Terms of Reference for Market-based livelihood feasibility study in Kismaya, Lower Juba region, Jubaland state in Somalia.

2.       General Context

Despite a significant response to Somalia's food crisis, recent data reveals that 3.7 million individuals, accounting for 22 percent of the population, are facing severe levels of acute food insecurity. These people are categorized in IPC Phase 3 (Crisis) and Phase 4 (Emergency). Typically, impoverished households lack productive assets and rely on uncertain income sources. Both men and women encounter challenges such as social stigma, exposure to repeated crises, high levels of debt, and an uncertain future. Therefore, they exhibit risk aversion and are hesitant or unable to invest in new livelihood activities.

Along the increased frequencies and impact of disasters, the Economic necessity and male unemployment and migration are driving an increasing number of women in Somalia to engage in entrepreneurship activities. The Somali National Development Plan 2020-2024 (NDP-9) estimates that up to 70% of households across the country today identify as economically “female-headed”. However, women are not socialized as independent economic decision makers and patriarchal

structures, both implicit and explicit, hold women entrepreneurs back from accessing financial assets and services. Many women entrepreneurs have difficulty meeting the formal criteria imposed by banks, such as having a collateral or male guarantor. As land ownership and inheritance laws favor men, it is extremely difficult for women to meet the requirements necessary to secure bank loans. Financial institutions are furthermore affected by gender biases within the society and have limited products and policies that remove barriers to access. Women are also less likely to be part of membership associations than men are and many see no benefits in joining altogether.

2.1 Gender disparity in socio-economic.

According to recent World Bank data, women make up 50.15% of the population but they still face segregation, socio-economic vulnerability, and political exclusion. This is due to the prevailing belief that women are primarily suited for domestic roles with no access to child-care service which hinders their empowerment. Women entrepreneurs often lack business skills, have limited access to business development services and finance, leading to women having lower revenues than their male counterparts and remaining excluded from the higher-earning segments of value chains. According to the Sectoral Assessment of Women’s Entrepreneurship Development in the Agriculture and Renewable Energy Sectors in Somalia (ILO, 2020), almost half of all women entrepreneurs in Somalia use their personal residence as their main business residence, one third used market stalls and only 18% had a proper business site. The mandatory certification fee introduced by the Ministry of Commerce and Industry’s online Business Registration and Licensing System does not favor entry-level and existing women’s businesses into getting their businesses licensed and registered. As a result, a critical proportion of women-led businesses remains informal thus, women have a disadvantaged position in the labor market, being overrepresented in insecure employment within micro and small businesses and underrepresented in larger, formal enterprises. Their lack of access to financial services, credit, and skills exacerbates this situation. Furthermore, women who head households and belong to internally displaced and ethnic groups suffer disproportionately from economic, social, and political marginalization and exclusion, due to their lower social status within their clans and gender inequality. The social marginalization of these women-led households makes it difficult for them to build the necessary social networks, access support services, and obtain information. As a result, they face higher rates of socio-economic deprivation and domestic abuse. These women are also burdened with a heavy workload of unpaid care work and household chores, which reduces their ability to engage in productive livelihoods.

3.       Project Background information

ALIGHT, in partnership with GIZ, is implementing a project to empower310 women-led households living in extreme poverty. This initiative aims to enhance their social and economic inclusion by addressing the various challenges they face, particularly in accessing secure and sustainable livelihoods. The program adopts a holistic Ultra-Poor Graduation approach, focusing on four key pillars: social protection, livelihood promotion, financial inclusion, and social empowerment. Within the livelihood promotion pillar, interventions are specifically designed to foster market connections, generate sufficient income to meet household needs, and enhance technical skills for economic resilience. The program's rationale is centered around the belief that transitioning from vulnerability to sustainable resilience and transforming ultra-poor households into sustainable income sources can only be accomplished through actively engaging in market-driven enterprises.

