Request_for_Information_-_Somalia_Economic_Growth.pdf

U.S. Agency for International Development USAID/East Africa P.O. Box 629 Village Market 00621 Nairobi, Kenya

Courier Address:

USAID/East Africa c/o American Embassy United Nations Avenue, Gigiri, Nairobi, Kenya

U.S. Postal Address:

USAID/East Africa Unit 8900

DPO AE 09831

email:

mmakosala@usaid.gov Tel: 254-20-862-2401 Fax: 254-20-862 2680 / 2682 http://eastafrica.usaid.gov

REQUEST FOR COMMENTS

Date Issued: February 6, 2015 Issued by: USAID/East Africa Issued through: Regional Acquisition and Assistance Office (RAAO) Issuing Contracting Officer: Maria Televantos Closing Date: February 20, 2015 Closing Time: 5:00 PM, Nairobi, Kenya Local Time

Reference: Somalia Economic Growth Activity

USAID/East Africa is in the process of designing new economic growth activity for implementation in Somalia. We are seeking public comments on the DRAFT Statement of Work to inform that design process. Responses to this request for comments are not binding on the U.S. Government and do not obligate USAID to issue a Solicitation, nor does it commit USAID to pay any cost incurred in the preparation and submission of comments.

Brief Project Description

The goal of the new economic growth activity is to promote inclusive economic growth in Somalia. The purpose is to catalyze both “systemic” economic changes - that affect all sectors of the economy - and “sectoral” ones that affect key industries. Systemic activities will open up opportunities for new, small and medium-sized businesses and investment from new sources by expanding access to the financial system and increasing the availability of key business services.

The sectoral interventions will increase private investment in industries with high growth and employment potential, including in regions previously inaccessible due to security. The activity will prioritize opportunities to promote economic growth in industries likely to attract women and youth who have been marginalized from pursuing economic opportunities.

Requested Information:

USAID/East Africa invites the public to submit comments on the DRAFT Statement of Work (SOW), including, but not limited to, comments on feasibility of activities, the most appropriate contracting mechanism, and innovative names for the proposed activity. These comments will be taken into consideration in the design of a final activity. Comments must be submitted to Maria Televantos, Contracting Officer and Ali Ali, Acquisition and Assistance Specialist, via email to mtelevantos@usaid.gov and alali@usaid.gov. The subject line must read “Somalia Economic Growth Comments,” and comments must be submitted no later than February 20, 2015 at 5:00 PM (Kenya Local Time).

USAID/ EAST AFRICA

Goal and scope:

The goal of the contract is to promote inclusive economic growth in Somalia. The contract must be implemented in all three zones of the country. The Contractor must be based in Somalia with primary and/or satellite office locations that will best meet project needs.

Background and context:

Somalia is emerging from two decades of civil war, exacerbated by prolonged drought that culminated in widespread famine in 2011. A series of efforts to establish a federal government and begin the process of re-unifying the country led, in 2012, to the creation of the Federal Government of Somalia (FGS) which is attempting to restore government functions with considerable assistance from the international community. The challenge of doing so is heightened by insecurity and high levels of corruption.

South Central Somalia was hardest hit by the civil war and, of the three zones of the country, suffers most from insecurity relating to the Al Shabaab insurgency. Nevertheless the partial and fragile peace and security gains there has led to a remarkable rebound of business activity throughout the country and a surge of investor interest, including from returning members of the Somali diaspora. Somaliland and Puntland have established relatively stable administrations that have unique and varying relationships with the FGS. The private sector operates for the most part autonomously. As investment increases, there has been gradual support from the private sector for government to implement and enforce regulation and provide key public goods essential for business growth.

Somalia1 is among the poorest countries of the world with GDP per capita of $288 and among the poorest economic performers (with a 75 percent unemployment rate). However, the emergence of the FGS, relatively stable governments in Somaliland and Puntland, and the optimism of businesses and investors create an unprecedented opportunity to accelerate Somalia’s economic recovery and increase employment throughout the country by addressing key constraints to growth.

The activity prioritizes opportunities to promote economic growth that will significantly increase employment, including jobs in industries likely to attract women and youth who have been marginalized from pursuing economic opportunities.

Constraints to growth:

Among the many constraints to growth, employment and higher incomes in Somalia, several stand out.

1 For simplicity in the text, the term ‘Somalia’ encompasses South Central Somalia, Somaliland and Puntland unless otherwise stated.

