Attachments
Executive Summary
COVID-19 was a catastrophic global shock whose ripple effects suspended livelihoods, shut down markets, and overwhelmed safety nets. The pandemic continues to have protracted impacts on households, communities, and systems. In that context, a widespread, short-term humanitarian response in Nigeria to quickly infuse cash into households and enterprises was appropriate to speed up recovery. At the same time, COVID-19 occurred in a context of increasing and more impactful shocks, and the need for short-term assistance to help affected households cope with these shocks and avoid backsliding continues. It is urgent and critical to understand which responses are appropriate, when, and by whom to inform future market- driven crisis responses.
This paper examines the case of the Nigeria Rural Resilience Activity (RRA), a five-year, US$49 million Activity funded by the United States Agency for International Development (USAID) Feed the Future portfolio within the states of Borno, Adamawa, Yobe and Gombe (BAY-G) in North Eastern Nigeria (NEN) and implemented by a consortium led by Mercy Corps, in partnership with Save the Children International and the International Fertilizer Development Center. The Activity aims to sustainably move people out of chronic vulnerability and poverty in conflict-affected areas by expanding economic opportunities and strengthening resilience capacities throughout local systems, at household, community, and market levels. As a long-term market systems development (MSD) program that launched a humanitarian response to COVID-19 led by unconditional cash transfers (UCTs) to 47,387 farmers, 5,560 local MSMEs, and 85 key intermediary actors, RRA offers a rare opportunity to examine the impact UCTs can have on MSD programming, in particular whether UCTs are an appropriate modality for an MSD program to pivot from market facilitation to direct implementation, what the impact was on the existing programming aims and operations, and whether the cash transfer activity distorted the markets the program was supporting. RRA also offers valuable learning for development programs considering how to best help households respond to shocks in ways that support - rather than undermine - the resilience of local market systems. As the COVID- 19 response activity was implemented in collaboration with nine other programs, six of which were FTF Activities, this case also illustrates the impact of cross-program and cross-organizational collaboration.
Through interviews with a wide-range of stakeholders involved in RRA’s COVID-19 response, the resounding conclusion was that the economic impact of the pandemic was so catastrophic that it was entirely appropriate for an MSD program to adapt to and implement a UCT-driven response - not only to help individual households avoid sliding deeper into poverty but, and equally important, to jumpstart a devastated local economy and prevent the collapse of the micro-, small-, and medium- enterprises (MSMEs) that are the backbone of the food system.
However, direct, NGO branded UCTs do not align with the lower visibility, facilitation-based interventions of MSD and this response was not without cost to the RRA team’s focus and, in some cases, led to partner and community confusion. It was also widely acknowledged that development programs must work on the longer-term solutions that build the resilience of vulnerable households and MSMEs to natural and human- caused shocks and reduce their dependency on welfare or humanitarian response. Making large-scale cash transfer responses a regular part of an MSD program could take away from efforts to create long-term systemic change and is not ideal. Therefore, in the context of recurring shocks and stresses, it is even more crucial for the humanitarian and development communities to push the boundaries of collaboration across programs and organizations so that MSD programs can anticipate shocks and include market system resilience into their response models, recognizing that the skills and tactics of market facilitation are still needed in a crisis response, while humanitarian and social welfare programs can address immediate needs and protect the progress of development gains.
As the humanitarian and development community continues to evolve and improve how it operationalizes its range of approaches, it needs to maintain programmatic flexibility and avoid technical rigidity to respond in the most appropriate manner to the unique characteristics of each context. UCTs have a valuable place in crisis response for the flexible choice they provide recipients to spend and invest as their needs require, as well as their ability to spur market multiplier effects. UCTs can be more powerful when layered with complementary long-term programming that aims to strengthen markets and their supporting systems, instead of aid actors taking on economic roles. With careful sequencing and layering of approaches, UCTs can spark deeper connections between a range of market actors as well as marginalized populations and lead to greater access to key financial services and market linkages.