This guidance note is part of a series of nine modules that seeks to provide support to humanitarian actors working on Cash Based Programming in Somalia.These guidance notes are meant to provide an overview of the topics while pointing to materials with more in-depth explanations. This module aims support agencies to decide when cash is appropriate.
Needs assessment and response analysis
Key questions to consider / Structured answers / Remarks-What is the nature of the crisis ? / Main types of crisis affecting Somali population
⧠Flood
⧠Conflict
⧠Drought / -Floods can affect the supply chain inside the country and therefore the local markets will temporarily cease to function effectively. This might in turn lead to areduced availability and a possible, though likely temporary, increase in prices of goods. In case floods are affecting supply routes for a significant amount of time, the possibility of inflationary pressure should be accounted for.
-Conflict could lead to an increase in the cost of goods especially during transport (longer roads used, taxation, risk…) or movement of population leading to challenge income generation and access to basic essential items. In this context, cash transfer can be considered as a validoption. Like for floods episodes, if the conflict is significantly affecting supply routes for a prolonged amount of time, inflationary pressure is likely to occur. In such context, the use of cash transfers should be carefully weighed against the risk of added inflationary pressure resulting from the injection of cash.
-Droughtundermines local production especially for those dependent on natural resources (farming, pastoralism) and access to water. Even if drought may not prevent local traders importing goods,it hasan immediate impact on access to food (self-produced), purchasing power (higher needs if self-production is failing leading to lower financial capacity) and health/nutrition conditions (water access related).However, as long as local traders and local markets still function, cash transfer interventioncan be considered.
-What are the key needsexpressed by the target groups? / Items / Type / Qty per HH
xx / xx / xx
xx / xx / xx
xx / xx / xx
/ This list will be the basis to assess the capacity of the local market for cash transfer project.
-What are the preferred modalities for accessing the needs of the target groups? / In-kind? Cash? Vouchers? Combination of the above? / Each organization / IO should ensure the inclusion of ‘preferences’ expressed by communities in their assessments
-What are the reasons for the target groups’ vulnerability? / ⧠Physical availabilityof specific needs (e.g. due to logistic, insecurity, …)
⧠Reduced / lack of access: such as lack of financial resources.
-What is the population profile? (livelihood , displacement, needs, status,other social categories) / -Livelihood 〖urban/rural, pastoralist, farmers, agro pastoralist〗
-Minorities’ status 〖…….〗
-Displacement status 〖IIDPs, Host, resident〗
-Also, identify specific needs / issues(gender, age and protection) / -Number of targeted beneficiaries. 〖…….〗
-Field needs assessment.
-Geo-referenced lists of villages where targeted beneficiaries are living 〖…….〗This should enable mapping of the villages targeted.understanding the specific locations will enable abetter appreciation ofthe logistics, security, access constraints, and the vulnerability to specific threats (flood, drought, conflict).
Better understanding the locations of the target group, their specific needs and the volume of their needs will support the appreciation of the logistic requirements. This would then be factored while deciding for in kind or cash inputs.
-How are people currently coping with the situation? (are they trying to get cash?) / -List negative coping mechanisms to be stopped per group of targeted beneficiaries (categorized per livelihood, gender, displacement status, minorities status).〖…….〗
-List positive coping mechanisms to be reinforcedper group of targeted beneficiaries(categorized per livelihood, gender, displacement status, minorities status). 〖…….〗 / -Identify negative coping mechanisms with longer term impacts.ie selling of productive assets and check the impact of response options (e.g. cash, vouchers, etc) on these coping mechanisms
-What are other agencies reporting on the level of needs (category of emergency, gaps, foreseen crisis)Source: NGO, Clusters, FSNAU. / Needs identified by other agencies available
⧠Yes⧠No / If yes, attach / refer to the report.
-What is the preference of the target group in terms of modality of support (cash, in kind, …) / ⧠In kind
⧠Cash unconditional
⧠Cash conditional
⧠Voucher / Acceptance of the communities and the local authorities is critical in the design of the project.
-What are the views of the local authorities in term of modality of intervention?
-What is the type of project / ⧠Preparedness to anticipated crisis.
⧠Support to livelihood
⧠Response to current crisis.
Market analysis
a)Is cash transfer possible and under which constraints?
What are the main risks related to cash transfers in the targeted area?Key risksare:diversion, inability to implement accurate monitoring system, weak accountability, limitedcapacity of the local suppliers, fragile stability and capacity of the local economy.More information on market analysis is available at
Key questions to consider / Structured answers / RemarksWhat are cash specific risks? / ⧠see “risk section”
-Capacity of local suppliers to cope with increased demand.
-Number of suppliers able to supply the goods needed by beneficiaries.