The cumulative absence of government: The collapse of government in Mogadishu in 1991 is felt across the board. Social services have disappeared or are being supplied on a limited basis privately or by non-governmental organizations (NGOS). The limited infrastructure that was in place before the civil war was destroyed or has deteriorated from lack of maintenance. With no authority to establish or enforce the rule of law in the economic sphere there has been no protection of competition, impartial enforcement of contracts or other measures to assure that the actions of businesses and investors benefit Somalia as a whole. The low starting point for rebuilding the capabilities of government in Mogadishu means that government will be limited under any scenario in the foreseeable future. Governance structures in Somaliland and Puntland are modest and have limited abilities to deliver goods and services. Innovative approaches to providing public goods and public order may therefore be required.

Elite capture: The business owners who provided essential services during the civil war, such as electricity, water, telecommunications and trade, undoubtedly performed critical functions at a difficult time in Somalia’s history. However, they are now forming monopolies and aggressively asserting control over new industries. Their influence allows them to directly affect legislation and exercise government authority over rivals and friends. “Elite capture” discourages new businesses from starting up and small and medium ones from growing, including women-owned businesses. It reduces the flow of investment for new jobs and stifles competition which contributes, in turn, to high prices and poor quality of goods and services.

Finance: There are no conventional financial institutions currently providing the full range of banking services needed in Somalia. Hawalas (traditional money transfer companies) and a mobile money system facilitate many payments between Somalis, though not all. Most damaging, there are no financial institutions to intermediate savings into investments elsewhere in the economy. The lack of finance perpetuates the problem of elite capture; those with resources already or with access to resources from family and clan are able to move forward while less connected startup entrepreneurs, small- and medium-sized businesses, and businesses owned by women lag behind.

Business climate and commercial law: Somalia has one of the most difficult climates for business in the world. Investor protections, property rights, the ability to enforce contracts and the cost of export/import of goods are, among other factors, extraordinarily weak. This discourages investment across the board but also reinforces the problem of elite capture – business groups that already have power have the ability to protect their interests, while others do not.

Product safety standards: The industries with greatest potential to grow and create new jobs – agribusiness, particularly horticulture, and fisheries – have small domestic markets. Success will depend on exports which will in turn depend on the ability of Somali producers to satisfy international standards for food safety. Food safety systems are complex and require close cooperation between the public and private sectors. Establishing a safe, good quality system is an ambitious goal for Somalia but essential if these growth industries are to achieve their potential.

Given limited government capacity, innovative solutions may be required.

Market research: Political instability, the lack of finance, elite capture, and a poor business climate are the main causes of an unusually high failure rate of businesses in Somalia.

Insufficient market research is common factor as well with the result that much investment is wasted. The very largest Somali firms undertake market research, but others rely on traditional information channels that no longer work as the economy becomes more sophisticated.

Skills: Somalia’s civil war produced a generation with little education and a limited supply of the skills demanded in the current labor market. Critical skill shortages in key industries are not addressed by current vocational training programs in part because there are few qualified instructors to teach them. High level technical skills are required for industries to fulfill their growth potential. Examples of skills in demand include the ability to size, design and install refrigeration and ice-making equipment in the fisheries industry or to remove field heat in agricultural products, and the ability to design and install transmission systems for renewable energy facilities. At the moment, companies import the skilled workers they need from neighboring countries.

Women and youth: Women and youth are disproportionately affected by the low level of economic activity in Somalia and face unique additional constraints to greater economic participation. Women face much narrower opportunities than men when seeking employment and higher barriers to starting and operating their own businesses. Youth bear the weight of the collapse of education during the country’s civil war and suffer an even higher rate of unemployment than the 75 percent average for Somalis overall.

The limits on women and youth create additional constraints to Somalia’s capacity for peaceful recovery and growth. Women’s multiple clan affiliations give them the potential to reduce conflict by bridging clan and sub-clan lines, but their lack of economic power reduces the authority with which they can perform this function. It is alleged that unemployed and excluded youth are the primary source of recruits for Al-Shabaab, particularly in South Central Somalia. In the north, youth reportedly are risking their lives and emigrating in search of better economic opportunities.

Assets to build on:

Despite the array of constraints, Somalia has important assets on which it can build.

Entrepreneurial culture: Somalis are extraordinarily entrepreneurial and willing to take risks.

