Social cash transfers help break poverty cycle and foster productivity in Zambia

Evaluating the impact of cash transfer programmes and their effect on poverty levels and food security. 

Key facts

Zambia’s Social Cash Transfer (SCT) Programme is implemented by the Ministry of Community Development, Mother and Child Health and has been operating in Zambia since 2003. As of December 2014, the programme reached 150,000 households across 50 districts and there are concrete plans to scale it up nation-wide in the near future. The main objective of the SCT is to reduce extreme poverty and to prevent its transmission across generations. Results from the impact evaluation carried out by FAO, the United Nations Children's Fund (UNICEF) and the American Institutes for Research show that the programme is having positive impacts: increased food security, improved child wellbeing, improved living conditions and increased productivity and ownership of productive assets.

Turning a new leaf as small entrepreneurs – the stories of Ruth and Poniso
28-year old Ruth Simutombo is one of the beneficiaries of the Social Cash Transfer (SCT) programme. She lives with her son Patrick and her sister’s son, Sichimwa, in Ng’andu Village in the Southern Province of Kazungula, which is where the programme first started in 2003.

It is late afternoon and she is slowly stirring the nshima – a dish made from maize flour and water which is the staple food in Zambia – while she recounts how being part of the transfer programme changed her life.

“I used to live in dire conditions. I could not afford buying my own house so we were sharing that of my grandmother’s. Now, with the money I receive every month, I moved into a new house with both children, bought them school uniforms and can pay for their school fees. Patrick wants to become a lawyer and Sichimwa a teacher… and now I can help make those dreams into reality.”

Ruth is also part of a training programme that teaches families how to save and invest money. Thanks to the new skills she learned, she was able to open a small shop in the local market that sells fruit, soft drinks and veggies.

Ruth is just one of many examples of the positive impacts of cash transfers in the country. Working to reduce poverty levels and its intergenerational transfer, the Government, through the SCT, targets the labour-constrained and extremely poor households. For a household to become eligible, they must meet certain criteria which include location of residence, proportion of household members of working age that are fit to work and welfare levels.

“I will always be grateful for the support I receive,” says Poniso Mondandi from Makalanguza village while she waits in line for the 140 Kwacha (equivalent to some US$27) she receives every two months. “Without the help, I wouldn’t have been able to open my small shop where I sell home-made bread buns, hats and dried vegetables. I wouldn’t have hired somebody to work on my farm or sent my grandchildren to school.”

An impact evaluation of the SCT, carried out by FAO, UNICEF and the American Institutes for Research, evidenced that beneficiaries increased the amount of land dedicated to crop production by 34 percent and expenditure on agricultural inputs more than doubled. Input and cultivation of land led to an almost 50 percent increase in the value of the harvest during the rainy season of 2012, which was mainly sold on local markets.

The programme impacted not only the direct beneficiaries but also the communities they live in. When beneficiaries spend the money locally, the non-beneficiary households that supply goods and services also benefit from the increased cash circulating in the community. For example, for every Kwacha transferred to beneficiaries, up to an extra .79 Kwacha in income is generated, mostly accruing to non-beneficiaries.

Evidence also shows that there was an important improvement in terms of food security and an increase in the share of households owning livestock such as goats, cows and chickens.

Hopes for a brighter future
Over the next months and years, FAO plans to expand its research programme in the country to include: i) assessing the longer-term impacts on productive activities and labour allocation of the programme; ii) undertaking a qualitative case study on the potential contribution of social protection interventions towards decent rural employment in rural areas; and iii) generating evidence on the value-added of combined agricultural and social protection interventions in improving household resilience, food security and nutrition and reducing poverty.

Combined with sound policy measures, the programme will strengthen Government capacities to better coordinate between agricultural and social protection interventions. It will also deepen policy makers’ understanding of how to break the cycle of intergenerational poverty and prove that cash transfers can help households become more productive.  

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