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Funded by the European Union
LIVELIHOOD MARKET ASSESSMENT REPORT
North-Eastern Nigeria: Adamawa and Borno States
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Acknowledgements
The Livelihoods and Market Assessment was a collaborative effort of various stakeholders including the beneficiary community. The consulting team wants to thank the various stakeholders that made this work possible. Special mention goes to DRC leadership for the technical guidance throughout the assessment, field teams for the administrative support and participation during data collection. The government line ministries and departments for Borno, and Adamawa states; private stakeholders, other NGOs, and UN agencies provided valued information required for this assessment. Profound gratitude to the community who volunteered their time and valued information, which made this assessment a success. Better Ideas Consulting provided technical leadership, guidance, and compilation of this report.
This publication has been produced with the assistance of the European Union. The contents of this publication are the sole responsibility of The Danish Refugee Council/Danish Demining Group (DRC-DDGand can in no way be taken to reflect the views of the European Union.
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Table of Contents
ACKNOWLEDGEMENTS ........................................................................................................................................... I
TABLE OF CONTENTS .............................................................................................................................................. II
LIST OF TABLES AND FIGURES ............................................................................................................................... III
LIST OF ACRONYMS .............................................................................................................................................. IV
EXECUTIVE SUMMARY ........................................................................................................................................... 1
1. INTRODUCTION ............................................................................................................................................. 5
1.1 PROGRAM BACKGROUND ........................................................................................................................................... 5 1.2 ASSESSMENT BACKGROUND AND OBJECTIVES ................................................................................................................. 5
2. THE INQUIRY PROCESS .................................................................................................................................. 6
2.1 DESIGN OF THE ASSESSMENT ....................................................................................................................................... 6 2.2 SPECIFIC DATA COLLECTION METHODS ........................................................................................................................... 6 2.3 SAMPLING STRATEGY ................................................................................................................................................. 7 2.4 DATA COLLECTION .................................................................................................................................................... 7 2.5 DATA ANALYSIS ........................................................................................................................................................ 8 2.6 STUDY LIMITATIONS .................................................................................................................................................. 8
3. KEY FINDINGS ................................................................................................................................................ 9
3.1 LIVELIHOOD RECOVERY PRIORITIES ............................................................................................................................... 9 3.2 CURRENT IDP AND HOST COMMUNITY LIVELIHOOD ACTIVITIES ......................................................................................... 10 3.3 EVALUATION OF BUSINESS VIABILITY FOR YOUTH AND WOMEN ......................................................................................... 12 3.4 KEY MARKETABLE VOCATIONAL SKILLS ....................................................................................................................... 18 3.5 FEASIBILITY AND MECHANISMS OF IMPLEMENTING CASH TRANSFERS ................................................................................. 22 3.6 TARGETING CRITERIA ............................................................................................................................................... 25
4. MAIN CONCLUSIONS AND RECOMMENDATIONS ........................................................................................ 27
LIVELIHOOD OPTIONS FOR IDPS AND HOST COMMUNITIES .................................................................................................... 27 EVALUATION OF BUSINESSES VIABILITY FOR YOUTH AND WOMEN ........................................................................................... 27 KEY MARKETABLE VOCATIONAL SKILLS ............................................................................................................................... 27 FEASIBILITY AND MECHANISMS OF IMPLEMENTING CASH TRANSFERS ....................................................................................... 28 AREAS FOR FURTHER RESEARCH ....................................................................................................................................... 29
ANNEXES ............................................................................................................................................................. 30
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List of tables and figures
List of tables
Table 1: Achieved sample ............................................................................................................................. 7
Table 2: Preferred business by age group................................................................................................... 14
Table 3: Ranking of the most viable businesses recommended for the program ...................................... 16
Table 4: The most viable recommended businesses by Local Government Area ...................................... 16
Table 5: % of respondents indicating preferred skills development area .................................................. 19
Table 6: The most marketable skills/areas of training ................................................................................ 20
Table 7: Vocational service providers that a project can link with to provide vocational training ............ 21
Table 8: Most appropriate mechanisms - ranked ....................................................................................... 25
List of figures
Figure 1: Conceptual framework .................................................................................................................. 6
Figure 2: Study area ...................................................................................................................................... 7
Figure 3:Household food sources ............................................................................................................... 10
Figure 4: Most important Income sources .................................................................................................. 10
Figure 5: Income sources by state .............................................................................................................. 11
Figure 6: Income earned by youth and women .......................................................................................... 11
Figure 7: Relative income earned by respondents ..................................................................................... 11
Figure 8: Income earned per month by LGA ............................................................................................... 12
Figure 9: Income earned per month by residential status.......................................................................... 12
Figure 10: Preferred business by respondents ........................................................................................... 13
Figure 11: preferred business by sex .......................................................................................................... 13
Figure 12: % of youth who received training in the last 5 years ................................................................. 19
Figure 13: % of youth and women trained in the last 5 years .................................................................... 19
Figure 14: Skills training preference ........................................................................................................... 20
Figure 15: Are commodities available on the market? ............................................................................... 22
Figure 16: Do you feel safe to visit the market at any time? ...................................................................... 23
Figure 17: Do you own a cell-phone? ......................................................................................................... 24
Figure 18: How good is network coverage in your community? ................................................................ 24
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List of acronyms
CaLP Cash and Learning Programme
CTP Cash Transfer Programming
DDG Danish Demining Group
DRC Danish Refugee Council
EU European Union
FGD Focus Group Discussion
GIS Geographical Information Systems
HEA Household Economy Analysis
IDP Internally Displaced People
IGA Income Generating Activities
IRC International Rescue Committee
KII Key Informant Interview
LGA Local Government Area
MMC Maiduguri Metropolitan Council
MRE Mine Risk Education
NGO Non-Governmental Organisation
NRC Norwegian Refugee Council
PCNI Presidential Committee on the North-East Initiative
SME Small and Medium Enterprise
SPSS Statistical Package for Social Sciences
ToR Terms of Reference
UN United Nations
UNDP United Nations Development Programme
VST Vocational Skills Training
WASH Water Sanitation and Hygiene
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Executive Summary Introduction
In response to the humanitarian crisis caused by the armed conflict in north-east Nigeria, the Danish Refugee Council/Danish Demining Group (DRC/DDG) is implementing a livelihoods program targeting Internally Displaced Persons (IDPs) and host communities in Borno and Adamawa states. DRC/DDG commissioned a livelihood and market assessment to recommend appropriate and viable businesses, income generating activities, and vocational skills. Furthermore, DRC/DDG wanted to understand feasibility and choice of the appropriate delivery mechanism(s) for Cash Transfer Program (CTP). The specific objectives of the assessment were;
▪ To investigate the microenterprise markets in Borno and Adamawa states, identify and provide guidance on economic sectors/sub-sectors with the highest potential for development of women and youth enterprises by DRC/DDG.
▪ To gather information on market demand and translate it into programming that responds to a dynamic business environment and youth needs through Vocational Training programs.
▪ To conduct a market assessment of the feasibility of CTP and the choice of cash transfer delivery mechanisms in DRC/DDG operational areas.
Methodology
The assessment design focused on three thematic programming areas; Small and Medium Enterprises (SME’s) and Income Generating Activities (IGA’s); Vocational Skills Training (VST), and Cash Transfers (CT). The data collection used a cross-sectional design incorporating both quantitative and qualitative methods. Quantitative methods were used to capture data on income and financial indicators measuring enterprise viability. Qualitative methods were used to gather an in-depth understanding of livelihoods and market structure. Both qualitative and quantitative methods were used to collect youth and women’s opinions on business preferences.
Summary of Key Findings
Livelihood recovery priorities
A consultative process with key government ministries, other stakeholders (private, NGOs, UN) and a wider literature review revealed the following livelihoods recovery priorities;(1) provision of food and non-food needs, (2) re-construction or provision of housing and public infrastructure, (3) provision of essential amenities, and (4) support through livelihood capacity building and start-up capital.
Current IDP and host communities’ livelihood activities
The assessment revealed that current livelihood activities for the targeted IDP and host communities are centered around agriculture and trade. The study showed that most households currently depend on crop production for food and income, as indicated by 36.7% and 33.5% of respondents respectively. At the same time, 33.9% of respondents reported trading various commodities as a primary source of revenue. Other significant livelihood sources reported were wage labor, government/NGO/UN assistance, remittances and livestock selling.
Evaluation of business viability for youth and women
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Understanding business choices for youth and women: The assessment showed that there are three main areas of business which many youth and women prefer; (i) tailoring as reported by 43.3% of respondents in both Borno and Adamawa states, (ii) farming, as indicated by 20.9% of the interviewees in Adamawa particularly in Mubi, and (iii) trading of household provisions as stated by 31.6% of respondents in Borno. The technical viability assessment also incorporated analysis of preferences of the target groups.
Existing potentially viable businesses identified by the assessment: 175 business owners (ordinary entrepreneurs, micro, small and medium enterprises) were surveyed to assess their business viability. Following the financial and qualitative analysis of a wide range of businesses, the following were selected; buying and selling of fish, livestock trading, local meat sellers/butcheries, tailoring, trading textiles, selling of bed sheets and curtains, bead making, crop and vegetable selling, groundnut oil extraction, and confectionaries (bean cake making).
Ranking selected most viable businesses: The analysis of viability used a combination of financial (profitability, return per invested amount, payback period) and non-financial (seasonality, demand, the opportunity for value addition) indicators to conclude viability. Based on the analysis of viability and technical judgement, the following businesses were most viable (per ranking), and are recommended for the program to support.
Rank Type of business Rank Type of business Rank Type of business
1 Bead making 6 Groundnuts for trade 10 Beans for trade
2 Watermelons for trade 7 Selling bedsheets and curtains
11 Tailoring
3 Fish selling 8 Beancake selling 12 Sesame seed selling
4 Meat seller (goat) 9 Groundnut oil extraction 13 Goat trading
5 Dry pepper selling
Marketable Vocational Skills
Of the of youth and women surveyed in Borno and Adamawa, 39 – 42% prefer to be trained in tailoring while 11.9% of youth and women in Borno and 22.7% in Adamawaprefer to be trained in farming techniques. For Borno state, a substantive 35.3% of respondents indicated a preference for training in trading and business management skills to enable them to run own businesses.
The most marketable vocational skills recommended for the program: The assessment identified a range of marketable skills which are likely to offer the greatest opportunities for youth and women. The most practical skills are those that support self-employment linked to specific areas of business. Some of the trained VST cadres will be funded by the program to start their own business whilst some will be linked to other opportunities.
