A woman hangs her washing to dry in Ruti, Zimbabwe 2012.

Cash transfer programming in Zimbabwe

Aid, Food & livelihoods, ICT4D

Khodeza Rume, a Humanitarian Support Personnel in Food Security and Livelihoods, reflects on a recent electronic cash programme with the World Food Programme and Econet. 

A woman hangs her washing to dry in Ruti, Zimbabwe 2012.

A beneficiary of an Oxfam agriculture and irrigation programme hangs out washing to dry in Ruti, 2012. Credit: David White

With the 2008 financial crash, Zimbabwe suffered a cash crisis and economic collapse which resulted in chronic food insecurity. The situation has since been exacerbated by the effects of El Niño with an estimated 4.1 million people affected in the current season. A lack of liquidity means there is not enough physical money in the economy. Oxfam in Zimbabwe have responded innovatively by working with the World Food Programme (WFP) with a mobile operator called Econet to deliver mobile money to affected populations in two districts. Mobile money includes payment services operated under financial regulation and performed from or via a mobile device. Despite the costs involved, overall this modality proved to be more cost effective and the experience in Zimbabwe demonstrated huge benefits.

A food distribution was initially planned, but an assessment in July showed that the market was still functional with the basic food and services locally. This resulted in a move from in-kind distribution of items to giving people cash to buy the items they needed.

Food is available in markets in Zimbabwe, often imported from Zambia, South Africa and Mexico with government subsidies ensuring that prices remain stable. The savings made in logistical costs thanks to the use of mobile money cash transfers, rather than food in-kind allowed for an additional 500 households to benefit during one 4 month programme as well as creating a contingency fund of $24,000.

The initiative has empowered people to make their own decisions and enabled traders to sell their own products

Econet were the chosen service provider through a competitive bid process. Econet also work with Care International, WFP and Save the Children. They are well established and have their own bank Steward Bank which supports their mobile money service Ecocash.

Mobile cash is a very secure form of purchasing power, compared to carrying an envelope full of cash for example, and the money can be used gradually, so users can buy what they need whenever they need it.

During the initial phases, community mobilisation was needed as work was carried out jointly through mobile money agents and Oxfam. Project participants signed to confirm they had received their money from Oxfam. A majority of people use Econet as their mobile phone service provider, but for those that did not have mobile phones or were using other service providers, prior arrangements were made for them to have access to the Ecocash platform. An education exercise was carried out to ensure that people understood how to make electronic transactions to buy goods and services. Community volunteers were recruited as focal points to help respond to any challenges relating to transacting on the mobile money platform. Ecocash agents and merchants were also sensitised to the programme so they could assist beneficiaries if necessary. There is also a toll free help line from Econet which was publicised during community meetings and displayed in public places and at community cash out points.

Through the voucher system, which was part of the broad Oxfam cash transfer programme in Zimbabwe, people quickly came together; organising their own transport (hiring a small truck with the money they’d been given) supporting each other and sharing information transparently. Everyone was very open so it was easy to work with people and understand their needs.

There is a transparent process to select beneficiaries based on a scoring system, so it’s obvious who is eligible for financial support. The initiative has empowered people to make their own decisions and increased liquidity has enabled traders to sell their own products as small shops and traders benefited from being Econet agents. Actors in the region have come together to share best practice so that more people may experience the benefits of this approach.

Author
Khodeza Rume

Khodeza Rume

Khodeza Rume is a Humanitarian Support Personnel (HSP) Food Security and Livelihoods at Oxfam GB. Her area of specialisation is cash and market based programming in conflict and disaster prone countries.