ALIGHT plans to conduct a market feasibility assessment as part of its project initiation process. The assessment will include evaluating livelihood opportunities for the target population, analyzing household economics, and studying the community’s political dynamics with relevance to micro-

business formation and success. To carry out this assessment, ALIGHT intends to hire a consultant who will lead the design and implementation of a market assessment and economic feasibility study. The goal of this assessment is to identify market opportunities for women-led ultra or multidimensionally poor households in Kismayo and understand the barriers faced by marginalized groups. The rationale for conducting this assessment is that understanding market opportunities and limitation is crucial for successful development of micro-businesses and thus is crucial for reducing poverty, as lack of access to income-earning opportunities is a major cause of poverty. To achieve improved incomes, it is important to involve local communities and people on the ground in driving and owning economic growth and private sector development as well as consider specifically involving women's groups who have successfully started small businesses and previously received support, to gain more knowledge about success, challenges, and good practices. i.e., women small business owners supported by NGOs. Therefore, the success of the SEPOW project greatly depends on a high quality market feasibility assessment.

4.       Assessment Goal and Objectives. 

4.1 The Goal of The Assessment.

The goal of the assessment is to carry out a market-based livelihood feasibility assessment to identify resilient micro-business opportunities for the poorest and marginalized population groups with a focus on women in Kismayo town.

4.2 Specific objectives:

The specific objectives of the assessment are:

•       To understand the target community, and the local structures or institutions that are key to local economies and their current challenges,

•       livelihood options for ultra-poor households, demand and supply for products and services, market access for target households (especially women), local capacity and resources, and potential risks and viability of livelihoods.

•       To identify viable and climate resilient solutions for addressing current and emerging livelihood challenges among the multi-dimensionally poor.

•       To evaluate the feasibility and provide a shortlist of viable income-generating options for women.

•       To identify market opportunities and gaps, capacity gaps for beneficiaries, high potential growth sub-sectors, and sub-sectors absent or flooded in the market.

•       To identify micro-business opportunities for the poorest and marginalized women, suitable industries and markets, and potential pitfalls for new businesses.

•       To identify barriers and constraints limiting economic engagement, required business skills for targeted beneficiaries, constraints in accessing capital and

•       Assess financial services, accessibility to ultra-poor, main barrier and recommendations for addressing Microfinance Institutions' requirements.

6.   Scope of the assessment

The scope of the assessment entails study on the specific objectives as stipulated under 4.2 above.

i.                    Geographical areas:

i.                    Kismayu urban town (Calanley, Fanole, Farjana, Gulwada,and Shaqaalaha/via-Afmadow including IDP sites in each village.

7.       Components of the Assessment

The market assessment is expected to consists of four interconnected components: the Consumer Demand Survey (CDS) component, the Market Opportunity Survey (MOS), the Entrepreneurship skills

& culture component (Knowledge, attitude & practice) of the target population, and the Business environment diagnostic component (Operating environment for small businesses, specifically focusing on economically disadvantaged ultra-poor women).

•       Consumer Demand Survey (CDS)

The Consumer Demand Survey (CDS) is a tool shall be used to assess the availability and satisfaction of goods and services in the market. It will help identify areas where there is unfulfilled demand and potential for improvement. Data collectors should target random consumers, considering age and gender. Around 60 quantitative observations should be recorded for an average market assessment.

To assess the purchasing power of the population, qualitative interviews are necessary in addition to the surveys. This helps determine opportunities for trade and production expansion. It is important to understand if the population can afford the products being assessed. Interviews should be conducted with community leaders, consumers, officials, and market traders to gauge the population's engagement with the market and their access to cash. Focus group discussions are recommended to capture diverse opinions, as purchasing power may differ among different groups within a locality.

