Safety Net Study in Somalia

Safety Net Study in Somalia PREPARED FOR:

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 Acknowledgements The cooperation and assistance of several organization and individuals were crucial in the implementationofthisfeasibilitystudy,andthustheresearchteamwouldliketoextendtheir sinceregratitudetothebaidoadistrictgovernment,residentsofbaidoa,andfinallythecoopi InternationalBaidoateam. ThefollowingindividualsatForcierConsultingcontributedtotheresearchandanalysisofthis reports: ErinSatterlee,ManagingDirector Somalia EeroWahlstedt,ResearchManager Somalia LauraWeinstein,Analyst AbdiAden,Researcher BakhtBaryar,Researcher ErinSatterlee ManagingDirector ForcierConsulting Somalia September2014 LegalNoticeandDisclaimer All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmittedinanyformwithoutpriorapprovalinwritingfromcoopiandforcierconsulting.survey datacollectedispropertyofcoopi. This report is not a legally binding document. It is a collaborative informational and assessment documentanddoesnotnecessarilyreflecttheviewsofanyofthecontributingpartnersinallofits contents.anyerrorsarethesoleresponsibilityoftheauthors. i

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 Copyright ForcierConsulting.Allrightsreserved. TableofContents Acknowledgements...i ExecutiveSummary...5 1 Introduction...8 1.1 ProjectBackground...8 1.2 COOPIinSomalia...9 2 ObjectivesandMethodology...10 2.1 Objectives...10 2.2 MethodologicalFramework...10 2.2.1 DeskReview...10 2.2.2 QuantitativeMethodology...10 2.2.3 QualitativeMethodology...11 3 KeyFindings...12 3.1 LivelihoodRisks,MitigationMeasures,&PreparednessPractices...12 3.2 LongZTermCashTransferProgramFeasibility...15 3.2.1 MarketAssessment...15 3.2.2 MoneyTransferOrganization(MTO)Assessment...22 3.2.3 OpportunitiesforLocalGovernmentEngagement...27 3.2.4 AdverseImpacts&ProgramImprovement...30 3.3 ImpactAnalysis:SafetyNetandCashTransferPrograms...33 3.3.1 RiskAnalysis...36 3.3.2 MonitoringandEvaluation...37 4 Conclusions&Recommendations...38 5 QualitativeTools...40 5.1 FocusGroupDiscussionGuide...40 5.1.1 CashZTransferbeneficiaries...40 5.1.2 Localbusinessmenandtraders...44 5.2 LocalGovernmentOfficials(IDI)...47 5.3 COOPI&ACTEDProgramStaff(IDI)...50 ii

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 5.4 Paymentserviceprovidersinfinancialnetworks(IDI)...52 5.5 Localcommunityleadersandelders(IDI)...55 Annex1:QuantitativeQuestionnaireforfieldsurveys...59 Annex2:QualitativeQuestionnaire:ListofParticipants...74 Annex3:Commodities:MEB&PriceMonitoringSurvey...75 Annex4:TermsofReference...76 ListofTables Table1:ParticipantsbyVillageandGender,BaidoaDistrict(August2014)...11 Table2:QualitativeDataCollection.BaidoaDistrict(August2014)...11 Table3:HouseholdIncomeLevelsbyWealthGroup:Baidoa(April2006ZMarch2007)...16 Table4:MoneyTransferOrganizations,Baidoa...22 Table5:RiskAnalysis...36 Table6:KeyMonitoringIndicators...37 ListofFigures Figure1:Whichofthefollowingriskfactorshasthegreatestoverallimpactonyourlivelihood?...12 Figure2:Howsignificantarethefollowingproblemsinyourcommunity?...13 Figure3:Whatisthegreatestrisktoyourlivelihood?AgroZPastoralistsvs.Pastoralists...13 Figure4:Howmanytimesperyeardoyouexperiencethisrisk?Pastoralistsvs.AgroZPastoralists...14 Figure5:Whatisthegreatestrisktoyourlivelihoodinthewetvs.dryseason?...14 Figure6:Howmuchofyourincomeisspentonfooditems?...16 Figure7:Wheredoyougotobuyyourprimaryfoodandgroceries?...17 Figure8:TrendsinCerealPrices,SorghumBelt...18 Figure9:TrendsinImportedCommodityPrices,BaidoaDistrict...19 Figure10:Wouldyouprefercashdisbursementsorfoodaid,ordoesitmattersignificantly?...20 Figure11:ConvenienceandFlexibilityofCashDisbursements...21 Figure12:PercentageofSurveyParticipantsFamiliarwithMobileBankingProvidersinBaidoa...24 Figure13:Howfrequentlydoyouoramemberofyourhouseholdusemobileservicesforcash payments?...25 Figure14:Wouldyouprefertoreceivecashtransfersonacellphoneorbyhand?...26 Figure15:Areyouawareofyourlocalgovernmentbeinginvolvedincashorfoodaid?...28 Figure16:Howhelpfuldoyouthinklocalofficialsareinmattersofaiddisbursement?...29 Figure17:Towhatextentshouldlocalofficialsplayaroleincashorfooddistributionprograms?...29 Figure18:Howmuchcontroldoyouhaveoveryourhouseholdfinances?...30 Figure19:Haveyoueverbeenapartofafoodorcashbasedprogram?...33 iii

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 Figure20:OrganizationsimplementingfoodandcashtransferprogramsinBaidoa...34 Figure21:Doyouthinkcashand/orfoodtransfershelpedyouinanysubstantialway?...34 Figure22:Howeffectivearecash&foodtransferprogramsindeliveringaidtoyourcommunity?...35 Acronyms ACTED AgencyforTechnicalCooperationandDevelopment AMNISOM AfricanUnionMissioninSomalia COOPI CooperazioneInternazionale CVMG CashVoucherMonitoringGroup DRC DanishRefugeeCouncil ECHO EuropeanHumanitarianAidandCivilProtectionDepartment FGD FocusGroupDiscussion FSNAU FoodSecurityandNutritionAnalysisUnitZSomalia IDI InZdepthInterview IDPs InternallyDisplacedPeople MEB MinimumExpenditureBasket MTO MoneyTransferOrganization NGO NonZGovernmentalOrganization NRC NorwegianRefugeeCouncil UNDP UnitedNationsDevelopmentProgramme iv

