Somalia, Somaliland

Partnership for Economic Growth

Overview:

The Partnership for Economic Growth (PEG) was a two and a half year project funded by USAID, which supported the Somali people’s goal to improve economic growth and livelihoods in Somaliland and Puntland. Under the leadership of DAI, the program collaborated with the Ministry of Livestock, Ministry of Commerce, and private sector groups to better the envi­ronment for investment, export marketing, and generated agricultural-based employment.

The livestock sector in Somaliland faced significant challenges, including increased competition from neighboring nations, trade barriers due to disease control, lack of access to veterinary inputs, and inefficient veteri­nary services. Yet, a strengthened livestock sector is vital as 65 percent of the economy is comprised of livestock-related commerce. In partnership with private and public sector, CNFA contributed its experience targeting all livestock value chains to assist the sector in the following areas:

Program Approach:

  • Capacity building of local veterinary service providers;
  • Improve animal feed and education for fodder farmers;
  • Provide veterinary services;
  • Train of community animal health workers (CAHW);
  • Strengthen and improve commercial livestock feed supply systems;
  • Strengthen feedlot enterprises;
  • Develop dairy processing facilities; conduct livestock end-market analyses; and provide rural financial services.

Livestock Component: The Livestock Component was the largest of the PEG Project. We played an advisory role to local non-profit organizations and enterprises who were recipients of capacity building grants and matching grants. These grants were utilized for the creation and implementation of demonstration farms, technical training in improved livestock care, dairy and fodder production techniques, livestock fattening programs and capacity building of local stakeholders.

Matching Grants to Local Enterprises: The CNFA Livestock Component collaborated with four small and medium livestock enterprises under a matching grant component. The goal of the matching grant component was to develop and expand various sub-sectors of the Somali livestock industry through developing and empowering local organizations. PEG matching grant recipients and illustrative activities underwent the following:

  • Al Husseini Farm and An’Aam Farm are Somali feed lot enterprises that received PEG grants and technical training in improved fodder production techniques. An’Aam Farm was created by an association of multiple investors, who collectively contributed more than $1 million in funds to create the farm. Al Husseini Farm operated on a much smaller scale, but both were fully functional feed lots providing animal fattening services to local farmers.
  • Horumar Farm was a model dairy farm, established with PEG support, which specialized in camel milk and fodder production. The owner bought milk from local out-growers and used a milk-analyzer to determine which of his neighbors produce the highest quality camel milk. Horumar Farm received a small matching grant to provide fodder production, dairy production, and dairy processing trainings with to increase the quality of milk in the surrounding area – a result desirable to local farmers, Horumar Farm and consumers. Inspired by the success of Horumar farm, one female neighbor purchased several camels purely to be able to take advantage of the growing market.
  • With PEG capacity building assistance, Togheer Womens Livestock Traders Association initiated a small ruminants buying scheme. The Association purchased small ruminants in rural areas and transported the animals to urban areas – primarily Buroa – or exported them regionally to an area with an increased demand and a higher price. Making only a $3 profit per head, the association applied for a PEG grant to begin a small-scale feedlot. The fattening station increased the weight of the sheep and goats, resulting in a price increase of up to 20% per animal at the end market.

Capacity Building of Somali NGOs: Under CNFA leadership, four local non-profit organizations were contracted to implement training programs and develop community-based demonstration farms where training in fodder production (i.e. variety selection, harvesting techniques, hay baling and storage, mineral supplementation) and animal health (i.e. disease control, drug quality and use) is available.

Expanding Regional Access to Micro-finance and Start-up Capital:

  • Kaaba Microfinance Institution (K-MKFI) is the only MFI in Somaliland. Through PEG program funds, K-MKFI was able to open a new office in the town of Gabiley, serving micro-enterprises and the informal markets in Western Somaliland. K-MKFI uses an Islamic-compliant lending methodology, which enables a previously untapped market in rural areas to access finance. The majority of K-MKFI’s micro-finance clients were small scale livestock producers and traders.
  • PEG contracted AIMS, a local consultancy firm, to complete an end market analysis of the livestock value chain in Somaliland and the larger region (Saudi Arabia, Yemen, Oman, UAE, Egypt). This analysis and subsequent PEG knowledge transfer activity highlighted both opportunities and constraints facing the livestock value chain in the region.
  • The Livestock Investment Chapter of the 2013 Somaliland Investment Guide synthesized the findings of PEG’s Livestock End Market Study. The Investment Guide highlighted investment opportunities through a printed edition and website feature. The website provides a platform to expand access to investment capital and targets potential diaspora investors.

Program Impact

  • 150 New jobs created through livestock value chain improvement;
  • 120 Agrovets and animal health workers receiving improved techniques;
  • 15,000 Improved household livelihoods;