PRIORITIES: ECONOMY SECTOR

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TABLE OF CONTENTS

ACRONYMS ...... IV

ACKNOWLEDGEMENT ...... ERROR! BOOKMARK NOT DEFINED.

SOMALILAND VISION 2030 AND NDP II GOALS ...... 1

INTRODUCTION ...... 2

ABOUT THE NDP II ...... 2 WHY: PRIORITISATION OF THE NDP II ...... 2 HOW WAS THE NDP II PRIORITISED? ...... 3

SECTOR BACKGROUND ...... 4

SECTOR VISION ...... 4 SECTOR OVERVIEW ...... 4 WHY IS THE SECTOR IMPORTANT? ...... 4 WHAT IS THE POTENTIAL OF THE SECTOR? ...... 9 MAJOR DEVELOPMENTS IN THE SECTOR IN RECENT YEARS ...... 13 PRIORITIZED OUTCOMES FROM SECTOR CONSULTATIONS ...... 14

PROGRAMMING FOR RESULTS ...... 15

PRIORITY OUTPUTS IDENTIFIED BY SECTORS ...... 15 REGIONAL CONSIDERATIONS ...... 16 IMPACTS ON CROSS-CUTTING ISSUES ...... 17 IMPACTS ON UNDER PINNING PRINCIPLES ...... 17 IMPACTS AND DEPENDENCIES ON OTHER SECTORS IN THE NDP II ...... 18

PROGRAM SKETCHES ...... 20

WHAT ARE PROGRAM SKETCHES? ...... 20 SUGGESTED PRIORITY PROGRAMS FOR THE SECTOR ...... 20

CURRENT PROJECTS ...... 27

NEXT STEPS ...... 30

SECTOR DIALOGUE WITH DEVELOPMENT PARTNERS ...... 30 RESOURCE MOBILISATION ...... 30 PROJECT DESIGN ...... 30

ANNEXES ...... 31

TABLE

Table 1. Prioritised outcomes from sector consultation ...... 14

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FIGURES

Figure 1. The Structure of the NDP II ...... 2 Figure 2. Indicative costing of the nine sectors and three cross-cutting issues ...... 3 Figure 3. The NDP II prioritisation process ...... 3

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ACRONYMS

ADO Agricultural Development Organization

CCT Cross-Cutting Themes

CEDAW Convention on the Elimination of All forms of Discrimination Against Women

CMW Convention on Migrant Workers

CRC Convention on the Rights of the Child

CRPD Convention on the Rights of People with Disabilities

DAI Development Alternative Inc

DFID Department of International Development

ESRES Energy Security and Resource Efficiency in Somaliland

FIU Financial intelligence Unit

GDP Gross Domestic Product

IC Investment Climate

ICCPR International Convention on Civil and Political Rights

ICERD International Convention on the Elimination of All Forms of Racial Discrimination

ICESR International Convention on Economic and Social Rights

IFC International Financial Cooperation

IFU Investeringsfonden for Udviklingslande (Danish Development Fund for Developing Countries)

MoF Ministry of Finance

MoPND Ministry of Planning and National Development

NDP National Development Plan

PPP Public Private Partnership

SPF Sector Priority Framework

STT Sector Technical Team

TVET Technical and Vocational Education and Training

UDHR Universal Declaration of Human Rights

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ACKNOWLEDGEMENTS

Within a relatively short period, the prioritisation team at the Ministry of Planning and National Development (MoPND) have led and completed the prioritisation process of Somaliland’s entire National Development Plan II (2017 – 2021). The NDP II prioritisation process, which started in July 2018 and concluded in December 2018 included extensive dialogue and consultation with technical representatives from 54 central government institutions and local governments. The “priority of priorities” of the Government of Somaliland have been identified based on Somaliland’s needs, as well as the priorities set out by His Excellency, President Muse Bihi Abdi, following his elections in November 2017.

I am grateful for the leadership and guidance of the Ministry’s Director General, Abdirashed Ibrahim Abdirahman who worked tirelessly with the prioritisation team and his counterparts across the Somaliland Government institutions to ensure that the prioritisation process was on track. Special thanks to Mubareg Abdulahi Ibrahim, the Ministry’s Director of Planning who, as the technical team leader of the prioritization process played a very crucial role. Abdilahi Ahmed and Mahdi Omar Sheik worked individually with each government institution, as well as with each sector and inter-sector committees, to ensure that the priorities of the Government were captured within and across institutions. Thanks to also Hinda Yousuf, Abdikarim Mohamoud and Ministry’s departmental directors and regional coordinators who contributed to the process. The sectoral approach taken as part of the methodology, encouraged the government institutions to think beyond their own organizations and take a more “systems- approach” to operationalising the NDP II. Importantly, regional prioritisation workshops were held across the six regions of Somaliland to inform the process with the active involvement of regional representatives of central government institutions and local governments.

On behalf of the Government, I would like to thank various development partners – in particular, DFID, DANIDA, the Governments of the Netherlands and Norway, the current development partners for the Somaliland Development Fund for making the prioritisation process possible. My Senior Adviser, Antony van de Loo supported by the Government of Denmark played an important role in the preparation and implementation of the process. The three experts, Alex Parks, Rima das Pradhan-Blach and Ahmed Mohamed Diriye provided invaluable advice, bringing international as well as Somaliland-specific expertise to develop simple tools for prioritisation of the NDP II and guided the process, while ensuring Government leadership and ownership of the process.

The Vice Minister of MoPND, H.E. Hussein Ibrahim Buni played an important role in communicating to the public about the prioritisation process. The Communications team from the Ministry ensured that efforts were documented, as well as ensuring that regular updates were provided to the public.

Most importantly, the National Planning Commission, appointed by H.E. President Muse Bihi Abdi have endorsed the priorities identified by the technical teams. The National Planning Commission, chaired by myself, is composed of eleven ministers who set the strategic development priorities of the Government of Somaliland. Their guidance in this process has been invaluable in moving Somaliland’s collective development goals forward. In addition, I extend appreciation to sector technical teams mostly led by Directors of Planning who were very instrumental to this process.

Finally, I would like to thank the many individuals who have not been named but have contributed to this important process.

Awale. I. Shirwaac

Minister of Planning and National Development

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SOMALILAND VISION 2030 AND NDP II GOALS

Somaliland National Vision 2030

A Stable, Democratic and Prosperous Country Where People Enjoy a High Quality of Life

Somaliland National Development Plan II Goals

Reduce poverty through increased economic opportunities and coordinated investment in youth, services, production and infrastructure

Increase resilience against the effects of climate change through improved management of the environment, strategic water management, food security and diversification of the economy

Maintain the human rights of every citizen through good governance, equal access to social services and economic inclusion

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INTRODUCTION

ABOUT THE NDP II The National Development Plan 2017-2021 (NDPII) has been developed following an extensive consultative process with a range of stakeholders concerned with Somaliland’s development came together to decide and agree on goals and targets for the next five years. Stakeholders including government institutions, private sector, civil society, NGOs, academia and the international community worked on analysing challenges and opportunities of each sector as well as devising the way forward. The NDPII was built on the progress made and lessons learnt so far in Somaliland’s development and is the next step in achieving the long-term development aspirations of The Somaliland National Vision 2030: A Stable, Democratic and Prosperous Country Where People Enjoy a High Quality of Life.

The NDPII formulation process was driven by its nine sectors, which are grouped under the five pillars of the National Vision 2030. In addition, three cross-cutting themes (CCT) were formulated - labour & employment, social protection and youth. The NDP II is also informed by two underpinning principles - human rights and resilience. The structure of the NDP II is summarised in Figure 1.

Figure 1. The Structure of the NDP II

Vision 2030 A Stable, Democratic and Prosperous Country Where People Enjoy a High Quality of Life Cross- cutting Social Infrastructure Environment Economic Pillar Governance Pillar Development Pillar Pillar Pillar Employment

Infrastructure and Labour (Transportation, Rule of law and Economy Education Environment Communication security and Technology, Land and Urban Management) Social Democratrisation Energy and and Health Extractives Protection decentralisation

Production (Agriculture, Public Resources Water & Livestock and Governance Sanitation Youth Fisheries)

Foreign Relations and International Cooperation

Underpinning Principles: Human Rights and Resilience

WHY: PRIORITISATION OF THE NDP II While Somaliland has made impressive gains in terms of revenue generation, the needs for furthering Somaliland’s continued development trajectory requires resources beyond its own revenues. Indicative costings of the investments needed for implementing the NDP II is estimated at USD 2.1 billion. Sectoral estimates are set out below in Figure 2.

Ministry of Planning and Development (MoPND) led the prioritisation of the entire NDP II to identify the most important interventions for the Government in order to operationalize the NDP II, and to match available resources and mobilise new resources. These priorities of priorities are captured in “Sector Priority Frameworks” or SPFs have thus been developed by the Government. The SPF’s are light touch and most importantly, are the Government’s

2 priorities. The SPFs are living documents, and will change as priorities are financed, or as new opportunities arise in relation to strategic direct foreign investments or Somaliland private sector investments.

The greatest investment needs as identified in the NDP II are in the infrastructure, health and education sectors as well as in youth – a cross cutting issue. Social protection and employment and labour are other important cross- cutting issues. Underpinning issues are human rights as well as resilience, and all the sectors have taken these important issues into account during the prioritisation process. The NDP II also estimates external aid flows to be at approximately USD 150 million per year, just over 30 percent of the estimated costs of the NDP II. While the private sector invests heavily in the many sectors, it is difficult to get accurate information.

Figure 2. Indicative costing of the nine sectors and three cross-cutting issues

HOW WAS THE NDP II PRIORITISED? Following the fifth successful elections in Somaliland in November 2017, the fifth President of Somaliland, His Excellency Muse Bihi Abdi, initially set out the strategic priorities of his administration, including economic growth, integrated water resource management, resilience, youth employment and security. The priorities set out by the President provided important criteria for the prioritisation process.

The Minister of Planning and National Development, H.E. Awale I. Shirwaac briefed the Cabinet on the NDP II prioritisation process that started in July 2018. The prioritisation team from the MoPND, together with external advisers developed tools for the prioritisation process for each Ministry and Agency to determine their priorities. The

MoPND team also undertook regional consultations to Figure 3. The NDP II prioritisation process inform the sectoral ministries at the centre NPC C ro Strategic s of regional priorities. s - U Decisions c n Snapshot of Prioritization u d t e ti Process n rp g i T n Sector Technical Teams (STTs) from each of h n e in Projects m g e T s h the sectors came together numerous : E e m m e p s l : times, supported by the prioritisation team o R s y e ie Key Activities m s it e il r n ie from the MoPND to identify their sectoral io t n r & p c l L e a a H and inter-sectoral priorities which have n b u io o m g r, a e Output Identification S n R o c R been articulated in the sector priority ia ig l h P ts ro booklets. These sectoral priorities are thus te c Sector Prioritization Framework t io n , the most important priorities of the GoSL, Y o u th endorsed by the National Planning Outcome Prioritization Commission. They provide guidance for programming purposes – and are not meant 7 to be a comprehensive program or project design. Next steps in relation to the SPFs are set out in each sectoral priority booklet, which primarily involves identification of priorities that the Government can do itself, and strategic dialogues with international partners to convert the priorities into projects and identify potential resources. 3

SECTOR BACKGROUND

SECTOR VISION A nation whose citizens enjoy sustained economic growth and reduced poverty levels

SECTOR OVERVIEW Why is the sector important?

The Economic Sector is critical for unlocking the potential economic growth in Somaliland as well as for job creation and poverty reduction. Somaliland has made tremendous progress in economic recovery and investment since the mid-1990s, however there are some challenges. Some of the major obstacles to investment are linked to access to finance, access to land, poor transport infrastructure, and finally, the high cost of energy. The cost of energy in Somaliland is one of the highest in the world – efforts are underway to regulate the energy sector and bring the cost of energy down. This is high priority for the government of Somaliland

While the private sector contributes to 90% of Somaliland’s Gross Development Product (GDP), key macroeconomic indicators are lagging behind the region, and the Government is keen to attempt to tackle the main obstacles hampering economic growth. According to 2014 World Bank Study on Economic Growth in Somaliland:

• Investment in Somaliland is low and stands at approximately 11 percent of GDP. • Trade with the outside world is very high (91.5%) • Unemployment & underemployment is very high • Budget shortfalls are financed by either through aid or remittance

As a starting point, the NDP II has placed priority on four focus areas for poverty reduction and economic growth: i) primary production; ii) higher productivity areas; iii) economic development; and iv) human development. These are set out below.

Primary production Almost fifty percent of the population are engaged in either crop production and/or rearing livestock, however, income generation through these activities are limited. According to the National Development Plan II (2017 – 2021), 60 percent of rural households, 15 percent of urban households and all nomadic agro-pastoralists rear livestock - the backbone of Somaliland’s economy, however, only 20 percent of rural households reported that they gain income from livestock. Raising agricultural and livestock productivity is a key priority. Expansion of the fisheries sector - the blue economy is an area that requires greater focus. Value addition in these key sectors will add to job creation as well as poverty reduction.

Higher productivity areas While the production sector is important, NDP II prioritises economic diversification away from the high dependence on the agricultural sector to manufacturing and services. As stated above, economic diversification however is however limited by an outdated regulatory environment, lack of access to finance, prohibitive cost of energy, a lack of appropriate skills, weak property rights and poor infrastructure. The priorities identified below aim to address these short-comings.