-Number of accessible alternative markets and frequency of markets is key in providing information on market capacity as well as the likelihood of inflation. / ⧠ <3⧠ > 3 / For this key question, you need to define what is an acceptable distance from the suppliers. Usually, a two hours one-way distance (with available transport means) is considered as the upper acceptable limit. If transport costs are covered by the IO, then this limit might increase, but needs to be well considered / verified
Are local suppliers willing to respondto an increase in demand and how quickly? / ⧠ Yes⧠ No
How quickly
〖…….〗 / Local suppliers should be approached to develop clear understanding of the local capacity to coop with a timely increased demand. Factors of vulnerability of the local suppliers (road network, conflict, local completion for contracts should be understood)and develop in the risk section.
Are prices reasonable compared to markets in other locations? / ⧠ Yes⧠ No / FSNAU could be used as a source to verify the coherence of the prices of items. You can register / access the data through the link below:
Map of the villages of the targeted beneficiaries, local markets and supply chain of preferred items by the target group? / Map of the supply chain / The mapping is important inunderstanding;
-Access to local markets by beneficiaries.
-Goods’ movements. What will be produced locally and what will be imported.
Remark: Given that in Somalia many goods including preferred food items are imported, some coastal cities might have fewer constraints than in-land cities wheregoods have to be transported through insecure and poor road networks. In general though and unless landlocked due to floods and/or conflict, markets of all regions of Somalia have shown considerable resilience and capacity to respond to increased demand.
What is the profile of the main local suppliers (conflict sensitivity) and what is their financial capacity (warranty) and ability to secure access along the supply chain (security)? / This isimportant to understand what the impact of selecting specific suppliers would be from a security and conflict point of view(relations between clans, ability to transport more goods/higher value across specific areas, …)
Clear context analysis and understanding of the key dynamics between clans should enable to define how selection of suppliers should be approached. Division of the contract to satisfy key parties involved in the conflict could be considered within reasonable limits.
Capacity of the suppliers to implement the activities and to be paid as reimbursableafter verification could be amongst the indicator to consider suppliers eligibility to apply to participate in the program. This will also enforce that if the suppliers is not able to secure access, no payment would occur.
Capacity of the local economy. Are there risks of market distortion due to the intervention (this will affectthe number of beneficiaries compared to the overall population,the foreseen market instability due to logistical, security, supply chain factors …) / ⧠ Yes⧠ No
Is the intervention expected to have an impact on the environment? / During the shelter project if timber or wood are in high demand and procured locally, the IO should consider the impact on the local environment as it could increase local conflict for natural resources and could further deplete natural resources. Consider the `Do no harm principle’ and explain how you will address / mitigate this.
Timeliness and seasonality / Distributing cash during a harvest season could negatively impact on the prices of food and terms of trade for farmers.
Access
Key questions to consider / Structured answers / Remarks-Is the area accessible by theIOstaff? / ⧠ Yes⧠ No / If no, the IOshould explain why access cannot be secured and how they will ensure proper targeting, monitoringand verification ofbeneficiaries (the challenge of remote management)
-Is the area accessible by some local suppliers? / ⧠ Yes⧠ No / If yes, then the profile of suppliers and the way access is secured should be clarified and documented.
If no, then the choice of programming or modality should consider these access constraints
If yes, conflict sensitivity should be carefully considered asking how the conflict would evolve using particular suppliers.
-Can a third party monitoring be done? / ⧠ Yes⧠ No / The methodology of the third party monitoring proposed should be clarified as specific approach will work in specific environments but not in others.
-What about other alternatives for remote management / This should stem from a structured risk analysis. Please refer to the section / Module 9
Cost-effectiveness
Key questions to consider / Remarks-Comparison of cost to deliver in kind versus cash/vouchers. / -The cost should be considered in term of unit price, transportation costs, insurance costs, storage/warehousing costs, distribution and security cost, etcvis a vis in kind distribution(s).
-Cost to recipients to access the goods(transport, taxation). / -Beneficiaries cost of transportation between their places of living and the distribution sites (in kind or cash/ voucher approach).
-Cost of transportation of heavy items back to their places of living.
-Potential increase in the level of taxation on beneficiaries when transporting visible goods of a certain value.
-Varies a great deal between regions/districts
-Fluctuation in exchange rate if cash is provided in USD while procurement of most items is to be undertaken in Somali/Somaliland shilling. / Cash transfer is done in USD and therefore beneficiaries will receive USD while most of their expenditure will be undertaken in local currency.Knowledge of the possible fluctuation of these rates is important to consider when designing the value of the cash to be transferred. Regular follow up of the exchange rate should be monitored to confirm the amount of the voucher.
-Foreseen level of selling of in kind donations by beneficiaries. / The level of reselling of items can occur when beneficiaries do not have enough choice on the selection of the items distributed. For a voucher project in Somalia, adding sugar could be considered. Sugar is a priority item in food expenditure pattern analysis.
-Foreseen evolution of prices of items procured. / Price in the market can evolve due the seasonality, the evolution of prices at global level for imported items, demand, changes in the context of intervention, … different programming provide different levels of control to adjust the priceswith the suppliers in order to guaranteesufficient quantity accessible to the beneficiaries.Voucher projects based on regular review of the price (monthly basis for example) can provide a fair way to control the cost of items.
