ACTIVITY HAS BEEN REVISED SIGNIFICANTLY FROM FY 2008 COP

TITLE: Economic Strengthening of Vulnerable Families

NEED and COMPARATIVE ADVANTAGE: In areas with high HIV/AIDS prevalence, families and

communities face increasing strains on their capacity to care for affected children. The microeconomic

impact of HIV/AIDS can create a poverty trap that ensnares the most vulnerable households (UNAIDS,

2008). About 40% of Tanzanian children under the age of 18 are living in households at or below the

national poverty level. HIV/AIDS undermines households' ability to maintain incomes, especially those

households engaged in labor-intensive work. When breadwinners are unable to work, families suffer

erosion of savings and productive assets, and sometimes the ability to produce food. Because resources

must be diverted to sustain basic needs, children's access to health and education services is at risk.

The impact of HIV/AIDS does not stop with the individual who contracts HIV. It essentially erodes the

resources of immediate and extended families as they struggle with multiple hospital trips, medical

expenses, and funeral costs, in addition to the ongoing costs of supporting the orphans of parents who die

from AIDS. For most vulnerable families in Tanzania, concern about sliding further into poverty subsumes

the other effects of HIV/AIDS. Thus, the ability to generate income and savings becomes a crucial weapon

for vulnerable households struggling to support their families.

There are also many factors that contribute to the youth unemployment rate, which, in Sub-Saharan Africa,

is the second highest in the world (UN Economic Commission for Africa, 2005). Poor quality of education

and a lack of market-driven skills training are the leading causes. Health status of young people also

affects their employment situation, with reduced likelihood of employment among those who suffer from

HIV/AIDS. The stigma associated with HIV/AIDS also compounds the employability of older orphans and

vulnerable children (OVC).

Given the situation of vulnerable households and adolescents, most OVC implementing partners include

economic strengthening in their portfolios. A gap exists in the evidence on the sustainability of these

activities and their influence on improved child wellbeing. Also, many OVC programs are managed by

health sector practitioners who try to adapt micro-level interventions from the economic growth sector

without actually partnering with experts from this sector. A framework for action is needed to improve the

management and results of the economic strengthening activities supported by the USG OVC portfolio.

ACCOMPLISHMENTS: Several OVC partners have designed and piloted small-scale household economic

strengthening activities such as the Peace Corps' Permaculture activity, the Catholic Relief Services'

savings and internal lending communities (SILC) program, and the Salvation Army's WORTH project.

Some tracking of benefits to children supported by participants in these projects is underway. Loan

repayment rates and maintaining of petty trade activities indicate successes to consider for replication. The

USG is planning to support a stock-taking exercise by economic growth experts to note effective and

sustainable strategies and to inform the development of an economic strengthening framework for use by

PEPFAR partners working with vulnerable youth and households caring for OVC.

ACTIVITIES: The primary objectives of this initiative are to: 1) implement a framework that unites OVC

partners in applying best practices from microenterprise and microfinance; 2) establish microenterprise and

microfinance programs in Tanzania; 3) increase engagement with economic growth partners; and 4) apply

indicators to track wellbeing of children in households participating in economic strengthening activities.

This framework will include a two-pronged approach: strengthening households (and particularly women)

caring for OVC and supporting youth employability. The goals will be to maintain household incomes and

transition households affected by HIV/AIDS out of destitution (e.g., chronically ill-affected, elder-headed, or

child-headed households). For adolescent OVC, the need is to increase marketability of skills, receptivity of

potential employers, and viability of business startups. The framework must be context-relevant to cover

rural, peri-urban, and urban areas.

Once a framework has been identified, TBD will assist OVC households through the establishment of

microenterprise and microfinance programs in Tanzania. The framework will cover the range of community-

and household-based means for improving livelihoods, increasing incomes, and managing household

resources relevant to the Tanzanian context. Scenarios for best use and a decision-tree process will be

included to help partners make informed choices. Specific interventions might include:

- Savings and loan schemes

- Small business training, development, and support

- Linkages to microfinance outlets

- Village banking

- Formalized ties to markets

- Vocational training based on market analysis and forecasting

- Networking to expand relations with private sector, including business associations

- Farming/gardening groups of people living with HIV/AIDS and/or caregivers

Successful implementation of these objectives should result in households caring for OVC experiencing and

reporting improved livelihoods, and vulnerable youth being equipped with market-driven vocational skills

who report obtaining income as a result of participating in either the formal or informal business sectors.

