Making Money Pay: Direct Cash Transfers in Kenya

Friday, May 30, 2014

According to proponents, direct cash transfers not only cut out admin costs and losses to corruption. They are also more empowering and effective.

Siaya, Kenya:

In December 2011, Special Inspector General for Afghanistan Reconstruction Major Gen. Arnold Fieldswarned that the amount of US aid wasted in Afghanistan since 2002 reached “well into the millions, if not billions, of dollars.”

Shortly afterwards, James Petersen, an auditor for US Agency for International Development in Afghanistan, suggested Fields had hardly even scratched the surface. “A mere 30 cents out of every dollar for Afghanistan goes to aid” after accounting for NGOs’ administrative costs, he wrote in a January 2012 article. “[But] it gets worse,” he continued. “Of that 30 cents, frequently only half reaches the intended recipient. The remainder is lost, stolen or misappropriated by Afghan workers and officials.”

An 85% loss rate would be unacceptable in almost any other sector, and although perhaps not as stark, huge proportions of aid budgets are lost to administrative costs and corruption in many other countries too. A growing number of aid critics insist that this shouldn’t be tolerable.

Source: Think Africa Press (link opens in a new window)

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