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 ExecutiveSummary In response to the 2011 famine and humanitarian crisis in South Central Somalia, Cooperazione Internazionale (COOPI) implemented a voucher based cash transfer program in 14 districts targeting 15,000 vulnerable households. This intervention was part of a larger, multizngo emergency cash transfer program which transferred over US$200 million to 233,436 households from 2011 through 2014. 1 Dueto the efficiency and effectiveness of these programs in addressing acute food insecurity, COOPI seeks to evaluate the feasibility of implementing a longer term safety net scheme in order to prevent chronically vulnerable and food insecure households from falling further below the poverty line. 2 Forcier Consulting conducted a feasibility study on behalf of COOPI to assess the relevance, effectiveness, efficiency, appropriateness, and impact of moving from a humanitarian cash transfer programtoapredictablecashzbasedsafetynetschemeinruralbaidoadistrictofsouthcentralsomalia. Data was collected in August 2014 among 214 residents in Bonkay, AwZadinle, Eykilban, Midow, Mooshe,Misgaale,Bullahaiiya,BullaJay,andEdadalocationsinBaidoaDistrict.Focusgroupdiscussions andinzdepthinterviewswerealsoconductedinbaidoadistrict. Section 1 of the following report provides a background on food insecurity in Baidoa District and COOPI sworkinsomalia.section2ofthereportidentifiestheobjectivesofthisassessment,aswellas the quantitative and qualitative methods used. The key findings are highlighted and explained in the followingsection.thefinalsectionprovidesrecommendationsforprogrammaticapproachestoaddress theimmediateprioritieswithregardstostrengtheningandexpandingsafetynetsystemsinthespecific targetedareaofoperation. Key findings from the feasibility study are as follows and reflect the views of survey participants, communityleaders,paymentserviceproviders,ngostaff,andgovernmentofficials: LivelihoodRisks&MitigationMeasures: LivelihoodRisks:Overhalfofsurveyparticipantsindicatedthatdroughthasthegreatestoverall impact on their livelihood (54.7, n=117) with onezthird of participants indicating that unemployment(15,n=32)andcivilinsecurity(15,n=32)constitutedthegreatestthreatto their livelihood. Nearly twozthirds of all respondents reported that these economic shocks occurredtwoormoretimesperyear(67,n=143). Coping Strategies: FDG participants noted that the most vulnerable groups use a variety of copingmechanismsinresponsetoeconomicshockssuchasgoingintoshortztermdebt,finding other sources of income through casual labor, and accessing traditional safety nets such as zakat. 1 Dunn,S.,Brewin,M.,&Scek,A.(2014)FinalMonitoringReportoftheSomaliaCashandVoucherTransfer Programme. 2 Ibid 5

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 MarketAssessment: FactorsSuggestingMarketFunctioning: High consumer demand for goods: Over threezfourths (83.6, n=214) of survey participantsindicatedthattheyarenotlivingcomfortablyontheircurrentincomewith nearly twozthirds (61.2, n=179) indicating that they spend most of their money on food.aslightlyhigherpercentageofpastoralists(65.1)indicatethattheyspendmore oftheirincomeonfoodthanagrozpastoralists(58.2) Market accessibility: Almost half of survey participants indicated that they go to the marketatleastonceaweek(47.7,n=102),whiletheremainingparticipantsreported thattheygoatleasttwoormoretimeseachweek(49.6,n=106). Market supplies: FDG participants reported that the can currently get all of the food andnonzfooditemstheyneedinlocalmarkets. FactorsLimitingMarketFunctioning: CivilInsecurity:Tradersandbusinessmenreportthattravelalongmajortradingroutes isrestrictedbyalzshabaab.threatsofambushandillegalblockadesimposerestrictions ontheprovisionofmarketsuppliestobaidoafrommogadishu. Rising local cereal prices: FSNAU (2014) reports that rising local cereal prices could generate additional inflationary pressures in the Bay region independent of demandz sideinterventions.however,inflationarypressuresfromrisinglocalcerealpricesmay beoffsetbyincreasesinagriculturalwages. MoneyTransferOrganization(MTO)Assessment: Capacity to expand services:inzdepthinterviewswithemployeesatbothhawalaandmobile cash payment agencies indicate that local Money Transfer Organization (MTOs) have the capacity in terms of infrastructure and personnel to implement additional cash transfer programsinbaidoa. Supportformobilecashpaymentsystems:Althoughamajorityofsurveyparticipantsreported thattheyhadneverusedmobilebankingservices(67.8,n=145)orknewofanyoneintheir householdusingtheseservices(57.1,n=18),almosthalfofparticipantsindicatedthatitwas eitherextremelylikely(15,n=32)orsomewhatlikely(30.4,n=65)thattheywouldusesuch servicesontheirphoneinthefuturetomakeandreceivepayments.furthermore, Barrierstomobilecashpayments:CellphoneownershipislimitedinBaidoa;lessthanhalfof surveyparticipantsindicatedthatthey(18.2,n=39)oramemberoftheirhousehold(21.5, n=46)ownedacellphone.almostallsurveyparticipantsindicatedthatiftheyparticipatedina cashtransferprogram,thatitwouldbemoreconvenienttoreceivethecashtransfermanually (95.3,n=204)ratherthanthroughacellphone(3.7,n=8). 6

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 StakeholderAnalysis: Local Government: While there are opportunities for NGOs to engage local government authoritiesintheplanningandimplementationofcashtransferprograms,cashbeneficiariesdo notbelievethegovernmentshouldplayaprimaryroleinaiddistribution.althoughalmostonez fourthofparticipantsthoughtthegovernmentwasveryhelpful(10.7,n=23)inmattersofaid disbursementorindifferent(6.1,n=13)abouttheirinvolvement,theremainingthreezfourths ofparticipantsrespondedthatthegovernmentwaseithernothelpfulalall(35.5,n=76),did notknow(41.4,n=88),orrefusedtoanswer(6.5,n=14). AdverseImpacts:FDGandIDIparticipantsreportedthatthegreatestadverseimpactofalong termcashtransferprogramisthatcorruptandunfairtargetingcriteriacouldfacilitateeconomic inequalities. They indicated that it is important for NGOs to have clear selection criteria and involvelocalcommunityleadersandelderswhentargetingbeneficiaries. ImpactAnalysis: Cash transfer effectiveness: Cash transfer beneficiaries were unanimous in their positive assessmentoffoodandcashtransferprograms,indicatingthattheprogrameitherhelpedtoa largeextent(58.7,n=54)orhelpedtosomeextent(35.9,n=33).whiletherearebenefitsto bothcashandfoodtransfers,nearlytwozthirdsofsurveyparticipantsindicatedthattheywould strongly(29.4,n=63)orsomewhat(40.7,n=87)preferacashtransferoverafoodtransfer (9.3, n=20). Furthermore, given the restricted humanitarian access in Baidoa, cash transfers aremorefeasiblethandirectfooddisbursements. 7