Support to vulnerable adolescents will focus on the interventions identified by the World Bank (March 2007)

found to be most effective in ensuring that young people gain employment. These interventions do not

address underlying systemic issues such as the education system, or the investment climate to promote job

creation. To fill this void, partnerships will be strengthened with USG colleagues in the economic growth

and education sectors. The most widely used interventions include: making labor markets more

maneuverable for young people, improving chances for young entrepreneurs, enhancing skills training, and

Activity Narrative: applying a comprehensive approach. A comprehensive approach requires considerable linkages with local

and national government, public and private educational institutions, as well as non-governmental

organizations to deliver critical vocational/technical training, related life skills support, job placement

assistance, and entrepreneurship opportunities.

The USG HIV/AIDS sector cannot take on the development and implementation of such a framework alone;

rather, it needs to be done in partnership with the economic growth sector. USAID/EG participation in

global learning activities and in policy dialogue helps to leverage investment and support across public and

private entities. The core competencies and networks of the economic growth sector are needed to

complement the expertise within OVC programs. Guidance on how to achieve such a partnership has

recently been published by the USAID Bureau on Economic Growth, Agriculture and Trade. USG/Tanzania

has an opportunity to apply this guidance by buying into a new procurement mechanism housed in its

USAID/Washington Economic Growth Office.

Specifically, this activity will contribute to the PEPFAR/Tanzania strategy by improving the livelihoods and

self-reliance of 5,000 vulnerable youth and 5,000 households caring for OVC, including most vulnerable

children committees and caretakers living with HIV/AIDS.

The framework to be applied includes steps for taking action on the new USG guidance on how to

implement economic strengthening activities in programming for vulnerable children. It will include the

review of promising practices that have helped to strengthen households. Also, the USG is reviewing the

validity of conditional cash transfers as an effective mechanism to strengthen households caring for OVC in

the Tanzania context. Results from a pilot program of the Tanzanian Social Action Fund, with support from

the Japanese Social Development Fund and technical guidance from the World Bank, will be taken into

consideration.

Given that all OVC partners will use the framework and apply the monitoring methods, each of the USG

priority regions will be reached through this activity. Piloting of the framework will be tied to the application

of OVC service standards and the model program learning districts that each OVC partner will oversee in

one of their geographic areas.

LINKAGES: This activity will focus on households caring for OVC. As such, the activity will link closely with

the OVC implementing partners, as well as those engaged in home-based care. The Tanzanian

Implementing Partners' Group for OVC will serve as a conduit for disseminating and reporting back on the

usefulness of the economic strengthening framework. Significant improvement in linkages or wraparounds

with economic growth partners will be accomplished through this activity. Placing funds into an economic

growth mechanism ensures that the implementing partner that will manage the program will be experienced

and well-networked within the microfinance and microenterprise sectors. PEPFAR/Tanzania will reap the

benefits of tapping into existing core capacities and infrastructures.

M&E: A primary gap in current economic strengthening activities is partner-wide agreement on and use of

methods for measuring the benefits of economic strengthening activities on OVC. Collaborative efforts with

economic growth partners will include a focus on developing or refining existing indicators and monitoring

systems to better track benefits to OVC; for example, whether they experience increased food access and

consumption of nutritious food. Specific indices of child wellbeing are included in the DMS. Also, the Child

Status Index (CSI) from USG will be consulted. At least one OVC partner has adapted the CSI as part of

their tracking of child wellbeing in households participating in a savings and lending scheme.

SUSTAINABILITY: Successful economic strengthening activities experience a high rate of graduates who

can sustain themselves. The economic strengthening framework will provide guidance on how OVC

partners can determine best options for achieving such success. Approaches to scaling-up will be included;

for example, identifying institutions, either public or private, that already provide one or more elements

needed to support youth employment (such as apprenticeships or educational support).

New/Continuing Activity: New Activity

Continuing Activity:

Emphasis Areas

Gender

* Increasing women's access to income and productive resources

Human Capacity Development

Public Health Evaluation

Food and Nutrition: Policy, Tools, and Service Delivery

Food and Nutrition: Commodities

Economic Strengthening

Estimated amount of funding that is planned for Economic Strengthening

Education

Water

Table 3.3.13: