Somalia: Private Sector & Labor Market Assessment

I.Background and Rationale

As part of a three-year programme focused on displacement-affected communities with a consortium of DRC and ReDSS, WYG will lead the private sector development and economic opportunities component of the overall programme. This will involve the establishment and operationalization of Business Support Centers (BSCs), engagement of MSMEs for apprenticeships and placements, skills training, and loans and grant provisions. This will be coupled with upstream public private dialogue, investment and business climate reform advice and market and value chain analyses. In addition, WYG will be undertaking a well-defined spatial plan in conjunction with authorities in Kismayo to enable informed decisions (i.e., investment in infrastructure) that unlock economic growth and foster social cohesion. The intervention locations of the project are in the localities of Kismayo, Mogadishu, Dolow and Baidoa in south-central Somalia.

For the skills development and employment opportunities subcomponent, activities will focus on (i) job skills training for wage employment together with job placement assistance; and (ii) entrepreneurship training with linkages to finance. This private sector engagement and economic opportunities component of the overall programme addresses the lack of livelihood options and economic opportunities for displacement affected communities that is a key driver of displacement.

The aim will be for training modules to reflect vibrant and growing sectors of the Somali economy, and for which there will be demand for the skills and occupation long past the project lifespan. The IMF (2017) reported that the construction, telecommunications and service sectors will remain the engines of growth in Somalia for the foreseeable future. In the short run, these sectors will have the most rapid output growth, thus it will be key to align the provision of skills training and job placement with sectors that have robust growth trajectories in the short, medium and long term.

Given the challenge of identifying sectors which will lead to the greatest returns on investment in skills development, training activities will focus on the development of broad and non-sector specific skills training that will enable trainees to attain skills that are transferable across a wider number of sectors. For sectors where there is labor demand, specialized sector-specific skills will be provided to complement the development of broad skills.

II.Objective of the Assessment

The design of training programs will be informed by the opportunities and constraints facing the labor market in Somalia and will respond to the challenges of displacement in the target locations of Kismayo, Baidoa, Dolo and Mogadishu. In order for this subcomponent to be successful, there will need to be a strong understanding of the economy, prevailing conditions and wages for workers and the demand for goods and services as well as the entrepreneurial landscape. While conducting this assessment, WYG will be to deep-dive into the SME market at the level of urban cities and centers of Mogadishu, Kismayo, Baidoa and Dolow to identify economic sectors and sub-sectors with the greatest potential for enterprise formation and development and employment. The assessment will enable the BSCs to provide relevant, updated, specific, detailed and reliable advice to entrepreneurs in the types of business they should form and in which sectors as well as to provide targeted value-added support to existing SMEs already operating in the identified economic sectors/sub-sectors. As result of this assessment, WYG will also be able to identify key constraints facing entrepreneurs, job-seekers and to pin point sources of growth and where job creation is most likely to occur in each target location. This assessment will inform the design of TVET training, skills training, entrepreneurship, job placement support to be subsequently provided and also provide detailed knowledge regarding the private sector and employment in target areas.

III.Scope of Work

To realize the above objective, WYG will carry out an assessment of the private sector and labor market in Somalia, with a specific focus on the displacement-affected “hot-spots” of Mogadishu, Kismayo, Baidoa, and Dolow that tackles the following issues:

• Mapping out the current state of play of in the market with respect to local skills, marketing channels, technologies, trade, infrastructure and goods and services in each of the target locations;
• Comprehensively mapping out the market actors and players supporting entrepreneurs and businesses in the target locations;
• Assessing local and national demand for goods and services that could be produced and marketed by startups and existing SMEs that are to be supported under BSCs;
• Identifying economically feasible sectors and sub-sectors in services and production, with higher potential (e.g., handicrafts, construction, farming, food production and processing, salon, hotel services etc.) that BSC support could focus on;
• Identifying marketing outlets and trading potential in the target locations in the country and abroad that would enable start-ups and SMEs to export select products in demand;
• Investigating the type and nature of market competition for the identified economic sectors with promise for BSC-supported entrepreneurs and businesses.
• Identifying the sectors of production that have high marketing potential for BSC-supported entrepreneurs and businesses, ranking the sectors and subsectors and providing a suitable strategy for each business area;
• Providing detailed recommendations on the services and products, within the identified sectors and subsectors, that have the best possible chance of leading to successful business outcomes for BSC-supported entrepreneurs, startups and SMEs;
• Identifying the state of play of private sector activity in each target location, examining linkages and the drivers of activity across sectors;
• Finding out the constraints and opportunities for growth in various sectors in each target location;
• Analyzing the supply of labor

o The profile of labor supply in each target location, examining education and skills of laborers;

o The labor market characteristics and conditions of youth, women and those affected by displacement, and examining their current skill and activity level in the market;

