Beirut, May 25, 2023 – The World Bank Group’s Board of Executive Directors approved today a US$300 million additional financing to the Emergency Crisis and COVID-19 Response Social Safety Net Project (ESSN). The additional financing will expand and extend the provision of cash transfers to poor and vulnerable Lebanese households and further support the development of a unified social safety net delivery system in Lebanon to allow a better response to ongoing and future shocks.
This US$300 million new package represents the second additional financing to the ESSN project (US$246 million) originally approved in January 2021 to help the Lebanon address the impact of the economic crisis and the COVID-19 pandemic on the poor and vulnerable population. The project already benefited from a first additional financing of US$4 million in May 2022. This second additional financing will continue to help Lebanon protect its population from the impact of various crises, as well as help the country develop a targeted and digital social safety net system. Going forward, Lebanon would need to secure the fiscal space needed to finance social protection needs, including social safety nets, over the long term.
Lebanon is more than three years into an economic and financial crisis that is among the worst the world has seen. A total contraction of 39.9% in real GDP since 2018 has already wiped out 15 years of economic growth. The crisis continues to have a severe impact on the social level and is significantly impeding access to basic public services. With the sharp deterioration in the currency, the three-digit inflation, and rising food insecurity and food inflation rates, the living conditions of extreme poor and vulnerable households continue to deteriorate. On the sectoral level, Lebanon lacks a comprehensive and inclusive social protection system that provides its citizens equal access and opportunity. Prior to the economic crisis, the social protection system was highly regressive, driven by universal subsidies and limited investments in targeted social safety net (SSN) programs.
Approved in January 2021, the ESSN project – also known as AMAN - has built the foundations of a poverty-targeted social safety net system in Lebanon through the establishment of DAEM, the first fully digitized national social registry. DAEM has facilitated the effective, efficient, and transparent provision of cash transfers to approximately 82,000 households meeting extreme poverty and social vulnerability criteria for up to 14 months. The project has adopted a robust Grievance Redress Mechanism through the establishment of a call center that ensures the prompt and efficient resolution of applicant queries. The ESSN project has also recruited a Third-Party Monitoring Agent to verify eligibility and confirm due payments to beneficiary households. A Post Distribution Monitoring survey conducted revealed that after receiving the transfers, the largest share of beneficiary household spending was on food (43% of spending) followed by healthcare (12% of spending). Around 99% of beneficiary households reported improved living conditions after the transfers, while 66% of beneficiary households with children reported that the transfers facilitated school attendance.
“The additional financing will enable the Government of Lebanon to continue to respond to the growing needs of poor and vulnerable households suffering under the severe economic and financial crisis,” said Jean-Christophe Carret, World Bank Middle East Country Director. “The financing will also facilitate the integration of existing SSN programs into a unified SSN program in line with the Government’s vision articulated in the National Social Protection Strategy, and ensure simplification of implementation, reduce fragmentation and duplication, and promote efficiency and effectiveness of SSN spending.”
Overall, the ESSN project and its additional financing will provide cash transfers to 160,000 households for 24 months. This includes the current ESSN beneficiary households in addition to new households who meet poverty and vulnerability criteria. Eligible households will receive monthly a US$25 flat amount, in addition to US$20 per household member (up to 6 members), i.e., a maximum monthly amount of US$145 per household. The project is jointly implemented by the Ministry of Social Affairs and the Central Management Unit at Presidency Council of Ministers that contracted the World Food Program to carry out eligibility verification visits and payments of the cash transfers. Payment information and as well as other critical messages are communicated to the recipient households via SMS monthly. Benefits are redeemed in actual US dollar through mobile transfer operators.
The additional financing will also expand the provision of education cash top-up transfers to a total of 92,000 students in beneficiary households between the ages of 13-18 year to cover the direct costs of schooling including school registration fees, parents’ council fees, school textbooks and stationery costs, transport, and school uniform expenses. Eligible students will receive between US$285 to US$425 per scholastic year depending on school grade and education stream to be paid directly to the beneficiary household. The attendance and the academic performance of eligible children will be monitored and reported by the Ministry of Education and Higher Education.
The ESSN additional financing will also support increased access to quality social services provided by the Social Development Centers of the Ministry of Social Affairs for 400,000 individuals and will provide capacity building activities to the social workers at the Ministry and centers to enable them to better carry out their functions.
Building on the progress achieved under the ESSN project, the additional financing will continue to support the development of DAEM Social Registry to an integrated Social Protection Information System (SPIS) as per the needs of the government. DAEM SPIS will facilitate the integration of poverty-targeted social safety net programs supported under the National Poverty Targeting Program (NPTP) and the ESSN-AMAN program as well as implementation of other SSN programs through the same gateway. SPIS will cover the core functionalities of any SSN program including intake & registration, assessment of needs and conditions, eligibility & enrollment, determination of benefits and services package, case management, delivery of benefits and services, grievance redress, and continuous monitoring through respective modules in the system.