Layering Cash Into Market Systems Programs: Catalyzing Market-Driven Recovery in Nigeria

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With global inequality and food insecurity on the rise in the aftermath of COVID-19 and other economic and sociopolitical shocks, Mercy Corps shares this learning paper highlighting the use of short-term humanitarian response layered into a market systems development program to support positive coping and accelerate resilient recovery. The paper aims to assist the aid community in understanding which responses are appropriate, when, and by whom to inform future market-driven crisis responses.

Mercy Corps and its implementing partners the International and the International Fertilizer Development Center (IFDC) and Save the Children have been implementing the USAID-funded Feed the Future Nigeria Rural Resilience Activity (RRA) in Northeast Nigeria since 2019. This learning brief examines RRA’s response to COVID-19, which used unconditional cash transfers to help households cope, jumpstart local economies, and prevent further backsliding among the businesses that marginalized groups rely on most. This combination of approaches enabled Mercy Corps to assess the impact that cash transfers can have on MSD programming, including both operational lessons and insights into how cash affects market actor incentives and behavior.

The brief highlights:

  • The positive impact of Northeast Nigeria’s short-term cash response, particularly in improving coping and recovery for marginalized groups.
  • The importance of pre-existing market knowledge, networks, and partnerships to the design and impact of humanitarian interventions.
  • Operational lessons for implementing direct-delivery interventions alongside market facilitation strategies.
  • Ideas for how to leverage cash responses to support inclusive change in local economies.

This is one of a series of briefs produced by Mercy Corps to capture learning on its Markets in Crisis approaches, including recent lessons from market-based drought response in Ethiopia. The series focuses on operational lessons; evidence of market-based coping and adaptation; and pathways to resilient market systems change. For more information, you can also see snapshot lessons from programs, which serves as a primer for this series.

Remote Sensing: Country-Wide Anticipatory Analysis

To better understand and anticipate potential impact of conflict on agriculture across the entire country, Mercy Corps Technology for Development (T4D), Crisis Analysis, and Sudan teams collaborated to conduct remote sensing analysis. This used satellite imagery to monitor the Normalized Difference Vegetation Index (NDVI) in agricultural areas across Sudan, and compare the average vegetation to previous years, serving as a rough proxy for potential agricultural production. Key findings include:

  • Early analysis in July 2023 indicated that vegetation levels in agricultural areas in Sudan were generally high compared to long-term averages, likely due to good early season rainfall and following a positive harvest for many staple crops in 2022.
  • However, from August, vegetation levels started to fall below previous years. By mid-September, when vegetation usually peaks, 2023 vegetation levels were lower than most previous years (with the exception of 2015 and 2017, which saw particularly poor harvests). This is despite above-average rainfall across the country.
  • The downward trend in vegetation indicates that the harvest is unlikely to be as positive as last year: comparing vegetation peaks in previous years to the annual national cereal production indicates that there may be some correlation between higher vegetation levels and better harvests, though this has not been statistically tested and is indicative only.
  • Certain areas stand out as particularly affected. Khartoum exhibited a decrease in average vegetation levels from July 2023, which progressively worsened as the season continued. Agricultural activity, both smallholding and commercial, was reported to be disrupted by presence or occupation by armed groups and proximate violent conflict, as well as lack of agricultural inputs and a fall in demand.
  • Across the east of Sudan, by September the vegetation index anomaly (difference with 10-year average) declined compared to July, despite reasonable rains. Irrigated areas and large-scale industrial farms that rely on fuel-powered machinery or intensive early funding appear to be particularly affected.
  • Gedaref state, a key producer of sorghum, has been relatively unaffected by direct conflict and is relatively accessible for humanitarian actors. Whilst at the end of July, vegetation levels were higher than 10-year averages, by mid-September, some areas in the north and west had started to decline despite reasonable rains.
  • With the upcoming harvest season, a critical issue will be ensuring that farmers are supported to harvest and sell their produce, given that key sorghum markets such as Khartoum and El Obeid may continue to be disrupted by conflict.