Request for Information RFI-663-22-HRA-0001.pdf

U.S. Agency for International Development

Entoto Road, US Embassy

P. O. Box 1014

Addis Ababa, Ethiopia

Tel. : 251-11 130 6002

Fax : 251-11 1242438

Website: http://ethiopia.usaid.gov/

USA Address:

2030 Addis Ababa Place

Washington, DC 20521-2030

P. O. Box 1014

Addis Ababa, Ethiopia

Tel. : 251-11 130 6002

Fax : 251-11 1242438

Website: http://ethiopia.usaid.gov/

USA Address:

2030 Addis Ababa Place

Washington, DC 20521-2030

P. O. Box 1014

Addis Ababa, Ethiopia

Tel. : 251-11 130 6002

Fax : 251-11 1242438

Website: http://ethiopia.usaid.gov/

REQUEST FOR INFORMATION (RFI)

RFI Number RFI-663-22-HRA-0001

Issuance Date December 3, 2021

Closing Date/Time January 5, 2022, 5:00 pm local time Addis Ababa

Subject Highlands Resilience Activity (HRA)

Dear Interested Parties:

The United States Agency for International Development (USAID) Mission in Ethiopia is in the process of designing an Activity tentatively called “Highlands Resilience Activity (HRA)” and posts this Request for Information (RFI) to collect written information as described in section I-

IV of this RFI.

THIS IS A REQUEST FOR INFORMATION ONLY and is issued solely for information-gathering and planning purposes. This is not a Request for Proposal (RFP) nor a Request for

Application (RFA) and is not construed as a commitment by the United States Government (USG) to issue any solicitation or Notice of Funding Opportunity, ultimately award a contract or assistance agreement on the basis of this RFI or pay for any information voluntarily submitted as a result of this request. Responses to this RFI must not be portrayed as proposals and will not be accepted by the USG to form a binding agreement. It should be noted that responding to or providing comment on this RFI will not give any advantage to any organization in any subsequent procurement(s), if such procurement(s) is released. USAID will not provide answers to anything submitted in response to this request. If a solicitation is issues, it will be announced or posted on

SAM.gov or www.grants.gov. It is the offeror’s or applicant’s responsibility to monitor these sites for announcements of new opportunities.

Responses to this RFI may be used by USAID without restriction or limitation. Responses to this

RFI must be submitted by email to caddis@usaid.gov no later than the date/time shown above.

Please include RFI Number RFI-663-22-HRA-0001 in the subject line. Responders will not receive individualized feedback. All inquiries concerning this RFI must be directed only to the email addresses identified above. Hard copy submissions will not be accepted nor will phone inquiries be entertained.

Thank you for your interest in USAID/Ethiopia programs and we look forward to your omments.

Sincerely, Admir Serifovic

Supervisory Contracting Officer https://sam.gov/content/home http://www.grants.gov/ mailto:caddis@usaid.gov

RFI-663-22-HRA-0001

Highlands Resilience Activity (HRA)

Section I: Response Requirements

USAID/Ethiopia seeks feedback on the following questions.

Key Questions

In view of the concept paper in Section IV, respondents are requested to provide answers, comments, and recommendations in response to the specific question below in the objective’s context:

Q1. How can this concept be adapted to a conflict or post-conflict environment?

Q2. What aspects or interventions that are necessary to achieve the goals as defined in the

HRA concept are missing or have not been addressed?

Q3. Does the logic behind the development hypothesis, results framework, strategic approach and expected outcomes (see below) make sense? Are the expected results realistic?

Q4. What is the level of interest from the Ethiopian private sector in contributing to the goals set out in HRA?

Q5. This activity will require good indicators across all of the objectives and desired outcomes. Are there illustrative indicators listed below that you would drop, change, or add? What indicators would you recommend for tracking the high-level results, outcomes, and impact?

Q6. Do you have any other feedback or recommendations that you would like to share with

USAID relevant to this RFI?

Section II: Eligibility

USAID/Ethiopia will accept responses from all interested organizations or individuals.

Section III: Submission Instructions

Please provide a cover page, that includes:

a. Organization name and address, including point of contact name and contact information;

b. Organization type (e.g., non-governmental organization, social enterprise, civil society organization);

c. Brief description of your organization, statement why it would be interested in this type of activity and applying as a prime. If a team or consortium is envisioned, please provide the names of the potential partner organizations.