Business or business sector Marketable skills
▪ Crop processing – milling and shelling ▪ Retail trading – cooling and power generation ▪ Transportation
✓ Repair of grinding and shelling machines: ✓ Repair of generators and refrigerators: ✓ Vehicle mechanics:
▪ Tailoring – cutting and design ✓ Technical skills for tailoring ✓ Repair of sewing machines
▪ Textile ✓ Tie and dye skills
▪ Crop processing equipment – new venture ✓ Skills for designing and/or repairing oil pressing equipment
▪ Shoemaking – new venture for men ✓ Skills for making of local brands of shoes
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▪ Fashion designing for women – new venture ✓ Skills for women to design own clothing fashion
▪ Cosmetology - new venture ✓ Cosmetology skills
▪ General – support reconstruction activities ✓ Skills for basic electrical engineering, plumbing, carpentry, welding, building, and bricklaying
▪ Business and financial management ✓ Trade and financial management are required to support all the recommended IGAs
Feasibility and mechanisms of implementing cash transfers
Overall, the assessment revealed that it is feasible for cash transfers to be implemented in Borno and Adamawa state. The feasibility is supported by the fact that markets have greatly recovered and are mostly accessible across the two states. However, the situation is still fragile as security is still a concern – the recovery progress may decline rapidly if the security situation further deteriorates. Additionally, despite markets recovering, households have not yet recovered from the insurgency effects. Despite this, there are adequate service providers such as banks, mobile telephone operators, and vendors who can support various cash delivery mechanisms. In view of this, an evaluation of potential options was done. The following (in their ranked order) were recommended as appropriate delivery mechanisms for cash transfers; (1) money agents, (2) mobile money transfers, (3) electronic vouchers, and (4) direct use of banks. The assessment recommends the first two as the most appropriate mechanisms as the security situation is still fragile
Conclusions and Recommendations
The findings of the assessment concluded that the targeted IDP and host communities depend more on agriculture and trading for their livelihood. Opportunities to support businesses exist and the most viable businesses or Income Generating Activities (IGAs) that the program can support include buying and selling fish, livestock trading, local meat sellers/butcheries, tailoring, trading textiles, selling bedsheets and curtains, bead making, crop and vegetable selling, ground\nut oil extraction, and confectionaries (bean cake making). Furthermore, it was found that there are several marketable skills which the program can invest in to support youth and women. These include; technical expertise on repair of grinding and shelling machines, generators, refrigerators, and tailoring machines; skills for designing oil pressing machines; technical skills for tailoring, tie and dye, shoe making, fashion designing and cosmetology; skills for basic electrical engineering, plumbing, carpentry, welding, building and bricklaying; business and financial management to support all the recommended IGAs.
The assessment also found that it is feasible to carry out cash transfer program in Borno and Adamawa states given that the environment fulfils the main requirements of a cash transfer program; functioning and accessible markets (though households are still economically constrained), and the existence of service providers and infrastructure that support different mechanisms. However, it should be noted that though markets are recovering well, households have not yet recovered. Furthermore, the security situation is still fragile, which may turn the recovery progress negative in the event of deterioration of the security environment. Nonetheless, the appropriate mechanisms recommended are the use of money agents and mobile cash transfers. Other mechanisms such as electronic vouchers and direct use of the bank can also be used where applicable.
Overall, the following recommendations were made based on the findings;
Livelihood options for IDPs and host Communities
▪ The program should focus on supporting some businesses which are already within the communities’ livelihoods system
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▪ Vocational skills training which support agriculture will likely make an impact given the level of activities related to agriculture
▪ The program’s targeting should deliberately focus more on the affected groups which reflected low incomes
Evaluation of businesses viability for youth and women
▪ For businesses that require high start-up capital (such as fish) which could be above the planned allocation, the program can fund half of what is required and still make an impact
▪ There is need to train the targeted beneficiaries on essential business and financial management so that they can run their businesses correctly
▪ DRC will need a robust system the program to monitor the businesses supported and to provide guidance to beneficiaries
▪ Where possible, engaging other institutions such as the Ministry of Trade and Commerce will be useful in having a stronger partnership to monitor the businesses
Key marketable vocational skills
▪ The program need to consider gender issues when selecting skills that youth and women can be trained in
▪ As recommended by Adamawa University key informants, the program should use a consultative approach to identify training areas for youth and women,
▪ There are close linkages between some of the business selected and skills, therefore the program must make use of these complementarities to enhance businesses
Feasibility and mechanisms of implementing cash transfers
▪ Money agents and mobile cash transfers are the most appropriate mechanism which have capacity to reach out to every community
▪ However, when using mobile cash transfers, the following must be considered; o a prior detailed network coverage assessment must be done to ensure feasibility of
implementation o the program will also need to verify the service provider’s agent network and ensure there is
guarantee for adequate agents during cash disbursements. o the program will need to agree with the service providers on how they will treat and manage failed
transactions, unblock blocked pin codes, and replace lost sim cards. ▪ When using money agents, the following must be carefully considered;
o the tendering process and recruitment should identify legal money agents who are authorised to trade as money agents by the government or the central bank
o the program should exercise extra due diligence on the contractual agreements and clearly articulate who shoulders the risk of delivering money to the beneficiary community
o the program also has a right to know the security mechanisms that the agents will put in place to make the deliveries safer
o the program will need a proper system for identifying beneficiaries and field staff (s) to facilitate identification of cash recipients,
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1. Introduction
1.1 Program background
In response to the humanitarian crisis caused by the armed conflict in north-east Nigeria, the Danish Refugee Council/Danish Demining Group (DRC/DDG) is currently implementing humanitarian programs in the affected areas. An estimated 10 million people are affected, and the government declared a state of emergency in the hardest-hit states, such as Borno and Adamawa. As the government succeeded in reaching some of the previously inaccessible areas, significant gaps related to food security and other basic social services were exposed. To this effect, the DRC/DDG has received funding from the European Union through the Emergency Trust Fund for Africa to promote stability and resilience among those affected by displacement in north-eastern Nigeria. The project is targeting IDPs and host communities in Borno and Adamawa States to address the core needs of the affected population. The overall DRC/DDG response includes; protection, Mine Risk Education (MRE), Mine Action, Armed Violence Reduction (e.g. Youth Empowerment and Community Safety), WASH, food security, livelihood, and NFI/shelter of urban caseloads and supporting outreach to affected areas and displacement camps. Through strengthening available livelihood opportunities, DRC/DDG aims to reduce IDPs reliance on community handouts through building a self-sustained livelihoods system. The program will focus on supporting appropriate livelihood options, which include; petty trade, vocational skills, and access to small businesses. In addition, the program will provide cash transfers as part of an integrated response.
1.2 Assessment background and objectives
Understanding market dynamics is pivotal in designing effective livelihood options. DRC/DDG is interested in the identification of activity options informed by current market opportunities and trends in petty trade, small business, vocational skills, business support and cash transfers. The livelihood and market assessment was commissioned to recommend appropriate income generating activities, vocational skills that are viable and demanded by the market. Furthermore, DRC/DDG intends to implement cash transfer program that requires an understanding of feasibility and choice of appropriate delivery mechanisms.
The following are the assessment’s specific objectives per the Terms of Reference (ToR):
▪ Investigate the microenterprise markets in Borno and Adamawa states, identify and provide guidance on economic sectors/sub-sectors with the highest potential for development of women and youth enterprises by DRC/DDG.
▪ Gather information on market demand and translate it into programming that responds to a dynamic business environment and youth needs through Vocational Training programs.
▪ Conduct market assessment to assess the feasibility of CTP as well as the choice of cash transfer delivery mechanisms in DRC/DDG operational areas.
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2. The Inquiry Process
2.1 Design of the assessment
The assessment design focused on three programming areas, (1) Small and Medium Enterprises (SME’s) and Income Generating Activities, (2) Vocational Skills Training (VST), and (3) Cash Transfers (CT). Data collection used a cross-sectional design incorporating both quantitative and qualitative methods to answer the study objectives. Quantitative methods – were deployed to capture data on income and financial indicators measuring enterprise viability, Qualitative methods were used to gather an in-depth understanding of a livelihoods and market structure. the Five tools were developed specifically to assess each of the three program areas. Figure 1 below shows the conceptual framework of how the assessment tools were used to collect data to respond to the assessment objectives adequately. A tools matrix with detailed information is provided in Annex 1 at the end of report.
2.1.1 Conceptual framework
Figure 1: Conceptual framework
2.2 Specific data collection methods
Secondary methods
An in-depth desk study was conducted to understand the context, and to complement information gaps in the assessment. The desk review included project documents and reports from other NGOs working in north-east Nigeria1.
Primary methods
▪ A survey was conducted by administering individual questionnaires to gather quantitative data among women and youth from IDPs and host communities. Data collected included; specific livelihood activities that households are engaged in, monthly incomes, and preferences in business and vocational skills. The survey was administered using an electronic mobile data collection system called magpi.
▪ Focus Group Discussions (FGDs) provided in-depth qualitative information to enhance understanding of local livelihood systems and markets. Participatory approaches were used to
1 NGO reports accessed through the humanitarian response website for north-eastern Nigeria
Objective 2 Objective 1 Objective 3
Tool 1: The bigger picture, initial interviews, consultations & Secondary/literature review
Tool 2: Community
FGD for IGA’s and VST
Tool 4: IGA and SME
project appraisal
form
Tool 3: Traders FGD
for Cash Transfers
Tool 5: Survey questionnaire
for youths and women
Formative
Assessment
outcomes
Main data
collection
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encourage the participants to freely discuss, analyse and share their views and opinions on issues related to livelihoods, economic activities, and markets.
▪ Key Informant Interviews (KIIs) provided broader picture information on issues related to small business, petty trade, vocational skills, and cash transfers. See Annex 2 for a list of the key informants interviewed.
2.3 Sampling strategy
2.3.1 Geographic sampling
The assessment targeted two states; (1) Adamawa state, in Mubi-north, Michika, Yola-north, and Yola-south geographic areas, and (2) Borno state in Maiduguri Metropolitan Council (MMC), Kaga, Jere, and Konduga. Figure 2 on the left shows the study area of Adamawa and Borno states.
2.3.2 Sampling of research units
The survey used probability sampling methods. The minimum sample size desired was 644 across the two states. However, during data collection, it was increased to 806 to allow for sub-group comparisons, and to minimize the influence of non-responses on overall results. As for the FGDs and KIIs, purposive sampling was employed.
2.3.3 Sampling demographics
The assessment reached out to a total sample of 806 respondents across the two states. Of these, 32.5% were males, and 67.5% were females. The average age of the sample respondents was 28.8 years. A further disaggregation of age showed that 41.5% were youth aged between 18 and 25 years, 45.8% of respondents were aged between 26 and 35 years, and 12.6% were women aged above 35 years. A disaggregation by residential status showed that 47.1% of respondents were host community members, 33.9% were IDP’s, and 19% were returnees.
2.4 Data collection
Data collection took place over a three-week period; 1 to 4 May 2017 in Borno state, 8 to 11 May 2017 in–Adamawa (Muni-north and Michika) –, and 5 to 9 June 2017 in Adamawa (Yola-north and Yola-south). The data collection team consisted of the lead consultant, DRC field staff, and externally hired research assistants.
Figure 2: Study area
Source: Danish Refugee Council Project documents
Table 1: Achieved sample
State LGA Communities Markets Businesses assessed
FGDs Survey sample
Bo
rno
Maiduguri 4 2 30 2 71
Kaga 1 1 15 2 72
Konduga 2 2 20 2 76
Jere 2 2 20 2 81
Ad
amaw
a Michika 4 2 30 2 116
Mubi N 4 2 30 2 190
Yola-N 1 1 15 2 47
Yola-S 3 1 15 2 153
TOTAL 21 13 175 16 806
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2.5 Data analysis
For quantitative data, SPSS and Microsoft Excel were used to clean and analyse data. In addition, ArcMap was used for mapping some of the assessment results. For the individual businesses assessed, financial indicators such as payback period, return per dollar, profitability per month were used to evaluate viability, in conjunction with qualitative indicators such as demand and seasonality. For qualitative data, Thematic Content Analysis Technique was used to group and analyse data by thematic area, and the convergence of opinion approach was used to the qualitative groups.
