PROMOTING INCLUSIVE MARKETS in SOMALIA PIMS Somaliland Investment

PROMOTING INCLUSIVE MARKETS in SOMALIA (PIMS) Somaliland Investment Forum 20 Sept 2016 PIMS implementing partners; - Somali Agricultural Technical Group (SATG); - Heritage Institute of Policy Studies (HIPS); - Forcier Consulting

PROMOTING INCLUSIVE MARKETS in SOMALIA (PIMS) PIMS: SUMMARY PROMOTING INCLUSIVE MARKETS in SOMALIA

PIMS at a GLANCE • Private sector development programme employing the ‘Market Systems’ approach • 36 Months; Start date, 27 April 2015 • Funded by UK’s Department for International Development (DFID) & DANIDA • Implemented by Development Alternatives Inc. (DAI) PIMS complements with SSA mandate PROMOTING INCLUSIVE MARKETS in Somalia

MARKET SYSTEMS APPROACH • Overarching approach to business and economic growth providing direction to achieve large-scale, sustainable impact • Market Systems programmes achieve this by facilitating systemic change in different contexts • Whether as workers, subsistence farmers, consumers or entrepreneurs, all poor people already participate in markets • Strengthening these markets in ways that secure higher incomes from or access to goods and services for the poor is seen as a sustainable way to fight poverty at scale PROMOTING INCLUSIVE MARKETS in Somalia

IMPACT TARGETS • GBP 25. 0 million additional net income for poor entrepreneurs and producers • 50% of surveyed firms/farms report significant net revenue increases • GBP 10. 0 million leveraged in additional investments • 9000 new jobs created (4400 for women); 500, 000 workdays PROMOTING INCLUSIVE MARKETS in SOMALIA

INCEPTION PHASE • Studied 6 sectors overall: livestock production for export; Dairy & Poultry ; sea fisheries; sesame; banana; and, citrus (the first 4 were studied in Somaliland) • Also explored cross-cutting opportunities in areas such as: light manufacturing; investment; and, market infrastructure • Presented findings and responsive strategies to public, private and civil society stakeholders at a validation workshops in Mogadishu, Hargeisa and Garowe, in late 2015 where proposed strategies were endorsed PROMOTING INCLUSIVE MARKETS in SOMALIA

SELECTED MARKETS/SECTORS AND GEOGRAPHIC ENTRY POINTS • Sesame - (L/M Shabelle valley) • Fisheries & Dairy - (Puntland) • Dairy Milk, Livestock & Poultry - (Somaliland ) • Crosscuts: Light industry and construction/Cf. W 7 PROMOTING INCLUSIVE MARKETS in SOMALIA

Sectors Discussion / Endorsement

PIMS GOVERNANCE STRUCTURE The primary objective of the PIMS Governance Structure is facilitating delivery of the programme, at the levels of: • Strategic decision-making via a Programme Steering Committees (PSC) to be established in Hargeisa ; • Day-to-day implementation guidance and monitoring via a Project Implementation Committees (PIC), also to be established in Project areas. . The Governance Structure would also facilitates PIMS’ external engagements, including with SSA coordination structures, the private sector, and international Private Sector Development (PSD) knowledge-sharing platforms. PROMOTING INCLUSIVE MARKETS in SOMALIA

PROGRAMME STEERING COMMITTEE (PSC) OBJECTIVES • Guidance and strategic direction for the implementation of the PIMS programme; • Ensuring that the PIMS programme is implemented in accordance with the programme objectives and achieves the desired outcomes, • Advising DFID Somalia and the Government on strategic opportunities, challenges, any modifications PROMOTING INCLUSIVE MARKETS in SOMALIA

PSC FUNCTIONS • Providing strategic direction and guidance and supporting overall planning and implementation of PIMS; • Contributing to monitoring and reviewing implementation progress against targets and resources allocated, and ensuring accountability; • Ensuring that PIMS programme activities represent good value for money (where necessary recommending external reviews; • Appraising the development impact of the programme, • Providing oversight of cost-benefit analysis, M&E mechanisms to validate results and review evidence of outputs to outcomes, and ensuring the embedding of lessons learnt in the programme; PROMOTING INCLUSIVE MARKETS in SOMALIA