While there are no limits on the length of submissions accepted, we value concise issue-specific responses with reference to page and section numbers in the draft description of objectives.

Please send responses to this RFI via email to the addresses listed on the cover page by the closing date listed on the same cover page. Responses to the RFI must be written in English, submitted in Microsoft Word compatible formats and use 12-point Times New Roman font.

Please number each page consecutively. USAID values concise, issue-specific comments.

Please be reminded that you will only receive an electronic confirmation acknowledging receipt of your response. No feedback or debrief will be provided on comments received. Phone calls or hard copy responses will not be accepted.

Responses may be used by USAID without restriction or limitation, therefore, proprietary information should not be sent. Again, your voluntary responses will be used to inform USAID’s

Highland Resilience Activity (HRA) design. The comments received may or may not be incorporated into any future solicitation. Please note again, that respondents will not receive individualized feedback. All submissions will be considered Government property and will not be returned.

Section IV: Concept Paper

HIGHLANDS RESILIENCE ACTIVITY (HRA)

1. Country Context

Over the past 20 years, Ethiopia has made significant progress in improving health, nutrition, education, and other human development indicators. Life expectancy has risen dramatically, while the percentage of the population living in poverty and hunger has fallen by a third in the last 10 years. Sustained economic growth and strong pro-poor spending by the Government of Ethiopia

(GoE) have been critical to this success, strengthened by the commitment of development partners such as USAID to support Ethiopia’s aspirations in poverty reduction. Yet for millions of

Ethiopians, the combination of poverty, vulnerability, and food insecurity erodes community and household resilience. These factors are exacerbated by climate change, conflict, and other acute and chronic shocks and stresses. Population density is high, and a large proportion of these households are without access to sufficient land and other productive assets. Additionally, some of the most targeted efforts to support families as they journey from subsistence to resilient and sustainable livelihoods have not had the lasting impact expected, especially given recurrent stresses and shocks.

A key success metric of Productive Safety Net Program (PSNP) 4 was client graduation from the program. To promote a livelihoods-driven approach to graduation, the PSNP 4 provided livelihoods support to a broad swath of PSNP clients in three livelihoods pathways: 1) Crop and livestock; 2) Off-farm; and 3) Wage employment1. Households received support from Kebele-level Development Agents (DA) to develop business plans for crop/livestock, off-farm, and employment pathways and received either a one-off $200 livelihood grant (10% of the target HH) to start their businesses or access to credit. Other PSNP clients were supported in obtaining access to credit from regional-based Microfinance Institutions (MFIs) to start their businesses. However, the graduation results from the PSNP 4 were nominal (frontline staff were overburdened to support too many clients; resources were constrained to promote a livelihoods approach at such a large scale; graduation targets were politicized to the point where regions were arbitrarily graduating households to meet annual targets).

To overcome some of these challenges, the PSNP 5 emphasizes intensified and targeted livelihood activities for fewer households and provides these households intensive technical support and increased inputs, to enable program exit. This approach is referred to as “The Big Push”. PSNP

5’s Big Push approach has a few defining characteristics:

- Targeting fewer households: The PSNP 5 will target only 20% of PSNP households in improving their livelihoods through a combination of time-bound and appropriate

1 The PSNP has identified the three livelihoods pathways that are most likely lead to sustainable income opportunities and provide avenues for investment by the GoE and donors funding the

PSNP.

strategies and investments. Targeted ultra-poor households will receive a $300 livelihoods grant.

- Tailoring support to clients’ needs: The Big Push approach will tailor livelihoods support to meet the needs of individuals according to their capacity and context in which they live.

Targeted clients will receive intense and high-quality support to help them exit from the program faster. Additional community facilitators will be hired to provide training/coaching to targeted households.

- Increased focus on improving women’s economic opportunities: The Big Push will try to address gender gaps in access to inputs and ownership and control of assets through 1)

Targeting women’s groups to participate in agriculture/livestock production and marketing training; 2) Ensuring that 50% of livelihood grants provided by the PSNP will be provided to women; 3) Developing new opportunities for women to participate in wage employment through the PSNP.

