Afghanistan

Overview

Cash and voucher assistance (CVA) in Afghanistan has grown rapidly and has become one of the preferred response modalities among humanitarian and development actors Since its introduction as a modality in 2009. Additionally, cash continues to be the preferred choice of assistance for vulnerable households, as revealed by the 2023 WoAA survey, where 63 % of respondents identified cash as their preferred modality of support. In quarter 3, the AAP Afghanistan Survey, cash featured heavily in the qualitative responses. An overwhelming majority of the responses related to cash were expressing the need for cash and requesting this type of assistance.

Multipurpose Cash Assistance: 16 CVWG partners indicated a collective planned budget of just under $ 16 million with a planned reach of around 42,240 households (295,680 individuals) across the country. The calculation is based on an average household size of 7 and the recipients are expected to receive an average of 3 months assistance with monthly instalment of $ 140 in line with the latest updated MEB guidance and ensuring complementarity with in-kind sectoral provisions.

The share and scale of cash transfers may be adjusted based on the stability of the overall financial system, socio economic stability and addressing the risks associated to Cash Distributions. CVWG has also developed risk mitigation recommendations to address risks and used and reference for cash partners in the country.

The Multipurpose Cash Assistance (MPCA) empowers disaster-affected individuals by offering flexibility in addressing their immediate needs, such as food, shelter, health, WASH, or education, while also boosting local economies, reducing administrative costs, and promoting social cohesion within communities.

In 2023, As of October, 32 CVWG reporting partners, including 4 UN agencies, 15 INGOs, and 13 national NGOs, have reached over 6.6 million people (952,000 households) in 187 districts out of the 401 districts in Afghanistan with CVA response. A total of USD 62 million has been distributed, with 85% delivered in cash and 15% delivered in vouchers. This includes both sectoral and multipurpose cash interventions.

MPCA - Contextual Analysis

According to the World Bank Report, the Afghan economy is currently operating at a new low-level equilibrium, heavily relying on international aid. This situation makes the economy delicate and vulnerable to disruptions. The Afghan currency (AFN) has been experiencing rapid appreciation since August, while the prices of the food basket have remained stable. It is important to note that the difference in timeline may temporarily misrepresent the cost of food compared to other components. However, the recent unusual appreciation of the AFN over the past two months indicates that caution should be exercised before restarting any exercises, especially considering that food prices remain stable. CVWG partners implementing cash-for-food programs, to consider the AFN value of the Minimum Expenditure Basket (MEB) and potentially allocate higher proportions of the MEB as transfers (e.g., 75%, 100%, or even 200% for rapid emergencies) when budgeting in USD.

It is believed that increased exports and imports in last two years, and the continuous flow of United States Dollars (USD) cash shipments through the UN facility to Afghanistan plays a crucial role in maintaining stability by ensuring an external cash supply in the local markets, similar to foreign investments. CVA has become essential in preserving people's purchasing power and enabling access to both food and non-food items (NFIs) within their local markets and during times of need.

There are several positive aspects that suggest the continued viability and feasibility of CVA in most locations, including both rural and urban areas, in Afghanistan. The key operational factors that drive the successful implementation of CVA as a humanitarian response modality in the current political landscape are:

1. continued market functionality in most of areas,
2. Availability of multiple efficient, safe, and effective cash delivery mechanisms
3. Sufficient cash liquidity within the financial sector that can be accessed by Financial Service Providers (FSPs) mainly propped up by Hawalas
4. Appreciation or depreciation of the Afghani (currency) is not abrupt.

According to the latest reports from the Joint Market Monitoring Initiatives (JMMI) conducted by REACH and the WFP weekly market bulletins, markets are operational, and essential commodities remain readily available in sufficient quantity and acceptable quality. However, the access of women and girls to markets and the restrictions on their movement continue to be significant challenges. CVWG partners are actively addressing these challenges, but their success varies depending on the location and the fragmented local negotiations that take place. The HAG can play a crucial role in providing coordination and support among humanitarian actors, particularly through the CVWG and DFAs. The involvement of the HAG can facilitate effective collaboration, information sharing, and joint decision-making to address the specific challenges related to women and girls' market access and movement restrictions. By leveraging the expertise and resources of various actors, the HAG can contribute to overcoming these obstacles and ensuring that the needs of vulnerable populations, including women and girls, are adequately addressed in a coordinated manner.

