Our humanitarian and stabilisation consultant James Barber reflects on our role helping to avert a hunger crisis in Zimbabwe through an innovative market-based mechanism that enabled maize importation.
Following consecutive droughts and amidst a liquidity crisis, the 2016/2017 agricultural season in Zimbabwe saw an impending food crisis, with drought leaving vulnerable households in danger of not getting enough food.
The challenge was ensuring there was enough grain available for vulnerable households to purchase food through CARE International and World Vision’s humanitarian cash transfer programmes.
Through the Grain Market Facility, we worked with commercial grain exporters and importers to get essential food supplies into markets. By enabling the private sector to respond to the supply and demand of grain we ensured that people in drought-affected areas could use these cash transfers to meet their basic food needs.
Here are three lessons we learnt in Zimbabwe:
1. The value of a broker between the private sector and NGOs.
NGOs and the private sector often don’t speak the same language during a humanitarian response. One of the biggest challenges is the need to bring in people with the know-how to negotiate effective partnerships and agreements with private sector providers. In Zimbabwe we acted as a broker, using our fund management, due diligence and supply chain experience to create links between the private sector and frontline humanitarian responders.
We reached out and selected potential suppliers using a due diligence process which included checks on suppliers’ ethical codes of conduct and financial history. The chosen grain importers would then deposit funds into a specially-created Grain Market Facility, with Crown Agents settling international contracts with exporters on their behalf. In total, £20.9 million funds were disbursed, allowing grain millers to continue working and ensure people could purchase grain through CARE’s local cash transfer programme.
2. Cash programmes are more flexible when underpinned by an effective market mechanism.
Market conditions in humanitarian response settings will never be perfect. CARE’s cash first programme in Zimbabwe proved the power of cash transfers. But to make them sustainable you need to ensure the market structures behind it are strong enough to withstand the transition from response to recovery.
During the Grain Market Facility, market demand and the ability to purchase grain was guaranteed by CARE’s local cash transfer programme. This meant we could support affordable grain prices and market stability because importers could continue distributing the grain to the last mile, with the assurance that grain reserves would be replenished through the intervention of the Facility. Without these market regulations in place to guarantee supply, the value of cash transfers could be diminished, leading households to resort to more risky means of sourcing food, such as selling assets.
3. There’s value for money in building up local partners to respond in the event of a disaster.
Empowering local actors helps to ensure more sustainable humanitarian responses. By upskilling the Zimbabwean public and private sector, we strengthened their ability to respond to future shocks. Involving local businesses in our due diligence processes exposed them to new ideas around business transparency which have been used long after the response ended. Embedding these ideas into local systems ensures local actors are better equipped to respond to market blockages in the future.
The changing humanitarian landscape needs the private sector to address humanitarian needs. We saw this during the Grain Market Facility, where traders were able to import 55,000 metric tonnes of grain to sell on the open market, which was used via humanitarian cash transfers to ensure over 1.6 million people’s food requirements for three months. Ultimately, mutual buy in across the private, government and NGO sectors is needed in to ensure coordinated and effective responses that lay the foundations for sustainable development longer-term. As a sector, we need to continue to build and broker these partnerships to ensure systems are in place when they are most needed.
Want to find out more? Read our lessons learned paper here.