•       Market Opportunity Survey (MOS)

The Market Opportunity Survey (MOS) should be designed to identify the reasons behind consumer dissatisfaction and business owner concerns regarding their market ventures. It should also aim to determine if business development services or training can improve their income-generating abilities. Data collectors should use systematic random sampling to survey vendors and producers in the market, ensuring a diverse range of participants. The size of the market should determine the interval for selecting participants, with approximately 30 observations recorded for each market assessment. The study should focus on local market opportunities and viable livelihood alternatives, particularly regarding women's participation. Key areas to be investigated include market functions, the role of women, business development service providers, and the socio-cultural aspects of women's resource ownership and usage.

•       Political economy analysis (PEA) Component:

The assessment also include component on Political economy analysis (PEA) to assess community power structure, clan dynamism, role of communal dynasties, community-influencers and the role of women within the community political-economy set-ups, the limitations to (marginalized) women‘s market participation and Gatekeeping structures in the economy. Thus, it will map community power structure to inform the vulnerability of different groups based on; clan dynamism, community-influencers and the role of women within the community political-economy set-ups.

•       Assessing business environment and recommend policy and programmatic response on longer-term Investment Climate Reform.

Business Environment Reform (BER) for sustainable development is a key avenue for policymakers to enable inclusive growth, job creation, and poverty reduction. A vibrant and sustainable private sector depends on smart policies and effective regulations balancing economic growth with social inclusion and environmental protection. The business environment comprises the policy, legal, institutional, and regulatory framework conditions that govern business activity. To ensure that these conditions set the right incentives and respond to businesses’ needs, including the voices of private stakeholders is important for an effective BER. Inclusive Public-Private Dialogue (PPD) is therefore essential

throughout the reform process, so that policy design is informed by the experience and needs of the “end users” – formal and informal business owners, workers, investors, and service providers.

In Somalia, the business environment does not support competitiveness, growth, gender inclusive business environment. The assessment should consider a brief assessment of the Business environment for certain businesses often engaged by women micro-entrepreneurs. Unless the program is certain that, the Business environment in which target population is operating is supportiive, there is every reason to believe that most of the SMES will continue facing growth & sustainability challenges in the future. Regarding consideration of gender sensitive business environment reform, the study will include Behavioural Analysis and Norms Diagnostic (BAND) useful to Identify and understand the social norms that shape the economic behavior of stakeholders and women in the business environment. This will help the assessment to identify unfavorable conditions & their impact as well as recommend possible remedy for reform.

8.       Assessment Methodology.

The consultant will propose a methodology that will be participatory, comprising a mixture of quantitative and qualitative methods, and that will include the following elements and among others:

•       Participatory methodology used to capture data and information from various stakeholders.

•       Market assessments should incorporate both quantitative and qualitative data.

•       Sample size should be calculated relative to the size of the local population and Random sampling techniques used to reduce enumerator bias.

•       Data collection methods included desk review, key informant interviews, focus group discussions, in-depth interviews, and observations

•       Consultative and participatory approach engaged ALIGHT and GIZ team throughout the assessment.

•       Assessment framework and tools designed through extensive consultations with ALIGHT and GIZ team.

•       Fieldwork-based primary data collection started after approving data collection tools and fieldwork plan.

•       Desk review conducted to inform data collection tools and perform critical market analysis.

•       Review of program documentation and previous assessments conducted by other agencies.

•       Desk research involved reviewing available literature, reports, and research studies specific to the assessment.

•       Listing of secondary literature review provided as references in the report.

N/B: The consultant will ensure all ethical standards are adhered to and will maintain the confidentiality of data collected from the target groups.

9.       Reporting and accountability. ALIGHT & GIZ will be responsible for:

i.            Providing the consultant with all necessary project documentation, including findings from GTS assessment.

ii.            Reviewing the assessment inception report.

iii.            Quality assurance of the assessment process.

iv.            Review the draft report and provide feedback to the consultant.

v.            Organize meetings on the presentation of key findings and data validation.

vi.            Review and approve finalized assessment report.