Key implementation challenges:

In 2023, the CVWG organized a series of consultation meetings to address key challenges and bottlenecks in the implementation of Cash and Voucher Assistance (CVA) in Afghanistan. Through these meetings, a list of practical operational and programmatic challenges was developed, which included:

1. Interference by DFA and community leaders in CVA programming, leading to demands for the inclusion or exclusion of specific beneficiaries.
2. Restricted access, enrollment, and participation of female recipients in CVA due to DFA policies regarding the role of women and girls in public life.
3. Limited access to CVA for specific vulnerable groups, such as older persons, persons with disabilities, and children.

CVWG’s competencies to support partners tackle the implementation Challenges.

1. Developing interagency guidelines as requested by partners and Clusters.
2. Financial Service Provider-FSP and Cash Activity mapping countrywide
3. Collaborating with Clusters and working groups to design and implement capacity-building initiatives, ensuring the participation of women in safe spaces.
4. Providing CVA technical support to Clusters and evidence-based analysis to the ICCT as needed
5. Cash Based Assistance implementation minimum standards setting and monitoring
6. Conducting CVA risk analysis and mitigation with a focus on gender and protection risks
7. Regular revision of the Minimum Expenditure Basket (MEB) and transfer values to ensure consistency and alignment of transfer values and delivery mechanisms.
8. Market Monitoring and Assessments in collaboration with REACH, JMMI, and WFP weekly price monitoring.
9. Facilitating Linkages between Financial Service Providers (FSPs), digital solution providers, and CVWG members to create an enabling environment for innovative CVA solutions.
10. Providing CVA technical support to AHF partners during allocation releases and other clusters/partners, including shelter, WASH (Water, Sanitation, and Hygiene), Protection, etc.

On the other hand, the functioning of the market and the availability of key commodities, such as food and essential non-food items (NFIs), are important factors to consider when determining the suitability of cash as a disbursement modality. In situations where market functionality is impacted by factors like border closures and limited local production, cash may not be the most appropriate form of disbursement. In response to such challenges, the CVWG works closely with partners to continuously assess the feasibility of CVA and is prepared to provide guidance on transitioning to alternative modalities as the operating environment evolves.

Response Strategy

In 2024, an estimated USD $646 million of the $3 billion requested for the HNRP is projected to be allocated in cash, encompassing $632 million in sectoral cash and $14 million in multi-purpose cash assistance.

The MPCA focuses on addressing the immediate needs of the population during disasters, targeting vulnerable individuals and communities. It follows guidelines and criteria based on factors such as crisis magnitude, income level, household composition, age groups, and vulnerability indicators. Cash is the preferred method for humanitarian assistance delivery, with cash for food and shelter being prominent. The CVWG revised the MEB September – October 2023, resulting in significant changes in MPCA transfer value when compared to MEB in April 2023, the difference in the value of the AFN is considerable and drives most of the changes in costs as well as the average income, critical to estimate an MPCA.

Sectoral Cash: Cash has become preferred way of delivering humanitarian assistance and the principal Clusters employing CVA as a modality of implementation, cash for food under the Food Security and Agriculture Cluster (FSAC) remains the larger category and ES-NFI mainly cash for shelter/winterization/transportation, with protection and WASH sectors occasionally employing CVA.

The Cash and Voucher Working Group- CVWG revised the MEB in September- October 2023 as part of the six-month revision for cluster baskets and MPCA. there is significant reduction of the MPCA transfer value as compared to April 2023, the difference in the value of the AFN is very significant and drives most of the changes in costs as well as the average income, critical to estimate an MPCA.

