The Weakest Link: Learning From the Resilience of Somalia's Market Systems
The authors discuss their application of USAID’s Market Systems Resilience (MSR) Framework. The authors focus on the use of the tool to assess the resilience of the market system itself in a Somalian context, including an exploration of how market systems, in a few circumstances, provided support/opportunities that helped communities better weather COVID and other stresses. While the blog provides a good overview, the team’s work in using the market system resilience framework continues in other countries developing insights and learning that are expected to be shared with the wider community.
Somalia, like the rest of the world, was not ready. As the shock of the COVID-19 pandemic rocked global markets, Somalia saw temporary closures of offices, schools, and airports as well as fewer events, which also had less in-person participation. For over a year the world experienced restrictions that were extended over and over again, and while the restrictions in Somalia were fewer and shorter compared to other countries, the negative impact reverberated across the nation.
The Hajj—the annual Muslim pilgrimage to the holy city of Mecca—usually attracts two million pilgrims from around the world. According to a Veterinary Medicine and Science report, Saudi Arabia imported more than three million goats, sheep, cattle, and camels during the 2019 Hajj season. In 2020, the Hajj was cancelled due to COVID, resulting in the loss of an estimated $500 million in livestock exports from Somalia.
The setback came as the country’s livestock sector – which engages more than 65% of the population and accounts for up to 75% of exports and 40% of GDP – had been making impressive gains in strengthening resilience and managing risk. Decades of conflict, periodic droughts, and pest infestations have all made it difficult for Somalia’s economy to grow.
Zoom in to the individuals that depend on income from the livestock sector and now faced the unprecedented market shock from COVID. As it turned out, livestock exporters lost their main market and didn’t have relationships with buyers in other countries. Similarly, livestock traders didn’t have back-up plans to help them continue operations. Somalia’s livestock market system essentially shut down, forcing herders to sell at depressed prices and people to lose their livestock-related jobs. While Somalia’s livestock production systems may be resilient to many shocks, the market system they depend on was not.
Why was the market system so vulnerable? What can be done to strengthen the market system so it can better respond to and recover from shocks?
A New Methodology
Resilience is not a new concept; individual, household, and community-level resilience has been defined and researched by USAID and its partners for years. Less clear has been resilience at the systems level.
In 2019, the global resilience community was abuzz with excitement – and curiosity – when USAID released the Market Systems Resilience (MSR) Framework. Brimming with potential to address some of the questions we’d been struggling with for decades, people wondered whether and how the MSR Framework could help identify what market system capacities are needed to absorb, adapt, or transform in the face of shocks and stresses.
A resilient market system can buffer the impact of shocks on producers, the workforce, other market actors, and even consumers. But, to use an old adage, the system is only as strong as its weakest link. The MSR Framework helps identify the weakest links in a market system by assessing eight structural and behavioral characteristics of market system resilience to identify weak areas. The data gathered within the MSR Framework then helps inform market system interventions that facilitate the direction of market system change away from being reactive and toward being more proactive to shocks and stresses.
RTI International tapped its internal Research and Development funds to put the MSR Framework to the test in Somalia, assessing both the livestock and grain market systems in the Bay and Bakool regions. The results were shared with the USAID Somalia Growth, Enterprise, Employment, and Livelihoods (GEEL) program to inform their assessment of current activities and adapt future programming to strengthen the weak links in these market systems.
The MSR Framework assessment identified that the livestock market system in the Bay and Bakool regions was overall “Somewhat Resilient” (Level 2 out of 4) because there was a variety of products and services flowing through the market, but competition and business planning was limited, while access to services and products was not inclusive.
Overall, the MSR Framework provided an incredibly helpful diagnostic of where the market system was weak and why – pointing to focal areas for future programming. Some of our lessons learned using the MSR Framework include:
Market application: The MSR Framework can be used for any market system—food market systems as well as non-food market systems like water and energy. But for the findings to be useful, it is important to clearly define the specific system that will be analyzed and identify the market actors that influence or interact with the system.
Access to data: Depending on the market system and location, official data may or may not be available. In the case of Somalia, business data are extremely limited, it was critical to leverage existing household and market system data from other implementing partners. Given that each MSR assessment is very specific, it’s helpful to coordinate with other organizations to share data.
Keeping it simple: The MSR Framework demands that indicators are contextualized, which is a time-consuming process. USAID’s initial indicators, along with those that RTI developed in Somalia, provided a library that makes it much easier to pull from for new assessments. Each time we use the MSR framework, we simplify and refine the process, making it easier for our MEL teams to implement an everyday MSR.
Based on RTI’s MSR Framework findings, the GEEL team is developing recommendations about current market system interventions that warrant scaling and new areas of programming that are needed to build market system resilience. The RTI team is also conducting an MSR assessment with USAID’s Feed the Future Kenya Crops and Dairy Market System Activity.
Reflecting on the presentations made at the Market Systems Symposium, it was clear that there is a significant interest in the MSR Framework. USAID recognized that “market systems resilience is a relatively unexplored area in development” and that their framework is exploratory for further testing, ground-truthing, and refining. This made the Market Systems Symposium a perfect platform to discuss and share the experiences, and we look forward to sharing more about our experiences at next year’s symposium.
Learn more about RTI’s food security, nutrition, and resilience work here.