Despite the unstable environment, diaspora investors in particular are aggressively exploring investment opportunities. Word of success also spreads rapidly which means that demonstration efforts have a good chance of success.

Financial sector reform: A new Banking Law approved in Mogadishu means that several commercial banks are expected to be operating in Somalia by the end of this year. The immediate beneficiaries will be exporters and importers who can finally work with letters of credit. Yet because creditor protections are weak, banks will only be inclined to lend to the largest borrowers for a number of years. Other measures will be needed to encourage banks to start lending “down market” and open finance up to a broader client base.

Development of commercial law: Somalia has operated with an evolving mix of customary, sharia and formal law since colonial times. During the civil war, in the absence of government, customary law came to the fore. This tends to favor the established elite, making it harder for startups, small- and medium-sized business, and women-owned businesses to protect their interests. The FGS has requested that key commercial laws be rewritten, and the World Bank is helping to do so. USAID and other partners supported a review of commercial laws in Somaliland. The government’s ability to implement commercial laws is weak, but they will begin to establish – at least on paper – a rule of law in economic affairs with greater protections for businesses across the board, regardless of size or ownership.

Renewable energy: Although energy is considered a critical barrier to growth, the electricity generating industry in Somalia’s cities and towns is controlled by monopolies and cartels that may resist reforms. But the renewable energy industry outside of Somalia’s cities, consisting largely of standalone single-purpose systems, is taking off and offers immediate benefits to agriculture and fisheries among other industries.

Opportunities in the fishing industry: A drastic reduction in piracy and resolution of conflicts between the FGS and regional governments over control of fishing rights have opened the door to development of a Somali-run deep water tuna fishing industry. This industry has tremendous growth and job-creating potential in areas with a certain degree of infrastructure and sufficient workforce; a few private Somali investors have recognized this and are beginning to move in.

Sustained growth will depend on exports, which means food safety must be addressed. Off-shore fishing by Somalis can most profitably and effectively be expanded through a new “intermediate” approach to catching fish: in terms of infrastructure and investment, this falls between the artisanal methods they use in shallow waters today and the industrial methods used by foreign factory fishing operations off shore.

Opportunities in agribusiness: Farmers in Somalia are willing to adopt new technologies and techniques that have been shown to improve yields and/or income. Horticulture in particular is a large potential employer in the agricultural areas of South-Central Somalia, including in areas where Al-Shabaab has capitalized on the dissatisfaction of minorities to attract recruits. Local and diaspora investors are keenly interested. The abandonment of farmland by refugees and internally displaced persons (IDPs) during the war creates opportunities for consolidated farming and rapid increases in employment. (Some of this land is already being rented by IDPs to others.) Horticulture, like fisheries, will ultimately depend on exports. As such, growth will rest heavily on Somalia’s ability to develop systems to track and assure food safety.

Implementation considerations:

The Contractor will carefully consider the role that government must play and work to strengthen counterpart capabilities accordingly. Because this capacity will be developed only gradually, the private sector will need to play a strong role in many aspects of project implementation. For example, investors will need to play a substantial part in agricultural extension under the project as well as in the development of systems to assure food safety and the integrity of agricultural inputs.

A Somalia-wide effort will also be politically complex. Somali society is fragmented by clan.

The Contractor must deal with the added complication of working with different governments across Somalia with an evolving separation of powers as well as a large number of donors and NGOs. The Contractor must employ mechanisms that bring people together, bridge differences and encourage all to focus on shared problems and interests.

The challenge of increasing youth employment may be complicated by apparent attitudes about work that some suggest lead many young Somali men to reject physical labor, hold out for the “perfect” job, and refuse to start at the bottom of the career ladder in order to work up. Observers agree that access to technology through work can overcome this reluctance in many cases, suggesting that an extra emphasis on technology in project activities could be useful. More transparent, merit-based recruitment in private sector organizations and industries will empower youth to seek work opportunities.

Technical approach including expected results:

The goal of the contract is to promote inclusive economic growth. The purpose is to catalyze both “systemic” economic changes - that affect all sectors of the economy - and “sectoral” ones that affect key industries. Systemic activities will open up opportunities for new, small and medium-sized businesses and investment from new sources by expanding access to the financial system, supporting policy and regulation, and increasing the availability of key business services.

The sectoral interventions will increase private investment in industries with high growth and employment potential, namely, horticulture, fisheries and alternative energy, including in regions previously inaccessible due to security. Other activities seek to increase the participation of women and youth in the economy and cuts across the other three results.

