Yemen: Assessing market functionality and perception of cash based assistance

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Street view of Sanaa, Yemen. ©OCHA/ Charlotte Cans, Sana’a, June 2015.

Street view of Sanaa, Yemen. ©OCHA/ Charlotte Cans, Sana’a, June 2015.

Since the outbreak of the Yemeni conflict in 2015, 3 million people have been displaced, and half of the population face widespread food insecurity, a collapse of public services and income, and rapidly rising price inflation. As of July 2017, much of the population had lost their primary source of income. To address these concerning needs, humanitarian actors increasingly use cash-based interventions to support families in meeting needs.

Despite increased usage of cash as a mean for aid delivery, REACH and the Cash and Market Working Group (CMWG) realised early 2017 that there was little evidence existed to show that this was the most effective mean of financial intervention. Within this framework, REACH and the CMWG conducted a study to better understand the suitability and perceptions of different cash transfer programme in the current Yemen market context.

The study was structured in two components: The first component explored the market system functions of essential commodities through interviews with vendors, assessing the availability, price consistency and restocking times of each product group. The second component addressed communities’ access to markets and perceptions of cash-based intervention mechanism and addressed how household access to markets and financial services changed since the onset of the conflict in 2015, through a series of focus groups discussions.

Regarding market functionality, two separate market systems were identified as operating either side of the line of conflict with Al Hudaydah port supplying vendors across the North West and central West of Yemen, while Aden port supplied the South West. REACH findings emphasize that the markets for food, cooking gas, hygiene items and water trucking were suitable candidates for a cash transfer programme, as these products were still widely available, despite significant price inflation reducing consumers’ purchasing power.

Findings focusing on communities’ access to markets underline that the cost of fuel was an extremely influential factor hindering access to markets. Collected data through focus group discussions showed that rising fuel prices had made public transport costs inhibitive and that many households could no longer physically or financially access markets. As such, interviewed participants emphasized the importance of an aid delivery mechanism which allowed flexibility for them to meet their specific needs, and which could be distributed and utilised without incurring transportation costs.

Based on these findings, REACH and the CMWG recommend aid actors to maintain flexible and suitable cash-based intervention. In the current context of Yemen, the most relevant intervention is multi-purpose cash grant programmes distributed at the local level, aiming to avoid transportation costs and targeting food, cooking gas, hygiene items and water trucking.

 


Access REACH Inter-Agency Joint Cash Study in full at this link.