2.6 Study limitations
The following were some limitations to the assessment:
▪ The scope of study: In response to the DRC/DDG needs and request, the assessment integrated four components which are typically assessed as individual studies. The components are Small and Medium Enterprises (SME’s), Income Generating Activities (IGA’s); Vocational Skills Training (VST), and Cash Transfers (CT). This made the scope of the study large, needing more time and resources. However, due to limited time and resources, it was agreed that the assessment design should prioritize main aspects of each of these four components.
▪ Time loss due to training logistics: Due to geographic spread, it was not possible for research assistants from both states to be trained at once as it was originally planned. Therefore, training and pre-test of tools was done twice (one in each state), which made the research team lose a considerable amount of time.
▪ Security Assessment: Though it was desirable to have provided an overall security layer on all the components of the assessment, it was difficult to do so because the scope of the study was too large to conduct a detailed security impact assessment.
▪ Assessing elasticity: The assessment provided a sound analysis on which businesses or IGA’s are most viable based on a combination of financial and qualitative analysis. However, the assessment was limited to analyse the elasticity of demand for each business though desirable.
▪ Value chain analysis: Much as the assessment identified the most viable business, it was beyond the scope of the assessment to conduct a detailed value chain analysis for each of the defined value chains.
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3. Key Findings
The findings of the Livelihoods Market Assessment have been organised into five sub-themes answering specific objectives and the key research questions. The sub-themes include (i) livelihood recovery priorities, (ii) current livelihood activities for that IDPs and host communities, (iii) the most viable businesses, (iv) key marketable vocational skills, and (v) feasibility of and mechanisms for implementing cash transfers.
3.1 Livelihood recovery priorities
The assessment started by looking at the bigger picture of the post-crisis issues in north-east Nigeria by exploring priority recovery options. This was informed by a consultative process with key government ministries and other stakeholders such as the UNDP. Below is a summary of stakeholders’ views:
Ministry of Recovery Rehabilitation and Reconstruction highlighted that one of the greatest impacts of the insurgency was the destruction of infrastructures such as public buildings, houses, schools, boreholes, and others. Reconstruction opportunities exist as part of rebuilding destroyed infrastructure.
Ministry of Women Affairs and Social Development stated that women have been extremely vulnerable, with the increase of women headed households, displacements, even their use/participation in suicide attacks. Given these multiple vulnerabilities, keeping women occupied and economically active will contribute to income earnings, which would reduce these vulnerabilities including the risk of recruitment by Armed Opposition Groups.
Vocational Skills Training Centre in Maiduguri indicated that Borno state relatively lacks skills which have further been exacerbated by the insurgency. This reveals a critical need to support different skills within the state for further empowerment of the local people.
Ministry of Trade and Commerce revealed that traditionally, SMEs drive the local economy. However the insurgency disrupted this, and hence their current priority is to boost SME’s so that the local economy is restored. It was also revealed that access to markets had been restricted due to security issues, and this has negatively affected the transport industry and free trading.
The Recovery and Peace Building Assessment for north-east Nigeria report (2016) states that “supporting youth is a fundamental element of sustainable recovery and peace building in the north-east.” It further states that “response strategies need to be designed with the input of young people and include initiatives addressing young men’s and women’s needs and concerns.” In this perspective, vocational training and economic engagement for young people are acritical for recovery.
The government strategy referred to as the “Buhari Plan,” points at “scaling up humanitarian relief and re-establish livelihoods with an emphasis on economic empowerment for displaced women” as one of the priorities for the north-east region. The inputs from different stakeholders and literature pointed to the following four priorities: (a) provision of immediate food and non-food items such as shelter, (b) reconstruction or provision of shelter and public infrastructure, (c) provision of basic amenities, and (d) provision of livelihood capacity building and start-up capacity. The recommended businesses and skills in this assessment align with the government priorities above. Interventions that support the agriculture sector and trade were highlighted as the mainstay of the local economy, which should be supported, particularly value addition through flour milling, oil pressing, and livestock fattening. Regarding targeting, the Ministry of Trade and Commerce stated that the program should prioritise people and micro-enterprises who lost their assets and are struggling to re-start or grow their business.
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3.2 Current IDP and host community livelihood activities
Understanding current livelihood strategies was important in identifying the most viable businesses that the program could support. It is important for the program to build on the existing strategies for sustainability. The recovery strategies proposed for this region build upon and scale-up existing successful initiatives.
3.2.1 Food sources
The sampled youth and women were asked about the ways by which their households obtained food during the previous month of the assessment (April 2017). This provided insight into the strategies that are currently contributing to household livelihoods. Figure 3 is a graphical presentation of household food sources. Production of own crops was ranked highest as a source of food (37.6% of total respondents), followed by purchasing or barter from the local markets (31.3% of total respondents).
The results show that IDP and host households value and depend on farming and income generation to meet their food needs. This corresponds with findings from Save the Children’s Household Economy Analysis (HEA), which revealed that producing own crops is the main food source for very poor and poor households. Therefore, interventions that support farming production, income generation, and value addition, will strengthen the communities’ physical and economic access to food. Farm production related activities will be more appropriate to host communities who have access to land whilst IDP’s would benefit more from income generating activities (crop trading) and value addition. Other food sources identified in this assessment include livestock products (milk and meat), remittances, government/humanitarian assistance, and fishing.
3.2.2 Income sources
Figures 4 and 5 show the results of respondents’ income sources in April 2017. Figure 4 shows the overall picture at the project level, while Figure 5 is disaggregated by state. The two main income sources for youth and women are the sale of farm products and trading as indicated by 33.5% and 33.9% of respondents respectively. These results confirm that agriculture is an important livelihood strategy for IDP and host communities, which is consistent with the information obtained from key informants that agriculture is the driver of the local economy. Supporting
agribusinesses is in line with the local economy and government priorities. Supporting agriculture value chains will enhance household income and stimulate production, which will contribute to the food security
Figure 3:Household food sources
Figure 4: Most important Income sources
31.3%
37.6%
3.8%
11.0%
5.3%
9.3%
Purchase/barter
Own production
Livestock products
Remittances/gifts
Fishing/hunting
Assistance (Government)
Assistance (UN/NGO)
Other specify
33.5%
33.9%
15.4%
2.4%4.6%
5.1%5.1%
Sale of farm produce Trading
wage labour Livestock sales
Assistance (Gvnt, NGO, UN) Gifts, remittannces
Other
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situation of the north-eastern region. The assessment also revealed the importance of trading as reflected 33.9% of respondents. In the areas where the assessment took place, trading takes place within daily and weekly organised markets where different households/traders exchange their wares, thereby earning income to feed their families. In addition, wage labour (unskilled and skilled) plays an important role as 15.4% of the respondents indicated it to be an important source of income.
The disaggregated analysis in Figure 5 shows differences in the proportion of youth and women who depended on trade and sale of farm produce. Youth and women from Adamawa are more depended on farm produce sales (41%) than the trading of other goods/services (26.3%), while for Borno, 60.2% indicated trading as their income source and 13.7% indicated the sale of farm produce. These results are reflective of the reality on the ground; with Mubi area of Adamawa being a pre-dominantly agricultural region given the conducive climatic conditions. Borno state especially Maiduguri area is known to be a trade hub for the north-east region. These macro-economic factors determine opportunities pursued by households in the two states as reflected in these results.
3.2.3 Amount earned from income sources
Figures 6 and 7 show the absolute income earned by youth and women from IDP and host communities. The average income earned per month by an individual youth or woman sampled across the two states was
Figure 5: Income sources by state
Figure 6: Income earned by youth and women Figure 7: Relative income earned by respondents
13.7%
60.2%
15%
2.1%5.0%
.9%3%
41.0%
26.3%
16%
2.5% 3.4%6.7%
5%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Sale of farmproduce
Trading wage labour Livestock sales Assistance (Gvnt,NGO, UN)
Gifts,remittannces
Other
% d
ep
en
din
g o
n in
com
e s
ou
rce
Borno Adamawa
0
5000
10000
15000
20000
Borno Adamawa
Inco
me
-Nai
ra
Other
Livestock sales
Skilled wage labour
Unskilled wage
labour
Trading
farm produce sales
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Borno Adamawa
inco
me
cont
ribu
tion
of e
ach
sour
ce
Other
Livestock sales
Skilled wagelabour
Unskilled wagelabour
Trading
farm producesales
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N17,559. The income earned does not reflect total income for the household but what was earned by the individual youth or woman sampled for the survey.
The survey included a variable to identify whether the respondent was the primary breadwinner or not, and it was revealed that 45% of the respondents were the primary breadwinners whilst 55% were not. This individual income is indicative of what some households are earning. Another important disaggregation was done on ‘residential status,' classified into three; host, returnee, and Internally Displaced Persons (IDPs). This was to investigate whether IDP’s and returnees have the same opportunities as host communities. Figure 9 shows that IPD’s are most vulnerable compared to the other groups as evidenced by low income earned. Income earning seem to correlate to resident status, with income earning declining with the stability of status from host communities, returnees to IDPs.
Save the Children HEA baseline in Maiduguri also revealed significant incomes disparity between host and IDP households. The decline of income by residential status reflects differences in access to opportunities, where IDPs are the most disadvantaged. The main driving factors are a loss of assets (livestock, equipment, access to land and working capital) and loss of social capital by IDPs due to displacement. It is important for the program to prioritize the IDPs in targeting as they are the most disadvantaged group due to above factors.
The income disaggregation (Figure 6) showed that youth and women from Adamawa earned N22,691 in comparison to N8,334 in Borno state. The partial explanation of the difference can be attributed to the insurgency, which has impacted markets in Borno more than in Adamawa. Observations indicated that economic activities in areas outside Maiduguri (Borno state) are still slow. In addition, due to the security situation economic activities in Borno state are still confined around the LGA centres and not the inner rural communities. There is limited space for economic activities in Borno in comparison to Adamawa, where economic activities were observed to be almost normal. A further disaggregation by LGA (Figure 8) shows the similar trend, with LGAs from Borno State earning significantly less than Adamawa LGAs.
3.3 Evaluation of business viability for youth and women
The evaluation of businesses or Income Generating Activities (IGA’s) was done to identify and recommend the most viable businesses for host and IDP youth and women, which DRC/DDG program could support. The market assessment provided first-hand information and experiences of the traders who are currently involved in these businesses. However, it was prudent for the assessment to first understand the choices or preferences of the youth and women to align the recommended businesses to their choices. This bottom-up approach was important as it will ensure sustainability of the final recommended interventions.
Figure 8: Income earned per month by LGA Figure 9: Income earned per month by residential status
-
5,000
10,000
15,000
20,000
25,000
30,000
Jere Kaga Konduga Maiduguri Michika Mubi-north Yola North Yola South
In
co
me
-N
aira
Local Government Area
-
5,000
10,000
15,000
20,000
25,000
Host Returnee IDP Host Returnee IDP
Borno Adamawa
Inc
om
e -
Na
ira
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3.3.1 Understanding business choices for youth and women
A survey of youth and women and Focus Group Discussions with key informants were used to determine and understand business preferences of youth and women. Figure 10 is a graphical presentation business preference of youth and women surveyed. It is evident from this graph that there are three main areas of business which many youth and women prefer; (i.) tailoring (43.3% of respondents) in both Borno and Adamawa states, (ii.) farming (20.9% of the respondents) in Adamawa particularly in Mubi, and (iii) trading of provisions (31.6% of respondents) in Borno. Disaggregation of the preferred businesses by age in Table 2 shows variation in business choices, which suggest age appropriateness of ventures.
