African Risk Capacity & KfW – Coordination, adaptability & cash: Looking back at a USD 23.1m operation in a year of Covid-19

Background:

 

  • What is ARC?

The African Risk Capacity is a specialized agency of the African Union (AU) established in 2012 to help African governments improve their capacities to better plan, prepare and respond to extreme weather events and natural disasters. Through collaboration and innovative financing, the ARC enables countries to strengthen their disaster risk management systems and access rapid and predictable disaster financing to protect their vulnerable populations. ARC establishment treaty has been signed by 34 Member States of the AU.

 

  • What is ARC Replica?

An innovative feature of ARC climate risk insurance is that policies can not only be bought by African Union member states, but also by humanitarian actors under the ARC Replica programme. This approach allows more people to be protected against the risk of drought in any given country.

 

  • What is Start Network?

Start Network is a global network of non-governmental organisations, made up of more than 50 national and international aid agencies from five continents. Its mission is to create a new era of humanitarian action that will save even more lives through innovation, fast funding, early action, and localisation.

 

  • What happened in Senegal?

The Government of Senegal and Start Network purchased insurance policies from ARC against the risk of drought in July 2019. The government of Senegal’s premium was worth 3m USD. Start Network’s premium worth 2.4m USD, was purchased with the support from Germany’s KfW Development Bank on behalf of BMZ. In late August 2019, insufficient rainfall was reported for the west of the country. In September, poor performance of modelled rainfall indicated an emerging major drought and that a payout would be made at the end of the agricultural season. This would mean that aid measures could already start before the damage caused by crop shortfalls occurs. The payout from African Risk Capacity was received in December 2019, and a 9-month long intervention began in early 2020.

 

  • What was delivered?

In the Final Implementation Plan, the Government of Senegal was expected to use ARC payout:

  1. To procure and distribute 7,300 MT of rice to 160,000 vulnerable people from 20,087 households; however, the payout response was subsumed by the national global response to Covid-19 pandemic, thus at the end 110,000 MT of rice was distributed to 1.1 million vulnerable households in Senegal.
  2. To procure and sell 10,800 MT of animal feed to vulnerable herders in the areas affected by drought at a subsidised price (a 40 kg bag of animal feed, which normally costs 8,000 CFA, was sold to herders at 2,000 CFA). The proceeds from the subsidised sales were deposited in an account in a local agricultural bank, a revolving fund managed jointly by a local livestock breeder organisation and local commissions.

 

The Replica partner, Start Network used the ARC payout to transfer XOF 2,882,309,650 (approximately USD 5.2 million) to 264,030 vulnerable people, 135,532 of which were women. The cash helped beneficiaries meet their monthly food requirements, giving them the ability to use the money to cover their nutritional and food needs. Before each distribution, beneficiaries were sensitized on how to use the money to improve their household’s food and nutritional security; (ii) to distribute quality flour to 232,979 vulnerable people including: 134,649 infants 0-5 years old and 98,330 pregnant and lactating women.

 

  • What was achieved?

The process evaluation following the delivery of the response found that the implementation of the activities financed by ARC payout, the food and cash distributions in particular, helped to strengthen households’ capacity to cope with the impact of the drought. The support helped the beneficiaries avoid resorting to extreme coping strategies, such as selling productive livestock or consuming seeds stocks. The table below shows the percentage of respondents from a sample of beneficiaries surveyed during the process evaluation on how food assistance and cash transfer helped them.

 

Impact Food Assistance Recipients Cash Assistance Recipients
Helped avert suffering 100% 98%
Helped meet monthly requirements 99% 98%
Helped improve household consumption 99% 92%
Helped prevent sale of livestock 90% 89%
Helped prevent migration for work 73% 82%
Helped prevent kids out of school 78% 79%
Helped reduce debt 98% 99%

Source: Draft process evaluation report of the 2019 payout in Senegal

 

Lessons learned in 2020

 

1.The Replica program, an opportunity for cross-learning

The Replica program obviously gives the opportunity to provide additional insurance coverage to vulnerable people in Senegal allowing a more diverse assistance to be delivered to twice as many vulnerable people affected by drought.  Moreover, the coordination and dialogue between Government agencies and Replica partners certainly represent a cross-learning between the two, which will likely lead to the improvement of the processes, the delivery and the impact of future response. The process evaluation identified lessons the government agencies could learn from the Replica partners including early planning of the operations, the inclusion of gender in targeting and distribution, the monitoring evaluation of the response, etc. On the other hand, the Replica partners could learn from the government agencies how to ensure appropriate communication with local communities and local associations, and how to effectively coordinate activities at national and local level with limited resources.