The Ministry of Energy and Minerals have prioritised reducing the cost of energy, one of the main constraints for the private sector. The Government has prioritised addressing some of the key enablers identified in previous diagnostics to facilitate economic diversification. These include efforts to strengthen the banking sector, tocreate an enabling environment for the private sector development, and investing key sectors such as fisheries, tourism development, free trade zones along with economic corridors, industrial development and service industry like telecommunication.

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The Infrastructure Sector has identified investing in key transport infrastructure that will support economic development, particularly in relation to economic corridors, airports and strategic ports.

The Production Sector has prioritised investing in value addition to livestock and agricultural products, large scale farms and development of the fisheries sectors.

Economic resilience The promotion of innovation and investments in appropriate technologies can promote economic resilience. For example, by using appropriate irrigation technologies, using innovation and technology for water management and harvesting, investing in Information and Communication Technology for early warning systems against natural shocks.

Human development Across all sectors, including in the economy sector, investment in human development, particularly in relation to the education sector, has been identified as a priority. A number of sectors, including energy and extractives, production, infrastructure, and the economy sector, have stressed the importance of investing in higher education, and technical and vocational education and training to produce skilled manpower.

A number of diagnostics have been performed in the past years particularly focused on economic growth and development, which provides the basis for some of the reform initiatives currently underway, and also the priorities identified by the ministries and agencies. The World Bank study also recommended that Somaliland take the following approach in terms of identifying drivers for economic growth:

• Identifying strategic choices for growth • Identifying key policies and institutions for growth • Choosing key sectors

The priorities identified by the ministries and agencies have attempted to do just this and are set out below.

Macro-economic Planning and Management

National Fiscal and The economy has been affected by high inflation rates, and this is partly due to the Monetary Policy dollarization of the economy. The Central Bank, and the Ministry of Finance have prioritized the development of national fiscal and monetary policies. This includes drafting exchange rates policy and setting the exchange rate regime for Somaliland. Continually monitoring the trade flows and inflation are also seen as important. All this requires institutional strengthening and capacity development. A project supported by the World Bank Multi Partner Fund will be providing support to this end.

Public Finance Reform to Enhance Economic Development

Revenue Generation Somaliland’s revenue system has seen limited fundamental change over the past three decades – but efforts are currently under way to increase revenue generation. The revenue system can be characterised by two main features: customs duties collected at border posts – largely the seaport at Berbera – which account for the majority of government revenue collections, and individual government agencies and local governments supplementing their funds through a wide range of small, incidental fees, charges and fines collected directly from urban populations. The core inland revenues that are characteristic of most modern revenue systems make up a small share of overall collections.

The government has managed to raise revenues in the range of USD 150-200 million annually. Government revenue continues to equate around 9% of gross domestic product. While these are not insignificant collections for what is largely an informal revenue system, it remains very low compared to other countries (where this figure is around 15%).Government taxation and regulatory roles are enforced on small to medium enterprises, rather than to large businesses.

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The Central Bank and the Ministry of Finance have identified a number of priorities, which include establishment of the Somaliland Revenue Authority, and creation of a Large Taxpayers Office and Tax Policy Unit. A National Revenue Policy is also to be drafted which will also standardise the way municipalities share revenues with the Ministry of Finance.

A project currently supported by DFID PROsperity from Revenue (Mashruuca Dakhliga Sareedo) or (PROFR) aims to increase the level of revenues collected by the Government of Somaliland (GoSL) – both from taxes and customs – in a manner that the Government can reasonably expect to maintain over the long term. To help raise the bar on revenue collections, PROFR will work to lay the foundations for a more progressive national government revenue system in Somaliland- i.e. those better able to pay taxes (i.e. large turnover businesses) contribute more to government revenues than those less able to pay, and that the policy and practice for administering taxes and customs takes into account the various taxpayers’ circumstances.

A more progressive revenue system will have three inter-related features:

• A tax base with more focus on direct and indirect taxes, in line with new legislation • A more equitably shared tax burden • Improved taxpayer perceptions

Development of the financial sector for private sector development

Strengthening domestic Access to finance and financial products have been repeatedly identified as a critical financial institutions to constraint for private sector development. The NDP II states that only 1.4 percent of improve access to finance firms applied for loans in 2012, despite 6.5 percent firms reporting that needed one. While there are a few financial products available to firms from remittance companies access to finance is limited because of the tough requirements.

The Central Bank has prioritised redrafting of the Islamic Banking Act to meet international standards, the Somaliland Banking Act, Central Bank Act and other banking sector reforms are underway. The Central Bank has also proposed priorities to manage risks in the banking and financial sector in order to encourage and expand access to finances, such as the establishment of credit bureaus, and establish a system for SWIFT codes.

Reduce financial illicit As remittances are key for private sector development amongst other things, and in flows order to promote foreign investment, the Central Bank has prioritised efforts to reduce illicit financial flows. Priorities identified include: approval of the Anti-money laundering/Terrorist Financing Act, enacting regulations of financial markets, including measures to counter Illicit Financial Flows, strengthening the Financial Intelligence Unit (FIU), developing systems and procedures for monitoring investigation and reporting of financial flows, as well as strengthening coordination between the FIU, and other government stakeholders including the intelligence service, prosecution office and the police.

Increased access to Firms in Somaliland are smaller than firms in other similar economies, with the finance for Small to average firm having only seven workers. Most firms are family operated with Medium Enterprises numerous barriers to growth, including access to finance. The Somaliland Chamber of (SMEs) Commerce has prioritised establishing a Banking Institute, improving investment guidelines, increasing the range of financial products as well as building the capacity of bank staff. Access to financial market information has also been identified as a priority.

Promotion of private sector investment

Diaspora finances Somaliland’s economy is highly dependent on external financial resources, with remittances from the diaspora estimated to be at about USD 500 to 600 million per 6 leveraged year. Remittances are used to underwrite local investments. The Somaliland Diaspora Agency, and the Ministry of Investment Promotion have identified this as a matter of priority.

Priorities include establishing a policy for the diaspora sector and a regulatory framework, engage the diaspora in strategic investment forums, and providing incentives for diaspora expertise and youth to return. Establishment of a diaspora fund has also been identified as a priority.

Export promotion The economy is very open, and the ratio of imports and exports to GDP was estimated at 91.5 percent, according to the 2014 Enterprise Survey conducted by the World Bank. Export promotion is also the primary means to earn hard currency. According to this same survey, exports amounted to USD 387 million in 2014 compared to USD 883 million of imports. The trade deficit in 2014 amounted to 37.5% of the GDP. The Ministries of Finance and Trade, Industry and Tourism have prioritised a number of activities to promote local production to reduce import dependency.

Priorities include development of an export promotion policy including taxation reforms and incentives for local manufacturers, improve trade analyses, support value addition to products currently being exported, and encourage aftermarket services. The Government has also prioritised development of a strategy for export markets, identified key sectors for export promotion, and economic diversification. Building the capacity of the Quality Control Commission is also identified as a priority, as well as financial sector reforms to enable financial investments and simplify financial transactions.

Reduction of imports The Ministries of Finance and Trade, Industry and Tourism have prioritised a number of activities to promote local production to reduce import dependency. Priorities include development of an import substitution policy, promotion of local production through a number of interventions including increasing the tax rate for imported goods, strengthening local human capacity for local manufacturers, and protection policies including supporting business incubators for local industries. The Ministry of Finance also prioritises customs reform.

Entrepreneurship Somalilanders are entrepreneurs by nature, however, with the exception of a promoted handful of large firms in the telecommunications, energy and remittance sectors, Somaliland’s level of investment remains low, compared to other Sub-Saharan economies. Most firms in Somaliland are small and mainly family-owned. Female ownership of firms is low and varies across the regions of Somaliland. Other than the key constraints already identified, the entrepreneurship skills, capacity to plan, operate and manage businesses are weak or limited. According to the NDP II, there is low demand for management and accounting services/skills by local firms.

Priorities identified by the Ministries of Investment Promotion, Trade, Industry and Tourism include: development of policies that promote entrepreneurship including development of policies on cooperatives, small to medium enterprises, microfinance, as well as business incubators, one-stop- shops, and business-to-business arrangements (B2B).

Public private While a PPP policy and regulatory framework is yet to be finalised, partnerships (PPP) PPParrangements are considered to be a viable alternative for development financing. There are already working models in the Energy and Water sectors in particular, which have been able to improve the quality of services. The Ministries of Trade, Industry and Tourism and Investment Promotion have identified to the need to develop a PPP policy and a strategy for PPPs in key sectors, in order to strengthen and formalise PPP arrangements.

In order to take this forward, the Government has prioritised the need for more Public-Private Dialogues (PPD) in key sectors to ensure more inclusive and sustainable policy solutions through a structured, evidence based and participatory reform

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process. The IFC has played a key role in this so far, certain sectors in particular, such as the Energy Sector. The Government has identified the need to continue and formalise this process in key sectors.

Economic formalisation and diversification

Tourism sector The tourism industry in Somaliland is nascent and is dependent on the diaspora, development despite there being an international guidebook on Somaliland.1The Government has prioritised the development of the tourism sector, particularly with the discovery of new archaeological sites besides Las Geel in Sahil region. The Government aims to attract investments in key sites such as Gacan-Libaax mountain, Daalo, Surad, the Golis Rangeland Mountains, Dhagax Guure, Aw Barkhadle, Dubaar, Old Camuud, Hiis amongst others.

The Ministry of Trade, Industry and Tourism have prioritised the development sustainable and responsible tourism including the following: archaeological and tourism policies, tourism protection plans, conservation plans, marketing strategy for tourism sites, and a tourism data management system. The Ministry of Investment Promotion has prioritised the establishment of investment strategies for the tourism sites identified above and more.

Formalise the informal Almost 20 percent of Somaliland’s GDP is dominated by the wholesale and retail economy sector, including the informal sector. By bringing the informal sector into the formal sector, the Government aims to strengthen private sector development, improve access to finance amongst other things. A recent study on the informal sector in Hargeisa found that informal economy operators face five major challenges including the lack of literacy and business skills, difficulties in infrastructure and operation, decreasing volume of business due to oversupply, lack of inclusion in government policy and lack of access to financial information, access to finance amongst others.

The Ministry of Trade, Industry and Tourism has prioritised finalisation of the Companies law, development of the SMEs policy, an assessment of the informal sector, a one-stop-shop for business registration, provide entrepreneurship and business incubator support.The Ministry has also prioritised supervision of private health and education centres, hotels, fuel stations, and travel agencies – this will require some inter-ministerial coordination. The Ministry also prioritised providing developing a scheme to provide the necessary market infrastructure.

Manufacturing sector The Government has been actively trying to promote manufacturing and trade as development key drivers of industry. The Ministries of Trade, Industry and Tourism as well as the Ministry of Investment Promotion have prioritised developing policies and a regulatory framework, Investment climate promoted, registration of national crafts women and men as well as industrial experts, and establishing industrial zones.

Investing in research and development

Investing in Research and Ministry of Planning and National Development, the Central Bank of Somaliland, Development for the Ministry of Trade, Industry and Tourism, as well as the Ministry of Investment economic growth have placed access to reliable market information about international and domestic markets as a priority. While the international community conducts market surveys, knowledge management is poor, and information is not readily accessible. The Central Bank of Somaliland has prioritised the refurbishment and capacity building of its economic research and statistics department.

The Ministries of Industry, Trade and Tourism and Investment Promotion have prioritised business incubators, innovation labs, appropriate technology development to facilitate higher productivity. The Ministry of Trade has also prioritised market surveys and higher quality sector studies for industry and trade promotion.

1https://www.bradtguides.com/destinations/africa/somaliland.html 8

What is the potential of the sector?2

Sustainable and The oil and gas potential of Somaliland is well known in the sector. The procedure responsible natural for investing in the oil and gas sector in Somaliland is straight forward and resource harvesting transparent. Somaliland public is equally welcoming and open-minded towards international investment. This sector has huge potential for foreign investment and could transform the future economic prospects of the country and its small population. The current scheme of Somaliland oil and gas blocks consist of 24 blocks of both onshore and offshore. Only a quarter of that is presently held by IOC’s that have exploration and production sharing agreement with the government those include: Genel Energy Plc, RakGas LLC and ANSAN WIKFS.

The Somaliland basement is part of the Mozambique orogenic belt which is the source of the gemstones in Kenya, Tanzania, Sri-Lanka, India and Madagascar. Somaliland has a favourable geological setting for mineral resources and potential for world-class discoveries. There is high potential for deposits of iron ore, manganese, platinum as well as gold-bearing veins. There are also a number of known deposits of minerals used in industry such as lead, zinc, tantalite-columbite, tin, and quartz crystals, accompanied by very large resources of marble, limestone and dolomites well as a substantial deposit of gypsum.

These mineral resources when exploited in an environmentally and socially responsible manner can diverse the economy of the country. Recently there have been foreign companies and local small-minors operating in gemstones, copper, jade, gold and metallic metals production.

More details are presented in the Energy and Extractives Sector Booklet

Energy Electricity from the renewables sector is even more greatly underserved – providing less than 2% of current production. Somaliland has huge potential in solar and wind sectors evidenced by their emergence in recent years as well other unexplored renewable energy resources such as geothermal, tidal and others. In a region where fuel security may vary considerably, leading to high price variability, renewables provide a reliable source of power generation. See Energy and Extractives booklet for more details.

Value addition to Livestock exports, chiefly to the Gulf Arab countries, account for about 60% of agriculture and livestock Somaliland’s national income, but great potential exists for Somaliland to capture further global market shares and invest livestock processing factories for value addition. Somaliland, and to a certain extent the other exporters from the Horn of Africa, depends on only a few countries for exports. For example, out of the 2.585 million head of sheep and goat exported through the Port of Berbera in 2010, about 78% went to Saudi Arabia, 20% to Yemen and the rest to Egypt and Oman.With increased investment, smart regulation, infrastructure development, sector coordination and improved branding, the Somaliland has ample opportunities to capitalize on the growth of the livestock sector in the Middle East and other regions of the Muslim world, while supporting the growing local demand.3

Agriculture is another sector with significant production and investment potential. With the introduction and trials of improved technologies, drought-resistant crops and better practices and research, the industry has the potential to be extremely successful. Opportunities include improving irrigation practices to enhance productivity, better land and water resources management, and piloting the potential for additional arable land that can easily be rehabilitated through soil and water conservation practices for better agricultural performance.

2This section has been primarily been extracted from the Somaliland Investment Opportunity Guide, Ministry of Trade and Investment. 3This section has been primarily been extracted from the Somaliland Investment Opportunity Guide, Ministry of Trade and Investment. 9

There are untapped domestic and export market opportunities, especially for horticultural and cereal crops. There are substantial opportunities for Somaliland Diaspora and local citizens who have investment capacity and foreign investors for the food and agro-processing industry. Fisheries Somaliland is endowed with a rich coastline along the Gulf of Aden and Indian Ocean. These waters are home to an extensive list of fish species, including various species of tuna, albacore, lobster, swordfish, shark, and many others. Even though no comprehensive data is available, estimates from fragmented assessments point to the existence of large untapped resources in a pristine environment (IUCN 1997/99 and Cesvi 2011).

The average annual value of the potential fish catch is estimated at US$32 million, assuming a freight on Board (FOB) price of US$2 per kilogram based on current practices and sales in Gulf markets as reported in a variety of United Nations and World Bank reports (JNA, Productive Sectors Report, September 2007). As per recent estimates, the yearly sustainable catch available to Somaliland fishermen could be around 40,000 metric tons (Shuraako.org).

The estimated catch by local Somaliland fishermen is around 1500 – 2000 metric tons annually. There is officially no production from the offshore fishing sector since the Ministry of Fisheries has stopped licensing foreign fishing vessels since 2012. As a result, there are no foreign vessels legally fishing in Somaliland waters at the present time.

The Las Qorey Tuna Canning factory in the east used to be the only fish processing plant in the country which stopped functioning recently. It used to constitute the largest available market for artisanal fishermen in that area. Since the plant started its operations in 2001, more than half of the boats and fishermen in Somaliland worked for it. During the nine months that small boats can safely go out to sea, the plant used operate at full capacity and processes up to 16 tons of fresh tuna per day, averaging an estimated 4320 tons per year. There are efforts to revive it soon.

Frankincense and gums4 There is a huge potential of developing the frankincense and gums industry in Somaliland particularly the Sanaag and Sahil Region. The commercial trade of gums and resins is formed by interlinked individuals and companies who made efforts to invest, collect, sort and market the frankincense and myrrha, the gums and resins from B. frereana, B. carteri and C. myrrha are the three main products from Somaliland and are currently exported to Ethiopia, Djibouti, Yemen, UAE, France, UK, South Africa, USA and South America. What is known as frankincense is actually a resin tapped from the boswellia tree, which oozes out sap/juice after being cut. Boswellia Sacra (Moxor) and Boswellia Frereana (yagcar) and Myrrh (dhidin) are found in Somaliland.Traditional (confectionary) and essential (aromatic) gums in Somaliland have an ancient history, with frankincense (Boswellia Frereanaand Boswellia Carteri) and myrrh (Commiphora myrrha) commercially exploited for chewing, cosmetic, religious (incense), and medicinal purposes for more than 2,000 years. Frereana (resin) is the higher valued of the two frankincense varieties and primarily used for confectionary applications (chewing). The Boswellia Frereanatree is unique in the world to Somaliland and Puntland. Carteri (gum resin) is more aromatic and more versatile than Frereana. It has medicinal applications and is also used in cosmeceuticals, nutraceuticals and perfumery (aromatherapy, perfumes and incense).1 It is used both in its natural form and is also distilled, depending on application. Several other gum species exist in Somaliland but are only marginally commercially exploited. These include gum opoponax (Commiphora erythraea glabrescens) (gum

4This section has been primarily been extracted from the Somaliland Investment Opportunity Guide, Ministry of Trade and Investment. 10

resin), which grows well in Ethiopia, but is limited in Somaliland (and of lesser quality), and gum arabic (Acacia senegal), whose export potential is virtually untapped.

Investment in the services Telecommunications services will be enhanced by the new fibre optic cables which sector are being laid to connect Somaliland’s major cities and towns and establish links to the outside world. This new infrastructure will revolutionize the way in which business is done in Somaliland and provide new opportunities, including support to the financial services sector. Although financial services are not robust, prospects for improvement are increasing.

Other business development services (BDS) are also increasing, and this promises to save investors from the trouble and expenses associated with bringing in expat labour to provide such services. The youth are an asset in Somaliland, and the Government is keen to ensure that investors’ required skills are available by training up this important asset to international standards in order to ensure that their business needs are met.

Other potential sectors for investment include tourism, infrastructure and social sectors. With the support of the Investment Guide, the people of Somaliland are welcoming investors to come and see for themselves the unexplored and untapped opportunities that the country has to offer in all the sectors of its economy.

Cement According to findings of several feasibility studies, raw material availability is in abundance for the plant to work for next 30 years. Around 80 – 90% of the raw material for cement production is limestone, clayey raw material (clay, mudstone or shale) accounts for between 10 – 15%,and the remaining 5% is gypsum or anhydrite.

An important component for the functioning of the cement factory is energy – by investing in the cement factory, using green technology, including renewable energy, the cement industry could provide raw materials for Somaliland’s booming construction industry.

The cement plant managed by the Berbera Cement Agency was closed in 1991 due to the civil war. Since then Somaliland has imported all its cement needs. The cement factory in Berbera used to exploit limestone for the production of cement, in addition to having one of the world's largest deposits of gypsum-anhydrite near Berbera. The proximity of the sources of raw material, the Berbera Cement Factory location and the Berbera port as a point of export is an added value.

Salt5 Sodium chloride, also known as salt, common salt, or table salt, is an important product in all countries around the world, including Somaliland.There are many uses for sodium chloride:

• It is added to food, either by the food producer or by the consumer, as a flavour enhancer, preservative, binder, fermentation-control additive, texture-control agent and colour developer. • In tanning and leather treatment, salt is added to animal hides to inhibit microbial activity on the underside of the hides and to attract moisture back into the hides. • It is also used in food processing including packing, canning, baking, and dairy and grain mill products. • Salt is used in industrial applications and processing including oil and gas exploration • Salt is used in textile dyeing and in processing heavy metals like aluminium, beryllium, copper, steel and vanadium. • It is used in rubber manufacturing and in paper and pulp industry, and to increase the curing of concrete in cemented casings and to provide firmness

5This section has been primarily been extracted from the Somaliland Investment Opportunity Guide, Ministry of Trade and Investment. 11

to highway bridge foundations. • Salt is also used in pharmacological products and veterinary medicines etc.

Infrastructure Infrastructure development is a policy priority for Somaliland’s path to sustainable recovery and reconstruction. The Government fully understands this and has endeavoured to create an enabling environment for investment and productive work based on strong and reliable infrastructure, which is a prerequisite for economic growth and development. The experience of Somaliland for the past decade has shown that economic growth and sustainable development will require essential infrastructure to be established across the country. The priority sub-sectors for infrastructure include: roads, housing, education, and health, telecommunications, ICT and ports. Transport Road transport continues to be the principal mode of internal transport due to a lack of railway infrastructure and limited coastal shipping. Air transport has continued to play an important role in the small-scale industrial development in Somaliland. At present, the transport infrastructure of Somaliland comprises of about 780km of roads, one major seaport, two major airfields, and four airports, which have paved runways. There are no railways, pipelines or inland waterways. Since the late 1980s, there has been no major investment in the development of transport infrastructure and there is limited maintenance of the existing transport infrastructure. Extending the network of secondary ports and jetties will facilitate the development of local fisheries, improve sea-based transport links and will provide alternative livelihood options to coastline communities.The Somaliland Government has entered into a 30 year concession agreement with Dubai Ports World (DPW), to invest $442 million in the upgrade and modernisation of the Port. DP World has 50 percent equity stake in the Berbera Port investment, the Government of Ethiopia took a 19 percent equity stake, with the remaining 31 percent with the Somaliland Government. This is an important milestone investment which we hope will lead to a multiplier effect in terms of economic and social development.

Port Class/Category Number Port Name/Location Jetty 1 Las Qorey Other minor ports 2 Mait, Hiis

Somaliland has two major international airports in Berbera and Hargeisa.This sector is expected to provide important support to the future growth of the economy in Somaliland.The airport in Berbera, can accommodate major cargo and passenger planes and has Africa’s longest runway. Almost all of the other major urban centres in Somaliland also now maintain at least one unpaved or paved airstrip capable of handling small aircrafts (such as Borama and Burao). With financial assistance from the Gulf States the rehabilitation and reconstruction of runways is on-going, including a major expansion of Hargeisa International Airport.

International 2 Berbera, Hargeisa Major domestic 1 Burao Feeder 2 Borama, Kalabayd/Tog- Wajaale Airstrips 1 Erigavo, Las Anod

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Major developments in the sector in recent years

Energy Sector The Electrical Energy Act was passed in early 2018 and is now effective. The Act has been re-introduced into Parliament to include important provisions on tariffs, electricity market structure and the Electricity supply industry structure.

The Power Master Plan activity for Somaliland is in the final stages to identify immediate, medium and longer-term interventions needed to move the energy sector forward. This was supported by the World Bank.

ICT sector The major developments made in the communication sector include but not limited to the reactivation of the governmental postal system. Ministry of Communications and Technology has taken over the role of circulating post among government institutions and also among government to partners. Other major developments include the efforts to regulate registered telecommunication companies.

Development of the ICT Sector also presents the potential for many innovations to foster economic development as well as address some of Somaliland’s key economic, social and environmental challenges. For example, the Disaster Preparedness and Food Reserves Authority (NADFOR) has prioritised an Early Warning System for natural disasters – which will have significant impacts for the economy sector.

Money transfer operators, including mobile money transfer has had a transformational change on financial inclusion, economic and social development. For example, Zaad was established in 2009, as Somaliland’s first mobile money platform.6Zaad is considered a model of best practice for financial inclusion and economic and social transformation by Groupe Spéciale Mobile Association (GSMA)— a global association of mobile telephone operators.7

The Education sector has prioritised training on ICT both in academic and technical and vocational education and training institutions.

Berbera Port In 2016, DP World won a 30-year concession with an automatic 10-year extension for the management and development of a multi-purpose port project at Berbera, Republic of Somaliland. The Port of Berbera opens a new point of access to the Red Sea and will complement DP World’s existing port at Djibouti in the Horn of Africa.

Construction of the quay construction has started and is expected to take two years to complete. Total investment of up to $442 million will be phased over time and be dependent on port volumes and will create a regional trading hub along with the scope for a free zone. The project will focus on containers with the capability to handle other types of cargo and will be implemented with the government of Somaliland.8

Insurance Companies Insurance companies were in Somaliland which offer insurance of international standards to the market such as Auto, Property, Medical, and Marine Insurance. The flourishing insurance industry will positively contribute to Somaliland’s business environment and investment climate. Takaful Insurance of Africa and Horn of Africa Insurance are among the newly established insurance companies.

Norfund, Danish Norfund has, together with Shuraako, a program of One Earth Future, and the Danish Development Finance development finance institution, IFU, established a USD10 million fund for supporting (IFU) and Shuraako small and medium sized companies in Somaliland

The Nordic Horn of Africa Opportunities Fund is among the first commercial

6Iazzolino, Gianluca. Following Mobile Money in Somaliland. Rift Valley Institute. 2015. p 5. 7Iazzolino, Gianluca. Following Mobile Money in Somaliland. Rift Valley Institute. 2015. p 5. 8http://web.dpworld.com/our-business/marine-terminals/middle-east-europe-africa/berbera-somaliland/ 13

investment funds for Somaliland. The Nordic Horn of Africa Opportunities Fund is expected to have significant development impact by enabling Somaliland entrepreneurs to build sustainable businesses, contribute to their country’s economy and tax base, and create a significant number of jobs within their communities.

The primary investment instrument will be the Sharia compliant “Murabaha” and the average deal size will be USD250,000. The investments are made into companies in various sectors including but not limited to fisheries, agriculture, light manufacturing, hospitalities, energy, etc. 9

PRIORITIZED OUTCOMES FROM SECTOR CONSULTATIONS Given the limited resources, the Ministry of Trade Industry and Tourism, Ministry of Investment Promotion, Ministry of Finance, Ministry of Planning and National Development, the Central Bank and the Diaspora Agency have prioritised the following outcomes from the National Development Plan II. The prioritised outcomes are summarised in Table 1.