The 35 years and above age category included women only as youth were defined to be within 16 to 35 years according to UNDP and Government of Nigeria’s definition of youth. The assessment excluded the under 18 years age group because of potential child labour issues. There are a few points that can be drawn regarding preference by age. First is that tailoring is most preferred by young men and women of age 18 to 25 years. This preference was supported by the FGDs where the key informants indicated that most of the youth can be trained and engage in tailoring as they do not have these skills yet tailoring is one of the important livelihood strategies in their communities. Secondly, farming is most preferred by adult women above 35 years. It must be noted that final targeting of the type of businesses must consider aligning interventions with the appropriate age group to enhance success and sustainability of the program.
3.3.2 Ranked list of selected most viable businesses
The main basis for evaluating the viability of the assessed businesses was detailed financial analyses (see Annex 2 at the end). While there are several indicators in the analysis, the main quantitative indicators used were profitability per month, return per amount invested, and the payback period. In addition, other qualitative indicators such as demand, opportunities for value addition and seasonality were also considered. Gender disaggregation was also used to identify appropriate businesses for the targeted communities. The results of this disaggregation are shown in Figure 11.
Figure 10: Preferred business by respondents
Figure 11: preferred business by sex
0.0% 10.0% 20.0% 30.0% 40.0% 50.0%
Tayloring
Farming
Livestock rearing
Poultry production
Milling/Grinding
Shelling/grading crops
Trading-livestock
Trading - farm produce
Trading - all other goods
Transportation
Mechanic
Food selling/catering
Other
Female Male
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Borno Adamawa
% -
you
ths
and
wo
me
n
Other
Transportation
Trading - all other
goods
Trading - farm
produce
Trading-livestock
Milling/Grinding
Livestock rearing
Farming
Tayloring
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There are two major findings that can be drawn from this analysis. Table 2 indicated that tailoring is most preferred by the younger age group, however, when disaggregated further by sex, as shown in Figure 11, it was revealed that more females (44%) prefer tailoring than men (25%). While market observations indicated that many tailors were men, through FGDs, women indicated that they would prefer their clothes made by female tailors, but they are few. As for men, the provisions trading came out as their most preferred business (26%) than for women (17%). Both women and men showed an equal preference for farming and trading of farm produce.
In addition, businesses that require technical skills and travelling like mechanics and transportation were preferred by men. Livestock trading was most preferred by men as it requires extensive local travel to buy livestock from farmers.
3.3.3 Existing potentially viable businesses identified by the assessment
Several businesses were assessed during field work, but only those that had greater potential were retained for further analysis. Box 1 shows the detailed description of the potentially viable businesses which were further analysed for viability.
Table 2: Preferred business by age group
Type of business 18 to 25
years 26 to 35
years Above 35
years
Tailoring** 56.8% 34.6% 30.6%
Farming** 12.1% 16.9% 30.6%
Livestock rearing 1.2% 4.2% 3.1%
Poultry .6% 1.7% 2.0%
Milling/Grinding 2.5% 3.9% 3.1%
Shelling/grading with machine
.9% 1.1% 1.0%
Trading-livestock .3% 3.1%
Crop sales 3.1% 5.9% 5.1%
Trading - all other goods**
13.7% 17.2% 22.4%
Transportation 3.1% 3.9% 0%
Knitting 0% .8% 0%
Other*** 5.7% 7.5% 2.1%
**Youth and women preferred trading of farm produce, tailoring, milling, and transport business. Choices seem to be largely driven by
businesses within respondents’ exposure. ***knitting, mechanic, electrician, cap making, saloon, barber,
photography, food selling, etc.
Box 1: Existing potentially viable businesses identified by the assessment
Buying and selling of fish: The proximity of Maiduguri to Lake Chad and of Mubi to Cameroon provides an opportunity for fish trading for Borno and the region. Fish come from Lake Chad to Borno in truckloads and is sold at Baga Road market, one of the biggest fish markets in Nigeria. Given the strategic location of Maiduguri relative to Lake Chad, Baga Road market is well positioned to receive most of the fish from Lake Chad and re-distribute to the rest of the country – reaching as far as Abuja and Lagos, with speculation that some are even exported. Locally, fish is sold within Maiduguri and other LGAs. There is also a good linkage on fish trade between Baga Road market and Mubi Main as well as Michika markets, both in Mubi – Adamawa state. For Mubi, traders have a supply market for fish from Cameroon which is about 150 kilometres from Mubi and 80 kilometres from Michika. Traders travel and buy fish which they bring to Mubi Main and Michika markets for re-sell. Some traders receive fish from traders who come from Baga Road market in Maiduguri.
Livestock trading: Livestock trading is an important business especially in urban areas. Traders travel to surrounding rural communities to buy livestock from villagers. The most common traded livestock are goats, sheep, cattle, and chickens. The traders bring groups of animals to the markets where meat sellers/local butcheries buy. Ordinary people also buy for own consumption whilst restaurant owners buy and sell it cooked. Given that there is a high consumption of meat due to the size of the population and the culinary dietary habits in Nigeria, it means that this is a business with a big market. However, there are security issues (access and a ban instituted by the government) which must be considered in the final program design.
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It is recommended that detailed security assessments must be conducted to add a security layer to the proposed businesses, and to identify areas where this may not be feasible.
Local butcheries/meat sellers: Meat sellers extends the value chain for livestock trading. Along the value chain, these are involved in buying livestock for slaughtering and selling to consumers for consumption. Whilst most meat is bought as raw for domestic consumption, some is roasted and sold as snacks to passers and other market players especially on market days. In addition, women who run restaurants also buy raw meat for the preparation of meals which they sell.
Tailoring – cutting and design: The role of the tailor is to make the attire charge a price for the service as people bring their own material. The most important tool of the trade is a tailoring machine and a generator for powering. In addition, they also use some accessories such as buttons, zips, bids which they buy from other suppliers.
Trading of textiles and other tailoring accessories; bed sheets and curtain; bead making: Given that tailoring requires textiles and other accessories, other people specialise in trading these materials to support the tailoring value chain. Thus, the business is closely linked to tailoring as it provides the required inputs. Other than textiles, they also sell a variety of bed sheets and curtains which were found to be mostly viable in Yola. Making of beads which are also used as part of tailoring accessories is a business most suitable for women which were found to be a profitable business especially in Yola. These are made from cheap materials which produce a reasonable return within a short period of time without injection of high capital.
Crop and vegetable trading: Crops and vegetable trading was found in all the markets visited for the assessment. Whilst small volumes are traded in smaller markets large volumes exchanged at large markets were also observed. In most cases, farmers bring their produce at the organised weekly markets where they sell to wholesalers and other players who buy for re-sell. Crops are sold to ordinary households (for consumption); restaurants; processers (value addition – e.g. ground nut oil extraction, milling into flour, bean cake sellers; other traders (redistribution). The most commonly sold crops as identified by the assessment were found to be water melons, sesame, millet, yams, maize, beans, rice, ground nuts, onion, fresh and dry pepper. Given that most of these crops are seasonal, it was observed from the assessment that traders who can manipulate seasonal supply had a greater chance of making super profits.
Oil pressing – groundnut oil extraction: This is an important value addition of ground nuts, an activity done by mostly adult women. Women use the traditional manual mill and millstone to extract the oil from the groundnuts. The extracted oil is collected into used empty bottles and sold to consumers who buy in numbers. There are several opportunities identified in this business; (1) to introduce mechanised way of extraction using oil pressing machines (will produce clean oil as well as improving efficiency which also means they can extract more oil from the same quantity of groundnuts); (2) introduce proper packaging which is well branded; (3) link oil pressing to VST through training young men who can produce oil pressing machines which can be supplied to oil pressing beneficiaries. This activity also promotes more production of groundnuts as the farmers will be benefiting from the trade which is a positive unintended impact to general crop production.
Confectioneries – baking of bean cakes and selling: Bean cake making business is specifically for women. This trade involves a special category of food preparation (bean cakes) meant for breakfast, light lunch as well as to be eaten as snacks. The bean cakes are made from bean flour (beans are the main ingredient). It is a value addition of beans, which promotes more production. The process involves buying of beans which is ground into beans flour. Other ingredients include oil and some spices which add taste and flavour to the bean cakes. With all these ingredients in place, the women bake the cakes which they sell at a small price but however enjoy the larger volumes they sell. Depending on markets, some sell everyday whilst some sell mostly during market days. It should be noted that this business is well linked to beans traders who are the suppliers of the main ingredient
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Based on the different combination of these indicators, as well as technical judgement, the following ranking provided in Table 3 was produced as the final most viable businesses recommended for the project. The assessment provided an extensive list to allow the project to have a wider choice. It should also be noted that the final analysis removed rice, maize, onion, millet, sheep selling, textile as well as meat selling (sheep) from the final list. However, these are still choices that could be pursued depending on the availability of resources. Otherwise, priority should be given to the ranked list.
Table 3: Ranking of the most viable businesses recommended for the program
Rank Type of business Payback period (months)
Net profit/loss per month after payback
Startup capital required (USD)
Net profit/loss per month after payback (USD)
Return per dollar invested
Seasonality
1 Bead making 2.95 22000 $207 $70 0.34 All year
2 Water melons 3.42 108,000 $1,175 $344 0.29 6 months
3 Fish selling 4.02 112,000 $1,433 $357 0.25 All year
4 meat seller - goat 5.27 71,000 $1,191 $226 0.19 All year
5 Dry pepper 5.34 50,000 $850 $159 0.19 8-12 months
6 Ground nuts 6.95 62,000 $1,373 $197 0.14 6 months
7 Selling bed sheets and curtains
5.42 93,000 $1,605 $296 0.18 All year
8 Beancake selling 5.72 39,000 $710 $124 0.17 All year
9 Ground nut oil extraction
5.02 24,400 $390 $78 0.20 All year
10 Beans 9.41 36,600 $1,097 $117 0.11 6 months
11 Tailoring 4.67 21000 $312 $67 0.21 All year
12 Sesame 8.51 47,000 $1,274 $150 0.12 6 months
13 Goats 8.71 45,000 $1,248 $143 0.11 All year
3.3.4 Recommended most viable businesses by Local Government Area (LGA)
Table 4 provides the recommended businesses disaggregated by Local Government Area. This table is specifically meant to guide programming.
Table 4: The most viable recommended businesses by Local Government Area
Type of business MMC Kaga Konduga Jere Michika Mubi-North Yola-North Yola-South
Bead making ▪ ▪
Fish selling ▪ ▪ ▪ ▪
Water melons selling ▪ ▪ ▪ ▪ ▪
Meat seller - goat ▪ ▪ ▪ ▪
Dry pepper selling ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
Ground nuts selling ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
Selling bed sheets and curtains
▪ ▪ ▪
Beancake selling ▪ ▪ ▪ ▪ ▪ ▪
Ground nut oil extraction ▪ ▪ ▪ ▪ ▪ ▪ ▪
Beans selling ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
Tailoring ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
Sesame selling ▪ ▪
Goats selling ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
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3.3.5 New potentially viable businesses – opportunities
The above sub-section provided a discussion on the existing most viable businesses in the targeted communities which the program can include. In addition to these, there are also other potential new areas of business (shown in the box below). identified which can also be targeted by the program
Box 2: New potentially viable businesses – opportunities
Fish farming – local production and selling: Whilst fish trade was found to be a lucrative business; there is also
an opportunity for fish farming. This involves breeding of cat fish and other types which will be sold as fresh fish.
