Saamaynta Ganacsiga / Quarterly Newsletter #7

GEEL's Quarterly Newsletter

Saamaynta Ganacsiga #7

GEELSomali

Geel_Somali

Geelsomalia

Project Achievements in Review

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fter 27 years of conflict and instability, Somalia is gaining relative peace and security. The country is endowed with important resources, including the longest coastline in Africa, a long history of livestock farming, and productive soil for agriculture, including fruits, vegetables, and sesame. USAID, through the Growth, Enterprise, Employment and Livelihoods (GEEL) project is supporting Somalia’s re-emergence as a frontier of economic transformation in East Africa. Since 2016, the project has contributed to the private sector through the introduction of new technologies, access to domestic and international markets, investment facilitation through value addition, and the modernization of commercial production through renewable energy.

To date, GEEL has worked with 127 Somali enterprises. Together with these partners, the project has supported creation of 1,882 new fulltime, permanent jobs in Somalia’s most productive sectors; as cultivated investments bear fruit in the coming months and businesses continue to expand, GEEL anticipates additional jobs and incomes for Somali households.

As shown here, a majority of jobs have been created in the dairy, livestock, and fisheries sectors.

1,882 jobs created since 2016

Increased Exports are Key to Economic Growth

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t the 2019 Gulfood trade show in Dubai, the world’s largest annual food exposition, USAID sponsored the attendance of 20 Somali businesses to network with some of the estimated 98,000 event visitors.

For the third consecutive year, GEEL organized the Somali Rising booth to showcase export-ready Somali products to an international audience of traders, investors, and businesspeople, including sesame and pulses, dried and fresh fruits and vegetables, meat, fish, and frankincense and other resins and oils. The 2019

delegation had high expectations based on success in previous years; in 2018, participants achieved a reported $4 million in exports to buyers in the UAE, Europe, North America, and Asia.

The Gulfood delegation is one example of the project’s focus on strengthening Somali companies’ access to markets. Strategic connections among value chain actors with complementary visions, market space, or products yields high-impact investments and generates sales.Through businessto-business introductions and by leveraging technical and networking events and regional trade forums, GEEL connects input suppliers to producers and exporters, entrepreneurs to financial and technical services, and business owners to world-class technologies, expanding opportunities for Somali businesses with a focus on long-term impact and sustainable growth.

$19.4 million in export sales since 2016 Since 2016, GEEL-supported business have reported $19.4 million in export sales across the project’s priority sectors as shown here.

“There is a lot of demand from other countries for Somali products,” said Sowda Osman, a banana and lime farmer. “A lot of people are visiting the booth and showing genuine interest in Somali farmers and their products. Somali products are in high demand internationally, and the fair helped farmers and producers gain access to these markets.” The Gulfood trade show proved to be an excellent opportunity for Somali traders to meet potential customers, build partnerships, and generate interest in Somali products.

New Investments Open Doors

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trategic investments can make all the difference to businesses seeking growth. USAID made significant investment in Lis Diaries, a milk and juice production company in Hargeisa, to purchase and install processing and packaging equipment.Vendor Tetra Pak along with Premier Bank provided financing, while GEEL offered technical assistance, including an on-site engineer to install new equipment and train staff on operations. GEEL also facilitated trainings on dairy processing, quality assurance, and hygiene standards, which was “positive at all levels, from managers to operators and cleaners” according to Chief Operating Officer Moustapha Osman. Lis Dairies now produces regular and flavored milk and fruit juices and has begun exports to Ethiopia thanks to its quality and health standards. According to Moustapha, most importers fail to achieve approval to enter Ethiopia’s market under rigorous testing requirements. “We could not have [succeeded through] that process had it not been for stringent processes that are in place at Lis” thanks to USAID investments in the company’s growth.

