Rampant inflation and climate crisis: can cash cope?

Nigeria is currently experiencing its worst financial crisis in almost 30 years. Economic reforms such as the floating of the naira and the fuel subsidy’s removal have contributed to rising inflation, which reached almost 30% in February 2024. The volatile financial climate is having a real and significant impact on crisis-affected communities in northeast Nigeria. In the BAY states (Borno, Adamawa, and Yobe), 4.4 million people are predicted to have crisis or emergency food needs during the lean season in 2024, impacting over 80,000 more people than last year. Continued conflict, rising food prices, and climate change contribute to this trend. Internally displaced people (IDPs) in Borno State face ongoing insecurity and uncertainty as camp closures have continued through 2023, following the Borno State government’s decision to close all IDP camps and relocate people to their place of origin. Camp closures are expected to continue through 2024, which risk a rapid expansion of informal settlements. Soaring inflation, a liquidity crisis, and waning humanitarian funding have combined to create a challenging environment for providers of cash and voucher assistance (CVA). Many are having to reassess their approaches to achieve best value for money. Humanitarian funding for Nigeria is predicted to decline in 2024, meaning the response’s strategy for 2024–2025 focuses on more targeted and prioritised assistance. This includes improving the cost efficiency of aid delivery, focusing on multi-purpose cash assistance (MPCA), and increasing interventions before crises escalate. As the response looks to cash, specifically MPCA, to make efficiency gains, it is more important than ever to ask people who receive cash and vouchers about their experiences, and how cash could work better for them.