2.2 Sierra Leone’s Emergency Cash Transfers in Response to COVID-19

BOX 2.2: Sierra Leone’s Emergency Cash Transfers in Response to COVID-19 In just the past six years, Sierra Leone has been hit by several devastating health, economic, and climatic shocks. The 2015 Ebola outbreak, which ultimately proved to be fatal for over one-third of the people it infected, claimed more than 3,900 lives—more than in any other country.a The heavy rains of 2017 that led to a mudslide in the capital city of Freetown left a scar that is still visible to this day. Throughout the past two decades, the country’s reliance on commodity exports has caused economic growth to be highly volatile, as shown by the sharp decline in output and job losses following the drop in global iron ore prices in 2015/16.b By the end of March 2020, the President of Sierra Leone declared a state of public emergency in response to yet another crisis, this time due to the global COVID-19 pandemic.c The events that unfolded in the subsequent months, however, demonstrated that Sierra Leone was better equipped to deal with this latest crisis. Only two months after the declaration of the emergency, the National Commission for Social Action (NaCSA), with support from the World Bank, started providing an Emergency Cash Transfer (ECT) payment in Freetown and the four regional headquarter towns of Bo, Kenema, Makeni, and Port Loko. The primary objective of the ECT was to protect vulnerable households and workers in the urban informal economy based on early analysis that suggested the pandemic’s economic impacts would hit informal sector workers in urban areas first and hardest. By August 2020, the ECT had provided a one-time transfer of Le1,309,000 (approximately US$135)—equivalent to approximately two months of minimum wage earnings in Freetown—to more than 29,000 households with urban informal sector workers.

Two key features enabled the swift rollout of the ECT. First, NaCSA had previous knowledge and experience in responding to crises through cash transfers, which enabled the process of building robust delivery systems over the years and provided a foundation for a crisis response intervention like the ECT. In 2014, the Government of Sierra Leone launched its flagship cash transfer program—called the Ep Fet Po. The Ep Fet Po is financed by the International Development Association (IDA) through the Social Safety Net Project (SSNP) and provides unconditional cash transfers to extreme poor households. The Government of Sierra Leone had scaled up the cash transfers to new households during the 2015 Ebola outbreak and the flooding and mudslides of 2017.d This experience proved to be vital in the design of the targeting strategy for the ECT as it required covering beneficiaries not traditionally included in social safety net programs. Independent spot checks have found that the targeting strategy worked as intended, effectively identifying vulnerable urban informal sector workers and achieving the desired female-to-male ratio of 70:30 among the ECT beneficiaries. Second, with crises such as the mudslide and Ebola in recent memory, NaCSA took the unusual but prescient step of holding a small amount of IDA financing from the SSNP’s Second Additional Financing in a “contingency fund.” The US$4 million was earmarked for emergency cash transfers and ringfenced until an “eligible emergency” occurred. Access to these pre-positioned emergency funds when COVID-19 hit was a decisive factor in the ECT’s timeliness, ahead of the slower mobilization of other resources. The timeliness of the first ECT led to the European Union providing additional funds to NaCSA to implement a second ECT in 2021 that benefitted an additional 36,000 households with informal sector workers in Freetown. Preliminary analysis suggests that these funds were mostly used to purchase food and helped self-employed households keep their businesses afloat.

a. Sandford et al. (2020). b. Gonzalez and Gutierrez (2017). c. https://statehouse.gov.sl/sierra-leones-president-julius-maada-bio-declares-a-state-of-public-emergency-says-there-is-no-lockdown/. d. World Bank (2017).