A revolution in helping Africa’s poor: Cash with no strings attached

CHAMBA, Malawi

The Impact of Cash Transfers on Poverty Alleviation

Two years ago, Magret Frank’s village in Malawi was devastated by a cyclone, destroying their homes and belongings. However, thanks to a pioneering program by GiveDirectly, Frank and her neighbors now have new brick houses with iron roofs, providing them with better protection during storms.

GiveDirectly, an organization founded by graduates of MIT and Harvard, aims to revolutionize the way aid is given to the poor by providing lump sums of cash with no strings attached. This program, which is Africa’s largest cash giveaway per person, has received support from donors such as Jack Dorsey, MacKenzie Scott, Chris Hughes, and the founders of Canva.

A study conducted by MIT economics professor Abhijit Banerjee and others, including two GiveDirectly directors, compared the impact of different methods of cash distribution. The study found that recipients of lump sums spent more money on healthcare, their children performed better in school exams, and they were more likely to start and earn more money from their own businesses.

Global Shift to Cash

The distribution of aid in cash has become a global trend. Microfinance, which was once popular, has proven to have negative long-term effects. Traditional aid agencies often distributed items such as food, livestock, and laptops, but studies have shown that there was often a mismatch between donations and actual needs.

Cash and voucher programs are becoming increasingly popular, with a total value of $10 billion in 2022. However, they still only account for about 5% of development aid and less than 20% of humanitarian aid globally. These programs often have conditions attached and suffer from ineffective targeting, unsustainable funding, and irregular payment cycles.

Paul Niehaus, co-founder of GiveDirectly, believes that while cash transfers cannot replace traditional aid for building infrastructure, they provide recipients with more choices and opportunities. Cash transfers offer the potential for transformative change in the lives of the poor.

Lessons Learned

GiveDirectly has learned valuable lessons from its cash transfer program in Malawi. Initially, the program targeted only the poorest villagers, but it has since expanded to include those with brick houses to prevent conflicts and cheating. Recipients who have stable living situations are more likely to use the cash to create jobs and improve their livelihoods.

While there have been incidents of fraud and theft in other countries where GiveDirectly operates, the organization has taken steps to address these issues and ensure the integrity of their programs. The government of Malawi is closely coordinating with GiveDirectly and recognizes the importance of allowing poor families to have a choice in how they use the cash.

Overall, cash transfers have shown promising results in alleviating poverty in Malawi. However, there is still a long way to go in eradicating extreme poverty in Africa. With continued support and innovative approaches like GiveDirectly’s cash transfer program, progress can be made towards achieving the Sustainable Development Goals.

SDGs, Targets, and Indicators Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 1: No Poverty
• SDG 2: Zero Hunger
• SDG 3: Good Health and Well-being
• SDG 8: Decent Work and Economic Growth
• SDG 10: Reduced Inequalities
• SDG 13: Climate Action

The issues highlighted in the article include poverty, hunger, health, economic growth, inequality, and the impact of climate change. These align with the above-mentioned SDGs.

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 1.1: By 2030, eradicate extreme poverty for all people everywhere.
• Target 2.1: By 2030, end hunger and ensure access by all people, in particular the poor and people in vulnerable situations, including infants, to safe, nutritious, and sufficient food all year round.
• Target 3.8: Achieve universal health coverage, including financial risk protection, access to quality essential health-care services, and access to safe, effective, quality, and affordable essential medicines and vaccines for all.
• Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity, and innovation.
• Target 10.4: Adopt policies, especially fiscal, wage, and social protection policies, and progressively achieve greater equality.
• Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries.

These targets reflect the specific goals related to poverty eradication, hunger reduction, improved health services, economic growth, reduced inequality, and climate resilience mentioned in the article.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, there are indicators mentioned or implied in the article that can be used to measure progress towards the identified targets. These include:

• Indicator 1.1.1: Proportion of the population living below the international poverty line, by sex, age, employment status, and geographical location.
• Indicator 2.1.1: Prevalence of undernourishment.
• Indicator 3.8.1: Coverage of essential health services (defined as the average coverage of essential services based on tracer interventions that include reproductive, maternal, newborn and child health, infectious diseases, non-communicable diseases, and service capacity and access).
• Indicator 8.3.1: Proportion of informal employment in non-agriculture employment, by sex.
• Indicator 10.4.1: Income growth per capita among the bottom 40% of the population.
• Indicator 13.1.1: Number of deaths, missing persons, and directly affected persons attributed to disasters per 100,000 population.

These indicators can be used to track progress in poverty reduction, hunger eradication, improved health services, economic growth, reduced inequality, and climate resilience.

Table: SDGs, Targets, and Indicators

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: washingtonpost.com

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