- Increasing livelihoods diversification to build resilience: The Big Push will promote inter-household livelihood diversification, particularly in the off-farm and employment pathways, to reduce income reliance on rainfed agriculture on small plots of land.

- Integrating youth in livelihood promotion: In addition to targeting youth for livelihoods promotion activities, PSNP 5 will support youth to become community facilitators and work with kebele development agents to implement various elements of the PSNP including public works planning, client verification, and provision of training to Big Push clients.

The PSNP focuses on the first two antecedents in its livelihood approach, improving production factors through the provision of technical assistance and financing for improved inputs and building social infrastructure-which includes secondary and tertiary roads. Largely missing from the PSNP livelihoods approach is a focus on improving market standards and the promotion of neighborhood effects to rapidly increase new production methodologies and the adoption of technology. Additionally, efforts to involve the private sector, particularly with local businesses, and linking activities to market-driven demand have been limited. Several findings suggest that a livelihood promotion program targeting PSNP households needs to focus on areas within proximity to a major market and with the potential for strong localized agricultural performance.

An overarching challenge is Highlands communities’ lack of functional market systems required to capitalize on increased production of higher-value crops. PSNP communities need links to markets looking for off-farm goods and services and require new investors to increase the number and size of firms operating in PSNP communities.

There is a critical need to rethink the concept of graduation from the PSNP. Despite defining a graduated PSNP household as one where “[in] the absence of receiving transfers, a [graduated] household can meet all of its food needs for 12 months and is able to withstand modest shocks,2”

PSNP 4 design documents, referenced here.

https://www.care.org/wp-content/uploads/2020/05/spir_learning_brief-sustainability_of_psnp_household_graduation-final_0.pdf

PSNP households were often arbitrarily graduated from PSNP in an effort to hit targets set for each region by the federal government. PSNP 4 used a Graduation Prediction System (GPS) and wealth ranking at the Kebele level to identify potential graduates. This approach to graduation is static in nature because it measures household resilience at a specific point in time and rural poverty in

Ethiopia’s Highlands is seasonal in nature (lean versus harvest seasons).

There is a clear need to assess graduation using a threshold-based approach, such as the Household

Economic Analysis (HEA) Livelihoods Impact Assessment tool. The HEA assesses household resilience based on three thresholds: 1) The survival threshold, the level at which households require food assistance to protect health and livelihoods; 2) The livelihoods protection threshold, the level at which interventions are required to protect livelihoods for household expenditure needs; and 3) No deficit, the level at which no emergency intervention is required.

2. Problem Statement

Vulnerable PSNP households within Ethiopia’s Highlands lack resilience due to insufficient demand-driven income opportunities capable of pushing them out of poverty, combined with limited public and private investment in the systems required to pull them into higher value and sustainable livelihood opportunities. The inability of PSNP households in Ethiopia’s Highlands to find improved income opportunities and to gain from increased public and private investment prolongs their dependence on social safety net programming, which directly contributes to a lack of household and community resilience to acute and chronic shocks. Additionally, the lack of viable and resilient livelihood opportunities can act as a deterrent to beneficiaries actively or successfully seeking graduation from the PSNP program. Improvements in nutrition and other life skill competencies are critical to improving household resilience and graduation from the PSNP.

While Ethiopia has seen significant progress in maternal and child nutrition outcomes over the last decade, access to safe, affordable, and nutritious diets remains a challenge. In 2019 only 13.5% of children 6-23 months received a minimally diverse diet, well below the regional average of 24%.

3. Activity Goal and Objectives

Goal: Strengthened resilience among vulnerable households in Ethiopia’s Highlands through increased public and private investments, resulting in 120,000 PSNP households reaching the graduation threshold

Objective 1: Enhanced household resilience through increasing demand-driven income

Objective 2: More resilient systems created through diverse investments, resulting in enhanced livelihood opportunities and reduced risk to shocks

HRA will facilitate the PSNP 5’s “Big Push” initiative by supporting 120,000 PSNP households to move above the graduation threshold to where they no longer require social safety net programming for household food security and where they have the capabilities and assets to withstand regular and predictable shocks. The Activity will achieve this goal by directly supporting households in increasing their on-farm, off-farm, and employment incomes and households competencies to lead a healthy life while also facilitating improvements in the market systems required to increase demand for goods and services in PSNP communities. HRA will integrate conflict sensitivity, youth, gender, and climate change adaptation into its programming approaches.