GEEL-facilitated co-investments at Lis Dairies allowed the company to expand exports to Ethiopia. Photo credit: iZone Production for GEEL

Since the project’s start, over $22 million has been invested in high-potential businesses, including coinvestments and business own investments guided

by GEEL technical staff. More than 60 Somali companies invested in infrastructure, including processing and packaging equipment, warehouses, packhouses, and laboratories, vehicles and boats, and cold storage equipment. Climate-smart and renewable energies comprised a portion of investments, including greenhouses, drip irrigation kits, solar-powered irrigation equipment, and water and soil testing equipment for improved fodder farming.

Over $22.5 million new investments leveraged since 2016 Investing in women is a priority for GEEL.As Mohamed Abdirahman Moalim, CEO of Kaah Islamic Microfinance (KIMS), puts it, women are “the foundation of the economy.” Yet, Somali women have limited access to financial services and technical resources that support commercial growth. To reduce this gap, GEEL organized two Access to Finance for Women in Business events in Hargeisa and Mogadishu in 2018, to introduce women entrepreneurs to finance and technology providers.

Approximately 100 women attended the events, representing various sectors including agriculture, fisheries, and livestock, as well as the hospitality industry. Following presentations by keynote speakers from Microdahab and the Women’s Veterinary Association, among others, participants networked in a “marketplace” where service providers hosted booths. The GEEL investment team is preparing high-impact follow-up activities with participants, including loan facilitation for 19 women, agricultural trainings to 12 women, and advertising support to three businesses. These and other continued activities are expected to significantly impact opportunities for growth among Somali women.

“The forum is important for women business owners to connect to finance providers face-to-face. Empowering women is important because they are the foundation of the economy.” – Mohamed Abdirahman Moalim, CEO of Kaah Islamic Microfinance (KIMS)

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New Technologies

nnovative technologies are crucial for market competitiveness: they increase efficiency, reduce cost, and support commercial longevity. GEEL is working to bring Somali businesses on par with their regional and international counterparts by integrating new technologies from renewable energy to artificial insemination and climate-smart operations. GEEL technical teams provide consultations to individual businesses, along with feasibility and other reports that help guide decision-making and investments.

Collaborations for ClimateSmart Agriculture Adoption Bringing climate-smart agriculture technologies to Somalia is an important step towards improved and sustainable production; equally important is facilitating adoption of those new technologies among commercial leaders in the sector.The Growth, Enterprise, Employment and Livelihoods (GEEL) program collaborated with Horn Gardens CoOwner Abdihafid Hashi on a joint vision to establish Somalia’s first local agro-supplier offering high-quality inputs and extension services to farmers: Horn

Gardens. GEEL designed and funded their flagship shop in Hargeisa, contributed to advertising costs, assisted with investment pitches, and established an interactive forum with farmer clients. Together, they are bringing climate-smart agriculture to commercial farms for sector-wide impact.

Each Horn Gardens package includes installation extension services for customers, including trainings on greenhouse farming and climate-smart drip irrigation lines. A total of 31 farms are “under our care,” Hashi says, demonstrating the values that underlie his business model.

“I can simply sell to you [without trainings] and make a profit, but you may not succeed… I would rather conduct trainings and provide technical advice so that I can see six farms that are very successful, than 100 that have failed.” – Abdihafid Hashi, Co-Owner of Horn Gardens With support from GEEL, Horn Gardens grew its model farm with two additional greenhouses, and provided farm management support to 400 farmers, creating 5 full-time and 64 part-time jobs. In 2018, GEEL also facilitated drilling of a borehole, providing on-site water access and allowing Horn Gardens to scale further. Thanks to GEEL, Horn Gardens is increasing the pace of adaptive, climate-smart farming in Somaliland.

