By Liam Taylor
Ethiopia’s flagship social protection programme has cut food and cash transfers to the country’s poorest households, even as the threat of starvation looms in several parts of the country.
The Productive Safety Net Programme (PSNP) provides assistance to around eight million vulnerable people, making it one of the largest welfare schemes in Africa.
But rising prices and cutbacks from some international donors have caused a serious financing gap of about $195 million over the next two years, according to Sintayehu Demissie, the head of the food security coordination office in Ethiopia’s ministry of agriculture, which manages the programme. Most beneficiaries will receive assistance for only four months this year, instead of the usual six, effectively slashing transfers by a third. Support to the most vulnerable has been cut from 12 months to 10.
In an emailed response to questions, Sintayehu described the measures as a “last resort”. They have “allowed for the continued support of the beneficiaries while maintaining the effectiveness of the programme”, she wrote. The scaling back comes as Ethiopia’s northern highlands are in the grip of an extreme hunger crisis after drought and years of conflict. In January, the US-funded Famine Early Warning Systems Network (FEWS NET) found that most of the Tigray region, still recovering from a brutal two-year war, is now experiencing “emergency” levels of hunger – one step below famine.
So too are parts of the neighbouring Amhara and Afar regions, as well as areas in the southern lowlands. The United Nations and the Ethiopian government estimate that, overall, 16 million people need food assistance nationwide.
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Going hungry
The PSNP is not an emergency humanitarian aid programme, but was launched in 2005 as a resilience-building social safety net that would help people put food on the table in rural areas of Ethiopia stalked by hunger. Most beneficiaries receive six months of support as payment for their participation in public works, such as building roads or planting trees. Those who are unable to do physical labour, such as people with disabilities, are given unconditional transfers year-round.
Beneficiaries are supposed to receive 15 kilogrammes of cereals per person each month, or the equivalent value in cash, although this target has rarely been met. In Tigray, transfers had been meeting a quarter of annual food needs in many areas but were suspended entirely in 2020, shortly before the outbreak of a war between the federal government and regional forces. “I don’t remember such a bad drought.”
The conflict is estimated to have killed hundreds of thousands of people, devastated the local economy, and displaced a million people. Although a peace deal was signed in late 2022, farmers – with most of their assets, like animals and ploughs, stolen or destroyed – had little to fall back on when the rains faltered last year.
On a visit to Tigray in January, when PSNP transfers would normally be scheduled to begin, The New Humanitarian found farmers fearful for the future after a failed harvest.
“I don’t remember [such a bad drought],” said Hadgu Kibret, a farmer near the small town of Wukro, who said she has sold her ox at knockdown prices to buy food. “At least if there was a safety net we could receive assistance every month.”
Since last year, the World Food Programme (WFP) has been distributing food from the PSNP in 17 of the 93 districts in Tigray, reaching 1.38 million people, a spokesperson told The New Humanitarian. The distributions continued even during months when WFP had suspended its main humanitarian assistance due to a scandal over fraud and food thefts.
The normal PSNP public works programme, however, only resumed in the region in March, according to Alembrhan Harifeyo, the deputy head of Tigray’s bureau of agriculture. Alembrhan added that delivery is hampered by an ongoing shortage of computers, motorbikes, and other equipment.
“All the social, environmental, and economic resources that had been built before the conflict have been totally damaged,” he said.
In the Oromia region, this year’s public works activities also began in March, said Kebede Genba, the director of the Oromia Region Food Security Directorate. But the delivery of the PSNP programme in parts of Oromia and Amhara continues to be disrupted by ongoing conflict and insecurity, compounding the financing gaps.
Financing gap
Nobody from the federal government or major donor agencies was willing to give an on-the-record interview about the PSNP, in a sign of the sensitivity of the issue, although some gave responses in writing.
The current phase of the programme began in 2021, with a budget of $2.2 billion to be spread over five years. Most of that was to come from international donors, led by the World Bank, with a target for the Ethiopian government to be covering about a third of costs by 2025.