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 1 Introduction 1.1 ProjectBackground With an estimated population of 227,761 people, Baidoa District is the largest and most populated DistrictintheBayRegionwithanurbanpopulationof59,110peopleand168,654peoplelivinginrural areassurroundingbaidoatown(undppopulationestimates,2005).baidoaisthetradingcenterofthe SorghumZBeltandcontainstworurallivelihoodzones:BayAgroZpastoralHighPotentialandBayBakool AgroZpastoralLowPotentialLivelihoodZones. 3 Similar to other regions in SouthZCentral Somalia, many Baidoa residents are facing acute food insecurity. 4 AccordingtotheFSNAUestimates,857,000peopleinSomaliaarestillinFoodSecurityCrisis (IPCPhase3)orEmergency(IPCphase4),requiringurgenthumanitarianassistance.Inaddition,over two million people will barely be able to meet their own minimal food requirements. Most of these peopledependonemergencyrelieftomeettheirbasicneeds. SincehumanitarianaccesstoBaidoaisrestrictedbecauseofpersistentsecuritythreatsintheregion, responsetohungerandvulnerabilitythroughfoodreliefisbothexpensiveanddangerous.although Baidoa District was liberated from AlZShabaab by Somali and Ethiopian forces in February 2012, humanitarian access to the area is prohibited and AlZShabaab continues to impede access along the BaidoaZMogadishuroadandsurroundingruralareas. 5 In this context of food insecurity and restricted humanitarian access, COOPI has been responding by investing in conditional and unconditional cash transfers in Baidoa, with the aim of protecting livelihoodsandpreventingfurtherdestitutionforthemostvulnerable.thisprogramispartofcoopi s larger cash transfer initiative which has implemented cash transfers in 14 Districts targeting 15,000 vulnerable households. Given the effectiveness and efficiency of cash transfer programs in Somalia, COOPI is willing to strengthen the current cash transfer program and gradually engage in long term safetynetprogramminginsouthcentralsomaliaaimedatpreventingthemostvulnerablecommunities in falling further below the poverty line. 6 While longerzterm cash transfer programs have been successfulinothercountriessuchasethiopia,itisfirstimportanttoexaminetheneed,appropriateness, and potential effectiveness of such programs in Baidoa District and whether they can complement existingsafetynetsystemsandfillthesocialsupportgap. 7 3 FSNAU(2009)BaidoaUrbanLivelihoodBaselineProfile 4 FSNAU(June25,2014)QuarterlyFoodSecurity&NutritionReport 5 Sabahi(February22,2012) AlZShabaabfightersfleeasSomali,EthiopianforcescaptureBaidoa 6 Dunn,S.,Brewin,M.,&Scek,A.(2014)FinalMonitoringReportoftheSomaliaCashandVoucherTransfer Programme. 7 Gilligan,D.,Hoddinott,J.,Taffesse,A.(2008)TheImpactofEthiopia sproductivesafetynetprogrammeandits Linkages 8

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 1.2 COOPIinSomalia COOPIZCooperazioneInternazionaleisaninternationalNGOwhoseheadquartersisinMilan,Italy.The organization was founded in 1965 COOPI's development programs and emergency interventions are carried out in 24 countries in Africa, Latin America and Asia. Through the commitment, involvement, resolutionandprofessionalismofitsstaff,coopicontributestotheprocessoffightingagainstpoverty andgrowthofthecommunitieswithwhichitcooperatesallovertheworld,interveninginsituationsof emergency,reconstructionanddevelopment,inordertoreducethevulnerabilitiesofcommunitiesin depressedordevelopingareas.coopiaspirestoaworldwithoutpoverty,abletoachievetheidealsof equalityandjustice,sustainabledevelopmentandsocialcohesion. Since 1992, COOPI has implemented projects in Somalia to improve access to healthcare, education, food and financial security, and to overcome vulnerabilities to the emergency situation generated by war,civilconflictandnaturaldisasters.currently,coopioperatesinthethreemainzonesofsomalia: northzwestern zone of Somaliland; the semizautonomous Puntland State in the north east; and the South Central zone of Somalia. Programs in South Central Somalia aim at saving lives and protect/improvelivelihoodsofthemostvulnerablefamilies.programsareimplementedinaccordance to the humanitarian principles, observing doznozharm principles and through participatory and collaborativeapproaches.coopiprogramsmainstreamgender,environmentalprotection,anddisaster risk reduction. COOPI seeks to link emergency response with recovery actions to promote resilience buildingathouseholdandcommunitylevel.interventionsaredesignedbasedonsoundandcoordinated situationalandgapsassessments,andtailoredtoneedsandcircumstancesoftargetgroupsconsidering sustainable solution to the problem stated by the communities. COOPI programs seek to promote accountability to target groups through transparent and participatory approaches, and triangulated monitoring.consideringvolatile security situation in Somalia, COOPI adopts cautious approaches and operationalguidelinestominimizestaffrisks. Over the past 5 years, COOPI has implemented in partnership with ECHO integrated multizsectoral projectswithanaimtocreatesynergyandincreaseimpactofinterventionsonthehealthandnutrition statusofthebeneficiaries.interventionspackagescompriseofwash,foodaid,andlivelihoodrelated activities. 9

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 2 ObjectivesandMethodology 2.1 Objectives The objective of this study is to provide an inzdepth analysis and understanding of the safety net approach in Baidoa District and how it could contribute to strengthen the resilience of the communities/beneficiaries involved as well as the improvement of the local economy. The specific objectivesofthestudyareto: Assessthelivelihoodrisks,mitigationmeasuresandpreparednesspracticesinruralBaidoa; AssessthefeasibilityofimplementingacashZbasedsafetynetprogram; Analyzetheimpactofsafetynetsprogrammingonhouseholds vulnerabilitytoshocks; AssessandrecommendtheappropriateMonitoringandEvaluation(M&E)systems; Recommend programmatic approaches to address the immediate priorities with regards to strengtheningandexpandingsafetynetsystemsinbaidoadistrict 2.2 MethodologicalFramework In order to gain a comprehensive understanding of the feasibility of a safety net approach in Baidoa District, a combination of qualitative and quantitative research techniques were employed. Data collection was carried out in the rural villages of Bonkay, AwZadinle, Awdinle, Eykilaban, Midow, Mooshe, Misgaale, Bulla Hajiya, Bulla Jay, and Edada villages in Baidoa District in August 2014. To provide a robust quantitative overview of residents of rural Baidoa District, site locations and householdswererandomlyselectedfromforcier sbaidoasampleframe. 2.2.1 DeskReview Acomprehensivedeskreviewofallavailabledocumentswasconducted,includingSomalia sfoodsafety and Nutrition Analysis Unit (FSNAU) market and baseline reports and other relevant documents providedbycoopi. 2.2.2 QuantitativeMethodology A quantitative survey was conducted that included respondent perceptions about livelihood risks, effectiveness of cash transfer programs,localpurchasingpreferences,theroleof localofficialsin aid disbursement, and mobile payment services. Random sampling was usedto administer the survey in Bonkay, AwZadinle, Awdinle, Eykilaban, Midow, Mooshe, Misgaale, Bulla Hajiya, Bulla Jay, and Edada 10