Illustrative results framework:

The specific activities to be undertaken for each result as well as indicators of success are subject to approval of USAID.

While the results are distinct, there are important potential synergies between them which the Contractor must seek to leverage. There will likely be, for example, a ready market in the fishing and agricultural work supported by the contract for the services of leasing companies developed in the systemic components. The development of leasing could thus be accelerated by focusing it at first on serving these two emerging industries which will grow faster, in turn, with the support of leasing finance. Similar synergies are likely with other forms of finance supported under the contract and with market research. The Contractor must identify and take full advantage of such opportunities.

Systemic activities:

Systemic interventions seek to remove or reduce economy-wide barriers to economic growth that affect all sectors and industries, and businesses of all sizes. Activities under these components are expected to disproportionately benefit startup firms, SMEs and women- and youth-owned businesses that, unlike large, more established companies, lack the relationships and resources to overcome barriers in other ways. These activities will promote competition in Somalia’s economy to balance the predominance of large businesses. It is understood that Somalia has many more barriers to economic growth than can be addressed within the scope of a single project; coordination with other partners will be critical. The specific barriers to be addressed by this project are those that are particularly constraining and/or are important for the industries the project will support through sectoral interventions. The systemic activities will be relevant to all three zones of the country and must, to the extent possible, be implemented Somalia-wide.

Intermediate Result #1 – business enabling environment strengthened through access to finance and support to policy and regulation

Other organizations, principally the World Bank, are working closely with the FGS and regional authorities to establish a legal and regulatory framework for Somalia’s newly emerging financial sector and to build the government’s capacity to provide sector oversight. However, that will not be sufficient to ensure that Somalia’s new private financial institutions extend services beyond a small number of large, well-established clients. That will require additional institutions and practices to “democratize” access to financial services.

Below are examples of activities that may address this result:

develop a leasing industry – with an initial emphasis on serving the horticulture, fisheries, and renewable energy sectors - to get equipment into the hands of investors and businesses that cannot finance their needs through banks;

encourage buyers and suppliers of all kinds to develop credit arrangements for creditworthy clients;

assist selected micro-finance institutions to move “up market” (this usually involves working more like a bank, accepting deposits and expanding the client base to larger businesses); and support policy dialogue and regulatory development and/or strengthening.

Intermediate Results 2 – enterprise development promoted through business development services

Expanding the supply of key business services in Somalia and their use particularly by SMEs, startups, women- and youth-owned firms, and new investors is critical for growth. Market information increases the opportunity for more to succeed – it benefits all, but means the most to startups and smaller firms (including women-owned businesses) that can least afford to make mistakes. Business chambers and industry associations have a potentially vital role to play providing services to their members and facilitating dialog between business and government.

Broad-based and representative associations give voice to smaller companies, providing access to policy makers and enabling SME actors to engage in policy discussions alongside the established business elite.

Below are examples of activities that may address this result:

help market research providers connect with potential clients and encourage investors and businesses, in turn, to buy market research services (this could include assistance for targeted marketing, outreach campaigns, building specialties, subsidization of initial services, and support to selected users to apply market information effectively, among others);

assist market research firms to develop and promote headline products that inform Somali businesses about the value of market information (e.g. a consumer trends quarterly, an annual survey of regional fruit trade, periodic seminars on emerging youth preferences) ;

strengthen providers of market research with technical assistance and/or training to build a reputation for quality and value; and involve research firms in sector-specific competitiveness events so that they can build in-house expertise and support those industries.

Sectoral activities:

The Contractor must complement the systemic activities with sectoral ones to accelerate the development of industries with particular potential to grow and create jobs, including in regions previously inaccessible due to insecurity. The industries the project will strengthen are those that best meet these criteria; for example, agriculture, with a particular focus on horticulture in South Central Somalia, fisheries, and renewable energy. The production potential of the horticulture and fisheries industries in Somalia far exceeds domestic demand which means success will require exports to foreign markets. In both these industries, the Contractor must encourage many players in the private sector to collaborate with each other and with federal and other government counterparts in new ways. The challenge of coordination between government and the private sector will be compounded by political/administrative and deeply rooted clan-based divisions.

