The objective of the Cash Transfer for Orphans and Vulnerable Children (CT-OVC) programme in Kenya is to encourage fostering and retention of OVC within families and communities, and to promote human capital development. Reaching approximately 150 000 households as of December 2012 with a fixed bi-monthly transfer of KSh4 000, the CT-OVC provides a significant infusion of cash into Kenya’s rural economy. The programme’s immediate impact is to raise the purchasing power of the beneficiary households. The value of the transfer represented an average of 14 percent of the expenditures of beneficiary households in 2011.
Viewed from a local economy-wide perspective, the beneficiary households are the conduit through which cash is channelled into the local economy. As the cash is spent, the transfers’ impacts immediately spread from the beneficiary households to others inside and outside the targeted villages. Income multipliers within the targeted areas are set in motion by doorstep trade, purchases in village stores, periodic markets and purchases outside the village. Some impacts extend beyond the project area, potentially unleashing income multipliers in non-target sites.
The local economy-wide impact evaluation (LEWIE) methodology is designed to detail the full impact of cash transfers on local economies, including on the productive activities of both beneficiary and nonbeneficiary groups, how these effects change when programmes are scaled up to include larger regions and why such effects occur. All of these aspects are important for programme design and for explaining their predicted impacts.
FAO. Impacts of the CT-OVC Programme on the Local Economy in Kenya. Food and Agriculture Organization of the United Nations, Rome, Italy (2013) 2 pp.