Integration of Beneficiary Views

The CVWG partners implement CVA programs in line with the AFG Interagency Cash Based Assistance guidance and minimum requirements, which mandate the inclusion of CVA programming with strong AAP and cross-cutting issues. In addition to regular face-to-face consultations and feedback with affected communities at the program/project level, the CVWG also analyzes data from other channels. According to the Afghanistan Community Voices and Accountability Platform, over 15,000 calls concerning cash assistance have been received, with 12% from Persons with Disabilities, 77% from females, and 23% from males. Of these calls, 41% were from MPCA clients and 19.9% were from Cash for Food clients/beneficiaries, while 29.7% were related to livelihoods. Over 70% of respondents expressed a preference for cash assistance, as evidenced by the APP's quarter 3 surveys. The overwhelming majority of responses related to cash expressed the need for cash and requested assistance.

In 2024, the CVWG will continue to work with AWAAZ and the AAP working group to ensure inclusive cash programming for affected communities, with a focus on minority groups, women, children, and people with disabilities.

Cash Coordination

The use of Multipurpose Cash transfers will be coordinated under the CVWG coordination structures. The CVWG will continue to provide technical support on the MPCA transfer value and coordination and will develop technical guidance on Afghanistan's MPCA programming. Similar to the ongoing earthquake response in October 2023, the CVWG will establish field-based sub-national MPCA coordination during crises to coordinate partners and provide technical and operational support. The MPCA will be reported under the CVWG reporting mechanism in IMMAP's data center, and the CVWG will analyses and present the data to CVWG members monthly, and to the ICCT and HCT upon request.

The CVWG partners, including ActionAid, SCI, DRC, Action Against Hunger, UNICEF, IFRC, CRS, NRC, World Vision International, IRC, ICRC, Care International, IMC, OCHA, IRW, Medair, ADRA, Welthungerhilfe, UNHCR, IOM, ACTED, SI, Concern-CWW, Caritas Germany, Mercy Corps, and others, are key partners involved in MPCA implementation and coordination.

Afghanistan initially planned to transition to the new cash coordination model by the end of September 2023. However, this did not happen, and the new timeline for the transition has been set for March 2024. The CWG leadership is a non-programmatic co-chair, which is OCHA in IASC settings such as Afghanistan. The deployed CashCap Expert to WFP is now coordinating with IRC, taking over soon the co-chair role from CRS. IRC has deployed a temporary co-chair until the recruitment of the full co-chair is finalized.

Monitoring

The CVWG will collaborate with IMMAP to customize MPCA reporting for the ReportHub and will circulate the MPCA 3W matrix on a quarterly basis during non-onset crisis periods. The achievements of partners in MPCA will be captured in the Quarterly CVWG Programmatic Snapshot Dashboards and partners' presence.

CVWG partners will conduct monthly Post Distribution Monitoring (PDM) on MCPAs and other cash response programs to verify the beneficiaries' cash utilization. PDMs are recommended to take place at least two weeks after cash disbursements. The CVWG suggests a sample size of 10-15% of recipients, with sampling stratified to ensure representative inclusion of various groups. PDMs should focus on interviews with Women Headed Households, Women within male-headed households, Households with persons with disabilities, Households headed by a person with a disability, Child-headed households, Households with Pregnant or Lactating Women, and other vulnerable groups subject to compounded vulnerability. In cases where access for women staff is limited or not possible, alternative options such as phone interviews or community-led discussions can be identified. If alternate recipients are identified by the intended beneficiary, an increased PDM sample size for this subset is recommended.

The CVWG will continue revision of the Minimum Expenditure baskets in every six-month cycle, this will be critical for the MPCA transfer values and market monitoring of the various cluster baskets.

The CVWG Partners will also monitor the community voices and will operate multiple 2-way feedback mechanism channels; at least two; ensuring access of persons with disabilities and women.

Information Gaps and Limitations

The CVWG currently lacks a dedicated Information Management (IM) personnel. As a result, the co-chairs of the CVWG rely on the assistance of IMMAP to gather cash response data from the ReportHub and create visual dashboards for CVWG stakeholders. While IMMAP provides valuable support in this area, there are additional data needs within the CVWG that require IM assistance. These include the mapping of the Financial Service Providers (FSPs) and the conversion of partners' MPCA response trackers into interactive dashboards specially during emergency.