The Contractor must have an approach for working with these industries that brings together the different players - governments, the private sector, financial institutions and donors - and facilitates coordinated efforts between them to address industry-specific challenges and opportunities. A “competitiveness” approach has the greatest chance of working in this environment. This approach benchmarks the strengths and weaknesses of an industry in one country and compares them to those in other countries competing in the same market to illuminate the common interests that Somalis have in working together to succeed internationally and to identify the specific actions that the private sector and government need to take for the country to become or remain competitive.

The outcome of a successful competitiveness exercise is typically an agenda for action with a variety of initiatives and investments to be taken by government, industry groups, individual firms and related industries such as financial intermediaries to sustain and grow the industry over time. The Contractor must support initiatives by government and investments by the private sector that help to implement the agenda and help to build the industry. Broad benefits could include a demonstration effect, pioneering of a technology or venturing into a new geographic zone, employing an unusually large number of people or engaging multiple small farmers, among other possibilities.

Intermediate Result #3 – improved production, employment and incomes in select value chains (horticulture, fisheries, and renewable energy)

The agribusiness component of the contract should focus primarily on horticulture in South Central Somalia, and must seek to increase investment, employment and incomes in the industry.

The fisheries component seeks to help Somalis access fish stocks beyond the continental shelf using technologies new to Somalia and levels of investment much greater than those used in artisanal fishing but less than that employed by the industrial fishing fleets of other countries fishing Somalia’s waters.

For all value chains being supported, the Contractor must use a competitiveness approach to bring together the diverse parties that will need to work together for the industry to grow and enter export markets. Key participants could include: investors in the sectors; selected industry associations; food processing; investors in boatbuilding; ice-making; refrigeration and transport;

selected fisheries cooperatives and/or associations; energy providers; marine engine parts suppliers and repair professionals; energy providers; input suppliers; exporters; freight and transport companies; airlines and shipping lines; financial institutions; government officials from related departments; university faculty; donors; and the media.

Known opportunities and constraints in the industry include:

a system to improve the quality of fertilizer, pesticides, and herbicides supplied to the industry, complementing work in this area by the Food and Agriculture Organization

(FAO) ;

a sustainable seed certification program and a growing seed production industry, also complementing work by the FAO (this may include planting materials other than seed);

a sanitary and phytosanitary quality control and certification system – sustainable within the resources available in Somalia – to give confidence to overseas buyers that Somalia’s horticulture exports are safe;

development and implementation of good hygienic practices (GHP) and Hazard Analysis Critical Control Point (HACCP) systems to give overseas buyers confidence that fish from Somalia is safe to eat (systems run entirely by the private sector have worked elsewhere in some cases and should be considered for application in Somalia);

development of a capacity by government and/or universities – sustainable within the limited resources available in Somalia and compatible with requirements of the Indian Ocean Tuna Commission – to monitor and sustainably manage fish stocks; and strengthen capacity of public and private sector energy management capacities, including development of smart policies and reforms that promote renewable energy and energy efficiency.

Below are examples of activities that may address this result:

introduce new crop technologies or new arrangements with outgrowers, produce or distribute new input technologies such as drip irrigation, or pioneer an export crop;

initiatives to, among others, build and operate larger fishing vessels, manufacture and/or distribute new fishing gear, repair marine engines, process fish, make ice, refrigeration facilities and refrigerated trucking fleets, or train technicians for the industry;

increase supply, repair parts, or train technicians working on renewable energy, especially with a focus on applying renewable energy to the horticulture and fisheries industries in new and innovative ways;

facilitating buyer and supplier credit and leasing equipment;

identify potential providers of market research and other business development services to key industry players, facilitate provision of those services, and assist these players, in turn, to apply market information to business and investment decisions;

encourage and support the development of an industry association/network of associations to facilitate sector growth, including by putting in measures to assure the integrity of inputs and the quality and safety of food and products produced for domestic and export markets; and carry out selected, small infrastructure projects, improvements, and repairs to facilitate the growth of agriculture, fisheries, and renewable energy industries. These may include water control structures such as culverts, catchment basins and irrigation canals, bridges, minor access roads, fish landing piers, fish holding and transfer equipment, ice-making and cold storage facilities, water pumping windmills, among others.

In addition to directly supporting contract activities, it is anticipated this will also demonstrate visible economic progress to residents of project areas. The Contractor must explore parallel implementation of activities with USAID’s Transition Initiatives for Stabilization (TIS) and TIS+ to encourage community involvement, support for project work and a positive vision of the future for Somalis in the assisted geographic area.