PSC FUNCTIONS (Cont’d/-) • Facilitating communication and advocacy for the PIMS with the relevant government, donors and other policy and decision makers; • Reviewing identified risks, and where appropriate, recommending follow-up activities to investigate or mitigate high risks; • Periodically approving PIMS briefs and presentations for PSG 4 (SSA) meetings and other external engagements ; • Ensure that the PIMS programme is well-aligned and coordinated with the relevant donor and Government policies, strategies, and programmes; and, • Ensuring appropriate geographic distribution of resources. PROMOTING INCLUSIVE MARKETS in SOMALIA

PSC Membership The PSC membership comprises representation from key decisionmaking institutions and organizations, includes: DFID, as the primary donor (initial Chair); DANIDA and other donors; Ministry of Planning and International Cooperation; Ministry of Commerce (as PSC-4 Co-Chair); Ministry of Livestock ; Ministry of Environment Senior Representative of the Chamber of Commerce and Industry; • Ministry of Agriculture • Sector Ministries (in attendance depending on agenda); • DAI as the lead implementing partner (secretariat); PROMOTING INCLUSIVE MARKETS in SOMALIA • •

PROJECT IMPLEMENTATION COMMITTEE (PIC) INTRODUCTION • A project Implementation Committee (PIC) was established for PIMS in the different areas; • The PIC will facilitate the day-to-day implementation and monitoring required to ensure the PIMS programme is kept consistently on delivery track; • The PIC is an appropriate platform to facilitate the linkages of PIMS with existing structures and forums and sector coordination forums, such as the ESCOM; PROMOTING INCLUSIVE MARKETS in SOMALIA

PIC Objectives • Monitoring PIMS programme delivery and providing contextual and operational direction and implementation oversight; • Identifying issues for discussion and inform the PSC on progress towards project deliverables, as well as opportunities and challenges, and recommendations arising; • Facilitating PIMS external engagements including with existing sector coordination structures; and set up additional inclusive structures if needed to strengthen sector coordination; • Promoting the contribution of PIMS to markets and private sector development, including formulation of sector development strategies; PROMOTING INCLUSIVE MARKETS in SOMALIA

Governance Structure Discussion / Endorsement

PROMOTING INCLUSIVE MARKETS in SOMALIA (PIMS) PIMS: SESAME STRATEGY PROMOTING INCLUSIVE MARKETS in SOMALIA

SESAME: VISION FOR GROWTH AND OBJECTIVES … VISION for GROWTH TARGET OUTCOMES Increasing coordination, innovation and efficiency in Somalia’s sesame sector to produce a steadily increasing supply of appropriate varieties of high quality and competitive sesame, leading to steadily expanding exports into existing and higher value new markets. • Improved production practices and knowledge to increase productivity and area under production to increase volumes available for export; • Increased exporter access directly to the end consumers to sell high value finished product, rather than selling low value, uncleaned seed; • Traders invest in high quality and capacity processing assets and are trained on best processing practices to produce high quality sesame product for export to prime markets. • Government officials and community leaders have a raised awareness of required reforms to reduce informal transactional costs and improved access • Agricultural sector infrastructure assets (such as irrigation schemes) are improved though cash for work (CFW) activities; PROMOTING INCLUSIVE MARKETS in SOMALIA

SESAME: INTERVENTIONS • Interventions to improve farmer knowledge and practices to increase sesame productivity • Improve knowledge of the end markets to promote increased exports • Improve sesame value addition and quality • Advocacy to reduce extortions and unofficial taxation that increase transactional costs • Improve infrastructure to promote production and trade through Cash for Work Activities PROMOTING INCLUSIVE MARKETS in SOMALIA

SESAME INTERVENTION LOGIC (EXAMPLE) POVERTY REDUCTION IMPACT Household incomes and employment increase in sesame sector due to expanding competitiveness, exports and sales into existing and higher value new markets GROWTH and ACCESS IMPACT Increased productivity of sesame producers MARKET SYSTEMSLEVEL IMPACT MORE KNOWLEDGE & APPLICATION OF BEST PRACTICES & TECHNOLOGIES BETTER ACCESS/USE OF INPUTS & SERVICES Increased sale volume at both domestic and export markets BETTER ORGANIZATION AND STAKEHOLDER LINKAGES NEW BUYERS & SOURCING AGREEMENTS INTERVENTION AREAS PROMOTING INCLUSIVE MARKETS in SOMALIA

