The government of Kenya has launched the pilot phase of a subsidy program which aims to provide poor Kenyans with a monthly cash allowance to meet their basic food needs. At a news conference held in Nairobi on 4 November, Prime Minister Raila Odinga announced that the government would be transferring US$20 a month to 20,000 Kenyan families living in Nairobi slums for the next nine months.

The pilot program marks the first phase of the Saidia Jamii ('Help the Family') program. During this phase, "Each household will be receiving Sh1,500 per month [KSh1,500, approximately US$20] delivered through mobile phone transfer and electronic card system," said the Prime Minister, according to the Kenyan newspaper the Daily Nation.

A second pilot phase, beginning in March, will expand the program to Kenya's second and fourth largest cities, Mombasa and Kisumu, where another 20,000 families will receive the subsidies. If successful, the results of these two pilot phases will inform the roll-out of the full Saidia Jamii program into other urban areas in July of 2010.

Prime Minister Odinga's announcement came as he received an interim report from a taskforce on the development of a comprehensive, targeted food-subsidy scheme in Kenya. The taskforce was formed in response to escalating food prices in the country, which have left many of the country's poor unable to meet their basic needs. The program must still be approved by the country's Cabinet.

Cash transfers are seen as good alternatives to traditional food and energy subsidies in developing countries, says a 2008 report by the German Development Institute (GDI). According to the DIE, for example, only an estimated 30% of spending by the government of India on food subsidies actually reaches the poor, while 70% ‘leaks' to non-intended recipients.

Cash transfers have also become popular in recent years because they have lower administrative costs than subsidy payments and do not distort market prices, adds the DIE paper.

The Kenyan subsidy scheme is being implemented by the Kenyan government with the support of Oxfam and the World Food Programme (WFP). The pilot phase of the Saidia Jamii program is being funded primarily by the Kenyan government, which will invest KSh 600 million (approximately US$ 8 million), while the WFP will contribute about KSh 81 million (approximately US$ 1 million).

Subsidy Watch contacted Marcus Prior, East and Central Africa Spokesman for the WFP, who explained that the Saidia Jamii program is "a direct cash-transfer program to protect the most vulnerable urban Kenyans from food insecurity. It will increase the purchasing power of households to help supplement and increase their food consumption." The cash transfer will be an unconditional, as opposed to a conditional cash transfer, which would require individuals to participate in one or more qualifying activities, such as attending labour-training courses, getting regular health checkups or enrolling their children in school.

According to Mr. Prior, given the WFP's extensive experience "managing similar projects in other parts of the world, and the care that has been taken in targeting beneficiaries correctly, WFP is confident this project will provide a vital boost to household food security amongst the poorest urban dwellers."

Yet the WFP recognizes that, as with all subsidies, there will be challenges to implementation. In particular, Mr. Prior said that targeting could be a sensitive issue as "not everyone who feels that they will be eligible can be targeted, at least not in the pilot phase." In order to deal with these concerns, local NGOs will be used to get the message across that only the neediest will be targeted, he added.

‘Community-based targeting' is to be used to select families, through a local community targeting committee. These will be composed of a local administration representative, the village chief (a figurehead common in slums), head teachers, community mobilizers, community elders, a city council representative, staff from other NGOs and other relevant actors.

They will choose which households are eligible for support based on targeting criteria such as the presence of several elderly people, child household-heads or people living with terminal illness and no support.

In order to prevent possible abuse, WFP will ensure that targeted households are registered in its database. WFP will also verify the registered database against a monthly disbursement list. Additionally, there will be monthly monitoring of randomly selected households to ensure their receipt of the entitlement. House-to-house calls will also be made to verify that recipients qualify for the subsidy.

The cash transfer program will complement other existing government social safety net programs including the Orphan and Vulnerable Children (OVC) cash transfer program and the Hunger Safety Net Programme (HSNP), added Mr. Prior.

Saidia Jamii is not without its critics. Francis Atwoli, secretary general of the Central Organization of Trade Unions (COTU), argues that other similar programs have failed, citing examples such as the Kazi kwa Vijana ('Jobs for Youth') and Unga ('Flour') programmes. Mr. Atwoli told the Daily Nation, "Like any other government scheme, it is prone to abuse by powerful forces in government who will use it to siphon taxpayers' money." MP Joshua Kutuny also raised concerns that the program could encourage rural-to-urban migration.