The Contractor will assess the benefits of engaging a small number of local universities/NGOs/research associations in a modest program of adaptive trials of better practices, new technologies, and other innovations to support investments that receive contract support . Emphasis must be placed on trials that will produce results that can benefit local stakeholders on the ground quickly – i.e., over 12 to 18 months.

Cross-cutting Result #4 – greater participation by women and youth in the economy as entrepreneurs, employers and employees.

The systemic activities of the contract have the potential to disproportionately benefit women and youth in business by improving their access to finance and their access to and use of market information, which will in turn increase the competitiveness of their enterprises. The Contractor must take steps to lock in and enhance these benefits. The Contractor must, for example, encourage leasing companies and/or other financial institutions to develop products tailored to women’s needs and employ women in outreach positions. Youth require access to capital, along with education on how to establish, run and grow successful businesses.

Access to business development services, for example market information, has the potential to increase the success rate of women and youth entrepreneurs, provided they use the service strategically and have access to market research that addresses their needs. The Contractor must work with business service providers to address the information needs of women in business and employ women in outreach roles and to help them use such information effectively.

The Contractor must support the development of a Somali women’s business association, chamber of commerce, or business “network” to provide both moral support and an information exchange to increase their confidence and hard business skills for competing in Somalia’s markets. Youth may benefit more from an expansion of existing business networks with youth-specific chapters.

Women and youth will benefit from the contract’s sectoral activities through increased employment and business opportunities in the growing horticulture and fisheries industries.

Their successful participation in these industries will increase, in turn, the project’s impact on economic growth and employment in Somalia more broadly.

Horticulture traditionally employs a large number of women in farm production, post-harvest processing, and as vendors at the retail end of the supply chain. Fishing industries tend to employ a large number of women at the processing end of the production chain. Development of the industry will create a significant number of new employment opportunities for women.

Additional steps to increase women’s participation may include:

ensuring substantial involvement of women in the competitiveness benchmarking exercise to help identify opportunities for including them in the industry and to make sure that any negative impacts on women are taken into account;

encouraging – even incentivizing – financial institutions, business service providers, universities conducting field trials and investors in the program to employ women in outreach roles to engage women effectively in project activities; and setting aside time for women-only sessions during field-level outreach work with farmers;

substantially involve women in the competitiveness benchmarking exercise to help assure that they participate in the industry in productive ways and that any negative impacts on women are known and taken into account;

encouraging, even incentivizing, investors, financial institutions, business service providers and universities participating in the project to employ women in outreach roles to increase the chances of engaging women effectively; and encouraging processing enterprises that receive project support to address the needs of women in the workplace with amenities such as transportation, separate prayer rooms and bathrooms and, possibly, day care support for children. (Women’s needs should be discussed in detail with women prior to carry out activities.)

In addition, opportunities to tap information and communications technologies that can connect women in Somalia to business and employment opportunities in socially acceptable forms should be seriously explored.

To attract youth to participate in contract activities and take up the jobs created by contract investments, the Contractor must look for ways to incorporate into contract activities technologies and education that are likely to attract youth interest and attention. These could include:

SMS-based education and skills development;

the introduction of soil testing and drip irrigation;

computerized cropping models, exposure to navigation, fish finding and refrigeration technologies; and engagement with the solar and wind power innovations supported by the contract, among others.

Collaborative efforts with the private sector to address higher-level technical skills shortages that constrain the industry must also be considered.

Management and coordination:

Location: The Contractor must be based in Somalia, with primary and/or satellite office locations that will best meet project needs. Any presence in Nairobi must be justified.

Unified implementation and management: Though activities can be implemented independently of each other to a degree, critical outcomes must come from synergies between activities.

Leasing, for example, has particular promise in agriculture and fisheries and could get its best start there. Horticultural development, to take another example, will particularly benefit from careful market research into the quality and safety requirements of regional export markets -agribusiness investors may be among the best early candidates for market research services.

The wide geographic distribution of contract activities and Somalia’s fragmentation by clan and political zone put an additional premium on the coordinated management of contract activities.

The Contractor must therefore establish, and sustain through the life of the contract, a unified leadership, management, and reporting structure for all contract activities and a coordinated channel for communications with USAID and other key stakeholders.