4. Activity Logic Model

HRA RESULTS FRAMEWORK

Theory of Change (TOC):

If targeted vulnerable households have enhanced demand-driven income opportunities in the on-farm, off-farm, and employment sectors, increased access to affordable and appropriate financial services and households nutrition, health and life-skill capabilities improved and if these improvements are matched with increased levels of public and private investment in enhanced livelihood opportunities, such as increased public investment in last-mile services to PSNP households, increased private investment in highland communities, increased demand for intensified commercialization of crops and livestock production in PSNP communities, and increased demand for off-farm and employment among Highlands households, Then there will be strengthened resilience among vulnerable households in Ethiopia’s Highlands Region resulting in

120,000 households reaching the graduation threshold of resilience.

5. Activity Description and Expected Results

Objective 1: Enhance household resilience through increasing demand-driven income opportunities

USAID envisions that the HRA will improve the incomes of at least 120,000 PSNP “big push” households through a combination of interventions. First, HRA will support targeted on-farm households in increasing the production and commercialization of their agricultural goods. The

MasterCard Foundation’s “New Rural Pathways

Model3” (see graphic to the left), which outlines a progression in income potential through seven pathways4 that ultimately lead to farm commercialization and enterprise formalization, provides an example of a model that HRA can utilize.

The model depicts a series of pathways that increase the economic opportunities of smallholder farmers and strengthen household resilience to external shock. These pathways include growing smallholder farmers into small to medium sized farms, that are business-oriented and able to generate surpluses and increase value, through the application of cost-effective and market-oriented production. Farmers and service providers increasingly formalize their enterprises and enable households to develop entrepreneurship skills and livelihood strategies that will lead to improved outcomes in on-farm and off-farm activities. In the latter case, some members of the farming households transition to non-agricultural opportunities. HRA will also work directly with private enterprises to increase the demand for off-farm goods and services produced by PSNP households, and with large employers to provide demand-driven employment training, leading to the creation of 40,000 full-time equivalent (FTE) jobs. It is also evident that income availability will not result in effective improvements in consuming nutrient rich foods to meet dietary needs at household level and lead https://pathways.raflearning.org/report/new-ways-to-understand-an-increasingly-sophisticated-market/

Rural Pathways include: 1) Developing a resilience buffer; 2) Farm intensification; 3) Land consolidation/aggregation; 4)

Transition to formal enterprises; 5) Transition to service provision; 6) Conversion to rural employment; 7) Migration to urban areas.

a healthy life. The need for beneficiary households to be equipped with life skills and abilities/competencies that enable households, including women and youth, to make informed decisions to lead a healthy and productive life is a critical element under objective one.

Second, HRA will provide access to affordable and appropriate financial services for 80,000 households through the mobilization of $53 million in loans. The Activity will use context-specific de-risking tools and technical assistance to microfinance institutions (MFIs) to increase lending volumes and loan sizes to PSNP clients. The Activity will focus on improving the financial ecosystem for Highlands PSNP clients by taking an integrated and market-driven approach to expanding financial service access for households and businesses.

Expected Results:

● At least 120,000 households get above the livelihood protection threshold

● At least 120,000 households attain minimum consumption diversity score

● At least a 25% increase in yield of targeted agricultural commodities.

● Value of $60 million in sales of producers and firms receiving USG assistance.

● At least $53 million mobilized in new loans to PSNP households for a first-round loan.