-Staff and means needed as per different modality of intervention. / Different types of programming will require different staffing profiles and different logistical means. CfWprogramming needs a strong field presence including engineers, while unconditional cash transfer mainly requires a team of monitors.
Profile of staff able to supervise, manage and train the suppliers are more important in cash transfer project than in an in kind distribution project.
Coordination and political feasibility
Coordination-What others agencies are doing and which modality of intervention have they selected? / -Understand the gap in terms of targeting (geographic, profile ofbeneficiaries, …)
-Understand the reasons for theselection of specific modalities of intervention per agency
-Which conditions or limitations have other agencies applied?(modality of intervention). / List limitations and mitigation applied.
-Lessons learnt by other agencies. / List lessons learnt.
Political feasibility
-In AS controlled areas, which modalitiesof intervention are accepted? / ⧠In kind (Certain agencies face difficulties with local authorities in provision of in kind items) this can impacton acceptance levels)
⧠Cash unconditional
⧠Cash conditional
⧠Voucher
-In AS controlled areasor where local authorities can give directives on the way to implement the project (this includes gatekeepers), what is the capacity of the organization to maintain control over design, implementation and monitoring of the project? / Can decision making on project design and management be independent enough ?⧠ Yes⧠ No
Can/should third party monitoring be set up to decrease level of pressure on the field team.⧠ Yes⧠ No
-In areas where government is operational, what are the government policies regarding cash programming? / ⧠Government policies regarding cash transfer.
Timeliness effectiveness
b)Time consideration
If the process is urgent, the implementing agencyshould prepare as much as possible in advance all selection processes (beneficiaries, sites, suppliers) which can be time consuming. Upon agreement on the proposal, the agency should train its staff and local suppliers before signing contracts.
Key questions to consider / Structured answer / Remarks-Is the needs assessment already available? / ⧠ Yes⧠ No / -If at the time of designing the project the needs assessment is available then the intervention could be undertakenquickly – ask the FS cluster what is available.
-How quickly could the situation change / ⧠Fluid environment /
⧠Stable environment
Target group in a ⧠stable/
⧠unstable situation / -Further displacement of population …
-Decreasing access to the area (by IP) and/or to market (by beneficiaries).
-Seasonal changes (rain in case of drought / shortage of water).
-Is the list of needed/preferred goods for beneficiaries established? / ⧠ Yes⧠ No
-Is the list of beneficiaries available? / ⧠ Yes⧠ No / Validation of the selection of criteria and then selection of beneficiaries is time consuming with the community as a whole and the local authority where conflict dynamics need to be constantly assessed. So, a realistic work plan is critical to justify the modality of intervention if emergency is a key factor influencing the design of the project.
-Is/are the supplier(s) already pre-selected through the procurement process? / ⧠ Yes⧠ No / As for beneficiaries, the selection of suppliers is complex and needs understanding of the conflict sensitivity.
-Given the status of beneficiaries and the impact foreseen to be reached how long can beneficiaries wait before receiving inputs?This should take into consideration emergency needs, seasonal calendar for livelihood project / ⧠ Up to 2 weeks.
⧠ Up to 5 weeks.
⧠ More than 5 weeks. / How fast can the IO deliver the project will depend on the level of preparedness of each key step (identification of the needs, detailed design of the project, status of procurement of all services needed, …) and the level of efficiency of the decision making within the organization, the level of access and relations with all stakeholders (elders, formal and informal local authorities in the targeted area).
The appreciation of the real capacity to deliver the project versus the level of urgency of the needs influencesthe selection of the modalities of cash transfer. It is therefore important that the selection of the modalities fit the real timing of delivery if emergency is a key justificationfor the selection of the modality of intervention.
- The fastest response is based an“unconditional cash transfer” modality of project implementation. Focus on the most vulnerable. Beneficiaries can use the cash received as they like.
- The second fastest response is based on the implementation modality of “unconditional voucher”. Delays could occur during time consuming activities.
Procurement process to select suppliers (vouchers). This will however depend on the level of preparedness of the IO and/or the ability to scale up existing activities.
Supply chain (source of supply, status of the road, potential roadblock…)
Organizing the monitoring of the distribution process.
Remarks:
Beneficiaries have less choice so the project is more focused on specific results targeted by the content of the voucher.
- The “conditional” related modalities of projects implementation are considered based on their urgent needs and therefore could take more time to be set up.
If time is important then IOshould define clearly what would the timeframe of each steps.
- Selection of beneficiaries
- Selection of suppliers (cash, voucher) providing vouchers or distributing cash.
- Distribution
The time to deliver compare to the type of modality could consider the followings table
Modality / Time considerationUnconditional cash transfers / Most urgent. Less than 2 weeks..
Unconditional vouchers / Urgent. Less than 5 weeks.
Conditional cash transfers / vouchers / Not urgent.
Nb: The approach to targeting beneficiaries would also be a key element impacting significantly on the timing of the project. High percentage of the community selected would be faster than selection process with complex selection criteria or with only small percentage of the community selected.