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 villagesinbaidoadistrict.thesurveywasplannedtobegivento20participantsineachvillage.atotal of214participantsweresurveyed. 8 Table1:ParticipantsbyVillageandGender,BaidoaDistrict(August2014) Bonkay AwZ adinle Awdinle Eykilaban Midow Mooshe Misgaale Bulla Hajiy Bulla Jay Edada Total 25 20 23 25 21 21 19 20 20 20 Male 18 14 6 7 14 8 10 13 14 8 Female 7 6 17 18 7 13 9 7 6 12 In each location surveys were randomly distributed across households and respondents to ensure a representativesample. 9 Fourenumeratorscollecteddatafrom12to18August2014.Datawascollected in the local language (Somali) using smartphones, whereby data was exported to a mobile collection website. The dataset was analyzed by using statistical software with technical guidance provided by SwissPeaks,anindependentqualitycontrolfirm,whocarriedoutadditionaldatacleaningandreliability checksduringdataprocessing. 2.2.3 QualitativeMethodology QuantitativedatawassupplementedwithqualitativedatacollectedviaFocusGroupDiscussions(FDG) andinzdepthinterviews(idis).withinbaidoadistict,fdgswereheldwithcashbeneficiariesandlocal businessmenandtraders.eachfdgconsistedof2participantsandtookbetween60and90minutes, dependingontheresearcher slevelofexperienceandtheknowledgeofparticipants. InZdepth interviews were conducted with local government officials, payment service providers, NGO programstaff,andlocalcommunityleadersandelders.atotalof8inzdepthinterviewswereconducted. Table2:QualitativeDataCollection.BaidoaDistrict(August2014) InterviewClassification Group Quantity FGD CashTransferBeneficiaries 1 FGD LocalBusinessmenandTraders 1 IDI LocalGovernmentOfficial (MayorofBaidoa) 1 8 The10locationsvisitedinthestudywereselectedviaacombinationofrandomselectionfromForcier Consulting sinternalbaidoasampleframeinadditiontosamplelocationsselectedbycoopistaffmembers. Householdandrespondentselectionwereconductedusingasystematicrandomsamplingapproach. 9 Onceahouseholdwasselectedforenumeration,thesurveyoremployedarandomcarddrawmethodinorder providemaximumrandomnessinparticipationselection.eachmemberofthehomewerelistedandnumberedon paper.enumeratorsthenproceededwithablindcarddrawtodeterminewhichperson(number)willparticipatein thesurvey. 11

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 IDI IDI PaymentServiceProviders (EmployeesofHormuudandDahabshill) NGOProgramStaff (COOPIandACTEDProgramStaff) 2 2 IDI LocalCommunityLeaders&Elders 3 3 KeyFindings 3.1 LivelihoodRisks,MitigationMeasures,&PreparednessPractices Baidoa frequently experiences many shocks and residents economic stability is constantly at risk. PoorergroupsfindthemselvesmostthreatenedbydisruptionstoBaidoa seconomy,astheyjustbarely meetminimumfoodrequirementsduringanormalyearandhavefeweroptionsforcopingwithshocks. Thissectionusesquantitativeandqualitativedatatooutlinethenature,frequency,andseasonalityof economicshocksaswellastheexistingcommunityzbasedcopingmechanismsvulnerablegroupsuseto mitigatetheserisks. Overhalfofsurveyparticipantsindicatedthatdroughthasthegreatestoverallimpactontheirlivelihood (54.7, n=117) with onezthird of participants indicating that unemployment (15, n=32) and civil insecurity (15, n=32) constituted the greatest threat to their livelihood. Nearly twozthirds of respondentsreportedthattheseeconomicshocksoccurredtwoormoretimesperyear(67,n=143). Figure1:Whichofthefollowingriskfactorshasthegreatestoverallimpactonyourlivelihood? Drought(n=117) 54.7 Unemployment(n=32) Civilinsecurity(n=32) 15.0 15.0 IncreasedCerealPrices(n=15) Inflabon(n=7) Disease(n=5) WaterShortages(n=4) 7.0 3.3 2.3 1.9 The survey results are consistent with responses from FGD participants who listed drought, unemployment, and civil insecurity as the most common risks to the economic livelihood of their community.amajorityofsurveyparticipantsalsoindicatedthatlackofinfrastructure,unemployment, security,governmentweakness,andnaturaldisastersareeitheraveryorsomewhatsignificantproblem 12

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 in their community. Participants were almost unanimous in the opinion that unemployment (80.4, n=172)andlackofinfrastructure(94,n=202)areverysignificantproblemsintheircommunity. Figure2:Howsignificantarethefollowingproblemsinyourcommunity? Verysignificant Somewhatsignificant Notatallsignificant Don tknow Refusedtoanswer LackofInfrastructure Unemployment Security GovernmentWeakness ClanIssues NaturalDisasters 0.0 20.0 40.0 60.0 80.0 100.0 The impact of different economic risks varies across livelihood groups but is consistent across other demographic factors such as gender, age, education, and employment. Figure 3 shows that a higher percentage of agrozpastoralists than pastoralists listed drought and unemployment as having the greatestoverallimpactontheirlivelihoodwhilepastoralistsweremoreconcernedwithcivilinsecurity, increasedcerealpricesandinflation. 10 However,pastoralistsexperiencetheseshocksaslightlygreater frequencythanagrozpastoralists(seefigure4). Figure3:Whatisthegreatestrisktoyourlivelihood?AgroQPastoralistsvs.Pastoralists Drought Unemployment Civilinsecurity WaterShortages IncreasedCerealPrices Inflabon 11.6 18.0 22.1 9.8 1.2 2.5 14.0 1.6 7.0 0.0 39.5 65.6 Pastoralist AgroZPastoralist 10 Typeofresidenceonthesurveyisusedasaproxyforclassifyingparticipantsas agrozpastoralist or pastoralist. Participantslivingin basichuts arecodedas agrozpastoralists whileparticipantslivingin nomadictents are codedas pastoralists. 13