But with annual inflation fluctuating and currently running at above 20% – and food price inflation peaking at over 40% – the real value of the transfer has been shrinking. This year, the size of the cash payment was increased by 34% to keep pace with soaring prices, although the number of months beneficiaries receive the support has been cut from six to four.
Inflation has stretched the capacity of the Ethiopian government, which is trying to stave off a debt crisis and defaulted on an interest payment to bondholders in December last year.
Audited accounts from the finance ministry – which declined to comment for this story – show that the government’s contribution remained fairly constant at just over 4 billion birr ($70 million) a year between 2020-2021 and 2022-2023, a steep drop in real terms because of inflation. That money accounted for about 18% of the total programme funding.
Sintayehu, the agriculture ministry official, said that the government’s contribution has increased to $130 million in the current financial year, representing just over a quarter of the PSNP’s $467 million budget for 2023-2024.
She added that inflation and the impact of the Ukraine war on food supply were the biggest drivers of the financing gap.
“In addition, some development partners have either reduced or paused [contributions] and couldn’t fulfil their original commitment,” she wrote, declining to specify which ones. A total of 13 donors – including the World Bank, the US, and the UK – have contributed to the programme in recent years.
Donor funding has been under pressure as governments have tried to respond to an array of global crises while skimping on aid budgets.
For example, the British contribution to the PSNP – which had been averaging 60 million pounds ($76 million) a year between 2015 and 2020 – had fallen to just 12 million pounds ($15 million) by 2022 as the UK slashed its aid spending worldwide. A British official told The New Humanitarian it plans to spend 40 million pounds ($50 million) on the programme in the current financial year.
A spokesperson for the United States Agency for International Development said that it has committed approximately $325 million to the PSNP over the last three years, but did not give a year-by-year breakdown.
Despite the present shortfall, overall donor funding increased substantially between 2020-2021 and 2022-2023, from 13 billion birr ($229 million) to 27 billion birr ($475 million) a year, above the rate of inflation. That was largely thanks to the World Bank, which has been the largest donor over the last three years.
In an emailed response to questions, the World Bank said that it is “exploring the possibility of providing additional financing” to the programme, and that other donors are also committing more money. “The current financing status, as well as austerity measures including agreed reductions in the number of months of transfers, means the core aspects of the programme can still be achieved,” the Bank said.
Evidence of success
The PSNP is one of the most ambitious social protection programmes in Africa, and it has had measurable successes. An independent evaluation in 2021 found that households in highland regions spent six fewer days going hungry and had 25% more animals as result of the programme, although the impacts in lowland areas were negligible. A World Bank report published in November found that public works activities reduced soil erosion and raised crop yields.
“It was considered a very effective food assistance response.” Most notably, the safety net softened the blow of back-to-back droughts in 2016 and 2017, helping to avert catastrophe. “It was considered a very effective food assistance response,” said Daniel Gilligan of the International Food Policy Research Institute, a think-tank headquartered in Washington DC. “The PSNP, and complementary efforts by the government, really deserve credit for that.”
But the programme has long been stretched by the sheer scale of need. For years, funding shortfalls have been managed by changing the food basket – removing pulses, for example, or replacing wheat with cheaper sorghum – or by letting cash disbursements fall behind rising food prices. In 2020 the wage rate was sufficient to buy 9.4 kilogrammes of cereal. The 15 kilogramme target “proved to be overly ambitious in part given budgetary constraints”, the World Bank report noted. Only 60% of cash transfers and 68% of food transfers were being paid on time.
“The numbers who needed support dwarfed the programme resources that were available in many places,” said Jeremy Lind, a researcher at the Institute of Development Studies in the UK, who has worked on evaluations of the safety net. He added that a “very, very common refrain” in interviews with beneficiaries was that surviving on the PSNP is “not like dying, but it’s not like living either”.
This article was first published on The New Humanitarian:
