CARE

© Sankalpa Acharya/CARE India

Rapid Market Assessment Report, Kumbi Woreda, East Hararghe Zones, Oromia Region, Ethiopia CARE E thiopia September, 2020

Author: Serkalem Getachew: Food Security and Livelhood Advisor, at CARE Ethiopia

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Contents

1. Background ...... 3 2. Objectives ...... 3 3. Methodology ...... 4 4. Limitations ...... 4 5. Result and Discussion ...... 4 5.1. Community priority needs and availability of commodities in the market needed by the shock-affected population...... 4 5.2. Market Functionality ...... 6 5.3. Financial services are available and accessible ...... 6 5.4. Market constraints and market response capacity ...... 7 6. Conclusions and Recommendations ...... 9 6.1. Conclusions ...... 9 6.2. Recommendations ...... 9

Table 1: Priority needs of food and non-food commodities by amount required per month...... 5 Table 2: Summary of markets, frequencies of market, and distance from the target community ...... 5 Table 3: Traders stock Expandability capacity depend on the needs ...... 7 Table 4: Key commodities in stock before and after the shock ...... 8 Table 5: Frequency of restocking before and now ...... 8 Table 6: Price changes ...... 8

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1. Background

East Hararghe zone is one of the 20 zones of Oromia regional state located in the Eastern part of the region, with a total population of 3,244,378. The zone has 20 woredas, of which 5 of them are pastoralists, and the remaining 9 woredas are agro-pastoralists / depends on a mixed farming system (agriculture and livestock production). East Hararghe zone boarding with Harari and Somali Regional state and Dire Dawa City administrative council, the zone shares a very long boundary covering about 1410 km with the Somali Regional State. Out of the 20 woredas in the zone, nine woredas, namely Chinaksen, Gusum, Babile, Midhega Tola, Meyu, Kumbi, Goro Gutu, Metta, and Jarso woredas share boundaries with the Somali region. Kumbi woreda is one of the woredas found in the East Hararghe zone, located 267 km away from Harar city. Most of the people's livelihoods are pastoralists. The woreda has 14 kebeles with 54,458 total populations. Due to the last couple of years, ethnic conflict between Somali and Oromo people has affected the people’s living system. Out of 14 kebeles, almost peoples in 11 kebeles were displaced and living in four IDP sites that are Mino, Kerri, Haro Boren, and Burka Negeya. Currently, 8701 IDP households (4245 Male and 4450 Female) in this woreda and they are living in congested and inadequate shelter conditions. Out of which, 4045 HHs need to return to their original place, but the remaining is not interested in returns back. Hence, before responding to the shelter and NFI needs to the IDPs through cash, CARE plan for conducting this rapid market assessment aiming at gaining an understanding of the ability of the market to respond to an increasing demand due to extra cash injection and the levels of target peoples access to the market. Thus, to provide general information on market conditions and to have a better understanding of the needs of IDPs, specifically in Kumbi Woredas of CARE implementing a shelter project, the community interviews and assessment conducted at field level and the finding summary noted in this report.

2. Objectives The specific objectives of this rapid market assessment were:

 To have a better understanding about the needs of a community where the project is planning to implement cash assistance.

 To see the capacity and stability of local markets in responding to the growing demands of communities’ due to cash injected in the local economy.

 To identify effective cash delivery mechanisms

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3. Methodology The primary data sources for the assessment are representatives selected from the community, key informants from the government, and traders. Pre-designed checklists were used to collect information from the three data sources community, key informants, and traders. The tool prepared for traders allowed them to understand the capacity of the market to respond to the demand to be created through cash intervention. Accordingly, nine community discussions were held comprising of 4 male and 5 females drawn from different sections of the community groups. To deepen our understanding of the objectives of the present study, we also conducted three key informant interviews with the government representatives, and 11 traders were interviewed, where eight retailers from Kumbi Mino market. In addition, to understand the nearest source market capacity, we have interviewed three wholesalers in Bedeno woreda, Burka, and Bedeno markets. Regarding the data analysis, we followed a thematic content analysis procedure where transcriptions was made for the intended objectives. All the above mentioned data sources used to yield rich contextual and content details related to the objectives of this rapid market assessment in Kumbi woredas of the East Hararge zone.

4. Limitations

 Lack of availability of secondary data to compare timeline data.  Because of the COVID-19 pandemic, the planned time to conduct the assessment was very difficult to bring the community participate.  Traders fear providing price information assuming that we are from the government taxation office.  Lack of wholesaler in the project implementation woreda.

5. Result and Discussion

5.1. Community priority needs and availability of commodities in the market needed by the shock- affected population. Almost all FGD participants from the woreda have ranked food items, cooking oil, cooking pot, Kettle and jerrycan, as their priority needs. They listed their priority by item and amount required for Household per month.