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 Figure4:Howmanytimesperyeardoyouexperiencethisrisk?Pastoralistsvs.AgroQPastoralists 38.40 32.20 32.2 31.4 19.0 10.5 19.8 15.7 3ormore bmesper year 2bmesper year 1bmeper year Don t know AgroZpastoralist(n=121) Pastoralist(n=86) SeasonalCalendar Survey results indicate that the impact of economic shocks varies across wet and dry seasons. The seasonalcalendarinbaidoadirectlyinfluencesthenatureofproductiveactivitiesandcorrelatesstrongly withdifferenteconomicvulnerabilities.economicactivitiesarethehighestduringthetwodryseasons ofhagaa(julyzseptember)andjilaal(januaryzmarch).sincecropsareharvestedduringthedryseason andcerealavailabilityishigh,surveyparticipantsindicatedthatcerealpricesandinflationdonotposea significantrisktolivelihoodsduringtheseseasons.however,halfofparticipantsindicatedthatdrought (50,n=107)andwatershortages(24.8,n=53)canposesignificantrisksduringthedryseason.Cereal cropsaregrownduringthetwowetseasonsofgu(aprilzjune)anddeyr(octoberzdecember).during therainyseasons,nearlyonezthirdofsurveyparticipantsindicatedthatincreasesincerealpricesisthe greatest risk to their livelihood (28, n=60), while another third of participants report that diseases, including,malarialoutbreaks,(28,n=60)posethegreatesteconomicrisk. Figure5:Whatisthegreatestrisktoyourlivelihoodinthewetvs.dryseason? Drought WaterShortages Disease IncreasedCerealPrices Inflabon Unemployment Don tknow Civilinsecurity 2.3 0.9 6.1 5.6 5.6 16.4 5.1 11.7 1.4 10.3 1.4 2.3 24.8 28.0 28.0 50.0 DrySeason(JulyZSept;JanZMarch) WetSeason(AprilZJune;OctZDec) 14

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 CopingStrategies&TraditionalSafetyNets FDGandIDIparticipantsindicatedthatcommunitymemberswhoaremostaffectedbyeconomicshocks useseveralcopingmechanismstomitigatethenegativeeffectsoftheseshocks.first,somevulnerable groupsgointodebttomeettheirbasicneedsandrepaytheirdebtorsaftertheirlivestockissoldand cropsareharvested.however,onecommunityleadernotedthatthe2011famineandrecentsecurity criseshaslimitedthenumberoftradersandlenderswhoarewillingtoextendcredittoconsumers.this anecdotesuggeststhatthatfewercopingmechanismsareavailableforthemostvulnerablecommunity members. Second, many people rely on finding other sources of income such as selling charcoal or findingcausallaboronfarms,inconstructionactivities,orindomestichouseholds.finally,vulnerable groups increase their reliance on traditional safety nets such as zakat, where community members collectdonationsforthepoorestmembersoftheircommunity.severalcommunityleadersnotedthat zakat contributions have decreased because of the overall decline in livelihoods and demands by Al Shabaab for monetary contributions. During security crises, FGD participants indicated that Internally DisplacedPeoples(IDPs)maybehostedbyfamilymembersandgiventemporaryshelter.Community leadersreportthatinordertoidentifythepeopleand/orgroupswhoaremostinneedofassistance, manycommunitiescreateapaneloflocalleaders,religiousmembers,andbusinessmentodeterminea final list of zakat beneficiaries. Although remittances from friends and family from the Diaspora constitute an important coping mechanismformanysomalis,fsnau(2009)findsthatthataccess to thesefundsislimitedamongpoorandmiddlezincomefamiliesinbaidoa. 11 3.2 LongZTermCashTransferProgramFeasibility 3.2.1 MarketAssessment Previousstudiesofshorttermcashtransfersconcludethattheseprogramsdidnotleadtoanoticeable inflationof food prices. 12 Thissectionofthestudyusesacombinationofquantitativeandqualitative datatoevaluatethemarketfeasibilityofalongtermcashzbasedsafetynetprograminbaidoa.overall this section finds that while there are several factors, such as market accessibility and consumer demand, which indicate that Baidoa markets have the capacity to increase supplies in response to demand,therearealsoseveralmitigatingfactors,suchasinsecurityandrisingcerealprices,whichcould potentiallyimpedethemarket ssupplyresponse.specifically,thissectionoutlinestheextenttowhich households economicandphysicalaccesstomarkets,marketsupplies,localfoodprices,andconsumer preferencesareconducivetoapredictablecashtransferprogram. HouseholdsEconomicandPhysicalAccesstoMarkets Survey and FGD participants indicate that there is a high local demand for goods in Baidoa and accessibilitytolocalmarketsbutweakpurchasingpowerasresultofcollapsinglivelihoods.overthreez fourths (83.6, n=214) of survey participants indicated that they are not living comfortably on their 11 FSNAU(2009)BaidoaLivelihoodBaselineProfile 12 Dunn,S.,Brewin,M.,&Scek,A.(2014)FinalMonitoringReportoftheSomaliaCashandVoucherTransfer Programme. 15

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 currentincomewithnearlytwozthirds(61.2,n=179)indicatingthattheyspendmostoftheirmoneyon food.thefollowingtableoutlinestherangeofhouseholdincomelevelsbywealthgroupinbaidoa. 13 ThisresultissimilartoaFSNAUlivelihoodbaselinestudyfortheBayAgroZpastoralregion,whichfinds that60percentofhouseholdincomeisspentonfood. 14 Table3:HouseholdIncomeLevelsbyWealthGroup:Baidoa(April2006QMarch2007) VeryPoor Poor LowerMiddle UpperMiddle BetterZOff <22,000SoSh 22,000Z32,000SoSh 32,000Z57,000SoSH 57,000Z80,000SoSh >80,000SoSh Figure6:Howmuchofyourincomeisspentonfooditems? 61.2 31.3 7.0 0.5 Mostof it (n=131) Someof it(n=67) Very likle (n=15) Don t know (n=1) FoodinsecurehouseholdsarealsowellconnectedtolocalmarketsinBaidoa.FDGparticipantsreported thattherearenosignificantbarrierstoaccessingmarkets.almosthalfofsurveyparticipantsindicated that they go to the market at least once a week (47.7, n=102), while the remaining participants reportedthattheygoatleasttwoormoretimeseachweek(49.6,n=106).mostsurveyparticipants buytheirprimarygroceriesfromthetownmarket(58,n=124),whileothersgotocartvendors(18.7, n=40),themaincitycentremarket(17.8,n=38),orlocalshops(5.1,n=11).almostallrespondents reportedthatdryitems(93.0,n=199)constitutethelargestpartoftheirhouseholdfoodbudgetover thanfreshproduce(3.7,n=8),withovertwozthirds(77.4,n=164)havingsomeornomoneyleftto spendonotherfooditems.thisresultisconsistentacrossagrozpastoralistsandpastoralists. 13 FSNAU(2009)BaidoaUrbanLivelihoodBaselineReport 14 Ibid 16