Table 1. Prioritised outcomes from sector consultation

ECO OUTCOME

Central Bank Central MinistryFinance of MinistryPlanning of MinistryTrade of MinistryInvestment of DiasporaAgency MACROECONOMIC PLANNING AND MANAGEMENT 1-1 By 2021, reduce the proportion of the population of Somaliland in extreme poverty by 20% ✓ (Economy) 17-3 By 2019, develop sound macroeconomic stability policies and regulatory framework ✓ ✓ ✓ ✓

BANKING SECTOR REFORM FOR PRIVATE SECTOR DEVELOPMENT 8-7 By 2021, strengthen the capacity of domestic financial institutions to encourage and ✓ expand access to banking, insurance and financial services for all the businesses. 8-9 By 2021, reduce financial illicit flows by 30% ✓ PUBLIC FINANCE REFORM FOR PRIVATE SECTOR DEVELOPMENT 8-6 By 2021, increase the share of tax revenue in GDP to 13% ✓ 17- 1 By 2021, increase the overall export share of the GDP to 10% ✓ ✓ ✓ 17-2 By 2021, reduce overall imports’ share of the GDP to 20% ✓ ✓ ✓ DEVELOPMENT OF FINANCIAL SERVICES TO THE PRIVATE SECTOR 9-2 By 2021, increase access to finance by Micro, Small and Medium Enterprises to 50% ✓ ✓ 8-4 By 2021, formalize existing Micro, Small, Medium Enterprises activities by 50% ✓ ✓ ECONOMIC DIVERSIFICATION 8-5 By 2021, increase the contribution of tourism activities into the GDP by 10% ✓ 9-1 By 2021, increase the contribution of the manufacturing industry into the national GDP to ✓ ✓ 7% and the employment level to 40% PROMOTION OF PRIVATE SECTOR DEVELOPMENT By 2021, increase diaspora role in both the domestic market investment to 10% and their ✓ ✓ ✓ 8-8 contribution to the public investment 8-3 By 2021, Somaliland will devise development and entrepreneurship-oriented policy ✓ ✓ framework 17-4 Strengthen and promote effective public-private partnerships (PPP) Programs ✓ ✓ PROMOTION OF RESEARCH AND DEVELOPMENT FOR PRIVATE SECTOR DEVELOPMENT 9-3 By 2021, increase the number of research and development (R&D) of the Somaliland ✓ ✓ ✓ population by 10% and research spending proportion of the GDP by 1.5%

9https://www.norfund.no/getfile.php/138250-1529506907/Dokumenter/Norfund%20press%20release%20Shuraako_Final.pdf 14

PROGRAMMING FOR RESULTS

NOTE: This section should be read together with Program Sketches as well as Annex 2 which has indicative interventions to inform program/project design.

PRIORITY OUTPUTS IDENTIFIED BY SECTORS Knowledge The Government has identified the need for better knowledge of markets, potential for trade, tourism and economic statistics. In order to develop various sectors for economic development, research and development is needed to develop the various priority sectors listed above on different fronts.

Policy and regulation There are a large number of policies, legislation and regulatory frameworks related economic growth and diversification that have been prioritised. These include policies and legislation in relation to trade, private sector development, entrepreneurship, banking regulations, private-public partnerships, tourism and archaeology, and industrial parks, and free trade zones and are listed below. These are all important in relation to economic diversification. The Government is committed to ensuring that these policies and legislation are developed in a cohesive and integrated manner.

• Somaliland Companies Law (Law No: 25/2004)

• Foreign Investment Law (Law No: 29/2004)

• Somaliland Central Bank Act (Act No: 54/2012)

• Somaliland Telecommunication Act (Act No: 50/2011)

• Islamic Banking Act (Act No: 55/2012)

• Trade Classification Act (Act No: 24/2006)

• Industrial Act

• Inland Revenue Act (Law No: 73/2016)

• National Audit Act (Law No: 74/2016)

• Customs Act (Law No: 72/2016)

• Weigh and Measurement Act

• Intellectual Property Act

• Commercial Bank Bill

• Anti-Money Laundering Draft Bill

• Domestic Investment Law

• Microfinance Policy

• PPP Policy

• Cooperatives Policy

• Trade Policy

• Investment Policy

• SMEs Policy

The Ministry of Employment, Social Affairs, and Family, as well as the Ministry of Youth charged with cross-cutting issues, have prioritised inclusive growth, which will require

15

clear strategies across the board.

Systems A range of systems are required to support the development of the economic sector. They include: establishing a tax office, establishing various new departments within existing agencies be it for macro-economic planning, to developing monetary policies, providing better access to information, and financial information. Importantly, the Central Bank has prioritised the establishment of a Financial Intelligence Unit (FIU) to counter money-laundering together with other stakeholders.

The Ministry of Employment, Social Affairs, and Family, as well as the Ministry of Youth charged with cross-cutting issues, have prioritised inclusive growth, which will require systems to ensure that the needs of vulnerable groups and youth are met.

Skills Skills development for macroeconomic planning, negotiations, including trade and investment. There is a shortage of skills for the government to conduct quality macroeconomic planning and research. For the economic sector to develop, capacity building on trade negotiations is required, so that the Government is on a level playing field, particularly in relation to investments and trade.

Significant skills are needed on entrepreneurship, as well as craftsmanship, and infrastructure-related skills amongst others. This provides an opportunity for TVET providers to design efforts that are targeted to market needs now and in the future. The Ministry of Employment, Social Affairs, and Family, as well as the Ministry of Youth and Sports have also prioritised this, with a particular focus on inclusive growth for vulnerable groups.

There is an urgent need for building capacity for the Central Bank, as well as the banking industry as a whole to meet international standards, and to take the financial sector forward.

Materials and There is an opportunity for the proposed sectors to invest first-hand in innovative Equipment green technologies to stimulate economic growth, and higher productivity. Investments will have to be made on specialised materials and equipment to enhance higher productivity. Operations and maintenance skills and budget will need to be factored in to ensure sustainability.

Infrastructure gap There are a significant number of infrastructure investments required for the economic sector, such as industrial zones, factories etc. This will increase the need for a skilled labour force in the construction sector – and hence an opportunity for creating a demand for infrastructure-related skills. This needs to be linked in with current and future TVET efforts underway. TVET programs should look at current and future skills needed.

Awareness Substantial amount of awareness raising has been identified by the sector, including about private sector development opportunities, as well as financial markets etc – which are good indicators of the appetite to increase transparency and accountability. Awareness raising of inclusive growth strategies should also ensure that actors in the informal economy including women and youth are reached.

Investment needs The Government can play a key role in creating the right enabling environment for stimulating the economic sector, and to attract direct foreign investment. The economic sector is one of the key sectors to enable social and economic growth in Somaliland. Investment needs for taking the productive sector forward are tremendous. Key enablers include banking sector reform, land reform as well as regulation of the energy sector to reduce the cost of energy.

REGIONAL CONSIDERATIONS Regional considerations: A major activity of the prioritization was consultation with regional stakeholders. Somaliland governance can be broadly categorized as de-concentrated with line ministry and agency representatives in the regions. As part of the NDP-II process MoPND conducted a regional planning exercise in 2016. Due to the impact of drought 16

and the elapsed time in was considered wise to conduct a rapid regional assessment of development priorities. The results of these regional consultations were fed into the sector meetings and cross-referenced against the SPF regional tables.

The outcomes of the regional priorities are set out in Annex 5.

IMPACTS ON CROSS-CUTTING ISSUES Cross-cutting issues are discussed in greater depth in the Cross-cutting issues booklet. See Annex 3 for all the outcomes for Cross-cutting Themes: Employment and Labour, Social Protection, and Youth.

Employment and Labour The economic sector has the potential to create much-needed employment which has been prioritised by a number of ministries and agencies. Priorities also point to marker- oriented academic and TVET programs.

As stated in the NDP II, this sector must consider “the rights of the citizens to equal chance of employment in the different sectors/ministers of the government as stated Article 20 of the Somaliland Constitution and Article 23 of the UDHR.”10

Social Protection As the economy grows, the promotion of decent work through active labour market policy and human rights are an important component that needs to be addressed upfront. Specific consideration for the prevention of child labour, and also the right to an adequate standard of living for all should also be ensured. Specifically set out in the NDP II are the following as examples:

“Equal involvement of boys and girls in exercising family life by fairly expressing their individual rights of Education, Health, voting, employment, life and the similar rights in regards of the culture and the Articles in the constitution of the country and UDHR.”

Preserving the rights of the minority, disadvantaged and people with disability by the local community as shown in Articles 8 and 19 of the Somaliland constitution and Article 7 of the UDHR.”11

Increased taxation/revenue has been prioritised by the sector. Social protection is essential for establishing trust between the citizen and the state, and therefore lays the foundation for the social contract. As such, social protection is often used as a policy tool to kick-start improved revenue generation through the collection of taxes. When citizens receive regular, reliable and predictable services from their government, a relationship is created that increases government legitimacy, and ability to collect taxes as citizens’ willingness to pay them.

Youth The Ministry of Youth and Sports have placed a priority on youth employment and recommended a number of priorities that the economic sector can respond to. This includes promoting youth entrepreneurship, access to finance, training of different forms and awareness raising.

IMPACTS ON UNDER PINNING PRINCIPLES Resilience Leveraging innovation to promote economic resilience has been identified as a priority. The economy sector has prioritised research and development to advance the economic sector, which includes finding solutions to address higher productivity and economic resilience.

Human Rights The NDP II takes a rights-based approach to human rights – political, economic and social rights. The Government has committed to promote human rights at the policy level, implementation level and at the level of civil society organisations and has committed to incorporate the following human rights principles across all of its development plans and frameworks.

Examples of some of the most relevant Human Rights Conventions to provide guidance

10Somaliland National Development Plan II (2017-2021), p 283. 11Somaliland National Development Plan II (2017-2021), p 283. 17

on this include:12

• Right to work and to just and favourable conditions of work: [UDHR art. 23; ICESCR arts. 6, 7, 10; CRPD art. 27; ILO Core Labour Conventions and ILO Declaration on Fundamental Principles and Rights at Work] • Prohibition of slavery, forced labour, and trafficking of persons: [UDHR art. 4; ICCPR art. 8; CEDAW art. 6; CRC arts. 34-36] • Equal rights of women in relation to employment: [CEDAW art. 11; ILO Conventions No. 100 and No. 111] • Prohibition of child labour: [CRC art. 32; ILO Convention No. 182] • Equal labour rights of migrant workers:[CMW art. 25]

IMPACTS AND DEPENDENCIES ON OTHER SECTORS IN THE NDP II Priorities identified in the Economic Sector are key to ensure Somaliland’s economic and social development. An overview of how the economic sector can have an impact on set out below. See Annex 4.

Energy and The economic sector can create a greater demand for electricity which can potentially push the Extractives price of electricity down provided the regulatory framework is updated.

Production The economic sector is highly dependent on the productive sector with livestock accounting for 30 percent of Somaliland’s GDP. Priorities in the economic sector aims to increase value addition to the livestock sector, increase agricultural production, and stimulate investment in the fisheries sector for export. One of the priorities for the economic sector is to strengthen the Quality Control Commission – this is a key step to ensure goods for the Somaliland market, as well as for export meet international standards. Priorities in the economic sector includes research and development to stimulate higher productivity.

Infrastructure The priorities set out in the economic sector requires many investments in infrastructure, for example, to increase access to markets, ports etc. With economic growth, and taxation reform, there is a possibility to increase revenues and thereby increase the capital budget for public infrastructure investments.

Governance A significant number of policies, legislation and regulations are required to support the economic sector. A legal drafting facility together with law faculties, relevant ministries and the solicitor general from the beginning may be an efficient way to draft legislation that is harmonised, while also building legal capacity.

Education The economic sector requires skilled workforce in the respective sectors and has prioritised a skilled labour market. The education sector in turn should respond to the demands of the economic sector at both professional and technical levels.

Health A well-functioning economy can stimulate the health sector, which in turn has the potential to provide a healthier workforce and improved human capital

.

WASH With industrial development and expansion of the manufacturing sector, the economy needs to ensure that industrial, and chemical wastes are responsibly disposed of. With the expansion of the economic sector, there will be growing demand for scarce water. However, this can be turned into an opportunity to use innovation and green technology to ensure that scarce water resources are utilised properly.

Environment Somaliland has skilled generations of technology in the banking and ICT sector. Expansion of the economic sector has to consider environmental impacts of all activities using innovation and green

12https://www.ohchr.org/Documents/Issues/MDGs/Post2015/SDG_HR_Table.pdf 18 technology as a starting point to ensure sustainable development.

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PROGRAM SKETCHES

WHAT ARE PROGRAM SKETCHES? The following charts show indicative arrangements, or “Program Sketches” that bring NDP II priority outcomes together under a single program umbrella, mainly from an operational point of view (expected synergy during implementation, common institutional arrangements).

Each chart includes:

1. The Government institutions that, based on their institutional mandates, should be involved in project design and/or project implementation.

2. The key outputs for each NDP II priority outcome, as identified by the sector in their SPF matrix. Note that this SPF matrix (Annex 2) also lists key activities to produce these outputs. However, these activities are not included in the charts.

3. A list of relevant enablers or output categories, that can assist staff in defining outputs in a more comprehensive way when designing Project Concept Notes and actual detailed Project Proposals. This is normally done in dialogue with potential financers and/or implementation partners.

It is important to understand that the Program Sketches:

❖ Represent Government’s view of how priority NDP II outcomes can be logically grouped under different programs from an operational point of view.

❖ Are NOT meant to be a graphic presentation of a complete logical framework of a project, i.e. including all outcomes and outputs of that project. They are meant to be a flexible tool that can be useful during the negotiation and design phase of projects in discussion with potential donors and implementation partners. Additional effort will be required to think through optimum project designs.