SESAME: IMPACT TARGETS • The sesame activities will lead to: – GBP 7, 500, 000 additional income especially for the poor producers and entrepreneurs; – 50% of surveyed firms reporting significant income increases (of at least 15%); – 3, 745 new jobs created (about 50% for women); and; – GBP 3, 000, in new investments. PROMOTING INCLUSIVE MARKETS in SOMALIA

PARTNER SELECTION PROMOTING INCLUSIVE MARKETS in SOMALIA

ELEMENTS IN THE SELECTION OF A PARTNER • Leverage: are they at the right point in the system? – Economic (e. g. lead firms) – Geograhphic (the right location to make a change) – Rules (formal or informal) • Will – Demonstrated interest to invest in the activity – Self selection – they choose to participate • Skills/Capacity – – The technical skills to do the job The business skills to do the job The financial capacity to achieve outreach Leadership skills to drive the activity themselves 25 PROMOTING INCLUSIVE MARKETS in SOMALIA

SELECTING A PARTNER Track Record -Evidence in support for or resistance to desired change -Advocate for broader vision of change high Capacity problem? Why aren’t they doing it already? WILL Leverage -Point (s) in system where large-scale change can be achieved Why work with them? Incentive problem? low SKILL high 26

CRITERIA USED TO SELECT PARTNERS • Objective: Address Animal Health constraints to the Markets – Have a commercial interest in animal health; – Have a growth/expansion objective; – Have ability to make large scale change; – Have the network or can create the distribution network to reach livestock/milk producers; – Have the skill and willingness including ability to invest own funds in the planned expansion; – Operate around major milk markets – Activities can have impact beyond milk producers; 27 PROMOTING INCLUSIVE MARKETS in SOMALIA

EXAMPLE OF POTENTIAL PARTNERS -DAIRY SECTOR Objective: To address market constraints in the milk sector by improving animal health and nutrition, reducing milk spoilage, and supporting related regulations, PIMS will partner with some or all of the following: • Lead veterinary importing companies; – Engage with agrovet dealers through the lead vet importing companies; • Linking vet service providers and CAHWS – to link with lead importers • Commercial fodder producers; • Importers of milk containers and milk traders; • Commercial dairy farms; • Ministry of livestock and the Vet. Board; Ministry of Environment and Rural Development 28 PROMOTING INCLUSIVE MARKETS in SOMALIA

Partner Selection Process /partners Discussion / Endorsement

Partner and beneficiary selection criteria • (Summary from the doc)

Sector Job creation strategy • Summary

Sector Capacity building Strategy • • On farm demonstrations, field days and training Lead farmers, champion farmers (private sector) extension workers Farmer Field School (FFS) Int. benchmark trips sesame exporters Chamber of Commerce PPPs (certification, standards, legislation) Financial institutions

Sesame Strategy Discussion / Endorsement

PROMOTING INCLUSIVE MARKETS in SOMALIA (PIMS) PIMS: FISHERIES STRATEGY PROMOTING INCLUSIVE MARKETS in SOMALIA

FISHERIES: VISION FOR GROWTH AND OBJECTIVES … VISION for GROWTH TARGET OUTCOMES The PIMS vision is for Somalia’s Ocean Fisheries sector to be steadily increasing supply of high quality fish leading to increased sales (value) to domestic and export markets, resulting in increased incomes and employment across the value chain. • Increased understanding of end market requirements, volumes, standards and pricing by exporters and other fish market actors so that they can mainstream the required changes; • Increased supply of, awareness and access by exporters to the required standards and certification services and new higher value markets; • Increased fishermen productivity through adoption of enhanced technical and sustainable fishing knowledge, attitudes and practices; • Reduced losses due to fish spoilage through improving knowledge and practices among fish market actors on fish storage and handling techniques; • Increased efficiency of the value chain through improved infrastructure at landing, cooling, transportation and market points; PROMOTING INCLUSIVE MARKETS in SOMALIA

FISHERIES: INTERVENTIONS • Increasing understanding of end market requirements, volumes, standards and pricing by exporters and other fish market actors so that they can mainstream the required changes; • Increasing the supply of awareness and access (i. e. Demand creation) by exporters to the required standards and certification services and new higher value markets; • Increasing fishermen productivity through adoption of enhanced technical and sustainable fishing knowledge, attitudes and practices (KAP); • Reducing losses due to fish spoilage through improving knowledge and practices among fish market actors on fish storage and handling techniques; • Increasing the efficiency of the value chain through improved infrastructure at landing, cooling, transportation and market points PROMOTING INCLUSIVE MARKETS in SOMALIA