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Table 1: Priority needs of food and non-food commodities by amount required per month.

Key commodity Amount needed per month for Price of the HH(5 person) Item Sorghum, 20 Kg 20 ETB/Kg Pasta 20 Pieces 25ETB/ 500gm Rice 15 Kg 40 ETB/kg Cooking oil 5 litter 35 ETB/litter

Sugar 2 kg 35 ETB/kg

Cooking pot 2 (More than a year) 300

kettle 1 For long time 300

Jerrycan(20 litter) 2 For long time 70

Hand washing Jug 1 per household 30

Washing basin 1 per household 35

In Kumbi woreda, there is only one market place which is the Mino market, and it is a principal market for the woreda that the majority of the peoples are using. In this market, there is the only retailer who is supplying the food commodities that is needed by the communities a single retailer could serve more than 1000 peoples per day. In Mino market, food commodity is only available. As the FGD participants mentioned, the price of the food items also expensive. However, there are two alternative marketplaces in Burka and Bedeno located 120 or 150 KM away from Kumbi woreda, respectively. As some of the people mentioned to buy the non-food items, they should have traveled to Burka and Bedeno woreda markets. In these two markets, food and non-food items are available, and the traders mentioned that as they could supply the non-food items to Kumbi woredas if needed. These markets serve as a source market for the Mino market traders since the retailers in Kumbi woredas are getting the commodities from these markets. However, since both markets are far from the woreda majority of the communities could not able to access these markets. Besides, due to increased transportation costs, even the retailer’s demands on the items they were buying is reduced.

Table 2: Summary of markets, frequencies of market, and distance from the target community

Name of the Marketplace Frequency of Distance to Means of Time to Cost to get marketplace location operation the transport to get there there marketplace access Mino weekly 200 meter No 10 minute No cost Kumbi transportation required Burka Bedeno Regular 120 KM Motor bike & 2 hour 500 birr by ISUZU motor bike and 300 birr by ISUZU Bedeno Bedeno Regular 150 KM Motor bike & 3 hours 500 birr by ISUZU motor bike and 350 birr by ISUZU

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5.2. Market Functionality Before the shock Mino market served for all peoples in 14 kebeles of Kumbi woredas, but since the shock 11 kebeles are only using this market, the other three kebeles are using other markets located in the Somalia region. As a result, the number of peoples coming to the marketplace has reduced by 50 %. As the traders told since the conflict, the demand for different commodities has changed because the IDPs do not have any income sources to buy various items from the market. Therefore the traders limited the amount and kinds of items supplying to the market. Besides, security issues have been a concern for traders to transport the commodities as well for the communities to access the market place. Before the shock, the key commodities that are wanted by the community like rice, Pasta, Water, sugar, and wheat flour were the traders sourced from Somali Region, but since the shock, they are only getting these items from Burka and other woredas of the East Hararghe zone. The shock affected the traders by reducing regular transportation service, increased the price of the commodity and cost of transportation, and reduced demand. Both the traders and the communities mentioned that since the shock, the price of the key commodities went up, particularly Sorghum and sugar experience particular large price changes. This price increment happens as a result of the security problem, and high transportation costs.

5.3. Financial services are available and accessible

Regarding financial service provider availability in Kumbi woreda, there is no financial institution at the proximity in Kumbi woreda. The peoples to get their cash from the bank, they should go to the Bedeno woredas which are 120- 150 km away from the woreda. There are two banks, Oromia cooperative bank and Commercial bank of Ethiopia in Bedeno woreda, and only Commercial bank of Ethiopia in Burka. All of the project targeted beneficiaries don’t have access to financial services providers in their woreda. All of the project targeted beneficiaries don’t have access to financial services providers in their woreda and never received the cash transfer via FSP. In terms of cash transfer modality, the target preferred cash transfer via direct cash transfer rather than using financial service providers. It is justified that they can’t afford to incur extra transportations to collect the cash.