• Analyzing the demand for labor

o The current structure of employment across sectors, examining wages and quality of work;

o The type of workers and the skills needed in high potential and growth sectors, and determining the wages, to promote the livelihood diversification and economic opportunities for the target population (i.e., those affected by displacement, women and youth.);

• Assessing the structure of the labor market, with a specific focus on constraints facing returnees, IDPs, women and youth in displacement affected areas (i.e., are they discouraged from engaging with the labor market?);

• Proposing the potential for entrepreneurship and business development in the target locations;

o Challenges facing entrepreneurs and start-up businesses in each target location (i.e., finance, legal, business development support etc.)

o The constraints to entrepreneurial activity by displacement-affected populations, women and youth such as property ownership, legal services, finances etc.

o The goods and services in demand in each target location with a view to examining those that can be supplied by indigenous businesses and start-ups to drive economic growth and job creation;

IV.Methodology

This assessment will be undertaken through (i) a desk review of existing literature and studies on the Somali economy, Somalian private sector and the local market dynamics in the displacement-affected urban areas; (ii) interviewing key labor market actors; and (iii) the utilization of a well-designed questionnaire as a tool for collecting data so that downstream private sector engagement and business development interventions are based on data and a solid evidence base. More specifically, the following guiding principles should be taken into consideration when conducting the assessment:

• Both primary and secondary data should be compiled and analyzed;
• A review of existing literature and studies on the Somali economy, private sector opportunities and the local market dynamics in the displacement-affected urban areas should be undertaken;
• Interviews and focus group discussions should be conducted with key market actors, business associations, small business enterprises, learning centers and key government institutions;
• Data and information should be collected through a well-designed questionnaire so that downstream private sector engagement, labour market, business development interventions are based on data and a solid evidence base;
• Community and stakeholder participation is a crucial element, hence in carrying out the assessment, every effort should be made to include all of the relevant stakeholders’ views and ideas towards the private sector and labour market assessment;

WYG expects the proposal to include;

• Composition of team and organizational structure,

• Comprehensive methodology,

• Indicative sampling size,

• Sample questionnaire,

• Work plan,

• Financial offer based on number of consultant working days

V.Outputs and Delivery Schedule

The output of the assessment will be a comprehensive report that will:

• Provide an Executive summary in the opening sections and detailed, relevant and reliable quantitative and qualitative information on the market contexts in the body of the report;
• Map the supply side and demand side in the target locations, culminating in a stakeholder consultation for the selection of sectors and sub-sectors with high potential;
• Provide general analysis on private sector in Somalia and a comprehensive analysis on the selected sectors and final recommendations of viable strategies and actions for supporting startups and SMEs in these sectors;

The first draft of the report shall be due on 13^th July and the final report shall be due on 20^th July.

VI.Duration

Assessment shall start on 15^th of June 2018 and shall be no longer than a month.

VII.Key Qualifications and Skills

A research consulting company will be contracted to carry out the assessment. Company should fill the attached Supplier Form and send it together with the proposal. The Company should have capacity to mobilize local enumerators and Senior Consultants of the team should have meet the following criteria:

· A degree in economics and specialization in private sector, labor market analysis and related fields;

· Minimum of seven (7) years of experience in labor market policy development, planning and analysis;

· Strong writing and communications skills;

· Experience with vocational training and job placement programs;

· Knowledge of the socio-economic environment in Somalia is an added advantage;

· Experience in carrying out labour market assessments is a requirement;

· Experience in SSA is an added advantage;

Kindly submit the technical and financial proposals to sharmarke.ahmed@wyg.com and betul.boyar@wyg.com.tr by 8th June 2018