In all communities visited no one was doing this business except for a few individuals in Maiduguri. This should
not be taken as an absolute gap, but rather as a temporary issue due to the conflict as there were market
interruptions. Nonetheless, market disturbances usually create local opportunities which some business people
can benefit. There is a high demand for fish across the communities which could be taken as a business
opportunity. Furthermore, given that some areas do not receive fish supplies because the of distance to the
source markets and security challenges, fish farming could be a way of ensuring local supply.
Design and supply of ground nut oil pressing machines: Given the need for mechanised ground nut oil pressing,
there is an opportunity to link youth to Vocational Skills for designing and supply of oil pressing machines. In this
case, the VST youth can be linked directly to women who will be involved in oil pressing, whilst they also supply
the greater community.
Value addition of pepper, tomato, groundnuts, and other crops by women: Whilst there is some value addition
that is already happening, this is currently being done to a lesser extent. There is an opportunity of value addition
of many crops including pepper, tomato, groundnuts, beans, fruits, and others.
Tie and dye: Linked to Vocational Skills Training where youth can be trained in tie and dye to start their business.
Across the markets, it was observed that there are few people with the required skills, which present a new
opportunity. The department of Entrepreneurship and Skills development at Adamawa State University indicated
that this is one area with good potential which can be derived from possible partnerships with creative
people/art to incorporate new designs that can add value and secure the professional paths for young people.
Shoe making: This is an area with great potential given that it surfaced as a need in most of the FGD’s and was
observed to be absent in almost all markets except in Maiduguri, Mubi and Yola main markets. Even in these
two, it was just a few people who were doing it. But the key informants expressed the need for locally made
shoes as the tailors do for Nigerian attires. If the program is to venture into this, they must link it to Vocational
Skills Training to provide the skills first.
Making pillows, bids, bags for women: Young and adult women alluded to the fact that they would like to do
business producing a variety of products such as pillows, bids, bags which are usually meant for women. The
assessment team tried to investigate on the availability of this activity in the markets and realised that it is not
common – which makes it a potentially new area of business. However, this may also require the support of
Vocational Skills Training.
Making local creams, lotions, soap, and perfumes/incense for homes: This is an activity for young and adult women which they expressed great interest in but however are not able to do it because of lack of skills and start-up capital. Fortunately, the Department of Entrepreneurship and Skills development for Adamawa State University confirmed that they could provide training in this area. Currently, almost no one is doing this in the rural communities. This gap is an opportunity for youth and women.
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3.3.6 Success factors of selected existing viable businesses
Several factors were identified as contributing to the successful implementation and better outcomes of the selected businesses. Box 3 below is a snapshot of some of these factors.
Box 3: Success factors of selected existing viable business
Profitability: the financial evaluation demonstrated the profitability of the selected businesses which is one of the major success factors.
Market /Demand: Nigeria is privileged to have a big population which ensures a ready market for most of the goods and services traded across the country. In fact, the North-East region has one of the highest population in the country, which supports demand for most goods and services.
Historical trade hub: Maiduguri Centre in Borno State is traditionally known as a trade hub given its strategic location on the country’s important borders. At the same time, Mubi is also well strategically positioned linking Cameroon, Chad, Central Africa Republic and even Sudan. In this regard, the geographic position of the North-East cities offers a great advantage to trading activities which is a key success factor.
Profitability through economies of scale: Though profit margins are smaller for some businesses, it has been observed that in most cases traders enjoy economies of scales from which they ultimately earn substantial incomes. The high population size of the region also brings benefits in economies of scale.
Most are already existing businesses: Most of the recommended businesses are already existing business. This means the targeted communities already have experience of running these businesses, but most of their challenges are capital and skills.
Integration of markets (Baga road, Mubi, Michika and others): The existing linkages and integration amongst markets will enable the project to link beneficiaries between markets. For instance, the project can support fish traders in Baga Road market and link them to other beneficiaries at Michika market.
Linkages between certain initiatives: The interdependency of selected business will facilitate the supply and demand of within the network of targeted beneficiary traders. For instance, textiles/accessories traders can supply tailoring beneficiaries; Vocational Skills for producing oil pressing oil machines can make/or maintain the machines for oil pressing beneficiaries; whilst crops and vegetable traders can supply restaurants need
Political will: All the communities assessed were willing to participate in business as it is one of their main livelihoods options and generational culture. The youth and women sampled expressed great willingness of participating in specific value chains, which is an enabling factor if the project is to venture into the same initiatives.
3.4 Key Marketable Vocational Skills
The second objective of the Livelihoods and Market Assessment was to recommend key potential and marketable skills that women and youth can be trained in. The aligns with the government of Nigeria which, through the Presidential Committee on the North-east Initiative (PCNI) has prioritised entrepreneurship and job creation for youth and women for their economic empowerment. This is one of the critical areas of supporting youth and women in the recovery process. The Recovery and Peace Building Assessment report highlights that addressing livelihoods and vocational training for young people is a key pillar. This assessment took a comprehensive approach to explore the vocational skills that have potential by interviewing the targeted youth and women, business people, and other key informants - including key vocational institutions and the responsible government ministries. First, the assessment identified what
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women and youth perceived as marketable vocational skills. It then substantiated this information with other sources to draw reasonable conclusions about what vocational skills are marketable.
3.4.1 Understanding training choices for youth and women
The analysis started by looking the proportion of youth or women who were trained in the last 5 years simply to identify the level of vocational training within the targeted communities. This was an important step of also involving youth in the identification of key areas which they can be trained in. This
school of thought was consistent with the Recovery and Peace Building Assessment which indicates that response strategies need to be designed with the input of young people and include initiatives addressing young men’s and women’s needs and concerns. It was observed that most of youth and women have not participated in any vocational training in the last 5 years as evidenced by 69% of respondents (Figure 12).
A further disaggregation by LGA showed that Adamawa had the highest percentage of trained cadres with Yola South being the highest of the 8 LGA’s assessed. Although the overall picture presented in the pie chart (lack of training) does not necessarily reflect a problem, it is a good proxy indicator and the starting point of a skills gap analysis.
Surveyed youth and women were also asked to indicate which areas they would prefer to train in or develop their skills if they had the opportunity Table 5 is a summary of their responses. From the results,39 – 42% of youth and women from both Borno and Adamawa indicated that they would prefer to be trained in tailoring. 11.9% of youth and women from Borno and
22.7% from Adamawa preferred to be trained in farming techniques. For Borno state, a significant 35.3% of respondents indicated that they would prefer training in trading and business management skills as these would allow them to venture into trading and/or own businesses. From this analysis, it should not be surprising to find most respondents talking about skills related to the usual things like tailoring, farming, and trade. This is because in any setting people normally relate more to the things they see. These results were considered as some of the preliminary options for potential skills to be recommended, however, further assessment was done combining other sources of information to come up with the recommended most marketable vocational skills.
Figure 12: % of youth who received training in the last 5 years
Figure 13: % of youth and women trained in the last 5 years
Table 5: % of respondents indicating preferred skills development area
Skills development area Borno Adamawa
Tailoring 39.4 42.1
Farming techniques 11.9 22.7
Livestock rearing techniques 4.1 5.5
Milling/grinding skills 1.1 1.8
Entrepreneurship skills 35.3 8.5
Transport operation 1.5 8.5
Mechanics 0.7 1.8
Catering services 1.5 0.8
Other** 4.5 8.3 **knitting, welding, construction, photography, cap making, etc.
31%
69%
Yes No
LGA Yes NoJere 16.0 84.0
Kaga 14.8 85.2
Konduga 30.3 69.7
Maiduguri 19.7 80.3
Michika 28.4 71.6
Mubi-north 33.2 66.8
Yola North 38.3 61.7
Yola South 44.4 55.6
% of youths and women who
received VST in the last 5 years
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3.4.2 The most marketable skills/areas of training
Across the board, there was a consensus that the most effective approach is to target vocational skills that link with self-employment rather than employment. This is because there are fewer opportunities for formal employment.
Unlike most cities, the urban centres in north-east Nigeria do not have factories or industrial areas that usually absorb vocational and apprenticeship trainees. Upon consulting the youth and women, 96.6% (Figure 14) indicated that they would prefer to be self-employed, concurring with other
stakeholders. The main reason cited was that they want to be empowered to run their own businesses through which they can also train and employ others. This corresponds with one of the sub-objectives of the Buhari Plan, “to equip women and youth with essential skills to make a living for themselves.”
The assessment found that most marketable skills are those that support business or income generating activities that women and youth engage in. Table 6 below presents the recommended most marketable skills in the targeted areas.
Table 6: The most marketable skills/areas of training Business or sector Marketable skills
▪ Crop processing – milling and shelling
▪ Retail trading – cooling and power generation
▪ Tailoring
▪ Transportation
Technical skills on repair of grinding and shelling machines, generators, refrigerators, and tailoring machines
✓ Repair of grinding and shelling machines: There is also a lot of crop processing that happens along the value chain as part of food preparation before consumption. This includes shelling of grains such as rice, milling of maize and other cereals into flour as well as milling of beans into flour for bean cake making. These milling and shelling activities demand the use of grinding and shelling machines daily requiring maintenance.
✓ Repair of generators and refrigerators: The high temperatures in most of Borno and Adamawa demands extensive use of refrigerators for cooling water, drinks, other minerals as well as perishables. However, there is also a shortage of power in rural and some of the urban areas. This necessitates the use of generators by most businesses as a source of power. However, the assessment revealed that there is a skills gap on maintenance or repair of such equipment especially in rural areas where most of the technicians are outsourced from urban areas.
✓ Repair of tailoring machines: As highlighted earlier, tailoring is one of the activities done by many people in the targeted communities. However, the tailors in the rural areas revealed a lack of people who can properly service their machines as a gap. Although there are some people who normally attempt to service the machines locally, they alluded to the fact that they only get properly qualified technicians from towns which show a skills gap in the rural areas.
✓ Vehicle mechanics: Various modes of transport re used for transportation of goods and people. However, whilst the supply of transport is adequate, there is a shortage of skilled mechanics to repair the vehicles and motorcycles in rural areas. Just like other technical areas, the mechanics are normally outsourced from the nearby urban areas.
Crop processing equipment – new venture
Skills for designing of oil pressing
✓ Groundnut oil extraction currently done manually can be done through mechanised oil pressing. through training young men in designing and assembling of simple ground nut oil pressing
Figure 14: Skills training preference
3.4%
96.6%
employment self-employment
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machines which they can supply to identified oil pressing beneficiaries as well as the entire community.
▪ Tailoring – cutting and design
Technical skills for tailoring
✓ Though tailoring looks like a simple business, there are technical skills required for one to engage in it and make a profit effectively. Whilst much of it comes with experience, armatures would require initial training to enable them to take off. The assessment revealed that this might not only be formalised training per day but can also be on the job training where the identified youth or women can be attached to selected prominent tailors where they can learn by doing (sort of apprenticeship).
▪ Textile Tie and dye skills
✓ There is an opportunity to further the textile industry by engaging into design and decoration of textiles. This was cited by several key informants as a lucrative area for youth which can enable them to start their own businesses.
▪ Shoe making – new venture for men
Skills for making of local brands of shoes
✓ This proposed new venture requires the technical skills for shoe making which must be provided through formal vocational skills or on the job training. This would help impart skills to those who may be interested in this venture and allow them to take off.