❖ Therefore, actual realistic project design proposals can include any of the following:

• All outcomes and outputs from a single program sketch • Only some of the outcomes and outputs from a single program sketch • Outcomes and outputs from different program sketches (integrated approach) • NPP II outcome with additional outputs and activities that are currently NOT included in the SPF

In short, the Program Sketches, in combination with the SPF Matrix in Annex 2 are meant to provide building blocks (outcomes and outputs) for the design of future projects that focus on the achievement of NDP II priorities.

SUGGESTED PRIORITY PROGRAMS FOR THE SECTOR All priority NDP II outcome and relevant outputs have been grouped under the following Programs:

1. Macro-economic Management 2. Development of financial services for the private sector 3. Tourism promotion and development 4. Promotion of private sector investment

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PROGRAM SKETCH: Macro-economic Management

IMPORTANT: The sketch shows government Central Bank Ministry of Finance institutions with a relevant mandate for the Ministry of Planning program WITHOUT indicating Lead Institutions. These are defined when designing actual projects and may be different for each project. Ministry of Investment Sector Program ECO1 Macroeconomic management Ministry of Trade, Industry and Tourism

Outcome ECO_17_03 Outcome ECO_08.09 Outcome ECO_08.06 By 2019, develop sound By 2021, reduce financial Increase the share of tax revenue in macroeconomic stability policies and illicit flows by 30% GDP to 13% regulatory framework

Output ECO Output ECO Output ECO Monetary Policy drafted and Enacted AML/CFT Legal A well improved tax administration approved frameworks system is established

Output ECO Output ECO Fiscal policy drafted and Output ECO Resource mobilisation through tax approved Strong Financial Intelligence Unit (FIU) collection has been improved

Output ECO Exchange Rate policy Output ECO documents drafted and Strong coordinated efforts Output ECO approved between FIU and other key Increased formalization of the stakeholders informal trade and economy Output ECO Continually monitored and controlled inflation

Output ECO Improved institutional coordination for macroeconomic stability

Output ECO Regulatory measures approved and implemented to improve the Balance of Trade

Outcome ECO_17_03 Outcome ECO_08.09 Outcome ECO_08.06 RELEVANT OUTPUT CATEGORIES / RELEVANT OUTPUT CATEGORIES / RELEVANT OUTPUT CATEGORIES / ENABLERS FOR THIS OUTCOME ENABLERS FOR THIS OUTCOME ENABLERS FOR THIS OUTCOME Regulatory instruments X Regulatory instruments X Regulatory instruments X System development X System development X System development X Human capacity building X Human capacity building X Human capacity building X Equipment and materials Equipment and materials X Equipment and materials X Infrastructure developm. Infrastructure developm. Infrastructure developm. Research & Knowledge Research & Knowledge X Research & Knowledge Awareness building Awareness building Awareness building X

21

PROGRAM SKETCH: Development of Financial Services for the Private Sector

IMPORTANT: The sketch shows government Central Bank Ministryof Trade, Industry and Tourism institutions with a relevant mandate for the program WITHOUT indicating Lead Institutions. These are defined when designing actual Sector Program ECO2 projects and may be different for each project. Development of financial services for the private sector

Outcome ECO_09.02 Outcome ECO_08.04 Outcome ECO_08.07 By 2021, increase access to By 2021, formalize existing By 2021, strengthen the capacity of domestic finance by Micro, Small and Micro, Small, Medium financial institutions to encourage and Medium Enterprises to 50% Enterprises activities by 50% expand access to banking, insurance and financial services for all the businesses.

Output ECO Output ECO Output ECO Upgraded informal Well-informed Small and Regulatory framework and businesses infrastructure Medium Enterprises about guidelines for the financial sector and space how to get loans and other redrafted, amended credit facilities

Output ECO Output ECO Awareness raised on Output ECO MSME policy drafted, informal sector Developed system that manages approved and implemented transformation into the the risk of banking and financial formal sector of the sector efficiently in order to economy encourage and expand access to banking, Output ECO New financial products appropriate for MSMEs Output ECO available in the financial Create conducive, sound sector and affordable harmonized business

Outcome ECO_09.02 Outcome ECO_08.04 Outcome ECO_08.07 RELEVANT OUTPUT CATEGORIES / RELEVANT OUTPUT CATEGORIES / RELEVANT OUTPUT CATEGORIES / ENABLERS FOR THIS OUTCOME ENABLERS FOR THIS OUTCOME ENABLERS FOR THIS OUTCOME Regulatory instruments X Regulatory instruments X Regulatory instruments X System development X System development X System development X Human capacity building X Human capacity building X Human capacity building X Equipment and materials Equipment and materials X Equipment and materials X Infrastructure developm. Infrastructure developm. X Infrastructure developm. Research & Knowledge Research & Knowledge X Research & Knowledge Awareness building X Awareness building X Awareness building X

22

PROGRAM SKETCH: Tourism Promotion and Development

23

PROGRAM SKETCH: Promotion of Private Sector Investment

IMPORTANT: The sketch shows government Ministryof Trade, Industry and Ministry of Investment Ministry of Finance institutions with a relevant mandate for the program WITHOUT indicating Lead Institutions. These are defined when designing actual Chamber of Commerce Sector Program ECO4 Quality Control Agency projects and may be different for each project. Promotion of private sector Diaspora Agency investment

Outcome ECO_08.08 Outcome ECO_09.01 Outcome ECO_17.01 Outcome ECO_17.02 Outcome ECO_08.03 Outcome ECO_17.04 By 2021, increase diaspora role in both By 2021, increase the Increase the overall export Reduce overall import’s By 2021, Somaliland will Strengthen and promote the domestic market investment to contribution of the share of the GDP to 10% share of GDP by 20% devise development and effective public-private 10% and their contribution to the manufacturing industry entrepreneurship-oriented partnerships (PPP) public investment into the national GDP to policy framework Programs 7% and the employment level to 40%

Output ECO Output ECO Output ECO Output ECO Output ECO Output ECO Sound Policies and Sound Policies and National export Import substitution Strengthened Diaspora Trust fund regulatory frameworks regulatory frameworks promotion policy policy developed environment for public- implemented formulated formulated developed private dialogue

Output ECO Output ECO Local production with Output ECO Output ECO Output ECO Investment climate Output ECO the aim of reducing Economic free zones PPP Policy formulated Diaspora business promoted Value added in export investment products increased import dependency established environment in place increased Output ECO Demand-driven skilled Output ECO manpower promoted Export markets Output ECO diversified Incentives developed for diaspora expertise Output ECO and young generations Industrial zones to return established

Output LAB Created conducive environment for national and foreign job seekers

[CROSS-CUTTING LABOR]

Outcome ECO_08.08 Outcome ECO_09.01 Outcome ECO_17.01 / 17.02 Outcome ECO_08.03 Outcome ECO_17.04 RELEVANT OUTPUT CATEGORIES / RELEVANT OUTPUT CATEGORIES / RELEVANT OUTPUT CATEGORIES / RELEVANT OUTPUT CATEGORIES / RELEVANT OUTPUT CATEGORIES / ENABLERS FOR THIS OUTCOME ENABLERS FOR THIS OUTCOME ENABLERS FOR THIS OUTCOME ENABLERS FOR THIS OUTCOME ENABLERS FOR THIS OUTCOME Regulatory instruments X Regulatory instruments X Regulatory instruments X Regulatory instruments X Regulatory instruments X System development X System development System development System development System development Human capacity building X Human capacity building X Human capacity building X Human capacity building X Human capacity building X Equipment and materials X Equipment and materials Equipment and materials Equipment and materials Equipment and materials Infrastructure developm. Infrastructure developm. Infrastructure developm. Infrastructure developm. Infrastructure developm. Research & Knowledge Research & Knowledge X Research & Knowledge X Research & Knowledge Research & Knowledge Awareness building X Awareness building Awareness building Awareness building X Awareness building X

24

PROGRAM SKETCH: Inclusion of Vulnerable Groups in the Labour Market (Cross-cutting Theme)

25

PROGRAM SKETCH: Promotion of Youth Employment and Social Affairs (Cross-cutting Theme)

26

CURRENT PROJECTS

Projects currently mapped in November 2018. This section is live and will be updated regularly. This does not include the significant contribution by the private sector.

PROJECT TITLE DESCRIPTION LOCATION FUNDERS IMPLEMENTERS STATUS

Somaliland/Somali Core Objectives: Improve the enabling Across Somaliland MPF Donors: EU, Component 1 is mainly Ongoing Economic Institutions & environment for private and financial UK, Germany, recipient-executed. Opportunities (SCORE) sector development &Catalyse private Sweden, Norway, Component 2 is Program investment and job creation. Denmark, executed by the World Switzerland, SPF, Bank on behalf of the Finland, USA, Italy Government.

Promoting Inclusive Markets Develop skills for youth, helping them to Across Somaliland DFID UK DAI (PIMS)- Implementation obtain jobs in the public sector as costs administrations are formed to create incentives towards peace

Promoting Inclusive Markets Develop skills for youth, helping them to Across Somaliland Denmark DAI Ongoing (PIMS) obtain jobs in the public sectors as administrations are formed to create incentives towards peace

Somaliland Investment The overall objective of this Project is to Across Somaliland USAID, DANIDA, DFID, IFC Ongoing Climate Reform Program enhance private sector led economic IFC Internal TF, CASA growth and competitiveness through IFC targeted investment climate reforms in Somaliland.

This will be achieved through the implementation of selected IC reforms in

27

PROJECT TITLE DESCRIPTION LOCATION FUNDERS IMPLEMENTERS STATUS

Somaliland and, security permitting and elsewhere.

Improving Sisal Production Improving sisal production: Plantation and TBC Finland International Solidarity Ongoing harvest mechanisms, machinery and skills Foundation (ISF), training for women to produce handicrafts Candlelight for Environment, Education and Health, ADO

Improving livelihoods for Improving livelihoods for youth TBC Finland International Solidarity Ongoing youth Foundation (ISF), Somaliland Youth Society (SYS)

Nordic Horn of Africa A USD 10 million fund for supporting small Across Somaliland Norfund has, together Various Ongoing Opportunities Fund and medium sized companies in with Shuraako, a Somaliland and elsewhere. program of One Earth Future, and the Danish The Nordic Horn of Africa Opportunities development finance Fund is among the first commercial institution, IFU investment funds for Somaliland and elsewhere. The Nordic Horn of Africa Opportunities Fund is expected to have significant development impact by enabling entrepreneurs to build sustainable businesses, contribute to their country’s economy and tax base, and

28

PROJECT TITLE DESCRIPTION LOCATION FUNDERS IMPLEMENTERS STATUS

create a significant number of jobs within their communities.

The primary investment instrument will be the Sharia compliant “Murabaha” and the average deal size will be USD 250,000. The investments are made into companies in various sectors including but not limited to fisheries, agriculture, light manufacturing, hospitalities, energy, etc. 13

13 https://www.norfund.no/getfile.php/138250-1529506907/Dokumenter/Norfund%20press%20release%20Shuraako_Final.pdf 29

NEXT STEPS

The sector booklets are a point of departure for sectors intensifying the dialogue with financers and implementation partners regarding the formulation of actual investments and projects, while ensuring alignment with NDP II priorities. After their endorsement by the National Planning Commission, each sector is expected to take the following steps:

SECTOR DIALOGUE WITH DEVELOPMENT PARTNERS The chair and co-chair of the relevant Sector Coordination Forum (SCF) prepare a meeting with the following agenda:

1. A presentation of the NDP II priority outcomes and Program sketches by the Sector Technical Team. 2. A discussion between SCF members about the following: o What are important gaps that need to be addressed in relation to each program sketch? How to address them? o What are potential quick wins, i.e. activities that quickly lead to tangible results (outputs). What type of assistance is needed to achieve these quick wins (technical assistance, funding,infrastructure etc)? o What kind of outputs can Government achieve itself with only minimal assistance of development partners? What would be the time-frame to achieve them? o How do on-going projects and negotiations for new projects align with the sector program sketches? Are adjustments needed? 3. Brainstorming on possible projects that will be crucial for program implementation, taking into consideration on- going projects and negotiations, as well as the identified gaps. 4. How to move forward regarding resource mobilization and project design? This should lead to an Action Plan with targets, deadlines and responsibilities, based on a clear division of labour in the sector. RESOURCE MOBILISATION MoPND suggests the following to facilitate the implementation of the formulated Action Plan in each sector:

1. The SCF identifies a “sector champion”, i.e. the development partner(s) best placed to assist the sector chair institution in the implementation of the Action Plan. 2. A strategic conversation is started with donors and the private sector to organise a multi-sector investment forum. For example: o Energy, Economy and Infrastructure o Production, WASH and Environment o Education, Health and Cross-cutting o Governance 3. This forum should showcase tangible examples of investments in Somaliland and the region, bring together a community of practice, identification of what is needed in the Somaliland context to push the sector forward, commitments from government, private sector and partners to jointly engage in the design of these projects. PROJECT DESIGN Once identified partnerships to engage in project design the following steps are suggested for each project:

o Drafting a Project Concept Note (which should identify existing assessments and potential data sources) o Consolidation of potential financing sources and securing funds for detailed project design o Detailed project design based on the approved Concept Note o Conclusion of financing and implementation agreements with participating financers and implementation partners.

