Yemen: Inter-Agency Joint Cash Study: Market Functionality and Community Perception of Cash Based Assistance, December 2017 [EN/AR]



Since 2015, conflict in Yemen has left 3 million people displaced and over half of the population food insecure, and has destroyed much of the country’s infrastructure . As of July 2017, much of the population had lost their primary source of income, 46% lacked access to a free improved water source6 , and an outbreak of cholera had become the largest in modern history.

The Cash and Market Working Group (CMWG) estimate that in 2016, financial assistance in the form of cash or vouchers was distributed across a total of 80 districts in 13 of Yemen’s 22 governorates. This includes 29 districts in which cash interventions from multiple sectors were being conducted simultaneously. Cash or voucher based assistance programmes were most common in the Food Security and Agriculture cluster, followed by Shelter, Protection, Health and Early Recovery.

As humanitarian actors sought to provide a flexible response to the dynamic context of the Yemen conflict, small scale Multi-Purpose Cash Grants emerged as a favourable option, enabling beneficiaries to adapt to the changing circumstances and to tailor their purchases to meet their specific needs.
In January 2017, the CMWG conducted a desk review of existing reports exploring the economic situation within Yemen, in order to inform and support humanitarian organisations in the design of response programmes. Key studies reviewed included the World Food Programme’s (WFP) 2010 Yemen Market Study which provided an overview of the market structure before the start of the current conflict, including indications of the supply lines and availability patterns of essential goods and commodities. In November 2016, the Yemen Ministry of Planning and International Cooperation published a socio-economic update which detailed the contraction of the nation’s GDP as a result of the conflict, the rising public budget deficit, and the liquidity crisis emerging as workers around the country were not paid. The study also highlighted the rising rates of inflation within the import-dependent country, as the exchange rate weakened and the Yemeni Riyal lost value against foreign currencies. These concerns have continued throughout 2017, with publications such as the Food and Agriculture Organization of the United Nations’ (FAO) ’ Monthly Monitoring Bulletin and WFP’s Market Watch Report recording the volatility of prices of essential commodities within Yemen.

A feasibility assessment to identify appropriate modalities for cash or voucher based programmes, conducted by the National Federation for Development and Human Response (NFDHR), Action Against Hunger (ACF), Oxfam, and the Norwegian Refugee Council (NRC), recommended the use of vouchers for food and water, sanitation and health (WASH) orientated programmes, however this study was conducted within a limited geographical area in Al Bayda governorate and so it is difficult to say if this finding applies to the country as a whole. Meanwhile, the United Nations High Commissioner for Refugees (UNHCR) and INTERSOS’ Rapid Survey on Cash Assistance and Rental Subsidies observed that when provided with unconditional cash grants, beneficiaries would prioritise spending on medicines and food.

Having considered the publications available, the CMWG felt that there was insufficient evidence to determine if a cash and market based intervention was appropriate for the current Yemen context. As such, the CMWG decided to conduct a primary data collection study to address existing information gaps, and to provide guidance to humanitarian actors. Following an initial coordination meeting of the CMWG members interested in conducting the study, the following objectives were defined:

  1. To provide a baseline of price and stock information of relevant basic commodities in assessed markets to organisations operating cash-based response programmes in Yemen.

  2. To identify the constraints and capacity of vendors in supplying and pricing basic commodities in assessed markets.

  3. To gather feedback from affected communities on access to markets and their familiarity, acceptance and preferences for cash-based modalities and mechanisms.

  4. To identify the potential constraints and risks of cash-based response in Yemen.

In order to conduct the study, the Technical Assessment Working Group (TAWG) was established to coordinate the design, implementation and analysis phases. The members of TAWG were agencies interested in contributing resources and actively participating in the study, while REACH and the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) co-chaired the group. Throughout the course of the study, REACH provided remote support and technical expertise, primarily by: providing advice for the development of tools and methodology of the study; providing technical and coordination support for data collection; leading technical data management and data cleaning; developing data analysis framework and leading data analysis process; designing, drafting and disseminating the final output; and producing maps and other data visualisation products. The inter-agency assessment group was guided by the Joint Cash Based Transfers Feasibility Analysis framework developed by four UN agencies – UNICEF, WFP, UNHCR and OCHA – at the global level.

The study consists of two components. The first is the Market Functionality component, which will explore the pricing, availability and supply network of essential commodities, as well as evaluating the constraints faced by vendors. The second, Community Access to Market, Acceptance, Safety and Risks, will explore the perceptions of communities towards different assistance and delivery mechanisms, as well as discuss how individuals’ access to markets has varied since the outbreak of the current conflict.