 

2. Coordination = Transparency

It became apparent early on in the ARC Replica payout operation in Senegal that coordination was key and would play a critical role in the success of the multi-stakeholder, multi-million-dollar intervention. This has proven true throughout 2020 with successful coordination leading to increased efficiency. Duplication was avoided and resources were pooled. In some cases, fixed costs were reduced thanks to the scale of the intervention. Open and regular communication between stakeholders led to greater visibility and in turn transparency. It is thanks to this that Start Network members, the Government of Senegal, and external partners have known what assistance is being delivered, where, by whom, and to whom. Targeting in particular, was a complicated endeavour and ran the risk of dangerous duplication efforts. This was an area where shared best practices, between the NGOs and the Government of Senegal, allowed both parties to reach those predicted to be worst affected by the oncoming drought.

Despite the clear advantages of coordination – it has not come without a price: consensus decision making takes time and the size and power of actors involved is not always balanced[1]. As one Start Network member agency noted in a post-implementation interview:

“We don’t usually work in such a large consortium – six international NGO partners is a lot. And this is something that made people wary about the feasibility of such an intervention. However, we think ARC Replica has proved that it can work.”

The strength of the Replica programme is rooted in integrated co-ordination between civil society, government institutions and ARC. By working together these stakeholders, delivered an efficient and transparent response that met the needs of the most vulnerable communities.

 

3. Adaptability in unusual circumstances

Complex emergencies require flexible programming. In Senegal this year we have seen—as we have seen in other years and other countries before—that adaptability, especially in fast changing programmes is primordial to their success. Like many humanitarian programmes worldwide, this payout operation was blindsided by Covid-19. The plans were made meticulously and in a coordinated manner with many parties validating and signing these off. Then the Covid-19 pandemic struck and plans had to be adapted yet again. However, this adaptation was crucial to the success of the intervention. As Kimetrica state in their Senegal Payout Process Audit: Final Evaluation Report (at the time of writing it is still in draft form, see footnote)[2]:

“The Replica partner was able to quickly pivot their approach to meet the changing environment caused by Covid-19. For example, most of the flour distributions were replaced by cash distributions due to restrictions on transportation between regions and on gatherings….[The Start Network] suspended malnutrition activities (which involved handling children), introduced Covid-19 sensitisation messaging, and merged planned repeating distributions into a single distribution.”

The adaptations made to the programme were approved by ARC and government partners, but did result in some delays to the original timelines. Nevertheless, assistance was delivered before the end of the lean season. This was even more critical this year due to the impact Covid-19 restrictions had on food security. During lean season, labour is often sought in cities or in markets. Households depend on this income for sustenance. But movement restrictions and the closure of markets quickly threatened this income source. The cash programming – that was adapted to be delivered at a larger scale than was originally planned – was needed more than ever to overcome the compounding challenges that families faced in 2020.

 

4. Why cash was king in 2020  

As explained above, the adaptable programming maximised the impact in a context where rules and safety measures changed every day. Cash in particular was a very versatile activity in this regard and allowed us to pivot quickly, efficiently, and safely. However, cash also brought other advantages with it. Firstly, cash gave recipients the power to choose what to buy.

“Although in-kind aid is very important, we much prefer to receive cash, as it allows us to deal with our food security needs as well as any other concerns that may come up.” – Representative from Supported Household in Ranerou Department

The needs of households were complex and unpredictable due to the unprecedented nature of the pandemic. Overall, the average spends on non-food items represented 26% of the total cash transfer (see pie chart below). One family reported to us that they used the majority of their cash transfer on health needs— in particular for malaria care.

Average % of Cash Received Spent in Each Area (Independent Monitoring Survey)

[1] More on the pros and cons of coordination can be found in this article.

[2] Due to be published before the end of 2020. Please note this is a draft at the time of writing and content may change between draft and finalisation.

5. Subsidized sales of animal feed and the revolving fund

The use of the proceedings from the subsidised sale of animals to replenish a revolving fund owned and managed by local communities is an effective and innovative solution to mitigate the impact of food insecurity in pastoral and agro-pastoral areas, and strengthen the livelihoods of pastoral households. The fund could be used for early action, easing the impact of the drought before implementation of the formal response.

 

Conclusions

On 15 December, Start Network will be releasing its full evaluation report on the ARC Replica payout intervention conducted in Senegal in 2020[1]. These and many more lessons learned will be elaborated. For now, it is becoming increasingly clear that the ARC Replica intervention has allowed us—Start Network and our members in Senegal, as well as our Government of Senegal counterparts—to get ahead of a severe drought, in a year where the compounding threat of Covid-19 has put many more families at risk of food insecurity. Coordination, cross-learning and adaptable, innovative programming are emerging as key components to this successful intervention and we look forward to building on these further in years to come, alongside ARC and our government counterparts.

[1] This will be released here on the above specified date: https://startnetwork.org/resources