with their reduced purchasing power, 90% of households surveyed in the KFSSG analysis reported having reduced meal frequency and dietary diversity. More than 60% skipped meals and nearly 80% reported purchasing food on credit from local vendors. Many also started engaging in high-risk livelihood strategies such as prostitution, crime, brewing/selling illegal brews and child labour. Up to 30% of the children have been taken out of school, rates of prostitution have increased to around 30%, whilst rates of scavenging among children were reported to have increased to around 30%. Residents also reported reducing expenditure on non-food items and social services (such as water, soap, sanitation, health and education).

Intervention to improve food security and livelihood

The overall goal of the Oxfam and Concern Worldwide programme was to improve livelihood security of the most vulnerable urban Nairobi informal settlement dwellers in response to the cumulative shocks and stresses. The specific objectives were:

• To improve access to food of the most vulnerable households in selected informal settlements in Nairobi
• To develop longer-term food and income security initiatives

The selection criteria used for targeting the vulnerable were:

• Child headed household not benefiting from the cash transfer programme or any other food support
• People living with HIV (PLWHIV) or other terminal illness with no support, with special consideration for the bedridden
• Elderly persons above 55 years taking care of three or more OVC
• Single mothers taking care of three or more OVC
• PLWHIV taking care of OVC on antiretrovirals (ARVs)
• Households taking care of OVC on ARVs
• Pregnant and lactating mothers with a midupper arm circumference (MUAC) of <18.5cm (indicating acute malnutrition)
• Children with a MUAC of <13.5 cm

Monica Akinyi is a single
mother with three children. She
works as a casual labourer,
washing clothes for a few
shillings a time. She had to carry
her two malnourished children
while she searched for work.

With her first payment, Monica
spent the entire amount on
food. For her second, she
bought supplies for her business,
which is now making a
profit. For the first time, she was
also able to buy small toys for
her children. Monica’s children
are healthier and happier
thanks to this programme.

Beneficiaries were identified using communitybased selection criteria through stakeholder’s consultation including village elders, youth representatives, women leaders, government bodies, faith-based organisations and community-based organisations. The Consortium and its partners then verified the beneficiaries through random visits to beneficiaries’ homes, cross-checking against statistics provided by the Area Advisory Council, Food by Prescription programme.

The Consortium implemented the programme jointly through their respective partners. Oxfam’s partner - Mukuru Slum Development Projects (MSDP) in Mukuru and Concern Worldwide’s partner - Redeem Gospel Church in Korogocho - were responsible for community mobilisation and sensitisation on the project. They facilitated community based targeting of beneficiary households, trained the community health workers, and monitored and reported to the Consortium on the status of the beneficiary households. The Consortium’s role has been in validating the beneficiary households, training and supporting partner organisations on cash transfer programming and transferring monthly cash transfers to the beneficiaries. Oxfam as the lead in the Consortium was also responsible for developing monitoring frameworks, donor contract management, fundraising for the project, lobbying and advocacy with the Ministry for social protection in urban areas, as well as facilitating linkages with partner organisations wherever necessary.

Implementation method for cash transfers

Vulnerable and food poor households were provided with cash transfer through mobile phones. Oxfam entered into an agreement with Safaricom (service provider) and availed the database from them for cash transfers. Oxfam staff underwent a training programme to operate the database. Simultaneously at the community level, households registered their phone numbers with Safaricom’s MPESA (that allows money transfers). About 40% of the households did not have phones, so the households were given sim cards and because of resource constraints, a couple of phones were positioned with the community health workers in each village, which the beneficiaries could access.

The grants were 1,500 Ksh per month ($12.5 USD). Initially the monthly grant amount was proposed as 2,475 Ksh per household, which was 33% of the cost of the household’s food basket given the high food price situation. The project advocated for the Government to start the social protection in urban informal settlements and an agreement between the Government and the Consortium was reached. However, Government decided to support the project with a monthly cash transfer of 1500 Ksh instead of the proposed 2475 Ksh per household in order to be on a par with other government social protection programmes, such as the older persons cash transfer and the OVC programmes.