▪ Fashion designs for women – new venture
Skills for women fashion designing
✓ The large population of women is served by products from international fashion designers, some of which are not really customised to their local traditional needs. Sentiments from women interviewed through FGDs indicated the ‘local fashion designing” as a gap. Opportunities include; designing of women bags, bids, local jewellery and other fashion accessories as well as bed sheets and pillows. However, this venture would require skills which are offered by technical vocational training institutions.
▪ Cosmetology - new venture
Cosmetology skills
✓ This is a new venture for women. They will be involved in making hair creams, lotions, soap, perfumes, shampoo, etc., which they can sell locally and affordable prices. Adamawa University Department for Entrepreneurship and Skills Development recommended this as one of the niche markets for young women which they provide training in.
▪ General – support reconstruction activities
Skills for basic electrical engineering, plumbing, carpentry, welding, building and brick laying
✓ One of the government’s main priority is re-construction which is directly related to the destruction caused by the insurgency. As a result, there is demand for skilled and semi-skilled people to participate in the construction industry. This makes skills related to construction marketable in this context.
▪ Business and financial management
Business and financial management are required to support all the recommended IGAs
✓ Whilst there are several viable businesses that youth and women can venture into, it was observed across the board that there is a general lack of business management and financial skills. It is therefore recommended that the initial stage after beneficiary selection should be to impart business and financial management skills.
3.4.3 Potential collaboration with vocational training service providers
Whilst there are several vocational service providers within Borno and Adamawa states, and surrounding areas, the assessment recommends two institutions per state which the program can link with. Table 7 provides the list of
Table 7: Vocational service providers that a project can link with to provide vocational training
Priority Borno State Adamawa State
1. ▪ State Vocational Skills Training Center
▪ Adamawa State University – Department of Entrepreneurship and Skills Development
2. ▪ Ramat Polytechnic ▪ Adamawa Polytechnic
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service providers to collaborate with in each state, ranked according to priority. The top priority providers confirmed that they are willing to collaborate with any program to provide vocational skills training.
3.4.4 Linkage between business support and Vocational Skills Training (VST)
According to the assessment, most of the marketable skills identified are directly or indirectly linked to the
most viable or new potentially viable businesses. In view of this, there is room for the program to provide
business support to legible beneficiaries particularly in the form of business grants and/or technical support
on identified viable businesses. In addition, the program can identify any gaps in business skills among the
beneficiaries. The beneficiaries can then be linked to necessary vocational skills training to address the gaps
and further enhance their business skill. The program should also consider providing VST to other
beneficiaries in their preferred skills/training area. However, this should be done within the confinements
of the skills identified as most marketable by this assessment. Upon completion of VST, beneficiaries who
would have trained in areas which are directly linked to viable businesses (such as tailoring) or areas
identified as potentially new viable businesses (such as tie and dye, shoe making, cosmetology, design of oil
pressing machines etc.), could be invited to submit business proposals for possibility of starting own
businesses should they succeed to secure a grant. For those who would have trained in other areas such as
repair of machinery or equipment, the program can link them to available opportunities.
3.5 Feasibility and mechanisms of implementing cash transfers
3.5.1 Introduction
Since a cash transfer feasibility study is normally a complex study on its own, this assessment did not collect detailed data. However, it relied on the interviews done with different key informants, secondary reports, and market observations. It was realised that cash transfers are already being used successfully as an effective means to deliver emergency / humanitarian aid to affected populations in the two states. This shows that it is feasible to implement cash transfers in this context. The Cash and Learning Programme (CaLP) guidelines were used to verify the feasibility of implementing cash transfers by assessing the following;
3.5.2 Markets functionality
Generally, markets seemed functional across the two states. Economic activities were observed to be taking place- traders were available to supply the required commodities whilst there was an active interaction between buyers and traders as people obtain goods and services. During the assessment, daily and weekly markets were observed to be operative. With improving security situation after the insurgency, markets have adapted with cash circulation almost back to normal. According to the Lake Chad Basin Crisis - Regional Market
Figure 15: Are commodities available on the market?
70%
27%
1% 2%
48%
28%
5%
19%
0%
20%
40%
60%
80%
yes, all times yes, sometimes yes, rarely not available atall
basic commodities Other (electricals, hardware, equipment)
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Assessment Report2 (2016), the closure of the borders around Lake Chad Basin affected market supply and transport costs. Cereal supplies were reported to have dropped, however, the markets were still functioning with some limitations. Transport was still functioning but with many hurdles as the transporters had to use safer longer routes which had several formal and informal security checkpoints. In addition, the Maiduguri Market Systems Report by NRC revealed that market actors interviewed reported being able to provide the necessary amounts of critical market items during insurgency to meet local demand. Furthermore, the report states that the critical market systems largely have the capacity to meet the anticipated demand in the event of continued insurgencies.
There were some variations observed between markets in Borno and Adamawa, and between rural and urban markets. The stocking levels for traders in the rural Borno were significantly low compared to Borno urban/ and Adamawa. As a risk minimising strategy, traders keep conservative stock just enough to serve people’s daily needs since they are not yet confident of the security situation. This concurred with the findings of the IRC Market Systems Assessment report which stated that low purchasing power was one of the major limiting factors to access by households in Borno state. This also concurred with a Market Assessment Report by WFP which pointed the lack of capital is one of the main constraints affecting traders in Borno state. In this respect, cash transfer programs are likely to contribute positively in further stimulating demand other than the main goal of improving household’s food and livelihood needs.
Unlike high valued goods (electricals, building materials, and equipment) basic food and non-food commodities were observed to be available during the time of the assessment and reported to be always available as shown in Figure 15. These findings were also consistent with the findings of a detailed Markets Assessment by WFP3 which indicated that staple food commodities were widely available in the markets of Borno and Yobe States.
Contrary to rural Borno, the markets in rural Adamawa were functioning well as the trading environment was observed to be almost normal. The level of market interactions observed in Adamawa was relatively better than rural Borno although the lack of capital was cited as the main limitation. In Mubi main urban centre, the situation was normal as the main markets were flooded with traders and buyers daily. The situation of Yola was even observed to be relatively better than the rest, mainly because it served as the main urban centre for Adamawa and was not affected by the insurgency as Maiduguri and Mubi. Traders in Yola were operating at their optimum levels, serving as important suppliers to Mubi.
3.5.3 Market accessibility and security
Though security is still a challenge, markets were generally accessible as most people could physically reach the markets anytime to perform their economic activities without barriers. The Markets report by WFP also highlighted that most markets in Borno state were accessible except a few due to insecurity. Though the government is still exercising high security measures, the general communities assessed revealed that they can visit the markets anytime without fear as shown in Figure 16. However, in terms of movement of bulk cash, it is recommended that the usual security measures be taken as the risk of carrying huge sums of cash is always high.
2 http://documents.wfp.org/stellent/groups/public/documents/ena/wfp282752.pdf
3 http://documents.wfp.org/stellent/groups/public/documents/ena/wfp291106.pdf
Figure 16: Do you feel safe to visit the market at any time?
95%
3%2%
Yes
No
Somewhat
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3.5.4 Existence of service providers that support Cash Transfer programming
Mapping of cash transfer service providers revealed that there are several service providers to support cash transfer using different mechanisms by various organisations. The main service providers are banks, mobile network providers, and vendors and were found to be available in the main urban areas, and are ready to provide the various services.
The main banks available in these three towns include Zeneth bank, UBA bank, Access bank, Diamond bank, First bank, Fidelity bank, Unity bank, FCMB bank, Ecobank, Stanbic bank, Skype bank, Heritage bank and Guarantee Trust Bank. Banking services are mainly found in the main urban centres like Maiduguri, Yola, and Mubi which make the service more accessible to urban populations. Additionally, the majority (83% and 88% of respondents in Adamawa and Borno respectively) of the sampled youth and women sampled revealed that they do not have bank accounts.
The main mobile network service providers across Borno and Adamawa states are MTN, Airtel, and Glo. These three provide network and other mobile related services to both rural and urban areas. Network coverage is a challenge (Figure 18) in some rural communities, where it was observed that MTN and Airtel are mostly available as they have a wider coverage. Possession of cell phones amongst the targeted population was found to be high with 71 – 73% indicating they own a cell phone with a registered sim-card across the two states as shown in Figure 17.
Figure 17: Do you own a cell-phone? Figure 18: How good is network coverage in your community?
Vendors are available, who provide different food and non-food commodities and these are usually drawn from a pool of retailers who are in abundance in the main towns as well as rural areas.
Overall, the above analysis shows that the critical requirements for implementing a cash transfer program are in place. It is evident from the above discussion that markets exist and are functional with most people able to access the markets as the general security situation is relatively calm. Furthermore, service providers and the infrastructure required to support different mechanisms such as mobile money, vouchers, direct bank are also available. In addition, secondary information also supports that it is feasible to implement cash transfers in this context. Lastly, other agents such as NRC, IRC, ACF, WFP are already implementing cash transfers based on their previous assessments which prove that the environment is conducive. Regarding the appropriate mechanisms, the section below provides an evaluation and ultimately recommendation of the most appropriate mechanisms.
However, it should be noted that though there is good progress on markets recovery, the affected population have not recovered from the insurgency shocks at the household level. Household incomes are still low and business people have not fully recovered to reach optimum operational levels. This is worsened
0%
10%
20%
30%
40%
50%
60%
70%
Yes No
Borno
Adamawa
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Jere Kaga Konduga Maiduguri Michika MubiNorth
YolaNorth
YolaSouth
excellent good better poor very poor no network coverage
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by rising cost of survival food basket (noted in May 2017) which is further reducing the already low household purchasing power, as reflected in the Market Monitoring Report for Borno and Yobe states by UNOCHA. Furthermore, the situation is still fragile as security is still a concern. Therefore, the recovery progress may decline rapidly if the security situation begins to deteriorate.
3.5.5 Selected four options for appropriate cash transfer mechanism
Based on the assessment, the following four options were identified as appropriate cash transfer mechanisms. The first two are the most recommended mechanisms. See Annex 3 for full details on how each mechanism works, its merit and challenges
▪ Money agents
▪ Mobile money transfers
▪ Electronic vouchers (e-vouchers)
▪ Direct use of the bank
3.5.6 The recommended most appropriate mechanism (ranked)
Based on the above evaluation, mechanisms were ranked as follows (Table 8) and the first two were recommended as the most appropriate for DRC.
Table 8: Most appropriate mechanisms - ranked
Rank Mechanism Areas applicable
1 Money agents All communities where DRC-DDG is currently operating
2 Mobile money transfers Almost all DRC-DDG operational areas where network is good
3 E-vouchers All communities where DRC-DDG is currently operating
4 Bank Mostly urban areas (Maiduguri, Yola, Mubi)
3.6 Targeting criteria
Beneficiary targeting should be guided by the process outlined in Box 4.
Box 4: Targeting criteria
Key criteria: The criteria for targeting beneficiaries for business support will be based on the strength of their proposal whilst for VST it will be based on their willingness to train in a specific area, or a tracked record of those who once trained but could not complete for various reasons. The key criteria will be used along other vulnerability and eligibility indicators below.
