Over the past decade, the World Food Programme (WFP) has increased the use of cash transfers alongside food deliveries to provide assistance to people in need. In 2017, WFP provided US$ 1.3 billion in cash transfers, up from US$ 880 million the previous year. This represented 30 percent of the organization’s portfolio. Where markets are functioning and local conditions favorable, cash transfers are an effective tool to accelerate progress towards Zero Hunger and reach the Sustainable Development Goals by 2030. They reduce the cost of providing food assistance, thus maximizing the number of people that can be reached.
Cash transfers are part of an integral solution to enable WFP to respond faster to the needs of the people it serves. They bring flexibility and agility to traditional assistance, allowing WFP to swiftly move from cash to food and vice versa. The decision to choose one over the other depends on the local context. These transfers come in various forms, from traditional banknotes, bank transfers or value vouchers to more innovative electronic platforms such as smart card or mobile money. Being at the forefront of technological developments, WFP is innovating with new ways of providing assistance. For instance, with the support of its Innovation Accelerator, WFP is piloting the use of blockchain technology to distribute cash assistance to Syrian refugees in Azraq Refugee camp in Jordan..
The benefits of cash transfers – whatever their form – are manifold. If deployed in the right context, they empower people to make choices about what they eat, which can lead to more diversified diets and improved nutrition. They can improve access to food and help reduce the need to resort to negative coping strategies, such as selling valuable production assets to buy food.
Furthermore, cash transfers are known to have a multiplier effect on the local economy. By enabling people to purchase food locally, they can help strengthen local markets, encourage smallholder farmers to be more productive and build national capacities, even in times of crisis. Recent studies have shown that US$1 given in cash to a refugee or vulnerable person translates into about US$2 in the local economy. Between 2012 and 2016, WFP cash transfers injected around US$ 2 billion dollars into the economies of Turkey, Lebanon, Iraq, Jordan, Egypt and Syria as part of the response to the Syrian emergency.
Cash transfers can also be integrated into broader social protection and safety net systems. In particular, in countries where there are no social protection systems – or where these are weak, rolling out WFP cash transfer programmes can help support their creation and strengthening. In Ecuador, WFP’s emergency cash programme in response to the 2016 earthquake was instrumental in strengthening the national safety net system.