In addition to farming products, Horn Gardens is the first business in Somaliland to provide agriculture trainings and on-farm technical advice to commercial farms, increasing the likelihood of successful production for agri-businesses. Photo credit: iZone Production for GEEL

Solar Energy for Cold Storage The energy team works with businesses to reduce energy costs that facilitate growth. In 2018, the project provided energy assessments to 17 businesses in priority value chains including livestock, dairy, and fish, and reviewed energy grant proposals for technical viability, including recommendations that led to procurement of renewable energy systems. Among those businesses, GEEL provided technical support and co-investment to Irmaan Dairy in Mogadishu, a business founded by diaspora that struggled to bring fresh milk to the local market without cold chain storage options. As a result, milk often spoiled before reaching their customers, depleting profit and posing a risk to consumer health. In addition, production at

the Irmaan plant was halted due to malfunctioning equipment. USAID provided investment support to Irmaan to procure a hybrid solar system that supplies energy to its factory, along with 30 solarpowered freezers at retail distribution points, while Irmaan provided a cost share for the purchase and installation of dairy processing equipment. GEEL also facilitated technical assistance and training for company staff on equipment operation and maintenance. The refurbished plant was officially launched in April along with a new line of products, and Irmaan reports that production has increased by 75 percent while the hybrid solar system is expected to save approximately $900–$1,000 of electricity cost per month and increase production by enhancing equipment performance.

GEEL-facilitated co-investments at Lis Dairies allowed the company to expand exports to Ethiopia. Photo credit: iZone Production for GEEL

Artificial Insemination Technology Boosts Dairy Production Livestock has been the major economic pillar of Somali communities for centuries. Under traditional pastoral practices, the average milk production of indigenous Somali cattle is around 2.5 to 4 kg per day. With improved, production-focused livestock management systems the same cattle could potentially produce 6 kg per day. To improve the genetic quality of Somali livestock, GEEL and Somali Bovine Genetics (SBG) introduced artificial insemination (AI) technology using high-quality semen from world-renowned

Canadian Semex bulls. Over the past three years, the cross-breeding program has produced 583 calves that are disease resistant and tolerant of the local climate. The calves are expected to produce 40 liters of milk daily, greatly increasing production and, in turn, revenue. Through the program, 40 technicians have been trained on the AI technology and process, and have achieved a successful conception rate of 86.5 percent, as compared to 60 percent before the program began. The first generations that were born through AI are producing 15-20 liters of milk per day, with volume expected to increase as they mature.

Said Shifo Farm CEO, “it will take less time to build a high-quality herd of cattle that can produce large volumes of milk to meet market demand.�

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Transforming Traditional Livestock Practices

hile the livestock sector is the historical backbone of the Somali economy, pastoralist communities and commercial dairy farms are vulnerable to recurrent droughts and perennial milk shortages.To build resilience in urban and peri-urban communities during dry spells, GEEL launched lactating herd leasing schemes at 42 commercial dairy farms, linking them with a total of 294 pastoralists and their camels. Commercial farmers feed, treat, and manage herds on behalf of smallholder pastoralists who own the camels and pay $90 per animal per month to produce and sell their milk. This strategy has helped to sustain the camels while creating revenue for the smallholder pastoralists and commercial farms.

In Puntland and south-central Somalia, GEEL introduced a training package on herd management best practices among 45 camel dairy farmers through farmer-to-farmer trainings. The trainings are expected to increase productivity per animal and per farm, boosting the availability of high-quality fresh milk. With the goals of improving livestock body weight, maximizing milk production per animal, and reducing production costs, the project team formulated a livestock-feeding plan based on animal age, health status, and productivity and also provided trainings on farm ration formulation to 35 farmers in Banadir and the Shabelle Valley, leading to healthier animals that breed earlier and produce more, reducing production costs for SomMilk, Beder Dairy & Meat, and Somali Bovine Genetics, three of the most prominent dairy farms in Somalia.

