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The impacts of the Child Grant Programme (CGP) on the local economy in Zambia

Year of publication 2014

Pages 2p.

Author Agriculture and Economic Development Analysis Division

Category Bulletin

Edition 1

Synopsis (short abstract) Local economy-wide impact evaluation (LEWIE) simulation methods are used to assess the likely impacts of cash transfers on the local economy. When the Child Grant Programme (CGP) gives money to beneficiary households, they spend it to buy goods and services. As this cash circulates within wards and districts it also creates benefits for non-recipient households that can provide the goods and services purchased by beneficiary households. The LEWIE model simulations show that the CGP has a potenti al total income multiplier of ZMK 1.79 in nominal terms, with a 90% confidence interval (CI) of 1.73–1.85.

Language English

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    Local Economy-wide Impact Evaluation (LEWIE) of Zambia’s Child Grant Programme 2014
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    The Zambia Child Grant Programme (CGP) provides a bi-monthly cash transfer to households with children under five years of age, with the goal of reducing “extreme poverty and the intergenerational transfer of poverty” in programme households. The CGP provides a significant infusion of cash into Zambia’s rural economy. When beneficiaries spend the cash transfer they transmit the impact to others inside and outside the local economy, more often to households not eligible for the cash transfer who tend to own most of the local businesses. The impact of the CGP on the local economy was simulated using a LEWIE (Local Economy Wide Impact Evaluation) model, focusing on the three districts where the programme is located and included in the CGP impact evaluation. The LEWIE model for the CGP found that the transfers could lead to relatively large income multipliers of ZMK 1.79. That is, every Kwacha transferred to poor households had the potential to raise local income by ZMK 1.79. Eligible hous eholds receive the direct benefit of the transfer, while ineligible households receive the bulk of the indirect benefit. However, if labour, capital and land markets do not function well upward pressure on prices could result. This would raise consumption costs for all households and lead to a real income multiplier that is lower than the nominal multiplier. This real income multiplier could be as low as ZMK 1.34. Complementary programmes that increase the supply response (such as access to cred it to invest in capital) could increase the real-income and production impacts of the programme.
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    Other document
    Impacts of the Child Grants Programme on the local economy in Lesotho 2013
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    The objective of Lesotho’s Child Grants Programme (CGP) is to improve the living standards of Orphans and Vulnerable Children (OVC) so as to reduce malnutrition, improve health status, and increase school enrolment among OVC. The CGP seeks to accomplish this via an unconditional cash transfer targeted at poor and vulnerable households. The programme’s immediate impact will be to raise the purchasing power of the beneficiary households. The LSL 1 440 transfer represents an average of 22 percent of the income of the treated households, every quarter the programme transfers LSL 3.3 million to 2 299 households.
  • Thumbnail Image
    Other document
    Impacts of the Child Grants Programme on the local economy in Lesotho 2013
    Also available in:
    No results found.
    The objective of Lesotho’s Child Grants Programme (CGP) is to improve the living standards of Orphans and Vulnerable Children (OVC) so as to reduce malnutrition, improve health status, and increase school enrolment among OVC. The CGP seeks to accomplish this via an unconditional cash transfer targeted at poor and vulnerable households. The programme’s immediate impact will be to raise the purchasing power of the beneficiary households. The LSL 1 440 transfer represents an average of 22 percent of the income of the treated households, every quarter the programme transfers LSL 3.3 million to 2 299 households.
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