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5.4. Market constraints and market response capacity

The traders in the Mino market can supply food items however they could hardly provide the Non-food items because there are no wholesalers in the woreda. Nevertheless, they mentioned that if they are communicated early and know the demand in the market might bring the NFI items, but they may require high costs. Accordingly, the profit margin they might request 30 – 40 %, the cost of transportation is the reason to increase the price of items, and security instability also makes them not to travel regularly. The market representatives mentioned three main factors that make it difficult for traders to continue their business as normal at the moment; these includes; no regularity of transportation, inflated the price of the commodities, and absence of wholesalers. However, the supply of key commodities will be improved if the current situation is supported by bringing supplies into the town and avail the regular transportation service in the woreda. Similarly, the traders stated, the three main factors that may make it difficult for them to increase the supply of key commodities were lack of demand, transportation, security issue and lack of enough stock. As the traders mentioned these factors can be addressed by Prior communication with transportation owners, contacting wholesalers, renting stocks, and checking the security situation. Out of 11 interviewed traders, three of them registered in the woreda trade office in Bedeno Woreda. Most of the traders mentioned that they stored their commodities at their shop/ in a small shop or their houses. The shock did not directly affect the traders' stores in Kumbi woreda, but due to the existing instability, they could not able to access the supplier market for the restoration of their stock. Besides, the current COVID-19 pandemic increased the commodity price and is affecting the trader's storage capacity. When the traders asked how many traders of their size are supplying this marketplace, in the Mino market, there are five, in Burka three traders, and in Bedeno were six the same size wholesalers are available. The traders mentioned that if the demand increased, they could restock within one week in minimum or three weeks maximum. Since the shock, the customers are buying less amount of the key commodities like rice, Oil, Pasta, and Sugar. The demand of the customers has changed because the costs of food items increased, due to COVID 19 restriction on transport, and transportation cost is expensive. Moreover, as a result of insecurity condition, lack of regular transportation, COVID 19, lack of Demand, and shortage of Supply from the wholesaler’, the retailers has changed the amount of key commodities in stock before and after the shock. Table 3: Traders stock Expandability capacity depend on the needs Time taken to respond Commodity If demand increases by 50% If demand increases by 100% names Rice Two week Three week Oil Two week Three week Pasta Two week Three week Cooking Pot 10 days 10 days Jerrycan One Week One week Hand washing One Week One week basin

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Table 4: Key commodities in stock before and after the shock Commodity name Quantity in stock Quantity in Reason for difference (if any) now stock normally Rice 5 Quintal 15 Quintal Lack of regular transportation, Pasta 150 Carton 250 Carton Security Instability, Sugar 50 Kg 150 KG Fear of COVID 19, Lack of Water 12 Pack 20 Pack Demand, and shortage of Supply in the wholesaler’ market.

Table 5: Frequency of restocking before and now Commodity name Frequency of restocking Quantity restocked each time Before Shock Now Before shock Now Rice Every three month Every Five month 10 Quintal 3 Quintal Pasta Every three month Every Five month 20 Carton 10 Carton Sugar Every three month Every Five month 5 Quintal 2 Quintal

Table 6: Price changes Commodity name Unit Current price Price before Price last year shock Oil Litter 35 25 25 Rice Kg 40 30 30 Pasta 500 Gram 25 18 18 Sugar Kg 35 25 25

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6. Conclusions and Recommendations 6.1. Conclusions In general, in the course of marketing assessment, we understood that the previous year’s conflict has affected the market situation in Kumbi woredas. The price of commodities has been unstable and has shown an increasing trend. In the study sites there are only limited shops and no wholesalers. These shops only have foods to buy. Our assessment have shown that the target community in the intervention kebeles were able to prioritize their needs of food and non-food items. Currently, the traders in Kumbi woreda are supplying food items only, but they are willing to bring NFI items if they are communicated earlier before the cash transfer. In the same token, the wholesalers in Bedeno woreda Burka and Bedono markets are also willing to transport the NFI items to the target population depending on the community preference. Respondents reported that they don’t often go to the big market centers for the fact that there is lack of transportation and even if available, not affordable. Regarding financial service provider availability, there is no such institution at their proximity in Kumbi woreda. In order for the people to get bank services, like withdrawing money, they should go to the Bedeno woreda which is 120-150 km away from the woreda. There are two banks, Oromia cooperative bank and Commercial bank of Ethiopia in Bedeno woreda, and only Commercial bank of Ethiopia is available in Burka. Therfore, we learned from this rapid market assessment that all the project targeted beneficiaries don’t have access to financial services providers in their respective woredas and never received the cash transfer via FSP(financial service providers) . In terms of cash transfer modality, the target beneficiaries preferred cash transfer via direct cash transfer rather than using those financial service providers. This could be justified that they can’t afford to incur extra transportations to collect the cash.

6.2. Recommendations

 Since the banks are far away from the districts, the direct cash distribution are preferred modalities and it will minimize the cost of the households incurred for transportation.  During direct CASH transfer, all COVID-19 protection protocols need to be followed.  In collaboration with woreda government office, prior to cash distribution communicate with transport service and traders that would enable supplier to supply the key commodities in sufficient quantities within the timeframes required.  Assess the security situations in the area, before cash distribution.  CARE conduct market monitoring and coordinate with the local trade office to regulate the price of items, which the trader inquired from the target beneficiaries.

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