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 Figure7:Wheredoyougotobuyyourprimaryfoodandgroceries? 18 5 TownMarket(n=124) CartVendor(n=40) 19 58 MainCityCentreMarket (n=38) Localshop(n=11) MarketSupplies&Availability Although Baidoa markets have fewer internal trade restrictions than other regions in South Central Somalia,localbusinessmenandtradersreportedinfocusgroupdiscussionsthattheirabilitytoprocure goodsandaccessmarketshavebeenaffectedbycivilinsecurity.oneofthegreatestobstaclesfacedby traders and businessmen is the possibility of an ambush from AlZShabaab when travelling with their goods. They also indicated that AlZShabaab has set up illegal blockades along the BaidoaZMogadishu roadanddemandpaymentsinexchangeforsafepassage.inordertomitigatethesetraderestrictions, interviewees proposed that the government should be responsible for protecting traders property rights. In the past few months, the African Union Mission in Somalia (AMISOM) has placed multiple troopsalongthebaidoazmogadishuroadtohelppreventfutureattacks. 15 Despitethesetraderestrictions,FDGparticipantsnotedthattheycangetallthefoodandgoodsthey needatlocalmarkets.participantsexplainedthatifthereisashortageofaparticularcommodity,local traderscanorderthegoodsdirectlyfrommogadishu.localtradersandbusinessmenfurtherconfirmed that markets contain most of the item that buyers need and that the prices of local goods can be maintainedinresponsetodemandifbuyersareusinghardcurrency.thesefindingssuggestthatbaidoa markets will have the capacity to increase supplies to meet an increase in demand as long as the securitysituationalongthebaidoazmogadishuroaddoesnotcontinuetodeteriorate. LocalCerealandImportedCommodityPrices FoodpriceinflationremainslikelyindependentofdemandZsideinterventionsbecauseofrisingcereal prices. Figure 8 shows the increase in red sorghum prices in the Bay region from 2,000 SoSh/1 kg in January2013,toalmost6,000SoShinJune2014. 16 AccordingtoFSNAU sfoodsecurity&nutritionbrief (2014), price increases are the result of low stocks from the below average Deyr 2013/2014 harvest, 15 Sabahi(August25,2014) ChallengesaheadasAMISOMforcespreparefornextAlZShabaaboffensive 16 DatacompiledfromFSNAU SomaliaIntegratedDatabaseSystem 17

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 reduced crop production from below normal Gu rains, and disruptions in farming activities cause by armed conflicts in high agricultural potential areas. However, Figure 8 also demonstrates that local cerealpricesaresignificantlylowerinthebayregioncomparedtootherregionsinthesorghumzgrowing beltsuchasgedo,bakool,andhiraanbecauseofintensifiedconflictintheseareas.thestrongprice integrationofbaidoacerealpriceswithothermarketssuggeststhatpricevariationsarenottheresult localsupplyzsidedisruptions. 17 Furthermore,increasesinagriculturalwagesassociatedwithhigherfood pricesslightlyoffsettheseinflationarypressures. 18 Figure8:TrendsinCerealPrices,SorghumBelt SomaliShillings(SoSH) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 BayCereal(RedSorghum) GedoCereal(RedSorghum) BakoolCereal(Red Sorghum) HiraanCereal(White Sorghum) Unlike local cereal prices, prices of essential imported commodities such as red rice and sugar have remainedrelativelystableovertime.figure9showsthatcommoditypricesinbaidoahavenotchanged significantlyfromjanuary2013throughjune2014. 19 17 FSNAU2014 FoodSecurityandNutritionQuarterly 18 Ibid 19 DatacompiledfromFSNAU SomaliaIntegratedDatabaseSystem 18

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 Figure9:TrendsinImportedCommodityPrices,BaidoaDistrict 40,000 35,000 SomaliShillings(SoSH) 30,000 25,000 20,000 15,000 10,000 5,000 ImportedRedRice(1kg) VegetableOil(1litre) Sugar Petro(1litre) 0 JanZ13 FebZ13 MarZ13 AprZ13 MayZ13 JunZ13 JulZ13 AugZ13 SepZ13 OctZ13 NovZ13 DecZ13 JanZ14 FebZ14 MarZ14 AprZ14 MayZ14 JunZ14 ValuesandIntervalsofCashTransfers SincethegoalofapredictablesafetynetprogramisaddresslongZtermvulnerabilityratherthanacute foodinsecurity,themonthlyvalueofabenefitreceivedfromalongztermcashtransferprogramshould be less than the monthly value allocated during shortzterm interventions. Among the NGOs who distributedcashthroughthecollaborativecashvouchermonitoringgroup(cvmg)initiativeinsomalia in2011,theaveragebeneficiaryreceived$65usdpermonth. 20 However,beneficiariesonlyreceived transfers over a period of one to five months, with the longest programs allocating lower monthly benefits. Although there is significant variation in the level of benefits provided by predictable safety net programs in Africa, the WorldBank contends that benchmarks can be established from existing cash transfer programs based on minimum consumption standards. 21 A survey of thirteen safety net programs in Africa revealed that monthly cash transfers range from 20 to 40 of annual minimum consumption needs. 22 FSNAU (2014) calculates that based on Minimum Expenditure Based (MEB) of basicfoods(cereal,oil,andsugar),themonthlyminimumcostoflivingisapproximately$58usdinthe Bay region or approximately $700 USD per year. 23 Based on the benchmark range established by the WorldBanksurvey,itisrecommendedthatalongZtermcashtransferprogramtransfersbetween$140Z $280USDtoprogramparticipantsannuallyinmonthlyallocationsof$12Z$23USDinordertomitigate 20 Dunn,S.,Brewin,M.,&Scek,A.(2014)FinalMonitoringReportoftheSomaliaCashandVoucherTransfer Programme 21 Monchuk,V.(2013)ReducingPovertyandInvestinginPeople:TheNewRoleofSafetyNetsinAfrica.World Bank. 22 ThesesurveyswereconductedinBurkinaFaso,Ethiopia,Ghana,Kenya,Lesotho,Liberia,Mali,Mauritania, Mauritius,Rwanda,Swaziland,Togo,andZambia. 23 FSNAU(2014)FoodSecurity&NutritionQuarterlyReport 19

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 vulnerabilities to economic shocks during the dry seasons and enable households to make capital investmentsduringthewetseason. CashTransfersvs.FoodAid:ConsumerPreferences InadditiontoBaidoamarketstructuresandperformancesupportingadditionaldemandZsideratherthan supplyzsideaidinterventions,surveyresultsalsoindicatethatthelocalpopulationpreferstheflexibility andconvenienceofcashtransfersoverfoodaid.nearlytwozthirdsofsurveyparticipants(70.1,n=150) reportedthattheyeitherstrongly(29.4,n=63)orsomewhat(40.7,n=87)prefercashdisbursement over food aid. Almost all participants indicated that cash disbursements are either very convenient (58.9, n=81) or somewhat convenient (37.9, n=81). Cash disbursements also afford recipients flexibilityintheirmarketchoices;participantsreportedthatitiseitherveryimportant(52,n=78)or somewhatimportant(48,n=72)thattheycanbuythingsotherthanfoodwithcashdisbursements, withamajorityindicatingthatitiseitherverylikely(22.4,n=48)orsomewhatlikely(65,n=139)that theywouldspendpartofacashdisbursementonnecessaryitemsotherthanfood. Figure10:Wouldyouprefercashdisbursementsorfoodaid,ordoesitmattersignificantly? 29.4 40.7 16.8 9.3 3.7 20