Flexibility in implementation: The contract will be implemented in a complex environment. The Contractor must work with governing authorities across Somalia on common issues where authorities overlap and interests may clash. Insecurity in South Central Somalia is expected to be a constant and evolving concern. Key features in industry markets may also change during implementation. Regional controls over foreign fishing in the Indian Ocean, for example, could dramatically affect prospects for Somalis to enter the market. Contract implementation must therefore be flexible, allowing for shifts in component focus and geographic focus if and as needed. Significant changes in focus require the written agreement of USAID.

Political sensitivities: The Contractor must steer activities in a clear and consistent direction even while working with multiple layers of government that may disagree on key issues and in the face of evolving decentralization initiatives. Project activities will also undermine existing ways of doing business (for example, monopolistic) and may face resistance to doing business differently. The Contractor must build alliances with government and private sector, manage the politics carefully, and consult USAID if/when any crisis looms. Limits on the presence of USAID staff in the field will increase the chances that counterparts will see the Contractor as representing the US Government and speaking for the USG on policy matters. These considerations will place unusual demands on the Contractor to understand the various interests at stake, navigate between them, and find common ground that counterparts can agree on. The Contractor must emphasize that it does not speak for the US Government on issues of policy or jurisdictional disputes and must refer such issues to

Linkages to other projects of USAID and other donors:

USAID’s overall goal in Somalia is to promote stabilization through good governance, economic growth, and countering violent extremism. USAID assistance is provided within the framework of the “New Deal for Engagement in Fragile States”, launched in 2013 to align donor resources with FGS priorities. In support of the New Deal process, USAID is a co-lead of the Economic Foundations bilateral coordinating group and is expanding, through this new activity, its economic growth assistance portfolio. There are important potential links between the work to be undertaken by the Contractor and efforts supported under the New Deal by other donors and international organizations.

The Contractor will explore the potential to leverage the impact of work under this contract through collaboration with USAID’s TIS and TIS Plus programs. TIS builds community cohesion and facilitates local level reconciliation in the aftermath of Somalia’s civil war by engaging communities in an open and shared process of selecting and implementing small-scale local infrastructure. If TIS is working in communities that will be affected by fisheries or agribusiness investments supported under this Contract, for example, TIS expertise and TIS processes could help to assure community understanding and support of the investment to the benefit of the investor and community alike. TIS successes in specific communities or geographic areas could also make those locations more attractive to potential investors in agriculture or fisheries. The Contractor is not required to coordinate all field-level investments with TIS, but will consider doing so on a case by case if and when coordination would advance the purposes of the contract.

Monitoring, evaluation and reporting:

The Contractor will develop an Activity Monitoring and Evaluation (M&E) Plan with a logframe to measure progress toward the contract’s purpose, sub-purposes, outputs and inputs. The Contractor will submit the Plan within 60 days of contract award for USAID’s review and approval. Indicators at the sub-purpose and purpose level will be outcome-focused to the maximum extent possible. The Plan will explain why specific indicators were chosen, how data baselines and targets will be established and how data will be collected over time.

The Contractor will also include in the Activity M&E Plan a number of indicators from the Department of State’s Office of Foreign Assistance (F) indicators list, proposing custom indicators, as needed. Potential candidates to consider include (but are not limited to) the following:

Number of firms receiving USG capacity building assistance to export;

Number of days of USG-funded technical assistance in financial sector enabling environment provided to counterparts or stakeholders;

Number of jobs attributed to (contract) implementation;

Number of hectares under improved technologies or management practices as a result of

USG assistance;

Value of exports of targeted agricultural commodities (including fisheries) as a result of

USG assistance;

Value of new private sector investment in the agriculture sector or food chain (including fisheries) leveraged by (contract) implementation;

Percentage of firms that have achieved improved technologies as a result of USG assistance;

Number of financial intermediaries supported by USG assistance;

Percentage of female participants in USG-assisted programs designed to increase access to productive economic resources (assets, credit, income or employment).

The Contractor will assure that all data collected meets USAID’s data quality standards and is disaggregated by sex and by region whenever relevant and feasible.

USAID/Somalia’s third party monitoring and evaluation mechanisms will be responsible for monitoring and verifying a sample of activities, as well as pre-approving designs and inspecting completed infrastructure repairs and improvements. The Contractor must fully support and provide all necessary data to facilitate monitoring and verifications, including full access and timely information on activities, locations, engineering plans and issues. Evaluations will be conducted externally. The Contractor must, therefore, ensure full cooperation with external evaluation partners.

