Eswatini

Swaziland: Cash based transfer intervention modality options, December 2016

Attachments

Key Findings

The Market Assessment’s intervention modality selection process identified the following key findings:

  • A total of 35 markets in 29 Tinkhundla across the country’s 4 regions were assessed. In total, 12 wholesalers, 64 medium vendors, and 43 small traders/retailers were interviewed using a structured questionnaire for a total of 119 traders.

  • The key variables considered for CBT transfer modality selection were: the capacity of markets to supply an adequate amount of food requirements, road quality, strength of mobile network, number of traders and their trade volume size, traders’ ability to absorb additional demand, food price stability over time, historical trade trends, previous intervention modality experience in the Inkhundla, security concerns, proximity to borders and contextual factors.

  • The market assessment found that cash is a viable option for at least 13 of the 29 assessed Tinkhundla. In these Inkhundla direct cash delivery to beneficiaries is recommended. The market will ensure that adequate food is available at an average price level for the season.

  • The market assessment found that vouchers are a viable option for at least 12 of the 29 assessed Tinkhundla. In these Tinkhundla vouchers were preferred to cash due to the market’s proximity to a border where cheaper goods can be found, or due to insecurity reasons or due to high transport costs. It is important to note that markets however are functioning and are integrated with adequate storage capacity.

  • The market assessment found that two Tinkhundla could support ‘cash and vouchers’. Cash is feasible in the urban area in the Inkhundla, while vouchers was recommended for the markets in the Inkhundla located close to a border or where traders mentioned preference for vouchers due to insecurity.

  • The market assessment found that two Tinkhundla out of the 29 assessed were recommended for in-kind distributions. These were markets with very high food prices and poor storage capacity and where roads and mobile network were poor. Shops in these markets were also few and small in size.

  • Interviewed traders identified: low consumer demand (24.4 per cent of traders) and limited trader capital (10.7 per cent) as key constraints to trade. These are typically constraints that can be addressed through the use of CBT interventions. Other key constraints to trade mentioned by the interviewed traders were: shortage of supply (19 per cent), insecurity (19 per cent), transport limitations (15.5 per cent), competition (9.5 per cent) and food assistance (1.8 per cent).

  • The main security issue/concern for traders in Swaziland is theft (shoplifting) and robberies (sometimes armed). This issue was raised by 19 per cent of interviewed traders as a key concern.

  • Low trader storage capacity usage (on average only 23.4 per cent for wholesalers, 37.2 per cent for medium vendors and 28.5 per cent for retailers of their total storage capacity was in use in November 2016), indicates that a CBT intervention could effectively build on local traders’ storage capacity to supply food to the food insecure.

Executive Summary

In late 2016 MoA requested WFP to conduct a market assessment to determine the functionality of food market systems (for maize, rice, beans and cooking oil) in Swaziland. The market assessment was undertaken to analyze Swaziland’s food market environment, structure and network. The assessment shed light on financial and physical infrastructure, trader typology, trader limitations and constraints to trade as well as covering market functionality throughout different seasons in a year.

A participatory process of detailed data analyses and discussion through a five-day long, open-door forum ensured the findings from the market assessment guided the market assessment’s Technical Working Group (TWG) in selecting the most appropriate intervention modality by market and Inkhundla. The TWG was also trained on WFP Trader Survey Market Decision Making Tool to support them in their decision making.

This report indicates the Regions and Tinkhundla where the market assessment’s TWG, who were composed of representatives from Swaziland’s Government, NGOs and UN Agencies, agreed markets to be suitable for cash, vouchers and/or in-kind interventions as well as highlighting the reasons behind the selection (please refer to Swaziland’s 2016 Market Assessment for more information).

The key variables considered by the TWG in their CBT modality selection process covered: market trade capacity, market functionality, seasonality, food source, market context and surrounding infrastructure, food price trends, insecurity, macro-economic policies and previous CBT experience in the Inkhundla.

The findings from the market assessment had as aim to inform the design and implementation of humanitarian food assistance programmes in the country for the 2016-17 lean season. Even though exhaustive the market assessment focuses primarily on assessing markets, as a result the CBT selection modality was undertaken from a market perspective. For a more encompassing overview of CBT feasibility agencies may find it beneficial to further assess CBT feasibility through other specific assessments such as and not limited to: finance, IT, security, logistics, and procurement assessments.