Food prices are rising all over the world. In Zambia, this means that many families cannot feed themselves adequately. To alleviate the hardship, social benefits are paid, which come from a World Bank fund. KfW pays into this fund on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ) together with other donors.
Eleven euros more per month makes a difference. The difference between a mother in Zambia preparing one meal a day and two. Hunger and malnutrition are widespread in this country in southern Africa. More than half of the population is considered poor. Almost every third child is chronically malnourished.
In addition to several years of drought in a row and the pandemic, the Russian war in Ukraine is exacerbating poverty. This is because global supply chains are disrupted, which also leads to higher prices for energy, food and fertiliser in Zambia. A vicious circle: because of the high prices, less fertiliser is used, which reduces agricultural yields and makes the products even more expensive. To help the poorest of the poor, the African state has been paying social benefits since 2003. The social security system could be maintained despite fiscal problems.
KfW is supporting cash transfers on behalf of the BMZ's special initiative "Transformation of Agricultural and Food Systems" (SI AGER) with an initial EUR 15 million, which is paid in full into a World Bank fund in which other donors are also participating. More than one million households and thus half of the poor in Zambia received monthly payments in this way, among them mainly single mothers. Presumably, 1.3 million households will receive monthly payments by the end of this year. As recently as 2015, there were only 250,000 families, then 630,000 in 2019. The payments currently amount to 200 Zambian kwacha (ZMW) per household, the equivalent of about eleven euros per month.
The transfer payments not only finance sufficient food, they can also offer a way out of poverty in the medium term. One of the beneficiary women managed to put aside enough money for an ice cream machine. Now she earns regular money as an ice cream seller and can use the income to provide further education for her son. Others raise livestock to improve their nutritional situation.
Social benefits do not only mean having more money at one's disposal. They improve the living situation in the long term. Many of the recipients organise themselves in savings groups, exchange information and learn about finances. In this way, women gain access to loans. These loans also open up ways out of poverty.
The payment is mostly sent as a voucher by mobile phone. The voucher can be redeemed digitally or converted into cash at a disbursement point. The beneficiaries, many of whom did not yet own a mobile phone, are now learning how to use it. Training is also part of the programme. Knowledge of the online money system opens up many new opportunities for the women in their daily lives. The services also reach people in remote places: Where there is no access to a mobile phone network or electricity, benefits are paid in exchange for a signature or – for those who cannot write – a fingerprint. Furthermore, the World Bank programme, which is funded by the BMZ, provides scholarships to enable girls to attend school.
The project contributes to reducing poverty and hunger and to empowering women and girls in particular.