Monthly cash transfers were provided to 5,000 households for a period of 8-10 months. Approximately 40% of the households exited as they could save from the monthly cash transfers to invest into their business. The remaining households continued to receive the monthly cash transfers, as well interventions to build their alternative livelihoods. Oxfam continued to advocate with the Government to take on households who were unable to graduate with alternative livelihood strategies and were in need of longer-term social protection programmes.

Results and impact

Household food security at the beginning and end of the project is shown in Figures 1 and 2 respectively that reflects increased food intake, with clear impact on food security. It has enabled uptake of ARVs by supporting adequate food intake amongst PLHIV and reduced the need for individuals to resort to transactional sex to obtain food. There were high levels of satisfaction from recipients and from local stakeholders and positive community and relational impacts.

The project improved investment in the future with impacts including households starting successful businesses, improved school attendance (children not required to scavenge for food), improved grades (better concentration as not hungry) and debts paid off.

As outlined earlier, the project had a threephase exit strategy, phase one addressed immediate basic needs through cash transfer, phase two addressed the labour market, while phase three explored accessibility to financial services and social protection. Under the labour market component, beneficiaries benefitted from skills transfer programmes, which facilitated their access to the labour market. The Consortium tried to link the beneficiaries to potential work opportunities in the city council, factories and other enterprises in the industrial area. Under phase three, the Consortium negotiated with financial institutions like Equity Bank to try to bring some of their services to the informal settlements, and worked closely with the Ministry of Gender, Children and Social Development to have a social protection programme for the poor households.

Key successes

At the local level

The pilot initiative has been dubbed as an investment rather than a handout. Each target household has been able to build its livelihood and income enhancing capacity which will help build their resilience to future shocks. This is possible mainly because this is an urban programme and households depend on the market for their livelihoods. The cash transfer has made the local market more vibrant as the households have more to spend and traders are able to bring in more commodities. The use of the electronic money transfer through MPESA proved very efficient and effective. It is replicable, but only in similar urban settings where mobile connectivity is good and cash withdrawal points are easily accessible to targeted households.

At the national level

The Government of Kenya through the Ministry of Gender Children and Social Development finally adopted the design of Oxfam’s cash transfer pilot and now is implementing urban cash transfers for the poor and vulnerable which is known as Urban Food Subsidy Programme (UFSP) since October 2011. To start with, the Government chose Mombasa, the second largest city in Kenya and is reaching out to 10,200 households. The government plans to expand it to Nairobi and Kisumu in the coming years. It is a programme that is fully funded by the Government’s taxpayer’s money from the Treasury. Oxfam has not only advocated with the Government for the adoption an urban safety net programme but also provides technical assistance to the Ministry and the County Government of Mombasa in order to build their capacities to enable them implement a cost effective and efficient safety net programme. Oxfam was also actively engaged with the Social Protection Policy formulation which was approved by the Parliament in May 2012, which has an explicit focus on the urban poor.

Programme design

The broad and long-term design of the project at the outset - from response to recovery and exit - has meant that resources could be raised and distributed accordingly; different donor priorities were matched to different project components. Government partnerships, together with multiagency cooperation, have been strong. The community-based approach has been effective and has been seen as a legitimate operational process.

Lessons learned

Maintaining good partnerships with government for the short and long term success of social protection programmes is vital. It is necessary to both align with the government standards and be innovative and flexible in the initial approach of project design, to maximise support.

In Kenya, for any safety net that involves cash transfer, the intended households need to possess a National Identity Card in order to benefit from it. Through Oxfam’s pilot in the informal settlement, there was the realisation that many needy households could not benefit from the project because of this criterion. This can be only possible if organisations do a direct envelope cash transfer instead of using any other form of delivery mechanism, as all service providers are bound by the Financial Statutory Regulations of the Country. Thus it is of utmost importance to mobilise communities and sensitise them about the worth of possessing National Identity Cards and facilitate that households register to avail the same.

For more information, contact: Sumananjali Mohanty, Social Protection Advisor, Oxfam Kenya, email:smohanty@oxfam.org.uk

¹http://www.alnap.org/pool/files/nairobi.pdf

²The Nairobi slums/informal settlements - an emerging food security emergency within extreme chronic poverty, A compilation and synthesis of key food security, livelihood, nutrition and public health data, April 2009