WFP plans to replace a percentage of the cereal ration of the in-kind General Food Distribtuion (GFD) provided to refugees in northern Kenya with a voucher that would enable them to buy other food commodities. This will initially be 10% of the cereal ration steadily increasing to 30% if markets respond well to the increased demand.
A key concern in scaling up the voucher scheme is the possible impact on the net distribution of costs and benefits in refugees, traders and the host community. In particular, possible effects on vulnerable groups and markets (especially prices), and the influence of exogenous factors such as food cuts, changes in the camp population and security restrictions.
The purpose of the research is to develop a set of analytical tools that will inform on the scale up of vouchers, and in particular help WFP to determine the most effective mix between GFD and vouchers, given available resourcing.
The approach used was holistic, initiating with key stakeholder interviews and examination of secondary data and background information to understand the context, key issues, expected costs, benefits and risks and other activities or exogenous factors which may influence outcomes. The expected theory of change was then developed, and a general equilibrium economic simulation model was formulated that computes the market (price) response to the injection of vouchers and compares it to in-kind food aid. A list of key variable and indicators were then developed, and a gap analysis and an evaluation of the current WFP M&E tools were then used to construct the data collection and analytical tools required to run the model.
The model is constructed taking into consideration key findings from the stakeholder interviews including seperate models for Kakuma and Dadaab, and individual household types which may differ in vulnerability (income and consumption) and accessibility to vouchers in different subcamps.
Three stand-alone surveys were proposed : A household (HH) survey, a trader survey and a market monitoring (MM) tool. These are to be supplemented by systematic monitoring of conflicts; FGDs with traders, host communities and refugees; KI interviews with local providers and suppliers; and a costing inventory and itemised menu construction for estimating the WFP provider costs.
The main model outcome is the percentage change in welfare (utility) or its monetized equivalent for different household types. Estimates of the costs of both the food and voucher distribution can be used to compute and maximize net welfare estimated from the model and the key parameters related to consumption and production. Although the model should only be seen as a decision-guiding tool, it has the capacity to determine the minimal cost associated with reaching a particular welfare goal, using a combination of instruments. It can also be used decide under what conditions (e.g. critical price levels), one may want to scale-back vouchers.