Management Consultant Mike Eldon

Roll out basic income for the poor in slums

The government, the private sector and others have been working hard to help the poor through offering food, medical supplies, sanitisers and other essential products.

But there is increasing acceptance of the need for a basic income, that is cash transfers, for the 10 million poor people in Kenya’s slums as being the best approach to help them.

There is an emerging consensus that the optimum way to defuse or prevent potential conflict is to pay direct cash transfers to all individuals. Basic income is more powerful than supplying goods, as it also promotes livelihoods and so reduces poverty.

Cash is urgently needed to help the poor in the slums of Kenya. And the same is true for many countries across Africa and beyond, especially if the virus spreads significantly more than has been experienced to date.

The brave early attempt to distribute desperately needed food in Kibera slum resulted in some chaos. And while additional measures have since been put in place to ensure both security and better co-ordinated distribution, an alternative would be to benefit from the experience of UNHCR in Lebanon.

There, UNHCR found that when using its limited winterisation funds to pay cash transfers to vulnerable families, the basic income tended to increase mutual support between beneficiaries; reduce tensions; and improve relationships with the host community. There were also significant multiplier effects, with each $1 of cash assistance generating more than $2 for the Lebanese economy, most of which was spent locally.

Then, with cash, people were able to buy what they most needed, whether food, rent or other essentials (like now, here and elsewhere, face masks).

Similarly, the World Food Programme (WFP), which compared food distribution with cash distribution in three countries, found that in Ecuador, Uganda and (pre-war) Yemen cash transfers led to improved nutrition and this at lower cost. That experience led WFP to put more emphasis on cash transfers, so that today over a quarter of WFP’s aid globally is cash-based.

What next for Kenya? It seems to us that there is a clear need for a basic income. A small amount of Sh1,000 monthly for each individual, including children over 5, has been suggested, to be distributed via M-Pesa to those who have a mobile phone and live in a poor area. For a period of three months, a monthly payment would still require Sh30 billion.

While clearly such an amount would not be easy to be made available given that the government has so many demands on its services, we know that the most vulnerable are our top priority.

Then what delivery mechanism to use? Technical experts at mobile phone companies think they can identify most poor people in the vicinity of a transmission mast through a technique known as “Geo-Fencing”.

Hopkins is Professor of CSR and co-founder Institute for Responsible Leadership
Eldon is Chairman, The DEPOT and co-founder Institute for Responsible Leadership
Munro is former UN Senior Policy Adviser on Sustainable Development and MYSA Founder Chairman
Vater is a Nairobi-based social entrepreneur, investor, manager and serial entrepreneur