Evidence on Impacts of Productive Inclusion Programs in the Sahel

· Resilience. Cash transfer programs help households build resilience to shocks, including climate shocks, by enabling them to protect consumption in the face of shocks and to protect and invest in productive assets (particularly livestock holdings) to diversify livelihoods and strengthen coping mechanisms.19

· Opportunity. Cash transfers enable households to make schooling-related investments and increase school enrollment and attendance. They also support women’s empowerment (with women acting as the primary drivers of livelihood diversification in the household) and stimulate human capital–relevant parenting practices.

· Livelihoods and jobs. Cash transfers coupled with productive inclusion programs help households build sustainable livelihoods, including outside agriculture. As such, they represent a critical first step toward self-employment opportunities for the extreme poor, especially the youth.20

Impacts are reinforced when involving a “plus” approach. Associated services (plus) can be cost-effective because they build on the existing platform of cash transfers and the associated delivery systems.21 For the national social safety net program in Niger, for example, the cash plus approach, which combines traditional cash transfers with productive inclusion, has been shown to significantly increase consumption, raise shock resilience, and help households build sustainable livelihoods (see box 2.1).22 It has also been shown to improve women’s labor participation, revenues, and various dimensions of psychosocial well-being, all while being highly cost-effective (Bance, Bermeo, and Kabemba 2021; Bossuroy et al. 2021).

Countries in the Sahel have started to deliver integrated productive inclusion interventions as part of national safety net systems to support extreme poor households’ economic activities and encourage diversification. Impact evaluation results from Niger show that the productive measures undertaken led to a large and sustained increase in consumption and food security. The evaluation tested three packages with common features involving coaching, savings facilitation, and micro entrepreneurship training as well as variations involving (1) a lump-sum capital grant (“capital”), (2) psychosocial interventions with life skills training and community sensitization on aspirations and social norms (“psychosocial”), and (3) a full package of all elements. These government-led interventions came as a “plus” on top of the regular cash transfers delivered by the national safety net system. In Niger, significant impacts were observed in the short run and were then sustained 18 months post-intervention for the three productive inclusion packages. Impacts on yearly household consumption were estimated between 7 and 15 percent ($267 to $566), making the productive measures highly cost-effective: the packages with psychosocial components had cumulative welfare impacts that already exceeded their costs 18 months after the intervention (figure B2.1.1).

BOX 2.1: Toward More Sustainable and Resilient Livelihoods and IncomeGenerating Activities: Evidence on Impacts of Productive Inclusion Programs in the Sahel

19 Premand and Stoeffler (2020) find that beneficiaries of a multiyear government cash transfer program in rural Niger can better mitigate the effects of droughts through savings, asset accumulation, and income smoothing. 20 Bossuroy et al. (2021). 21 Premand and Stoeffler (2020); Bossuroy et al. (2021); Andrews et al. (2021). . 22 Premand and Stoeffler (2020); Bossuroy et al. (2021).