Policy Brief: The Economic Impacts of Cash Transfer Programmes in Sub-Saharan Africa

Abstract

Cash transfer programmes in sub-Saharan Africa impact the productive activities of both beneficiary and non-beneficiary households in the communities where they are implemented. These programmes have led to an increase in agricultural activities in beneficiary households, including greater use of agricultural inputs, more land area in crop production and higher crop output. Beneficiary households have increased ownership of livestock and agricultural tools, as well as a greater tendency to participate in non-farm family enterprises. Moreover, households that receive transfers tend to reallocate their labour away from casual agricultural wage labour to household-managed economic activities. In almost all countries, cash transfers have allowed beneficiary households to avoid negative risk coping strategies and to better manage risk, partly by allowing beneficiaries to ’re-enter’ existing social networks and thus strengthen their informal social protection systems. Finally, cash transfers benefit the wider community, leading to significant income multipliers throughout the local economy. The nature and magnitude of these impacts vary from country to country, however, due to differences in programme design, implementation and context.

Citation

FAO. Policy Brief: The Economic Impacts of Cash Transfer Programmes in Sub-Saharan Africa. Food and Agriculture Organization of the United Nations, Rome, Italy (2014) 4 pp.

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