chapter  3
26 Pages

Reaching orphans and vulnerable children through cash transfers in sub-Saharan Africa: Simulation results from alternative targeting schemes

BySCOTT R . STEWART AND SUDHANSHU HANDA

Introduction Social cash transfer(s) (CTs) are small, predictable sums of money to poor and vulnerable families and are a relatively new social protection instrument in Eastern and Southern Africa (ESA). However, this instrument is rapidly gaining popularity as an effective intervention to enhance the participation of the poor in economic development and to combat inequality, social exclusion and chronic poverty. In the HIV and AIDS policy dialogue, in particular, the “protective” dimension of programming in the four Ps (in HIV/AIDs programming, the four Ps are (1) prevention of mother-to-child transmission, (2) pediatric care, (3) prevention of HIV transmission among adolescents and young people, and (4) protection of children affected by HIV and AIDs) increasingly calls for the use of social CTs to support families that care for orphans and other children affected by AIDS (UNICEF and UNAIDS 2004). Advocacy among AIDS scholars for such programs is driven by the fact that AIDS is the number one cause of primeage mortality in Sub-Saharan Africa (SSA), and the region hosts approximately 25 to 30 million orphans, one-third of whom have lost a parent to the disease. AIDS-related prime-age adult mortality has seen life expectancy rates decline dramatically in the region and has severely weakened family support systems already stretched thin by extreme chronic poverty. In this context, CTs are increasingly being called for as an AIDS mitigation measure to help families cope with increasing dependency ratios and the associated burden of care and to protect the health and human capital development of orphans and other vulnerable children (OVC). In ESA, the largest CT program for children is South Africa’s National Child Support Grant (CSG), which reaches over nine million children up to age 14 and which is currently being expanded to cover children up to age 18 over the next few years. However, several countries have smaller programs, either demonstration programs (e.g. Kenya and Zambia) or established programs but with low coverage (e.g. Malawi, Mozambique and Rwanda). Lesotho is currently designing a CT program targeted to OVC, while Botswana and Namibia both

have either in-kind or cash-assistance programs for families that care for orphans. Several other countries are currently considering implementing CTs on a trial basis, including Tanzania and Uganda. These types of programs are thus very much part of the social policy dialogue in ESA and, in March 2006, 13 countries in the region, under the auspices of the African Union, signed the Livingstone (Zambia) Call for Action, which essentially pledged countries to develop national social protection strategies and to specifically design and implement social CTs within the next three years. A follow-up to the original Livingstone Meeting, known as Livingstone 2, occurred in Namibia in October 2008 and marked the first African Union Ministerial Meeting of ministers of social development. A Pan African Framework for Social Development was adopted at this meeting, which included a component on social protection. As momentum gathers around CTs, a host of technical questions arise on program design parameters, such as targeting, transfer levels and overall costs and affordability. An important policy question from the OVC angle concerns how to scale-up such programs to reach children most in need of assistance. A recent study (Schubert 2007) analyzed the demographic composition of participant households under the Zambia and Malawi pilots, which at the time were confined to a single district within each country, and concluded that these two programs reached a significant number of AIDS-affected households, including OVC, though such households are not explicitly targeted. On the other hand, the CT demonstration in Kenya targets OVC households directly, while in Mozambique the CT program targets the elderly and anyone who is disabled or chronically sick living in a poor household; all of these programs are thought to capture a significant number of AIDS-affected households, including OVC, but none of these programs operate at scale. Both for these countries and for others in the design phase, such as Lesotho, Rwanda and Uganda, the policy question of interest is to determine which of these alternative targeting schemes would capture the most OVC if taken to scale. This chapter simulates the coverage and related impact on the poverty and schooling of OVC under a national CT scheme in four ESA countries, using nationally representative household budget and expenditure surveys. We compare the efficiency of alternative CT targeting strategies in terms of coverage among the poorest deciles, assess the poverty impacts of alternative targeting schemes and conduct empirical estimations of the effects of the alternative targeting strategies on school enrollment of OVC in eligible households. This paper is methodologically very similar to that of Kakwani et al. (2006), who also used microsimulations to predict the “impact” of CTs on poverty and school enrollment. However, our paper differs in several respects to the 2006 study. First, our focus is on comparing specific targeting schemes that are actually in existence in ESA, while Kakwani et al. (2006) focused on a generic set of programs, including universal programs. In that sense, our results are of greater practical relevance to the current debate on program design in the region. Second, given the strong OVC and AIDS mitigation undercurrent in the CT dialogue, we explicitly consider the performance of these specific schemes in reaching orphans and

other ultra-poor children, since these groups are typically cited as the main target population for such programs. Finally, our modeling of school enrollment focuses on the relevant behavioral parameter in the target population – the poorest 30 percent of households – which provides a much more accurate assessment of the ability of CTs to affect schooling than that reported by Kakwani et al. (2006).