● At least 60% of targeted households have access to Community Based Health Insurance

(CBHI) benefits

Illustrative Indicators

● Yield of targeted agricultural commodities within HRA communities

● Value of agriculture-related financing accessed as a result of USG assistance

● Percentage of participants in USG-assisted programs designed to increase access to productive economic resources disaggregated by age

● Number of households participating in group-based savings, micro-finance, and lending programs

● Percentage of female participants in USG-assisted programs designed to increase access to productive economic resources

● Percentage of households that meets minimum consumption diversity score

● Percentage of households reporting improvements in self-reported well-being – disaggregated by sex

Objective 2: More resilient systems created through diverse investments resulting in enhanced livelihood opportunities and reduced risks to shocks

HRA will collaborate with woreda and kebele governments and the private sector in the provision of last-mile service to PSNP clients so that they can maximize the productive value of public works in their communities. This will include increased community engagement in the selection of public works and mobilizing and directing resources allocated for other agricultural-related programs, such as for small-scale irrigation and agricultural commercialization, to be used on public works sites. HRA will coordinate with the Government of Ethiopia to layer and sequence public investments in PSNP communities to maximize social returns, such as coordinating with the Ministry of Labor and Social Affairs (MOLSA) to increase youth and women’s engagement in livelihoods and increasing the utilization of community-based health insurance (CBHI) to reduce household medical expenditures. The activity will mobilize more resources from the private sector into highlands communities to ensure that households have access to additional services and resources provided outside of the PSNP that are required for resilience. These complementary livelihood services and tailored support to the targeted households on top of the predictable transfer of PSNP resources enable PSNP clients to build productive and shock resilient assets and gradually become capable of exit from the PSNP.

The HRA will use frameworks such as the market systems development (MSD) approach (see diagram to the right) to facilitate stronger linkages between PSNP clients to increase the demand for agricultural commodities, non-farm goods, and employment services among Highland PSNP communities. The market systems development approach recognizes that poor people act in market systems as laborers, producers, and consumers and that their livelihoods depend on markets. The poor are often excluded from market participation due to barriers, such as limited access to quality inputs, poor market information, or formal and informal standards and norms that govern local markets. The market systems approach maps these barriers and then collaborates with public and private institutions to develop innovative solutions to overcome them. Using the MSD approach, HRA will also work directly with local, regional, and national buyers of agricultural and non-farm goods to increase the demand for products produced and services provided by PSNP households. The

Activity will map local and regional labor demand and partner with local employers to place trained employees. Finally, HRA will foster firm growth by mobilizing an additional $25 million of investments for Small to Medium Enterprises (SMEs) operating in Ethiopia’s Highlands by partnering with Ethiopian-based and regional investors. The Activity will focus on understanding the current barriers to demand of agricultural products, off-farm goods, and employment services of PSNP households and then co-create solutions with the private sector to overcome those barriers.

Across all IRs, it’s imperative to enhance the empowerment of women and youth, enhance social cohesion, and social accountability. Activities are intended to bring new focus and clarity to work to positively influence the local systems including both social dynamics and formal and informal institutions. Young women and men lack access to land, credit, agricultural inputs, education/ training and viable sources of livelihoods. Addressing the unique challenges of women and youth in the PSNP program will require innovative approaches and specific programming. More than a third of the population are considered to be in the youth cohort in Ethiopia (15-29 years of age).

The activity will provide targeted interventions that focus on women and youth that ensure creating sufficient capacity that enable these segments of the community to gain and benefit from economic opportunities which will in turn foster broader national development.

Expected Results

● At least $50 million of additional investments mobilized for HRA communities

● At least $25 million mobilized for SMEs operating in HRA targeted woredas in the

Ethiopian Highlands

● HRA clients increase the value of sales of on-farm commodities by at least $80 million

● HRA clients increase the value of sales for off-farm goods by at least $40 million

● At least 5,000 SMEs (50% WSMES) (such as agro-dealers, pullet growers, bee colony multipliers, improved seed multipliers, agro-processors, micro-franchise women) supported to deliver appropriate services to the PSNP beneficiaries

● At least 35% of the targeted households recover from two of the salient shocks:

increased food prices and drought. [Note: it was notable that only roughly ten percent of the households were found as recovered from either shock during the baseline survey of L4R in 2018]

Illustrative Indicators:

● Value of new USG commitments and private sector investment leveraged by the USG to support food security and nutrition

● Value of annual sales of producers and firms receiving USG assistance

● Number of hectares under improved management practices or technologies that promote improved climate risk reduction and/or natural resource management with USG assistance (EG.3.2-28)

● Ability to recover from shocks and stresses index [RESIL-a] - FtF Resilience

Indicator