At Beder Dairy Farm in Somaliland, camel leasing is an essential element of the company’s production strategy. Photo credit: iZone Production for GEEL

Leveraging Farmer Networks for Increased Sesame Production

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esame is grown widely in Somalia, yet its export value depends on the international market. While international prices have steadily increased since 2005 along with increased consumption, low production levels in Somalia restrict sector growth. GEEL identified Haicot of Beletweyne as a sesame business with significant growth potential based on its network of associated farmers, or out-growers, who supply a portion of their harvests for sale. In a cost-share arrangement, GEEL supported an investment in sesame processing machinery and provided technical on good sesame production practices. As a result, Haicot increased its production volume by 30 percent, created 27 new jobs, and incorporated 250 new farmers in its out-grower scheme. Boosting processing capacity among larger companies has positive impact on out-grower farmers as well. Abdihakim Sidow, an out-grower, noted that even for “farmers who are connected to companies that export to international markets, those companies in most cases lack technical know-how on processing capacity, especially at the standards required for export. This also [affects] the farmers because sesame demand will go down as a result.” With proper training and processing equipment, however, the benefits of the out-grower scheme multiply: “We are now connected to experienced local companies that are well equipped...

This has increased our income and farmers like self-have benefitted marvelously.” – Abdihakim Sidow, Sesame Out-Grower In addition to leveraging out-grower networks for production growth, GEEL has made use of similar farmer networks to increase knowledge and skills for improved quality and quantity of sesame harvests. Using a training-of-trainers model, GEEL staff led modules on data collection, demonstration farm establishment, and cost-sharing schemes for 25 trainers who subsequently trained over 1,700 rural farmers and led the establishment of 40 demonstration farms for future trials of new seeds and techniques. Farmers who received trainings reported an average 50 percent harvest increase.

The GEEL project facilitates farmer-to-farmer trainings to increase sesame production and improve quality, growing the export market. Photo credit: Omar Farouk

The Fish Sector Holds Greatest Potential for Economic Impact

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omali fish resources are abundant, yet the sector currently comprises less than 1 percent of GDP. One barrier to growth is a lack of safe and hygienic processing capacity, equipment, and standards. In turn, this discourages local and international sale of high value Somali fish that could transform economic opportunities for Somali fisherfolk and processors. To start laying the foundation for safe and hygienic fishing industry, in 2018 GEEL provided five short training courses to 241 people that included aspects of seafood quality and basic hygiene.

After inspecting seafood operations in Mogadishu and Bosaso in Puntland, the Société Générale de Surveillance (SGS), the world leader in quality assurance, selected Somali fish businesses interested and capable of making the financial investment to achieve Hazard analysis Critical Control Point certification, an international standard for hygienic processing of food products. GEEL will later facilitate certification trainings and promote HACCP-certified fish products to international and local buyers to boost sales.

By ensuring hygiene and processing standards, GEEL is supporting Somali fish business to access the export market and deliver high-quality products to the local market. Photo credit: iZone Production for GEEL

Who We Are The USAID/Somalia Growth, Enterprise, Employment & Livelihoods (GEEL) project addresses challenges and opportunities that are common among multiple economic sectors in Somalia and builds the capacity of internal investors as well as the Somali diaspora eager to invest in business opportunities. GEEL prioritizes industries likely to attract women and youth who have been marginalized from pursuing economic opportunities in the past.

Saamaynta Ganacsiga means “Impact in Trade� in the Somali language, and reflects our goal of keeping partners informed and engaged through this newsletter. Each quarter, GEEL shares exciting developments and provides you with a selection of stories, news, events, and resources to help everyone from producers, community members, businesses, and consumers stay apprised of project activities.

GEEL is continuously working with the private sector and government to attract capital investment to create new businesses and expand existing ones. Somalia is undergoing a unique and progressive transformation, and as the country continues to engage more with the international market, we are deepening our support to the burgeoning private sector.

This document is made possible by the support of the American people through the United States Agency for International Development (USAID). The contents of this document are the sole responsibility of International Resources Group (IRG) Ltd. and do not necessarily reflect the views of USAID or the United States Government.

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maynta Ganacsiga #7 @GEELSomali

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