Step 1: The first level of targeting (initial screening) will be based on vulnerability (related to livelihoods and food security). This process will provide a limited list of potential youth and women beneficiaries who will be further selected for business support or VST. Not all will be selected as final beneficiaries, rather this is to identify potential beneficiaries who will participate in the next level of selection – so this must be clarified during this exercise. The idea here is to reduce the number of people who will apply for business grants or who can be enrolled in VST as this should be limited only to vulnerable youth and women not all other aspiring/existing business people. The first level selection will be based on the following indicators;
Dimension Indicator
Primary target group – Youth and women
▪ Male and females of age 18 to 35 years
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▪ All other females above 35 years4
Participation in business
▪ Youth and women already engaged in some form of business, with special emphasis on those identified as most viable businesses
▪ Ordinary entrepreneurs and micro-enterprises (those employing 0 to 4 employees)
▪ People who were once in business but were disrupted by the insurgency and could not re-start due to lack of capital
Social vulnerability (related to livelihoods and food security)
▪ key vulnerability indicators of poverty should be defined by the local community5 (however, can consider wealth indicators such as asset ownership, income, remittances etc.)
Other social vulnerabilities
▪ Consider other indicators such as dependency ratio of household, youth/women from households with economically inactive household heads etc.
Residential status ▪ All must be targeted if they are vulnerable and meet other criteria, however key consideration should be given to IDPs
Step 2: After initial screening, the potential beneficiaries will be further selected picking those who are running6 businesses identified as most viable by this assessment. This group will be invited to submit business proposals and only those with sound proposals will be selected as final beneficiaries for business grants. This process requires a business financial consultant to guide criteria for eligible proposals and the process. The remaining group will be invited to choose training area of interest for VST from the list of marketable skills identified by the assessment. Should consider those who trained and could not complete because of various obstacles as first choice (category 1), then those never trained but have a passion for training in that area as category 2. Then from those who would have succeeded for business grants, identify any training needs which can improve their business and include them for VST (category 3). After training, category 1 and 2 may be invited for proposals in their areas which may need business grants support, or they will be linked to key areas of the economy where they can use their skills.
4 The program can out an upper age limit to encourage only those who are economically active
5 Using local definitions
6 Include those who were doing but have been disrupted by insurgency – need to prove
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4. Main Conclusions and Recommendations
Livelihood options for IDPs and host communities
Agriculture remains the main source of livelihoods for assessed IDP and Host communities. Trading, wage labour and remittances are important strategies for accessing income to access food. The markets play crucial role in ensuring providing a platform of exchange of goods and services, which the insurgency had disrupted. The markets have adapted and there is fair functionality although the risk of unpredictable disruptions still exist given the fragile conflict context. Targeted communities are on the recovery path and support that re-establishes/strengthen/adapt existing livelihoods and maximising on new opportunities will enhance recovery and build their resilience. Based on these findings, the following recommendations are proposed:
Recommendations
▪ The program should strengthen strategies that are part of the existing livelihoods system and build community cohesion to minimise the risk of failure when linkage to new opportunities are initiated building on gained social capital. (See specific list of activities in Box 1 and Box 2)
▪ Vocational Skills must be linked to activities related to opportunities in agriculture, value addition, small scale manufacture. These could include; metal fabrication, the design of agriculture equipment as well as crop processing equipment such as grinding and shelling mills. (see full list of options in Table 6).
▪ Given the variation of income between states and amongst people of different residential status, the program’s targeting should deliberately focus more on the affected groups which reflected low incomes. (see targeting criteria Box 4)
Evaluation of businesses viability for youth and women
Many targeted youth and women’s preference is inclined towards tailoring, trading, and farming business. The financial viability analysis highlighted that businesses related to trading of various items which are chiefly livestock, meat, crops, and fish were most viable. In addition, businesses in line with value addition of crops (bean cake selling and groundnut oil extraction) were also found to be viable, which makes agriculture (crop and animal production) a driver of the local economy.
Recommendations
▪ The program must use the list of viable businesses provided in this report and enrol participants based on choice and preference highlighted.
▪ The vocational, value addition and trade activities must include basic business and financial management training.
▪ DRC/DDG should collaborate with institutions such as departments of the Ministry of Trade and Commerce to ensure sustainable support and access to government facilities for monitoring youth and women businesses.
Key marketable vocational skills
The findings indicate a preference for vocational skills that promotes self-employment rather than employment. The opportunities identified for vocational skills training directly enable the youth and women to start and run business enterprises. There exist skills gap between urban and rural areas with scarcity of most technical skills in rural areas such as repair of machinery and equipment, which shows an opportunity
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for rural youth to engage in these trades. In addition, massive reconstruction opportunity following the damage of infrastructure exist. These skills include basic electrical engineering, plumbing, carpentry, welding, building and brick laying which are expected to contribute to the reconstruction work. With the current level of reconstruction, these skills are highly marketable yet in some communities just outside the main urban centres of Maiduguri and Mubi, these skills are rarely found.
Recommendations
▪ Consider provision or linkage to institutions that provide financial start-up capital for trade and income generating activities started off from the vocational skills.
▪ The program must incorporate gender into the selection of skills that youth and women can take.
▪ As recommended by Adamawa University key informants, the program should not impose training areas on youth or women, but rather should take a consultative approach of understanding their needs and preferences first, then present the options on the table and allow the youth and women to choose from the pool.
▪ The program must make use of identified complementarities to enhance business. Design of oil pressing machines to support oil pressing; groundnuts traders to supply oil pressing women.
Feasibility and mechanisms of implementing cash transfers
The assessment results show that it is feasible to implement a cash transfer program in the targeted communities of Borno and Adamawa states. The markets were observed to be functional and accessible enabling households to obtain commodities and money through existing service providers. More importantly, the assessment observed that other NGOs/UN agencies are currently using various forms of cash transfer mechanisms which are successful. Mechanisms are contextually applicable in rural and urban. The assessment identified Money agents and Mobile Cash Transfers as the most appropriate mechanisms. Despite markets recovery, the risk of disruption remains on alert and households are yet to fully recover from the socio-economic and psychological effects of the insurgency.
Recommendations
▪ Money agents and Mobile cash transfers are the most appropriate mechanism which have capacity to reach out to every community.
When using mobile cash transfers;
1. a prior detailed network coverage assessment must be done to ensure that there will not be challenges during implementation
2. the program also should verify the service provider’s agent network and ensure there is guarantee for adequate agents during cash disbursements.
3. the program also should agree with the service providers on how they will treat and manage failed transactions, unblock blocked pin codes, and replace lost sim cards. If these areas are not well articulated, the usually lead into delays for some beneficiaries and may also result in the program and the service provider failing to account for some transactions (especially failed)
When using money agents;
1. the tendering process and recruitment should identify legal money agents who are authorised to trade as money agents by the government or the central bank
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2. the program should exercise extra due diligence on the contractual agreements and clearly articulate who shoulder the risk of delivering money to the beneficiary community
3. though the agents must shoulder this risk, the program also has a right to know the security mechanisms that the agent will put in place to make the deliveries safer
4. a proper system for identifying beneficiaries should be put in place by the program, and at the same the program must field its staff on the ground who will facilitate the identification of the correct recipients of cash
Areas for further research
▪ A detailed value chain analysis of the few selected most viable IGAs would add in-depth information that can re-shape the way the project can support these businesses.
▪ On the same businesses, a study of elasticity would allow the program to understand the behaviour of the market if more players are added.
▪ Potash mining and trading as fertiliser was identified as potentially highly profitable. However, there are concerns for environmental sustainability and security risk as anecdotal evidence suggest it can be used in making explosives. Further examining sustainable extraction of this resource to support local livelihoods is encouraged.
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Annexes
Annex 1: Data collection tools matrix Specific tool Objective
addressed Thematic areas covered Respondents Systematic process Mode of data
collection Responsibility
Tool 1 – The overview and formative tool
All objectives
The bigger picture for SME/IGA, VST, and Cash Transfers
VST providers, Business associations, Government departments and line ministries, Academic/Training institutions, Banks, Mobile network providers, NGO/UN
Visited each of the offices and conducted semi-structured interviews
Paper based Consultant with assistance from 1 programme person
Tool 2 – Community FGD for IGA’s/businesses and VST
Objective 1 & 2
General livelihoods, economic activities, ranking of viable businesses, skills gap analysis, opportunities for business and employment
Community key informants, i.e. traders, local government representatives, local leaders, local business people, youth’ representatives, women representatives.
Purposively selected the representative markets in each LGA, then mobilised the respondents, facilitated FGD’s ensuring participatory approaches
Paper based Consultant to lead with assistance from 1 programme person
Tool 3 – Traders FGD for Cash Transfers
Objective 3 Market functionality and access, Commodity supply, Service provision (Banks, Mobile money, Cash in Transit), Security issues
Traders, traders’ association representatives, business people of different forms, financial institution agents, mobile network providers agents, youth, and women
Purposively selected the representative markets in each LGA, then mobilised the respondents, facilitated FGD’s ensuring participatory approaches
Paper based Consultant to lead with assistance from 1 programme person
Tool 4 – IGA and SME project appraisal form
Objective 1 & 2
Business information (Financial information, non-financial information), Skills training/skills gap, Market demand and supply, opportunities, constraints, and support required
SMEs, traders, or individuals engaged in small business/ IGA’s – ensuring youth and women who are running businesses are included
Purposively selected the representative markets in each LGA. Consulted key informants and listed/categorised IGA’s and SME’s available by sector. Ranked the IGA’s/businesses, identified the potentially viable ones, and conducted a detailed assessment with the individual business owners
Paper based 5 Research assistants with intermittent support from the consultant and programme person
Tool 5 – Survey questionnaire for youth and women
All objectives
Livelihood strategies, incomes, IGA’s and small business, opportunities and constraints, skills training and skills gap, markets functionality and access, availability, and access to financial and mobile money services
Youth and women From each LGA, purposively sampled communities for the survey. In each community, mobilized youth (age 18 to 35 years – both male and female) and women above 35 years. From the youth, categorised them into 2; lower and upper youth, i.e. age groups 18 to 25 years (lower) and 26 to 35 years (upper). This ensured all age groups are represented. Conducted individual interviews.