Partner and beneficiary selection criteria • (Summary from the doc)

Sector Job creation strategy • Summary

Sector Capacity building Strategy – Fishermen groups, associations and firms: • • Attach skilled fishermen Skilled fisher instructors and consultants Training manual development Demonstration kits – Establish linkages buyers/processors – Cold chain, ice, storage – PPPs (certification, standards, hygiene, legislation) – Financial institutions

Fisheries Strategy Discussion / Endorsement

PROMOTING INCLUSIVE MARKETS in SOMALIA (PIMS) PIMS: DAIRY STRATEGY (Already Presented to the Somaliland PSC and endorsed) PROMOTING INCLUSIVE MARKETS in SOMALIA

VISION for GROWTH and OBJECTIVES VISION for GROWTH TARGET OUTCOMES “……production, timing and prices for sales of high quality local milk and ghee products have steadily increased raising incomes of value chain actors, especially lowincome producers and entrepreneurs, while displacing some imports of processed milk products” • Improved fresh milk value chain, characterized by better coordination between producers, transporters, wholesalers and retailers, serving high value processors and domestic urban end markets leading to increased sales, jobs and incomes; and, • Higher volumes of higher quality milk and ghee are sourced/processed/marketed from a larger group of producers by bulkers/traders with improved capacities that is hygienically processed and distributed. PROMOTING INCLUSIVE MARKETS in SOMALIA

VISION and OBJECTIVES (Cont’d/-) • Increase milk yields by improving animal health and nutrition; OBJECTIVES • Increase milk value by reducing spoilage; • Expand milk and ghee production; and, • Improve the business environment PROMOTING INCLUSIVE MARKETS in SOMALIA

INTERVENTIONS Intervention area 1: increasing milk yields – Intervention 1. 1: Improving Animal Health – Activity 1. 2: Improving Animal Nutrition • Intervention area 2: reducing milk losses to increase value – Intervention 2. 1: Improving Milking and Milk Handling Practices – Intervention 2. 2: Improving Milk Supply and Preservation Systems • Intervention area 3: expanding milk and ghee production • Intervention area 4: improving the business environment PROMOTING INCLUSIVE MARKETS in SOMALIA

FRESH MILK STRATEGY POVERTY REDUCTION IMPACT Household incomes increase in fresh milk sector due to improved knowledge, vet drugs and services, which increase milk productivity GROWTH and ACCESS IMPACT Increased productivity of milk producers MARKET SYSTEMSLEVEL IMPACT MORE KNOWLEDGE & APPLICATION OF BEST PRACTICES & TECHNOLOGIES BETTER ACCESS/USE OF INPUTS & SERVICES Increased milk sales at end markets BETTER ORGANIZATION & STAKEHOLDER LINKAGES NEW BUYERS & SOURCING AGREEMENTS INTERVENTION AREAS PROMOTING INCLUSIVE MARKETS in SOMALIA

QUALITY VET DRUGS INTERVENTION LOGIC Intervention logic PROMOTING INCLUSIVE MARKETS in SOMALIA

Partner and beneficiary selection criteria • (Summary from the doc)

Sector Job creation strategy • Summary

Sector Capacity building Strategy • Establish sector transformation working group • Training (in)formal member based organizations • Chamber of Commerce • Public-Private-Partnerships – Set standards and legislations (feed supplements, vet drugs, milk cans) • Financial institutions

Dairy Strategy Discussion / Endorsement

CRITERIA USED TO SELECT CFW PROJECTS – Directly address infrastructure constraints in the value chain; – Should directly serve the value chain actors and transportation/handling of produce – like farmers, dairy producers, fish producers; – In consultation with relevant government ministry (Mo. ERD, Mo. L, Mo. PW); – In consultation with and acceptance from communities and traders; – Sustainable community arrangement for infrastructure management in place 54 PROMOTING INCLUSIVE MARKETS in SOMALIA

Cash for Work Strategy Discussion / Endorsement

PROMOTING INCLUSIVE MARKETS in SOMALIA (PIMS) QUESTIONS?

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