Abstract
Evaluates the impact of a project to provide cash grants to help resettle victims of the 1999-2000 floods in Mozambique (resettlement grant activity). The activity helped families return to their homes and farms and rebuild their lives, while at the same time, jump-starting economic activity, re-establishing effective demand and supply of goods and services. Cash grants were distributed from December 2000 to April 2001 to more than 106,000 rural families. Each head of household received 1.5 million meticais, about US$92. The distribution of US$9.7 million was accomplished at 167 distribution sites that encompassed over 730 villages in 30 districts within the five affected provinces. Grants were delivered to the woman of the household. Families were able to chose for themselves which goods or services, or even savings were their highest priorities. Grant recipients for the most part met criteria based on, among others, location and damage to homes and crops. Beneficiary identification involved a village by village registration process, collecting names, inventorying losses, and verifying information with village elders. Grant recipients were poor, largely subsistence farmers, living in rural villages near their own fields. Many recipients live in areas often affected by extreme natural conditions. They suffered in the floods then, and are now suffering with drought. Grants were primarily spent on household goods (e.g., dishes, pots, pans, blankets), clothes, and livestock. The money was spent mainly near local distribution points, and thus remained in the region, stimulating sales and job creation by retail traders. Food prices increased substantially during and after the floods, but food inflation effects of the program were minor, given the tendency by households towards purchases other than food. The main cause of the marginal local inflation was the scarcity of products, highlighting the importance of accompanying such cash programs with complementary programs on the supply end. The program contributed to the revitalization of distribution networks in affected areas. The extra income that trickled up to local retailers in the form of increased business allowed them to restock their stores and repair damages caused by the floods. The fundamental principle of a cash grant program -- that without any conditions attached, households would make prudent use of the money - was confirmed. The view that women manage the money and choose the family priorities was also borne out. The program helped stabilize affected households by providing them with income lost during the floods, and allowed homes to be re-established, essential needs to be met, and productive, income-generating activities to be re-started. Those most severely affected by the floods were assisted, and in the absence of the grant program, would have been worse off. At the same time, however, the program reinforced a sense of expectation by villagers that others may be depended upon for their survival. (Author abstract, modified)