Anticipatory cash transfers for climate resilience – evidence from a randomized experiment in Northeast Nigeria

This paper presents the findings from an experimental study designed to assess the impacts of a one-off large lump sum anticipatory cash transfers on welfare and coping strategies of smallholders in climate-risk and conflict-affected communities in northeast Nigeria. The central hypothesis of the intervention is that when climate vulnerable communities have timely access to information and the financial and social resources to act upon that information, they will avoid negative coping strategies and build more diversified and climate resilient livelihoods. The study transferred a lump sum of anticipatory cash to a randomly sampled group of 725 households (‘treatment’) based on a climate data risk threshold for flooding. An equal number of comparable households (‘control’) received the same amount of cash after the flooding. The study collected baseline and endline data from the sample of 1450 households and analyzed using a pre-defined econometric model. Several indicators of outcomes including food security, climate adaptive and resilience actions, and wellbeing measures were used to assess the intervention. The results indicate that anticipatory cash has significant impacts on reducing negative coping strategies, increasing the number of pre-emptive climate adaptive actions, and increasing investment in productive assets that could enhance future resilience. On other hand, anticipatory actions do not seem to have significant impacts on short-term food and non-food consumption expenditures. In a nutshell, findings indicate that a one-off large sum anticipatory transfer could lead households to build their climate resilience, and hence a promising intervention to reduce vulnerability of households to future climate shocks.