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 Figure11:ConvenienceandFlexibilityofCashDisbursements Very Howconvenientwouldacash disbursementbeforyou? Somewhat Howimportantistheabilityto buyitemsotherthanfood? Notatall Conclusions 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 Howlikelyisitthatyouwould spendcashonitemsotherthan food? ThereareseveralfactorswhichindicatethatmarketsarewellfunctioninginBaidoaandwouldsupporta longztermdemandzsidecashintervention: Highdemandforgoods,consumerpreferenceforcashtransfers,&marketaccessibility: Surveyparticipantsindicatedthatnotonlydotheyhaveademandforlocalgoodsandaccessto marketstobuythesegoods,buttheyalsoprefertheabilitytobuybothfoodandnonzfood itemswithcashtransfers. Marketsupplies:FDGparticipantsreportedthatthecancurrentlygetallofthefoodandnonZ fooditemstheyneedinlocalmarkets. However,therearealsoseveralchallengestomarketfunctioninginBaidoa: Civil Insecurity: Traders and businessmen report that travel along major trading routes is restricted by AlZShabaab. Threats of ambush and illegal blockades impose restrictions on the provisionofmarketsuppliestobaidoafrommogadishu. Rising local cereal prices: FSNAU (2014) reports that rising local cereal prices could generate additionalinflationarypressuresinthebayregionindependentofdemandzsideinterventions. However, inflationary pressures from rising local cereal prices may be offset by increases in agriculturalwages. Recommendationstoensuremarketfeasibility: Implement a price monitoring survey: This survey should collect markets data on the availabilityandpriceof26commodities,aswellastheexchangeratesonaweeklybasis. 24 This 24 Foracopyofthissurvey,seeDunn,S.,Brewin,M.,&Scek,A.(2014)FinalMonitoringReportoftheSomaliaCash andvouchertransferprogramme,annex18,page66. 21

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 survey will ensure that COOPI can adjust cash transfer programming to changes in market availabilityandprices. 25 Cashtransfervalues&intervals:BasedontherangeestablishedbytheWorldBanksurvey,itis recommendedthatalongztermcashtransferprogramtransfersbetween$140z$280usdto programparticipantsannuallyinmonthlyallocationsof$12z$23usdinordertomitigate vulnerabilitiestoeconomicshocksduringthedryseasonsandenablehouseholdstomake capitalinvestmentsduringthewetseason. 3.2.2 MoneyTransferOrganization(MTO)Assessment This section uses qualitative and quantitative data to analyze the capacity of Money Transfer Organizations(MTOs)inBaidoatoimplementalongtermcashtransferprogram.Overall,thissection finds that while hawala and mobile cash transfer organizations have the capacity to implement cash transfers, limited cell phone access and lack of understanding about mobile payment systems could create barriers to expanding mobilecash payment services in Baidoa. In order to incorporate mobile banking systems into a long term cash transfer program, it is important to conduct an awareness campaign to educate beneficiaries about the benefits mobile banking as well as the technical requirementsoftheseservices. MoneyTransferOrganizations(MTOs) Humanitarian organizations operating in Baidoa primarily use hawala agents to distribute cash to beneficiaries.accordingtofsnau(2009),thereareatleastninemoneytransferorganizations(mtos) currently operating in Baidoa, with average monthly cash distributions from remittances and NGOs ranging from $20,000 USD to $150,000 USD. 26 Currently, COOPI is working with the largest MTO in Baidoa, Dahabshiil, to transfer $48.00 USD per month to beneficiaries through cash vouchers. The regionalmanagerofdahabshiilindicatedinaninzdepthinterviewthathiscompanyhasthecapacityto increasetheirmoneytransferservicestoincludeadditionalcashtransferbeneficiaries. Table4:MoneyTransferOrganizations,Baidoa Money Transfer Organizations Average Monthly Cash (MTOs) Distributions(USD) Dahabshiil 100,000Z150,000 Amal 80,000Z85,000 Qaran 80,000Z100,000 Mustaqbal 40,000Z50,000 Tawakal 35,000Z40,000 HodanGolabl 50,000Z150,000 AmmanaExpress 20,000Z25,000 KaahExpress 80,000Z120,000 Olympic 60,000Z150,000 25 SeeAnnex1foracomparisonofitemsmeasuredbytheFSNAUfortheMinimumExpenditureBasketandPrice MonitoringSurvey. 26 FSNAU(2009)BaidoaBaselineLivelihoodStudy 22

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 Pictures1&2:HawalaAgencyInterview&EnumeratorTraining InterviewingwithDahabshiilRegionalManager EnumeratorsTrainingonSmartPhoneUsage In addition to hawala agencies, there has also been an expansion in mobile banking services across southzcentral Somalia. Since 2011, these services have expanded in response to increasing security concernsassociatedwithmanualcashtransfersystems.thesesafetyconcernsarealltoorealinbaidoa; theregionalmanagerofdahabshiilreportedthatalshabaabrecentlyexplodedacarbombandkilled35 peopleand5staffmembersattheirbaidoaofficeafterfailingtopay$8000usdtoalshabaableaders. Additionally,beneficiarieswhoreceivemanualcashtransferscanbeobservedqueuinginthestreetand are at greater risk of theft. Mobile cash transfers can also be more cost effective by eliminating the transactioncostincurredwithahawalaagent. There are two primary mobile money services currently available in southzcentral Somalia: the Electronic Voucher Cash (EVC) + service offered by the area s largest mobile network operator Hormuud Telecommunications, and the EZmaal mobile money service launched by Nationlink. IDI participants reported that Hormuud is also the most widespread mobile banking provider in Baidoa. Electronicvouchersaredelivereddirectlytobeneficiarieseitherthroughmobilephonesorconfidential numbers.thebeneficiarythengivesamerchantavouchernumberandverifiesthetransactionwitha PIN. 27 TheBaidoaZbasedmarketingofficerforHormuudindicatedinaninterviewthathiscompanyisworking withthelocalngo,intersos,totransfer$300usdpermonthinmobilevouchersto2,500beneficiaries inruralandurbanbaidoa.healsoreportedthathormuudplanstoexpandtheirmobilebankingand payment services in order to increase accessibility in rural areas where fewer residents have mobile phonesandtradersarelesslikelytoacceptmobilevouchers.heindicatedthathormuudprovidesfree registration and sim cards to beneficiaries and does not charge customers for sending, receiving, or withdrawingcashfromtheirmobilemoneyaccount. 27 O Brien,C.,Hove,F.,Smith,G.(2013)FactorsAffectingtheCostZEfficiencyofElectronicTransfersin HumanitarianProgrammes 23