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ANNEX 1. SUMMARY OF ALL OUTCOMES FOR THE ECONOMY SECTOR

ECO Outcome

CentralBank ofFinanceMinistry ofPlanningMinistry ofTradeMinistry ofInvestmentMinistry Diaspora Agency ECO1-1 By 2021, reduce the proportion of the population of Somaliland in extreme poverty by 20% (Economy) ✓ ECO1-2 By 2021, the government of Somaliland will promote pro-poor and vulnerable groups' access to finance by 30% ECO1-3 By 2021, sustain GDP per capita growth rate to 5% per year ECO1-4 By 2021, increase productivity per worker levels by 20% ECO8-3 By 2021, Somaliland will devise development and entrepreneurship-oriented policy framework ✓ ECO8-4 By 2021, formalize existing Micro, Small, Medium Enterprises activities by 50% ✓ ECO8-5 By 2021, increase the contribution of tourism activities into the GDP by 10% ✓ ECO8-6 By 2021, increase the share of tax revenue in GDP to 13% ✓ ECO8-7 By 2021, strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all the businesses. ✓

ECO8-8 By 2021, increase diaspora role in both the domestic market investment to 10% and their contribution to the public investment ✓ ✓ ECO8-9 By 2021, reduce financial illicit flows by 30% ✓ ECO9-1 By 2021, increase the contribution of the manufacturing industry into the national GDP to 7% and the employment level to 40% ✓ ✓ ECO9-2 By 2021, increase access to finance by Micro, Small and Medium Enterprises to 50% ✓ ECO9-3 By 2021, increase the number of research and development (R&D) of the Somaliland population by 10% and research spending proportion of the GDP by 1.5% ✓ ✓

ECO10 - 1 By 2021, reduce income inequality in urban and rural areas to 30% and 35% respectively. ECO17-1 By 2021, increase the overall export share of the GDP to 10% ✓ ✓ ECO17-2 By 2021, reduce overall imports’ share of the GDP to 20% ✓ ✓ ECO17-3 By 2019, develop sound macroeconomic stability policies and regulatory framework ✓ ✓ ✓

ECO17-4 Strengthen and promote effective public-private partnerships (PPP) Programs ✓ ✓

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ANNEX 2: PRIORITISED OUTCOMES BY ECONOMY SECTOR

Annex 2 presents the inputs received from the Sector Technical Teams. These are draft inputs from the Sector Technical Trams and are there to inform design of programs and projects.

Priority Outcome Indicators Baseline (2016) Final Target (2021) Priority interventions ECO1-1: By 2021, reduce the proportion 1.1. Proportion of 49% Urban 39.2% Urban Promote pro-poor entrepreneurship investment programs of the population of Somaliland in population below the 61% Rural 48.8% Rural Develop ZAKAAT policies and strategies extreme poverty by 20% international poverty line, 49% Male 39.2% Male Streamline national and local gov’t levels intervention strategies and plans for “Poverty Reduction & by sex, age, employment 52% Female 41.6% Female Risk Mitigation” status and geographical location (urban/rural)

Lead MDA Knowledge Laws/Policies Systems Human Capacity Materials Infrastructure Awareness Ministry of Planning and National OUTPUT TYPE: Development

PRIORITIZED OUTCOME, OUTPUTS AND ACTIVITIES OUTPUT KEY ACTIVITIES: 2018 2019 2020 2021 1. Macroeconomic 1.1. Securing sufficient resources (Financial and skilled human resources) for establishing Macrocosmic Development Department Development Department 1.2. Reviewing the structure, mandate, and the functions of the governmental institutions and identifying the best practice of establishing established at the MPND poverty reduction system

1.3. Developing sound pro-poor macroeconomic policy and strategy , which assigned the poverty reduction mandate into the current Development Department to be transformed into Macroeconomic Development Department, which has clear functions that building on the exist initiatives 2. Macroeconomic Development Department 2.1. Incorporating macroeconomic courses, diploma, and degree into the courses of the NIPS strengthened 2.2. Increasing the staff of the department and sharpening their skills 3. Periodic macroeconomic 3.1. Collecting macroeconomic data and analyse for annual and quarterly basis

publications produced 3.2. Producing macroeconomic reports and publishing them 4. Result based metronomic 4.1. Disseminating macroeconomic publications and archiving with easy accessibility for national and international institutions, and the private policy and decision making sector crafted

NDPII Sector Priorities (v12.0) 32

Priority Outcome Indicators Baseline (2016) Final Target (2021) Priority interventions ECO8-6:Increase the share of tax Volume of tax revenue as 6.4% 13% • Develop sound and harmonized tax policies and regulatory frameworks revenue in GDP to 13% Percentage of GDP • Improve tax administration system

Lead MDA Knowledge Laws/Policies Systems Human Capacity Materials Infrastructure Awareness OUTPUT TYPE: Ministry of Finance ✓ ✓ ✓ ✓ ✓ ✓

PRIORITIZED OUTCOME, OUTPUTS AND ACTIVITIES OUTPUT KEY ACTIVITIES: 2018 2019 2020 2021 1. A well improved tax 1.1 Establishment of Somaliland Revenue Authority (SLRA) which is now partially implemented administration system is 1.2 Draft SLRA’s functional mandates, roles and responsibilities established. 1.3 Development of SLRA’s TOR 1.4 Nomination of SLRA’s board committee and executive director

2. Resource mobilisation has 2.1 Creation of Large Taxpayers Office been improved 2.2 Creation of Tax Policy Unit

2.3 Draft of Somaliland National Revenue Policy 2.4 Sharing of Revenue collection of municipalities with MOF systematically

NDPII Sector Priorities (v12.0) 33

Priority Outcome Indicators Baseline (2016) Final Target (2021) Priority interventions ECO17-3: By 2019, develop sound 3.1. Number of 3.1. - Develop fiscal and monetary policies macroeconomic stability policies and macroeconomic policies and Not available - Reform exchange rate regime and stabilize exchange rate regulatory framework regulation frameworks in - Closely monitor and control inflation place

Lead MDA Knowledge Laws/Policies Systems Human Capacity Materials Infrastructure Awareness Outputs 1- 3: Central Bank of Somaliland OUTPUT TYPE: ✓ ✓ ✓ ✓ ✓ Outputs 4- 5 Ministry of Finance

PRIORITIZED OUTCOME, OUTPUTS AND ACTIVITIES OUTPUT KEY ACTIVITIES: 2018 2019 2020 2021 1. Improvement of drafting 1.1 Drafting the monetary principles, Guidelines and tools ✓ Monetary Policy Documents 1.2 Publishing the monetary policy periodically for every quarter and sharing with the public ✓ 2. Drafted exchange rate policy 2.1 Drafting the exchange rate policy document and defining the exchange rate regime for Somaliland ✓

documents 3. Strong monetary policy 3.1. capacity building for the staff of the department ✓ department 3.2. Establishing operating models and systems for monitoring and controlling the money supply ✓ 3.3. allocating enough budget to the department ✓

4. Drafted a national fiscal and 2.1 Hiring senior consultant for drafting national fiscal policy with all stakeholders monetary policies 2.2 Setting a five year of strategic plan aligning with the NDP II for ministry of Finance

2.3 Drafting monetary policy with the central bank of Somaliland and other relevant stakeholders

3 Continually monitored and 3.1 Taking into account the current consumer price index of Somaliland. controlled inflation. 3.2 Controlling currency inflows and outflows across bank branches in Somaliland

3.3 Balancing the trade deficit

NDPII Sector Priorities (v12.0) 34

Priority Outcome Indicators Baseline (2016) Final Target (2021) Priority interventions ECO9-2:By 2021, increase access to 2.1. Proportion of 2.1. 2.1 - Promote increase range of financial products available in the financial sector finance by Micro, Small and Medium small-scale industries 38.8% 50% - Improve access to financial market information Enterprises to 50% with a loan or line of 2.2. 2.2. - Promote competition in the financial credit 2.2. Proportion of Not available MSMEs with loan and or line of credit, excluding small scale industries

Lead MDA Knowledge Laws/Policies Systems Human Capacity Materials Infrastructure Awareness OUTPUT TYPE: Central Bank of Somaliland ✓ ✓ ✓ ✓ ✓ ✓

PRIORITIZED OUTCOME, OUTPUTS AND ACTIVITIES

OUTPUT KEY ACTIVITIES: 2018 2019 2020 2021 1. Developed system that 1.1 Establish credit reference bureau guidelines. ✓ manages the risk of banking ✓ and financial sector 1.2 Create credit reference bureau system. efficiently in order to 1.3 Hire IT and banking experts or develop the capacity of Banks internal staff encourage and expand ✓ access to finance

2. Well-informed Small and 2.1 Promote increase range of financial products available in the financial sector ✓ Medium Enterprises about ✓ how to get loans and other 2.2 Improve access to financial market information credit facilities 2.3 implement Investment account guidelines. ✓ 2.4 Establish Banking institute. ✓

NDPII Sector Priorities (v12.0) 35

Priority Outcome Indicators Baseline (2016) Final Target (2021) Priority interventions ECO8-9: By 2021, reduce financial illicit Number of small arms and light 5.1. Develop and adapt policies, laws and strategies regarding illicit flows (e.g. funds earned, flows by 30% weapons in the hands of people Not available transferred or utilized illegally) with no legal documents Establish/Strengthening monitoring mechanisms of financial institutions to prevent illicit financial flows

Lead MDA Knowledge Laws/Policies Systems Human Capacity Materials Infrastructure Awareness OUTPUT TYPE: Central Bank of Somaliland ✓ ✓ ✓ ✓ ✓ ✓ ✓

PRIORITIZED OUTCOME, OUTPUTS AND ACTIVITIES OUTPUT KEY ACTIVITIES: 2018 2019 2020 2021

1. Enacted AML/CFT Legal 1.1 Approval of Anti-Money Laundering and Terrorist Financing Act by the Parliament. ✓ frameworks 1.2. Enacting a Regulations of Financial markets in line with the act and Particular measures to counter IFF (Illicit Financial Flows) rely on requiring ✓ preventive measures by financial institutions, supported by supervision unit.

1.3. Preparing guidelines to direct the companies and individuals engaging the capital inflow and outflow. ✓ 1.4. Monitoring capital flight specially borders and airports ✓ 2. Strong Financial Intelligence 1.1. Staff capacity building for combating IFF. ✓ Unit (FIU) 1.2. Establishing systems and/or Data bases for monitoring, investigation and reporting of Illicit Financial Flows. ✓

1.3. Developing operating models and documents of the FIU – department. ✓ 1.4. Allocating enough budget to implement the regulations and guidelines those limiting the IFF. ✓ 3. Coordinated and connected 3.1 Coordination of Central Bank Financial Intelligence Unit and the government actors involved in implementing measures to combat IFF, like ✓

among its Stakeholders national intelligence, prosecution office and police.

3.2. Training the Financial institutions on Illicit Financial Flows and the regulatory frameworks of Somaliland. ✓ 3.3. Start up the reporting of suspicious transactions and any transaction which is above USD 5,000 as per the Law ✓

NDPII Sector Priorities (v12.0) 36

Priority Outcome Indicators Baseline (2016) Final Target (2021) Priority interventions

ECO8-7: By 2021, strengthen the capacity of 7.1. - Develop regulatory framework and guidelines for the financial sector domestic financial institutions to encourage 7.1. Number of financial Not available institutions in the country - Strengthen financial sector stability and efficacy and expand access to banking, insurance 7.2. - Establish and promote credit rating agency; and financial services for all the businesses. with number of branches providing credit facilities Not available - Raise awareness on- Develop regulatory framework and guidelines for the financial sector - Strengthen financial sector stability and efficacy 7.2. Proportion of adult - Establish and promote credit rating agency; applicants (15 years and older) - Raise awareness on with a bank account and/or applied loan/credit at any bank or other financial institution

Lead MDA Knowledge Laws/Policies Systems Human Capacity Materials Infrastructure Awareness OUTPUT TYPE: Central Bank of Somaliland ✓ ✓ ✓ ✓ ✓ ✓

PRIORITIZED OUTCOME, OUTPUTS AND ACTIVITIES OUTPUT KEY ACTIVITIES: 2018 2019 2020 2021

1. Regulatory framework and 1.1 Redraft Islamic banking act that meets international best practice ✓ guidelines for the financial sector redrafted, amended 1.2 Redraft, submit and enact the Somaliland banking act ✓

1.3 Review and amend the central bank act ✓

1.4 Implement Investment account guidelines ✓

1.5 Draft the prudential requirement for banking regulation. ✓

2. Developed system that 2.1 Establish credit reference bureau guidelines. ✓ manages the risk of banking and financial sector 2.2 Create credit reference bureau system ✓ efficiently in order to 2.3 2.3 Hire IT and banking experts or develop the capacity of Banks internal staff ✓ encourage and expand access to banking, 2.4 Develop system to establish swift codes

NDPII Sector Priorities (v12.0) 37

Priority Outcome Indicators Baseline (2016) Final Target (2021) Priority interventions ECO8-4: By 2021, formalize existing 3.1 Proportion of firms not 45% 22.5% 1.Upgrade informal businesses infrastructure and space Micro, Small, Medium Enterprises registered with MoTIT 2.Raise awareness on informal economy transformation into the formal sector activities by 50% 3.2 Proportion of informal 3.Create conducive, sound and affordable harmonized business registration system employment rate in non- agriculture activities, by sex

Lead MDA Knowledge Laws/Policies Systems Human Capacity Materials Infrastructure Awareness OUTPUT TYPE: Ministry of Trade, Industry and Tourism ✓ ✓ ✓ ✓ ✓