The Contactor will be required to provide a narrative report following a USAID-issued template, and upload the report and input data into USAID’s Clearinghouse on a quarterly basis. Reports must also be posted on USAID’s Development Experience Clearinghouse for transparency purposes. The Contractor must submit to the Development Data Library (DDL), at www.usaid.gov/data, in a machine-readable, non-proprietary format, a copy of any Dataset created or obtained in performance of this award, including Datasets produced by a subcontractor at any tier.

Key personnel:

Chief of Party (COP): The COP is the leader of the project team, responsible for overall implementation, results, and management. He/she is the team’s interlocutor with USAID and is responsible for establishing and maintaining constructive relations with counterparts across the different regions of Somalia. The COP is the final implementing team authority on management issues including staff, logistics, financial accounting and security. Required qualifications include:

At least a Masters degree in business, economics, or other relevant field;

Minimum 10 years managing complex economic growth assistance projects in developing countries;

Minimum three years’ experience in fragile or post-conflict states;

Experience working collaboratively with host country governments and the local private sector, and coordinating activities with those of other donors;

Experience in project design and implementation, including financial management experience, such as budgeting; tracking, reporting and accounting; and procurement;

Experience managing projects and/or an office with culturally diverse teams and working with counterparts from other cultures; and Excellent oral and written English language communication skills

Deputy Chief of Party (DCOP): The DCOP supports the COP, acts for the COP as needed and described above, and carries out any other tasks assigned by the COP to ensure proper management of the Contract. Required qualifications include:

At least a Masters degree in business, economics, or other relevant field;

Minimum 5-8 years managing complex economic growth assistance projects in developing countries;

Minimum three years’ experience in fragile or post-conflict states;

Experience working collaboratively with host country governments and the local private sector, and coordinating activities with those of other donors;

Experience managing culturally diverse teams and working with counterparts from other cultures; and Excellent oral and written English language communication skills.

The contractor will propose two additional key personnel that will cover a range of technical areas and project activities, such as: financial sector, business development services, value chains

(agriculture – (horticulture and fisheries) and renewable energy), and gender and youth. The project will also require short-term technical expertise. Key personnel must have:

At least a Masters degree in finance, business, economics or a related field, such as agriculture;

Minimum eight years’ experience with financial sector development in developing countries;

Prior experience in fragile or post-conflict states;

Experience managing staff and other resources to achieve results;

Experience working collaboratively with host country governments, the local private sector, and implementers of other donor-funded activities; and Excellent oral and written English language communication skills. Somali speaking skills an advantage.

Monitoring, Evaluation and Learning Specialist: The Monitoring, Evaluation and Learning Specialist is responsible for all monitoring, evaluation, and learning activities. The Specialist must ensure that all activities are in line with the Agency Learning, Evaluation and Research policy ensuring that impact reporting includes cost/benefit analysis of interventions. Required qualifications include:

At least a Masters degree in business, economics, statistics, international development, or a related field;

At least 5 years’ technical experience in developing and implementing monitoring and evaluation plans and results-based management;

Must demonstrate at least 3 years’ work experience in developing countries, including in conflict-affected contexts; and

Excellent oral and written English language communication skills. Somali speaking skills an advantage.

Assumptions and risks:

Contract success depends on a number of assumptions. The most important is that current levels of peace and security in Somalia are maintained or increase. Horticulture development in South Central Somalia would be affected by even a modest deterioration in security. A major breakdown of order would affect all project components though elements of the financial sector and market research components, as well some fisheries work and some minor activities in agribusiness could be sustained if security in Somaliland and Puntland stayed at current levels.

A second assumption, essential for rapid growth in the fisheries and horticulture industries, is that a competitiveness approach can indeed pull together individuals and firms in Somalia with different clan affiliations and from different business groups, and with authorities from different regions and different levels of government, to address shared interests in developing these industries. Some progress is possible at the level of individual firms without this degree of cohesion. But Somalia’s ability to build confidence overseas in the safety of its food exports would be significantly constrained and the potential of both sectors would be reduced.

Drought is always a risk in Somalia and would affect horticulture the most. Prolonged drought would divert government resources and attention from most activities under the contract.

Finally, the contract requires that a diverse set of activities be implemented across a large geographic area with weak transportation connections and in collaboration with counterpart authorities from different regions at multiple levels of government whose relationships with each other will evolve as contract activities move forward. This is a complex program and as such, the Contractor must put in place an implementation team and management structure that can manage this level of complexity effectively.