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 Since mobile banking and payment services are relatively new to Baidoa, only onezthird of survey participants(27.3,n=62)werefamiliarwithatleastonemobilebankingserviceoperatingintheirarea. Ofthosewhowerefamiliarwithmobilebankingservices,Hormuudwasthemostwidelyknownmobile banking service among participants (88, n=55) with only a few participants familiar with Nationlink (8, n=5). 28 Despite the limited familiarity with specific mobile banking services, a majority of participantsindicatedthattheybelievedmobilebankingserviceswereeitherverycommon(9.3,n=20) orsomewhatcommon(43,n=92)intheircommunity. Figure12:PercentageofSurveyParticipantsFamiliarwithMobileBankingProvidersinBaidoa 3 8 Hormud(n=55) NabonLink(n=5) 89 Dahabshiil(n=2) Althoughamajorityofsurveyparticipantsreportedthattheyhadneverusedmobilebankingservices (67.8,n=145)orknewofanyoneintheirhouseholdusingtheseservices(57.1,n=18),almosthalfof participantsindicatedthatitwaseitherextremelylikely(15,n=32)orsomewhatlikely(30.4,n=65) that they would use such services on their phone in the future to make and receive payments. Even thoughamajorityofparticipantswhoreportedthattheyhadusedmobilebankingservicespreviously foundtheserviceeitherextremelyeasy(12.2,n=6)orsomewhateasy(44.9,n=22)touse,mobile paymentservicesarealmostexclusivelyusedbymalesurveyrespondents.menconstituted90percent of the survey participants (n=39) who reported that they sometimes used mobile services for cash payments. 28 WhileafewparticipantsindicatedthattheyreceivedcashtransfersfromDahabshiil(3.0,n=2),this organizationdoesnotcurrentlyoffermobilecashtransfersinbaidoa. 24

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 Figure 13: How frequently do you or a member of your household use mobile services for cash payments? Frequently 0.0 2.3 Somebmes 20.6 36.7 Household Never 57.1 67.8 Personal Don tknow 6.1 6.5 However,thelimitedaccesstomobilephonesinruralBaidoacouldcreateabarriertoimplementing mobilecashtransferprograms.lessthanhalfofsurveyparticipantsindicatedthatthey(18.2,n=39)or a member of their household (21.5, n=46) owned a cell phone. Nearly half of survey participants reported that they did not know about the reliability of mobile banking services (49.5, n=106) or mobilepaymentsystems(33.6,n=72).almostallsurveyparticipantsindicatedthatiftheyparticipated in a cash transfer program, that it would be more convenient to receive the cash transfer manually (95.3, n=204) rather than through a cell phone (3.7, n=8). Furthermore, nearly twozthirds of participantsreportedthatiftheywereabeneficiaryofanewcashtransferprogram,theywouldeither somewhat (56.5, n=121) or strongly (22, n=47) prefer to receive cash in hand rather than by cell phone (7.5, n=10). These results suggest that in order for a mobile cash transfer program to be feasible, the program would need to provide a cell phone to beneficiaries and educate beneficiaries aboutmobilecashtransfers,particularlyamongwomen. 25

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 Figure14:Wouldyouprefertoreceivecashtransfersonacellphoneorbyhand? 56.5 12.6 22.0 4.7 2.8 1.4 Conclusions There are several benefits and opportunities associated with using mobile payment services in the implementationofapredictablecashtransferprogram: Reducessecurityrisksassociatedwithmanualtransfers:Mobilepaymentservicesmitigatethe riskofextortionofdeliveryagentsandtheftamongcashtransferbeneficiaries. ExpansionofmobilebankingservicesinBaidoa:HormuudTelecommunicationscurrentlyhas anextensivemobilenetworkinbaidoaaswellasexperienceimplementinghumanitarianmobile cashpaymentsystems.hormuudisalsoplanningonexpandingtheirservicesinbaidoadistrict. Positive community perception of mobile payment systems: Despite survey participants limited knowledge of mobile payment systems, most participants believe that these payment systems are widespread and are likely to use mobile payments in the future. Additionally, beneficiaries who have used mobile payment services have a positive assessment of these services. However,therearealsoseveralbarrierstoimplementingmobilepaymentsystems: Limited community awareness of technical aspects of mobile banking: Since a majority of surveyparticipantsareunfamiliarwithmobilepaymentsystems,theyarealsohesitantabout thereliabilityoftheseservicesandareunlikelytoprefermobileservicesoverfamiliarmanual cashtransfers. 26

COOPISomaliaCashBasedSafetyNetProgrammingStudy September2014 Limitedaccesstocellphones:ApproximatelyoneZfifthofsurveyparticipantsindicatedthatthey orsomeoneintheirhouseholdhasaccesstoamobilephone. Recommendations Utilizing mobile payment services is feasible in Baidoa if the following recommendations are incorporatedintotheprogramdesign: Implement a mobile payment service awareness campaign: Given the limited knowledge of mobilepaymentservices,programbeneficiariesmustbeeducatedaboutthetechnicalaspects ofmobilepaymentservices. Cellphonedistributionmustbepartofprogramimplementation:Limitedcellphoneaccessin ruralbaidoanecessitatesthatcellphonedistributionisincorporatedintotheprogramdesign. 3.2.3 OpportunitiesforLocalGovernmentEngagement Thissectionexaminestheopportunitiesforengagingwithlocalstakeholdersintheimplementationofa predictablecashtransferprogram.whileaninterviewwiththemayorofbaidoasuggeststhatthereare opportunitiesforngostoengagelocalgovernmentauthoritiesintheplanningandimplementationof cashtransferprograms,cashbeneficiariesdonotbelievethegovernmentshouldplayaprimaryrolein aiddistribution. Pictures3&4:LocalGovernmentAuthoritiesandDataCollection LeadResearcherInterviewingwithMayorofBaidoaEnumeratorsCollectingDataUsingSmartphones LocalGovernment AccordingtoaninZdepth interview withthemayorofbaidoa, there are several ways in which NGOs have already engaged the local government in the implementation food and cashzbased transfer programs.first,thelocalgovernmenthasservedasaliaisonbetweenthecommunityanddonorsby helping to identify the greatest needs in the community and compiling lists of the most vulnerable groups.second,theyhaveassistedngosinlogisticalmattersbyfacilitatingconnectionsbetweenidps 27