Electronic system through tablets
7 Research assistants with guidance from consultant and their Team Leader
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Annex 2: Financial analysis of identified businesses
Annex 3: Financial analysis of the identified businesses Business type Dry perpper Beans Ground nuts Water melons Sesame Maize Millet Rice Onion
Opening balance - project loan (intitial capital injected) 267,000 344,400 431,000 369,000 400,000 175,000 100,000 130,000 45,000
Total expenditure for the month (stock + equipment) (267,000) (344,400) (431,000) (369,000) (400,000) (175,000) (100,000) (130,000) (45,000)
Gross sales 320,000 384,000 496,000 480,000 450,000 185,000 109,800 148,000 55,000
Tax on income (3,000) (3,000) (3,000) (3,000) (3,000) (3,000) (3,000) (3,000) (3,000)
Net income 317,000 381,000 493,000 477,000 447,000 182,000 106,800 145,000 52,000
Instalment on capital loan received (0% interest) (50,000) (36,600) (62,000) (108,000) (47,000) (7,000) (6,800) (15,000) (7,000)
Balance B/F - opening balance for month 2 267,000 344,400 431,000 369,000 400,000 175,000 100,000 130,000 45,000
Operating costs for month 2 & subsequent months (no equipment) 267,000 344,400 431,000 369,000 400,000 175,000 100,000 130,000 45,000
# of months needed to return initial capital invested 5.34 9.41 6.95 3.42 8.51 25.00 14.71 8.67 6.43
Payback period (months) 5.34 9.41 6.95 3.42 8.51 25.00 14.71 8.67 6.43
Net profit/loss per month after payback 50,000 36,600 62,000 108,000 47,000 7,000 6,800 15,000 7,000
Start up capital required (USD) 850$ 1,097$ 1,373$ 1,175$ 1,274$ 557$ 318$ 414$ 143$
Net profit/loss per month after payback (USD) 159$ 117$ 197$ 344$ 150$ 22$ 22$ 48$ 22$
Return per dollar invested 0.19 0.11 0.14 0.29 0.12 0.04 0.07 0.12 0.16
Seasonality 8-12 months 6 months 6 months 6 months 6 months 6 months 6 months 6 months 8 months
Business type Beancake selling Oil extraction Tailoring Textile Bead making
Opening balance - project loan (inititial capital injected) 223,000 122,600 98,000 545,000 65,000 504,000
Total expenditure for the month (stock + equipment) (223,000) (122,600) (98,000) (545,000) (65,000) (504,000)
Gross sales 250,000 112,000 72,000 586,000 80,000 600,000
Tax on income (3,000) (3,000) (3,000) (3,000) (3,000) (3,000)
Net income 247,000 109,000 69,000 583,000 77,000 597,000
Instalment on capital loan received (0% interest) (39,000) (24,400) (21,000) (38,000) (22,000) (93,000)
Balance B/F - opening balance for month 2 208,000 84,600 48,000 545,000 55,000 504,000
Operating costs for month 2 & subsequent months (no equipment) 208,000 84,600 48,000 545,000 55,000 504,000
# of months needed to return initial capital invested 5.72 5.02 4.67 14.34 2.95 5.42
Payback period (months) 5.72 5.02 4.67 14.34 2.95 5.42
Net profit/loss per month after payback 39,000 24,400 21,000 38,000 22,000 93,000
Start up capital required (USD) 710.19$ 390.45$ 312.10$ 1,735.67$ 207.01$ 1,605.10$
Net profit/loss per month after payback (USD) 124.20$ 77.71$ 66.88$ 121.02$ 70.06$ 296.18$
Return per dollar invested 0.17 0.20 0.21 0.07 0.34 0.18
Seasonality All year All year All year All year All year
Business type Fish Goats Sheep Meat seller - goat Meat seller - sheep
Opening balance - project loan (inititial capital injected) 450,000 392,000 636,000 374,000 753,000
Total expenditure for the month (stock + equipment) (450,000) (392,000) (636,000) (374,000) (753,000)
Gross sales 565,000 440,000 690,000 448,000 864,000
Tax on income (3,000) (3,000) (3,000) (3,000) (3,000)
Net income 562,000 437,000 687,000 445,000 861,000
Instalment on capital loan received (0% interest) (112,000) (45,000) (51,000) (71,000) (108,000)
Balance B/F - opening balance for month 2 450,000 392,000 636,000 374,000 753,000
Operating costs for month 2 & subsequent months (no equipment) 450,000 392,000 636,000 374,000 753,000
# of months needed to return initial capital invested 4.02 8.71 12.47 5.27 6.97
Payback period (months) 4.02 8.71 12.47 5.27 6.97
Net profit/loss per month after payback 112,000 45,000 51,000 71,000 108,000
Start up capital required (USD) 1,433.12$ 1,248.41$ 2,025.48$ 1,191.08$ 2,398.09$
Net profit/loss per month after payback (USD) 356.69$ 143.31$ 162.42$ 226.11$ 343.95$
Return per dollar invested 0.25 0.11 0.08 0.19 0.14
USD to Naira rate used 314 314 314 314 314
Seasonality All year All year All year All year All year
Selling bed sheets & curtains
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Annex 3: Options for cash transfer mechanisms
Annex 4: Options for cash transfer mechanisms Option How it works Evaluation of the option
▪
Mo
ne
y ag
en
ts
There are three parties involved in this mechanism – the organisation, the money agent and the beneficiary. It starts with the organisation identifying and contracting a money agent who has the capacity and legality to deliver money on behalf of a client. The contract is based on a pre-financing basis where by the money agent has the mandate to deliver money to the beneficiaries at her own risk. The project then reimburses the agent according to receipts after successful delivery of cash to the beneficiaries. A commission is charged by the agent as the cost of delivering the service and this is negotiated at contractual stage. The project has the responsibility to set up dates for cash disbursements and set up/implement a system that will ensure that the money is delivered to the right recipients. In this respect, the project allocates its staff who accompany the agent to facilitate and validate that the money is delivered to the right beneficiaries on the date of the distribution.
Merits ▪ One of the biggest advantages is pre-financing, the project only
reimburses upon successful completion of cash disbursements to beneficiaries
▪ The delivery to the beneficiary is done at the agent’s risk ▪ It is flexible, can reach any community, be it rural or urban ▪ Cash deliveries are done at the convenience of the project and in the best
interest of the beneficiaries ▪ It is currently being used by IRC and Oxfam with confirmation that it is
working well. ▪ No other infrastructure is required to support the mechanism like in the
case of mobile money transfers or e-vouchers. De-merits ▪ Due diligence is required in contracting an agent and ensure the contract
does not have loopholes for manipulation
▪
Mo
bile
mo
ne
y tr
ansf
ers
The system for mobile money transfers involves many parties chiefly the interested organisation, the mobile money service provider and its agents (for cashing out), the bank and the beneficiary. The organisation first contracts the mobile money service provider, and in the case of Nigeria the mobile service provider must have a registered partnership with a bank for it to be allowed to provide this service. After contractual agreements, the organisation transfers money into the mobile money service provider’s account sitting with the bank. Beneficiaries are provided sim-cards which are then registered for mobile money. Registering for mobile money means an account is created (wallet) which money can be deposited, withdrawn (cash out) or perform any other transactions. When disbursements time arrive, the bank is given an instruction to disburse allocated cash transfer amount to each beneficiary wallet, and the beneficiaries are alerted through a text massage (SMS). Beneficiaries will then approach the different agents for cashing out or making withdrawals. They can as well withdraw their money from the respective bank ATMs whilst at the same time can transfer their money from one wallet to the other.
Merits ▪ Has capacity to reach all areas provided there is network hence
appropriate for both rural and urban beneficiaries ▪ Well supported by service providers like Airtel and MTN who are
already using it with other humanitarian organisations ▪ There are fewer logistics involved as money is transferred
electronically ▪ It minimises the risk of handling cash by project staff
De-merits ▪ This is a fairly new approach in North-East. The consultants observed that
the service providers are still learning. ▪ Given the above, it was observed that the agent/vendors network is still
very poor such that beneficiaries cannot access the agent service easily at any given time – this makes the whole service to be inflexible.
Furthermore, the idea of mobilising agents at one central point for cashing out/withdrawals still returns the security risk and defeats the purpose of mobile money transfers
▪
Dir
ect
use
of
the
B
an k
This is a straightforward system where the organisation contracts the bank to disburse money for its beneficiaries on its behalf. After contractual agreements, the organisation transfers money into the bank account of the bank and given payment instructions which the bank will then follow to disburse money to individual beneficiaries who would have opened bank accounts with the respective bank. In
Merits ▪ Cash is always available at the bank ▪ Minimises the risk of gathering people and moving bulk money De-merits
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terms of reaching out the communities outside the urban areas, there were mixed responses from the banks. Whilst most of the banks revealed that they are not able to deliver cash outside the bank, some banks like UBA (Maiduguri and Mubi), Stanbic, First Bank and Eco bank (all in Yola) said they were willing to deliver cash outside to the communities upon proper arrangement of security which may include armoured vehicles. As for the case of UBA in Mubi, it was indicated that they can deliver the money to the community but however at the expense and risk of the organisation.
▪ Most appropriate for urban beneficiaries since most of the banks cannot deliver cash to the communities. This attracts extra transport costs and travelling time for beneficiaries
▪ During the assessment, the data collection team observed long queues of clients who came to withdraw their money – beneficiaries are likely to spend considerable time queuing for money.
▪ For the case of UBA bank, it is risk for the project to bear the risk of bulk cash delivery to the community
It requires all beneficiaries to physically open bank accounts, and this process can be cumbersome
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The mechanism involves several parties and infrastructure to support it. The main parties are the organisation, the service provider to support the platform, the vendor who interface with beneficiaries and the beneficiary. The infrastructure required include the platform, terminals, smart cards, and printers. The organisation contracts a service provider (e.g. Redrose or Mastercard) who will set up the platform. The platform is managed or controlled by the organisation which they use to credit money to beneficiaries’ smart cards. The organisation also selects and train vendors who are responsible for facilitating beneficiaries’ purchases. Beneficiaries will purchase from the vendors using the smartcards which are swiped via the terminal machines. The account balance is debited every time a card transaction is made and the organisation has the capacity to view all the transactions on the platform. The account balance is not real money, but figures created by the system for the purposes of allowing beneficiaries to purchase. The organisation then pays the vendor at the end after all beneficiaries have exhausted their balances.
Merits ▪ The system is secure, risk free as there is no interface with real money ▪ The organisation has total control of the system through the platform ▪ Once set up, it can reach beneficiaries across all communities ▪ It has proven to work in Borno as it is currently being used by NRC with a
system supported by Redrose De-merits
✓ The major disadvantage of this mechanism is that it is expensive as it requires a lot of components.
✓ The tendering process and contractual agreements usually take a considerable time to complete
✓ It also involves selection of appropriate vendors which is another process which consumes time
✓ Since the beneficiaries do not access their physical cash, there is usually a compromise on flexibility and choice
If not monitored well, beneficiaries are vulnerable to abuse by vendors
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Annex 4: List of key informants
The following stakeholders were also interviewed to provide high level information on the 3 thematic areas of the assessment.
▪ Ministry of Trade and Commerce – Permanent Secretary for Borno State
▪ Airtel – Maiduguri ▪ Ministry of Commerce and Trade – Commercial Officer for Mubi
▪ Ministry of Women Affairs and Welfare Development – Permanent Secretary for Borno State
▪ State Emergency Management Authority – Adamawa State
▪ Adamawa State University – Department of Entrepreneurship and Skills Development – Mubi
▪ Ministry of Poverty Alleviation and Youth Empowerment – Permanent Secretary for Borno State
▪ Ministry of Women Affairs and Welfare Development – Adamawa State
▪ First bank – Mubi
▪ Ministry of Recovery Rehabilitation and Reconstruction (3 R’s) – Permanent Secretary for Borno State and curtesy visit to the Commissioner
▪ Ministry of Trade and Commerce – Adamawa State
▪ UBA bank – Mubi
▪ State Vocational Skills training Centre – Principal for Borno State
▪ Vocational Skills Centre – Yola ▪ MTN – Mubi
▪ Access bank – Maiduguri ▪ Fadama Project, under Ministry of Agriculture and Natural Resources – Poverty Alleviation Project targeting Youth, Women, and others – Mubi
▪ Michika Microfinance – Head of Operations – Mubi
▪ Zeneth bank – Maiduguri ▪ Ministry of Women Affairs – Zonal Social Officer for Mubi
▪ Ministry of Commerce and Trade – Commercial Officer for Mubi
▪ Stanbic bank – Yola ▪ Zenith bank – Yola ▪ UN OCHA – Yola
▪ UBA – Yola ▪ Eco bank – Yola ▪ CISCOPE – Yola
▪ First bank – Yola ▪ UNDP Coordinator of Early Recovery, Livelihoods Sector
▪ NRC – Maiduguri
UN OCHA Cash Working Group Coordinator – Maiduguri
▪ IRC – Mubi
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Annex 5: Income Map by LGA