PRIORITIZED OUTCOME, OUTPUTS AND ACTIVITIES OUTPUT KEY ACTIVITIES: 2018 2019 2020 2021

1. Upgrade informal businesses 1.1 Supervision on Businesses operating in the Informal sector ✓ ✓ ✓ infrastructure and space 1.2 Private Health sector ✓ ✓

1.3 Classic and semi classic Hotels ✓ 1.4 Fuel Stations ✓ 1.5 Travel and Tourism Agencies ✓

1.6 Small and medium sized Industries ✓ ✓ 1.7 Private Education Centres ✓ ✓

2. Raise awareness on informal 2.1 Develop MSME Policy ✓ economy transformation into 2.2 Conduct business intervention activities ✓ the formal sector 2.3 Identify Businesses operating in the informal sector ✓ 2.4 Provide awareness on joining the formal sector ✓ 2.5 Improve ease of doing business. i.e. starting Business indicator ✓

3. Create conducive, sound and 3.1 Finalize Companies law ✓ affordable harmonized business registration system 3.2 Provide infrastructure for One Stop Shop Business Registration (OSS). i.e. Offices, Computers ✓ ✓ 3.3 Develop automated system for Business registration ✓ 3.4 Develop harmonized Business registration forms ✓ ✓ 3.5 Document harmonization ✓ 3.6 Provide training for the OSS staff ✓

NDPII Sector Priorities (v12.0) 38

PRIORITIZED OUTCOME, OUTPUTS AND ACTIVITIES OUTPUT KEY ACTIVITIES: 2018 2019 2020 2021 3.7 Implement Online name search and Online Business registration ✓

3.8 Ease of Doing Business – Improve Starting Business Indicator ✓

Priority Outcome Indicators Baseline (2016) Final Target (2021) Priority interventions

ECO8-5: By 2021, increase the Proportion of Tourism in GDP 0% 2% Develop policy and regulatory framework for promoting tourism contribution of tourism activities into the GDP by 10% Number of jobs in tourism Develop tourism infrastructure industry as a proportion of total jobs. Develop tourism marketing programs

Lead MDA Knowledge Laws/Policies Systems Human Capacity Materials Infrastructure Awareness OUTPUT TYPE: Ministry of Trade, Industry and Tourism ✓ ✓ ✓ ✓ ✓ ✓ ✓

PRIORITIZED OUTCOME, OUTPUTS AND ACTIVITIES OUTPUT KEY ACTIVITIES: 2018 2019 2020 2021

1.1 Investigation and Evaluation of the policy proposals 1.2 consultation with interested parties 1. Policy and regulatory 1.3 Develop Tourism and ArchaeologyPolicies, first draft. framework for promoting 1.4 Validation and Stakeholders engagement ✓ tourism developed 1.5 Translation to Somali language 1.6 Final Draft (Somali Version) Submission to the cabinet for approval 1.7 Dissemination of the New Policy- Publish in the Gazette 2.1 Tourism protection plan for Laas-geel conservation is already finalized 2. Tourism infrastructure 2.2 Dhagax-kuure conservation is under process. ✓ ✓ ✓ ✓ developed 2.3 Monitored Country’s Tourism Archaeologies. i.e. Laas Geel, Dhagax Guure, Aw Barkhadle, Dubaar, Old Camuud, Hiis And Maydh, Daalo Etc 3.1 Formulate marketing strategy for Tourism sites. ✓ ✓ ✓

3. Tourism marketing 3.2 Site visit for Tourism centres. ✓ ✓ ✓ ✓ programs developed 3.3 Recorded the number of Tourism sites ✓ 3.4 TV program for Tourism sites ✓

NDPII Sector Priorities (v12.0) 39

Priority Outcome Indicators Baseline (2016) Final Target (2021) Priority interventions ECO8-8: By 2021, increase diaspora role 1.Proportion of firms 8.1 4% 8.1 10% 1.Establish Diaspora Trust Fund in both the domestic market investment owned by diasporas 2. Create sound and friendly business environment for the Diaspora investment interventions to 10% and their contribution to the 2. Number of public 3. Create programs for bringing diaspora expertise and young generation back to home public investment projects

Lead MDA Knowledge Laws/Policies Systems Human Capacity Materials Infrastructure Awareness OUTPUT TYPE: Somaliland Diaspora Agency Ministry of Investment Promotion ✓ ✓ ✓

PRIORITIZED OUTCOME, OUTPUTS AND ACTIVITIES OUTPUT KEY ACTIVITIES: 2018 2019 2020 2021 1. Diaspora Trust fund 1.1 To develop Diaspora sector regulatory policies and set up mechanisms ✓ implemented 1.2 Engage diaspora communities abroad ✓

2. Diaspora business investment 2.1 To improve homecoming events, promote Diaspora voluntary labour force and improve data registration. ✓ environment in place 2.2 Do workshops for diaspora business investors ✓ 2.3 Provide business development training 3. Incentives developed for 3.1 To raise incentive awareness for the Diaspora ✓ diaspora expertise and young 3.2 Marketing camping for diaspore expertise ✓ generations to return 3.3 Provide capacity building for the youth

NDPII Sector Priorities (v12.0) 40

Priority Outcome Indicators Baseline (2016) Final Target (2021) Priority interventions

ECO9-1: By 2021, increase the 1.Share of Manufacturing in 1.7% 7% 1. Develop sound policies and regulatory framework contribution of the manufacturing GDP 2. Promote demand-driven skilled manpower industry into the national GDP to 7% 3. Establish industrial zones and the employment level to 40% 2. Manufacturing employment as proportion 4. Provide reliable and affordable energy of total employment 5. Create sound investment climate

Lead MDA Knowledge Laws/Policies Systems Human Capacity Materials Infrastructure Awareness

Ministry of Trade, Industry and Tourism OUTPUT TYPE: ✓ ✓ ✓ ✓ ✓ ✓ ✓

Ministry of Investment Promotion ✓ ✓ ✓ ✓ ✓ ✓ ✓

PRIORITIZED OUTCOME, OUTPUTS AND ACTIVITIES OUTPUT KEY ACTIVITIES: 2018 2019 2020 2021

1. Sound policies and regulatory 1. Develop/Review policies and acts (e.q. Investment, industrial and trade) ✓ framework formulated 2. Organise consultation workshops for relevant stakeholders ✓ 3. Develop Industrialization Policy, first draft. ✓

4. Translation to Somali language ✓

5. Final Draft (Somali Version) Submission to the cabinet for approval ✓ 6. Dissemination of the New Policy- Publish in the Gazette ✓

2. Investment climate 1. Organizing national investment forums ✓ ✓ promoted 2. Organise international investment forums ✓

3. Attract investors to provide alternative, reliable and affordable energy ✓

4. Demand-driven skilled 1. Registration of national craftsmen ✓ manpower promoted 2. Supervision of Somaliland crafts and technical ✓ 3. Sorting and categorizing Somaliland crafts and technical ✓ 4. Sorting and categorizing Somaliland Industries ✓ 5. Rebuilding the national industrialization Area ✓ ✓

NDPII Sector Priorities (v12.0) 41

PRIORITIZED OUTCOME, OUTPUTS AND ACTIVITIES OUTPUT KEY ACTIVITIES: 2018 2019 2020 2021 6. Register the Industrial Experts and other technicians ✓

5. Industrial zones established 1. Procedure Guideline Forms for Industries sanitation Environment ✓

2. Embark on supervision to Industries and identify suitability of their location ✓

3. Conduct a research on identifying suitable areas for Industrial zones ✓ 4. Develop dedicated infrastructure and thereby reduce expenses in the long run. ✓

5. Eligibility for several types of benefits from the government. ✓

6. Attract new business ventures with a better integrated infrastructure that is beneficial to them. ✓

7. Help reduce the impact of industrial uses on the environment and society since it will encourage firms to buy industrial property within ✓ the designated areas only.

NDPII Sector Priorities (v12.0) 42

Priority Outcome Indicators Baseline (2016) Final Target (2021) Priority interventions

ECO17-1:Increase the overall export Proportion of Export to the Not Available 10% • Develop export promotion policy share of the GDP to 10% Total GDP $496 M • Diversify export markets Trade Deficit • Promote value added in export products

Lead MDA Knowledge Laws/Policies Systems Human Capacity Materials Infrastructure Awareness Ministry of Finance ✓ ✓ ✓ ✓ ✓ ✓ OUTPUT TYPE: Ministry of Trade, Industry and Tourism ✓ ✓ ✓ ✓ ✓ ✓ ✓

PRIORITIZED OUTCOME, OUTPUTS AND ACTIVITIES OUTPUT KEY ACTIVITIES: 2018 2019 2020 2021 1. National export promotion 1.1 Hire an expert/consultant for drafting the national export promotion policy including in key sectors such as (agriculture, mining, fisheries, ✓ policy developed energy, livestock and tourism) 1.2 Analyse current available domestic goods for export

1.3 Review of tax exemptions of current domestic goods

1.4 Produce Trade analysis – balance of payment ✓

1.5 Coordinate with regional integration ✓ 1.6 Incentivise local production ✓

1.7 Formulate industrialization policy ✓

1.8 Enforce Business demarcation Act ✓

2. Value added in export 2.1 Seek profitable markets commodities across regional countries. ✓ products increased 2.2 Improve and promote quality assurance of national domestic products. ✓

2.3 Provide tax exemptions for local manufacturers ✓

2.4 Encourage aftermarket services ✓ ✓ ✓ ✓

2.5 Facilitate form of payment. i.e. use credit cards ✓

3 Export markets diversified 3.1 Set strategy for Export markets. i.e. Building capacity to supply large volumes of export orders ✓

3.2 Higher spending on research ✓ ✓ ✓ NDPII Sector Priorities (v12.0) 43

PRIORITIZED OUTCOME, OUTPUTS AND ACTIVITIES OUTPUT KEY ACTIVITIES: 2018 2019 2020 2021 3.3 Identification of potential industries ✓

3.4 Coordinate with Quality control Commission on exporting quality products ✓

3.5 Identification of diversified markets and diversified products. I.e. Top trading partners identified from the Trade statistics ✓ 3.6 Negotiation for reduction of tariff and non-tariff barriers ✓ 3.7 Industrialization policy ✓

NDPII Sector Priorities (v12.0) 44

Priority Outcome Indicators Baseline (2016) Final Target (2021) Priority interventions

ECO17-2:Reduce overall import’s share Proportion of Import to the • Not • Develop import substitution policy of GDP by 20% GDP Available • Promote local production with the aim of reducing import dependency Trade Deficit • $496M

Lead MDA Knowledge Laws/Policies Systems Human Capacity Materials Infrastructure Awareness Ministry of Finance ✓ ✓ ✓ ✓ ✓ OUTPUT TYPE: Ministry of Trade, Industry and Tourism ✓ ✓ ✓

PRIORITIZED OUTCOME, OUTPUTS AND ACTIVITIES OUTPUT KEY ACTIVITIES: 2018 2019 2020 2021

1. Policy of import substitution 1.1 Development of import substitution policy by hiring an expert consultant ✓ is developed 1.2 Consultation with interested parties ✓ 1.3 Validation and Stakeholders engagement ✓

1.4 Translation to Somali language ✓

1.5 Final Draft (Somali Version) Submission to the cabinet for approval ✓ 1.6 Dissemination of the New Policy - Publish in the Gazette ✓ 1.7 Diversify customs import goods and prioritizing substitutable ones

1.8 Review customs Evaluation Books which is temporarily recording all possible goods with the rate of tax and its value

2. Local production with the 2.1 Increasing both the tax rate and tax base of importing goods aim of reducing import dependency increased 2.2 Increasing the exchange rate of foreign currency ($) which the basic of importing goods from overseas countries 2.3 Develop strategy for Import substation and outward oriented strategies ✓ 2.4 Reduce import dependence through incentivizing Manufacturing activities ✓ 2.5 Protection for local/ domestic market ✓ ✓ ✓ ✓ 2.6 Improve skilled manpower for Local manufacturers ✓ 2.7 Protection of “infant industries” for imports and incentives to encourage capital and technology imports. ✓

NDPII Sector Priorities (v12.0) 45

Priority Outcome Indicators Baseline (2016) Final Target (2021) Priority interventions ECO8-3: By 2021, Somaliland will devise 3.1. Development and development and entrepreneurship- Entrepreneurship-oriented 3.1. 3.1. - Develop SMEs policy oriented policy framework policy framework in place Non-existent Policy framework in place - Develop entrepreneurship policy - Develop trade policy - Develop cooperatives policy - Develop microfinance policy - Develop industrial policy - Develop PPP law, polices & regulations

Lead MDA Knowledge Laws/Policies Systems Human Capacity Materials Infrastructure Awareness OUTPUT TYPE: Ministry of Investment Promotion ✓ ✓ ✓ ✓ ✓

PRIORITIZED OUTCOME, OUTPUTS AND ACTIVITIES

OUTPUT KEY ACTIVITIES: 2018 2019 2020 2021 1. Industries mapped 1.1 Review statistical analysis of official government data ✓ ✓

1.2 Analyse non-governmental data ✓ 1.4 Develop, Design and evaluate industrial policy ✓ ✓

2. Economic free zones 2.1 Develop and evaluate trade policy ✓ ✓ established 2.2 Develop and evaluate relevant policies (eq. Cooperative, microfinance, entrepreneurship and ect). ✓ ✓ 2.3 Conducive investment environment and relevant regulatory framework ✓ ✓ 3. Industrial cities established 3.1 Develop entrepreneurship policy ✓ ✓ ✓ 3.2 Develop SMEs policy ✓ ✓ ✓

NDPII Sector Priorities (v12.0) 46

Priority Outcome Indicators Baseline (2016) Final Target (2021) Priority interventions ECO17-4: Strengthen and promote Number of 4.1. 0 4.1 10 Strengthen public-private dialogue effective public-private partnerships conferences/meeting on 4.2. Not available 4.2 1 Develop PPP policy, regulations and strategies (PPP) Programs public private dialogue 4.3. 4.3 Promote finance public projects through PPP Number of policies and guidelines for public-private partnership and dialogue

Lead MDA Knowledge Laws/Policies Systems Human Capacity Materials Infrastructure Awareness OUTPUT TYPE: Ministry of Trade, Industry and Tourism ✓ ✓ ✓ ✓ ✓ ✓ ✓ Ministry of Investment Promotion ✓ ✓ ✓ ✓ ✓ ✓ ✓

PRIORITIZED OUTCOME, OUTPUTS AND ACTIVITIES OUTPUT KEY ACTIVITIES: 2018 2019 2020 2021

1. Strengthened environment for Strengthening an enabling Environment for PPD ✓ ✓ ✓ ✓ public-private dialogue 1.1 Hold the Economic Sector Coordination meeting – ESCOM for facilitating Public and private discussions on economy ✓ ✓ ✓ ✓ 1.2 Establish National Public Forums to Exchange views on Challenges faced by the private sector i.e. Annual Public Private Dialogue – 2018 ✓ ✓ ✓ ✓ Economy –Wide PPD Forum and Tourism Forums etc.

