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Since 2005, citizens of Lesotho over the age of 70 have been eligible to receive an Old Age Pension from the government. The pension, originally M150, was recently increased to M200 (US$30) a month. In Malawi, some two million smallholder farmers benefit from a fertiliser subsidy funded by the government. In Swaziland, orphans and vulnerable children (OVC) can receive food, psychosocial care and other support through Neighbourhood Care Points.

All of these are examples of 'social transfers' -- a term that refers to a wide variety of social assistance measures that public and civic bodies provide to those living in poverty or in danger of falling into poverty. In addition to Lesotho, Malawi and Swaziland, most other countries in the region, including Zambia, Mozambique, Zimbabwe and South Africa, implement some kind of social transfer system, ranging in scale from small to large.

Social transfers can take the form of cash, food, agricultural input (seeds, fertiliser), assets (livestock, tools), or a combination of these. Social transfers can take the form of short-term humanitarian assistance in times of emergency or long-term, pre-planned and predictable support for vulnerable groups.

While emergency assistance is important in times of crisis, it has become increasingly clear that poverty in southern Africa is a chronic, enduring problem. It is also clear that short-term, sticking-plaster remedies have failed to address the underlying causes of poverty. As a result, governments in southern Africa as well as NGOs and international donors have started paying more attention to long-term, predictable social transfer programmes that are focused on addressing chronic poverty.

Emergency and short-term assistance can protect people and save lives in life-threatening situations. Long-term social transfer programmes, on the other hand, can prevent people from falling further into poverty, and also help promote people out of poverty, by giving them opportunities to improve their lives and go forward. Old age pensions, unemployment insurance and health benefits are examples of preventive measures, while school meals and conditional cash transfers have a promotional role by supporting improved nutrition, education, and health care.

Social transfers form part of a country's broader 'social protection' programme -- an essential public service aimed at helping citizens cope with risk, vulnerability, hunger and poverty. A good social protection programme has three major components: social legislation (laws and measures protecting citizens' rights); social insurance (contributory schemes, such as unemployment insurance); and social transfers. Unlike social insurance, social transfers are non-contributory, which means that the recipient is not required to pay for them through premiums or taxes.

Because they should be predictable over a long term, social transfers require reliable resources. They must be planned and budgeted for by governments. As a result, many cash-strapped governments in southern Africa have been reluctant to implement social transfer schemes. But major international donors are increasingly seeing the value of long-term social transfers; many are looking to reduce their financial support for emergency humanitarian assistance and correspondingly increase their support to on-budget, government-run social transfer programmes.

In some cases, governments have decided to implement social transfer schemes even without donor support and have found that the benefits far outweigh the costs. For example, Lesotho's Old Age Pension benefits 74 000 citizens, while accounting for just 3% of government expenditure. It is delivered through the Lesotho Post Office and operating and delivery costs are just 6% of the value of the grants. Swaziland's Old Age Grant also functions well and is relatively cheap to operate -- with delivery costing about 15% of the value of the transfers.

This piece was based on the policy brief entitled “What are social transfers?”, which forms part of a series of 10 policy briefs providing an overview of the issues and arguments in the current debate on the role of social transfers as a means of reducing chronic hunger and poverty in southern Africa.

Malawi: The Government of Malawi operates a pilot social cash transfer scheme in Mchinji. The pilot scheme is funded by UNICEF, and it aims to verify the hypothesis that locally implemented cash transfers are feasible, cost-effective and have a quick impact. The pilot targets 3000 'ultra poor' and 'labour constrained' households, representing 10% of the district's population. Monthly transfers vary from MK600 (US$4.20) to MK1800 (US$12.60) depending on household size, with additional amounts for every child attending school. Total cost for the pilot phase, from October 2006 to December 2007, is estimated at $480,000. Nationwide coverage is envisaged by 2016 at an annual cost of $42m. Mozambique: The Programe de Subsidio de Alimentos (PSA) is a cash transfer programme funded by the Government of Mozambique and implemented by the National Institute for Social Action (INAS). PSA aims to assist poor households who are unable to work or satisfy their basic needs -- particularly the elderly, disabled and chronically sick, and malnourished pregnant women. The PSA currently has 97,000 direct beneficiaries. The cash transfer varies between MZN 70 and 140 (US$2.68-5.36) monthly. The total programme cost for 2007 is MZN189 million (US$7.2 million). Zambia: Since 2000/2001, the Government of Zambia, through the local NGO Programme Against Nutrition (PAM), has been providing food security packs to improve productivity amongst 'vulnerable but viable' smallholder farmers. Packs contain mainly seed and fertiliser for 0.25ha each of a cereal, a legume and a root or tuber crop. At the design stage, 200 000 households were to be reached per year, each receiving packs for two years after which they were expected to 'graduate' to other agricultural support programmes. In practice, resources allocated to PAM for the programme have declined since 2003/4 so that in 2006/7 the ZK15 billion (US$3.7 million) allocation provided for less than 20,000 packs. Zimbabwe: In 2006/7, as a component of the DFID-funded Protracted Relief Programme, ActionAid worked through local partners to provide food vouchers to some 1500 urban poor and HIV/AIDS-affected households in Harare, Bulawayo and Gweru. Monthly vouchers, valued at about US$18, can be exchanged for a specified basket of food commodities at specific retail outlets. ActionAid has been able to fund the programme using foreign currency converted at near-market exchange rates negotiated in advance with the Reserve Bank. Based on a survey of beneficiary preferences, the intention is to move towards offering beneficiaries a choice of cash or vouchers.