1.3 Produce periodic reports on PPD ✓ ✓ ✓ ✓ 1.4 Establish secretariat for PPD agreed points ✓ ✓ ✓ ✓

1.5 Develop and promote strategy for public-private partnership ✓

2. Formulated PPP policy 2.1 Consultation with interested parties ✓ 2.2 Develop PPP Policy, first draft. ✓ 2.3 Validation and Stakeholders engagement ✓ 2.4 Translation to Somali language ✓ 2.5 Final Draft (Somali Version) Submission to the cabinet for approval ✓ 2.6 Dissemination of the New Policy- Publish in the Gazette ✓

NDPII Sector Priorities (v12.0) 47

Priority Outcome Indicators Baseline (2016) Final Target (2021) Priority interventions ECO9-3: By 2021, increase the number of 3.1. Research and 3.1. 3.1. - Increase research budget in both public and private sectors research and development (R&D) of the development expenditure Not available - Establish university research and development oriented annual ranking Somaliland population by 10% and as a proportion of GDP 3.2. 3.2. - Promote establish national research centres research spending proportion of the GDP 3.2. Researchers (in full- Not available by 1.5% time equivalent) per million inhabitants

Lead MDA Knowledge Laws/Policies Systems Human Capacity Materials Infrastructure Awareness

Central Bank of Somaliland OUTPUT TYPE: ✓ ✓ ✓ ✓ ✓ ✓ ✓ Ministry of Investment Promotion ✓ ✓ ✓ ✓

PRIORITIZED OUTCOME, OUTPUTS AND ACTIVITIES OUTPUT KEY ACTIVITIES: 2018 2019 2020 2021

1. Strong Economic research 1.1. promote and refurbish this department of the Central Bank ✓ and statistics Department 1.2. Allocating budget to the R&D ✓ 2. Zero tax policy for R&D 2.1 Collect data and examine relevant sector (eg. Economic sector) in the course of the research and assess the outcome of the layout. developed 2.2 Conduct risk analysis (government risk). ✓ ✓ ✓

3. Enabling environment for 3.1 Promote establish national research centres business incubators ✓ ✓ established 4. Research 4.1 Increase research budget in both public and private sectors ✓ ✓

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ANNEX 3. SUMMARY OF OUTCOMES: CROSS-CUTTING ISSUES Outcome Prioritised EMPLPOYMENT AND LABOUR LAB1 -1 By 2021, reduce the proportion of the population of Somaliland in extreme poverty by 20% (Employment and Labour) LAB4 -1 By 2021, increase the number of individuals who have relevant education and skills, including technical and vocational skills for employment by 20% LAB8 -1 By 2021, increase the proportion of men, women and youth including persons with disabilities in employment by 20%, 20% and 20%, respectively ✓ LAB8 -2 By 2021, reduce the proportion of youth not in employment, education or training to 25% for males and 17% for females SOCIAL PROTECTION SOC 1 - 1 By 2021, reduce the proportion of men, women and children of all ages living in extreme poverty in all its dimensions according to national definitions by 20% ✓ SOC 1 - 2 By 2021, 30% of vulnerable population will have access to social protection systems SOC 1 - 3 By 2021, increase proportion of vulnerable people will have access to basic services from by 5% SOC 2 - 1 By 2021, alleviate the prevalence of undernourishment of rural and urban population by 12% SOC 2 - 2 By 2021, reduce the prevalence of food insecurity amongst rural and urban population by 10% SOC 3 - 1 By 2021, reduce HIV/AIDS new infections by 10%, and ensure access to information for all. By 2021, implement legal framework that will reduce all forms of discrimination against all marginalized groups (women, children, minority, people with SOC 5 - 1 disability and youth) everywhere SOC 5 - 2 By 2021, reduce the incidence of domestic violence against women by 16 % SOC 5 - 3 By 2021 reduce the incidences of rape and other forms of sexual violence by 50% SOC 5 - 4 By 2021, reduce the new incidences of FGM amongst young girls to 8% SOC 5 - 5 By 2021, reduce the new incidence of early and forced marriage by 5% By 2021, the Government of Somaliland will allocate 2% annual budget for the promotion of gender equality and the empowerment of all women and girls at SOC 5 - 6 all levels SOC 10 - 1 By 2021, the Government of Somaliland will enact and adapt non-discriminatory policies and legislations YOUTH YOU 1 - 1 By 2021, will reduce the number of youth aged 15-35 living in poverty based on Somaliland definitions by 15% ✓ YOU 1 - 2 By 2021, 2% of youth aged 15-35 will be able to access financial services and microfinancing ✓ YOU 1 - 3 By 2021, the Government of Somaliland with international partners to establish a cross-ministry Youth and Sports Development Fund ✓ YOU 1 - 4 By 2018, the Government of Somaliland will have a pro-poor and gender sensitive Youth Policy By 2021, 50% of Somaliland Youth aged 15-35 will be aware of preventative measures to avoid contracting AIDS, tuberculosis, malaria and neglected tropical YOU 3 - 1 diseases and combat hepatitis, water-borne diseases and other communicable diseases

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Outcome Prioritised YOU 3 - 2 By 2021, 50% of Somaliland Youth aged 15-35 will be aware of the negative effects of Khat and other narcotic drugs including opportunities for treatment YOU 3 - 3 By 2021, the Government of Somaliland will seek to reduce the number of traffic related deaths amongst Youth aged 15-35 by 25% YOU 3 - 4 By 2021, 60% of Somaliland youth will engage in sport, physical exercise and productive leisure activities ✓ YOU 4 - 1 By 2021, 30% of Somaliland Youth aged 15-35 will have access to an accredited vocational or higher education training course YOU 4 - 2 By 2021, 30% of Somaliland Youth aged 15-35 will have basic ICT skills and literacy YOU 4 - 3 By 2021, reduce proportion of youth in the vocational training and tertiary education access disparities between male and female Youth by 20% YOU 4 - 4 By 2021, reduce proportion of youth in the vocational training and tertiary education access disparities between rural and urban Youth by 15% By 2021, reduce proportion of youth in the vocational training and tertiary education access disparities between those Youth with and without disability by YOU 4 - 5 10% YOU 4 - 6 By 2021, 62% male Youth aged between 15-35 will be literate YOU 4 - 7 By 2021, 57% female Youth aged between 15-35 will be literate YOU 8 - 1 By 2019, Somaliland will have a functioning Youth Job Creation and Entrepreneurship Policy YOU 8 - 2 By 2021, 75% of Somaliland youth aged 15-35 will be in some form of employment, education or training ✓ YOU 8 - 3 By 2021, Somaliland Government will have an effective and practical policy prohibiting human trafficking YOU 16 - 1 By 2021, the Government of Somaliland will have reduced individual participation in youth violence by 25% YOU 16 - 2 By 2021, reduce female youth exploitation and rape by 50% YOU 16 - 3 By 2021, will seek to have 30% of Somaliland political decision-making positions (Local Government/Parliament/MDAs) being youth aged 15-35 YOU 17 - 1 By 2021, the Government of Somaliland will hold 5 National Youth Development Coordination and Monitoring Conferences

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ANNEX 4. ECONOMY SECTOR IMPACTS ON THE OTHER SECTORS

PRODUCTION INFRASTRUCTURE GOVERNANCE EDUCATION HEALTH WASH ENVIRONMENT By 2021, agricultural By 2021, the Government of By 2021, review the structure By 2021, 70% of secondary By 2021, reduce under-5 By 2021, improve water By 2021, develop and apply production yield per Somaliland will increase funding and functions of public school students are aware of mortality to at least 100 quality by reducing by legal framework to achieve hectare will increase by into scientific research on institutions by 100% reproductive and communicable per 1,000 live births, 30% of consumption of environmentally sound 20% technological advancement health issues infant mortality to at water contaminated management of chemicals and within the Somaliland context by least 70/1000 and with hazardous all wastes 10% neonatal mortality to at dissolved chemicals and least 35 per 1,000 live salinity births By 2021, the area of land By 2021, increasing the number By 2021, develop civil service By 2021, male and female By 2021, reduce the By 2021, substantially By 2021 decrease the release under agricultural of engineers and skilled technical quality standards and enrolment in all TVET course epidemics of AIDS to increase water-use of point-source pollution cultivation will increase by specialists working in the certifications for competence programs will increase to 10,000 5/1000 tuberculosis, to efficiency across all particularly to air and ground 30% Infrastructure Sector by 20% measurement students 250/100,000, malaria to sectors and ensure water by 20% less than 0.9/1000 and sustainable withdrawals hepatitis B 130/100,000 (IWRM)

By 2021, the weight in kgs. By 2021, the Government of By 2021, build on existing By 2021, the number of By 2021 develop By 2021, substantially Integrate international climate per average animal head Somaliland will increase the initiatives to develop University course first year competent human increase water-use change measures into national will increase by 25% share of national budget and measurements of progress on student enrolments will have resources and increase efficiency across all policies, strategies and stakeholders funding allocated Somaliland sustainable increased by 20% health worker density to sectors and ensure planning and strengthen to the development of development that complement 50% sustainable withdrawals resilience and adaptive infrastructure by 10% gross domestic product, and (IWRM) capacity to climate-related support statistical capacity hazards and natural disaster building in national and local levels. By 2021, 30% of farmers By 2021, the government of By 2021, promote and By 2021, 10% of current primary By 2021 develop an early By 2021, increase the Improve education, and pastoralist will apply Somaliland will ensure that at significantly improve national and secondary schools and warning and response capacity of awareness-raising and human drought resilient least 30% of the cities that has planning processes and 100% of new buildings must systems, risk reduction development public and institutional capacity on agricultural practices inclusive and sustainable urban institutional capacities meet minimum infrastructure and management of institutions engaging in climate change adaptation, planning and management in 23 requirements including safe health risk the WASH sector by mitigation and early warning main (electoral) districts water supply; disable access; 30% green space; male/female latrines and secure walls. By 2018, the Somaliland By 2021, 30% of the urban By 2021, develop national By 2021, USD 3million will be By 2021, improve and adapt Government will review population will have universal quality control standards, secured and distributed into existing National strategy for and integrate sustainable access to safe, inclusive and testing and quality assurance in science, technology, disaster reduction and risk consumption and accessible, green and public Somaliland engineering and mathematics management, particularly production pattern spaces, in particular for women international scholarships for drought resilience frameworks into its and children, elderly and postgraduate students agriculture, fisheries and persons with disabilities livestock policies By 2018, an integrated and By 2021, establish a USD By 2021, allocate 10% of the

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PRODUCTION INFRASTRUCTURE GOVERNANCE EDUCATION HEALTH WASH ENVIRONMENT cross-sectorial watershed 2million research grant fund country's land as protected management policy will be focusing on research in areas (watershed area and developed; enabling sustainable natural resource biodiversity hotspots) sustainable agriculture and management and exploitation livestock production systems By 2021, increase grazing By 2021, 3% of the national By 2019, assess 45 potential reserves to 6 and holding education budget and externally major community-grazing grounds to 5 for funded education program reserves and by 2021 restore sustainable livestock budgets will be allocated and conserve 15 of them. grazing towards drought resilience and preparedness education programs

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ANNEX 5. REGIONAL OUTCOMES

Awdal Marodijeeh Sahil Togdheer Sool Sanaag

1. Small Business 1. Small Business 1. Tourism Development 1. Construct skin and hide 1.Conduct project 1. develop cooperatives Strengthen Project in the Strengthen Project in the Project for improving factory in Togdheer region. promoting regional project region by establishing region by establishing tourism infrastructure cooperatives microfinance schemes for microfinance schemes along the seashore youth and women 2. Factory Development 2. Industrial Development 2. Promote local small and 2. Initiate encouraged 2. Income generation Project by encouraging Project by constructing: medium enterprises programs lowering the large scale private sector o Cement plant project unemployment in the invested projects o Distemper factory • Create region o Tomato processing cooperatives. factory Fish processing factory 3. Result Based Decision Making Project by establish regional data collection/dissemination center under the Ministry of Planning

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