Document of The World Bank

FOR OFFICIAL USE ONLY

Public Disclosure Authorized

Report No: 142981-DJ

IMPLEMENTATION COMPLETION AND RESULTS REPORT

JSDF TF0A0350

Public Disclosure Authorized ON A

SMALL GRANT

IN THE AMOUNT OF USD 2.73 MILLION

TO THE

REPUBLIC OF DJIBOUTI

MINISTRY OF ECONOMY, FINANCE & PLANNING, IN CHARGE OF PRIVATIZATION Public Disclosure Authorized

FOR

ENHANCING INCOME OPPORTUNITIES PROJECT (P148586)

November 27, 2019

Public Disclosure Authorized

Social Protection & Jobs Global Practice

Middle East And North Africa Region

Regional Vice President: Ferid Belhaj

Country Director: Marina Wes

Regional Director: Keiko Miwa

Practice Manager: Hana Brixi

Task Team Leader(s): John Van Dyck

ICR Main Contributor: Matuna Mostafa

ABBREVIATIONS AND ACRONYMS ADDS Agence Djiboutienne de Développement Social (Djibouti Social Development Agency) ATA Aid to Artisans CLE Centre for Leadership and Entrepreneurship Caisse populaire d'épargne et de crédit (Popular Bank for Credit and Saving / national CPEC micro-financing entity) CPS Country Partnership Strategy DJF Djibouti Franc FM Financial Management IDA International Development Association IFR Interim Financial Reports INGO International Non-government Agency JSDF Japan Social Development Fund MASS Ministry of Social Affairs and Solidarity MSE Micro, Small and Medium Enterprise NGO Non-governmental Organization PDO Project Development Objective PIU Project Implementation Unit Projet de Promotion de l’Emploi des Jeunes et de l’Artisanat (Enhancing Income PROPEJA Opportunities Project) SME Small and Medium Enterprises SSN Social Safety Net

TABLE OF CONTENTS

DATA SHEET ...... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ...... 4 II. OUTCOME ...... 8 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ...... 18 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 24 V. LESSONS LEARNED AND RECOMMENDATIONS ...... 28 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ...... 31 ANNEX 2. PROJECT COST BY COMPONENT ...... 37 ANNEX 3. RECIPIENT, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ...... 38 ANNEX 4. CALCULATION OF INCREASE IN INCOME FOR YOUTH ENTREPRENEURS ...... 41 ANNEX 5. LOCALITIES/ DISTRICTS PROPEJA ACTIVITIES IMPLEMENTED ...... 43

The World Bank Enhancing income opportunities in DJ (P148586)

DATA SHEET

BASIC INFORMATION

Product Information Project ID Project Name

P148586 Enhancing income opportunities in DJ

Country Financing Instrument

Djibouti Investment Project Financing

Original EA Category Revised EA Category

Not Required (C)

Organizations

Borrower Implementing Agency

MIN. OF ECONOMY AND FINANCE ADDS

Project Development Objective (PDO)

Original PDO The Project Development Objective is to improve access to life-skill, livelihood skills training, and access to finance for at least 3000 low- and semi-skilled youth and women in poor communities in Djibouti-ville and neighboring Arta, the northern region of Tadjoura, and the southern region of Ali Sabieh.

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The World Bank Enhancing income opportunities in DJ (P148586)

FINANCING

FINANCE_TBL Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) Donor Financing TF-A0350 2,730,000 2,730,000 2,729,787 Total 2,730,000 2,730,000 2,729,787

Total Project Cost 2,730,000 2,730,000 2,729,787

KEY DATES

Approval Effectiveness Original Closing Actual Closing 19-Jun-2015 20-Aug-2015 20-May-2019 20-May-2019

RESTRUCTURING AND/OR ADDITIONAL FINANCING

Date(s) Amount Disbursed (US$M) Key Revisions

KEY RATINGS

Outcome Bank Performance M&E Quality Satisfactory Satisfactory Substantial

RATINGS OF PROJECT PERFORMANCE IN ISRs

Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 15-Oct-2015 Satisfactory Satisfactory 0.00

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The World Bank Enhancing income opportunities in DJ (P148586)

02 20-Jan-2016 Satisfactory Satisfactory 0.40

03 11-Aug-2016 Satisfactory Satisfactory 0.40

04 21-Jun-2017 Moderately Satisfactory Moderately Satisfactory 0.65

05 05-Jun-2018 Satisfactory Satisfactory 1.59

06 29-Jul-2019 Satisfactory Satisfactory 2.73

ADM STAFF

Role At Approval At ICR

Regional Vice President: Gerard A. Byam Ferid Belhaj

Country Director: Poonam Gupta Marina Wes

Director: Xiaoqing Yu Keiko Miwa Yasser Aabdel-Aleem Awny El- Practice Manager: Cristobal Ridao-Cano Gammal Task Team Leader(s): Stefanie Koettl-Brodmann John Van Dyck

ICR Contributing Author: Matuna Mushfeqa Mostafa

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The World Bank Enhancing income opportunities in DJ (P148586)

I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES

Context

1. Djibouti, one of the smallest countries in Africa with a population of less than a million, is also one of the poorest countries in the world. The country is akin to a city-state, with 80 percent of the population residing in and around the capital, Djibouti-Ville, with the vast majority of the people participating in the informal sector. The country lacks fresh ground water and arable land which combined with an annual long dry season that lasts 3–4 months and periodic droughts and floods, means that the country relies almost entirely on imports to meet its food requirements.

2. Approximately two fifths (41.9 percent) of the population lives in extreme poverty (of less than US$1 per day); and poverty rates are even higher in rural areas, where 9 out of 10 people live in extreme poverty, and 7 out of 10 live in relative poverty. The rural nomadic population is dependent on pastoral and agricultural activities for their livelihood, which is under threat due to the degradation of natural resources from overgrazing. A severe drought in 2012, further intensified vulnerability and poverty, and left 20 percent of the Djibouti-Ville population and 75 percent of the rural population exposed to severe and moderate food insecurity. Despite concerted efforts, in 2012 (the most current data available during project preparation), Djibouti ranked 164 out of 187 countries in human development. Malnutrition was prevalent throughout the country: 29.6 percent of children under the age of 5 years were underweight, 29.7 percent were chronically malnourished, and 17.8 percent were acutely malnourished.

3. The typical household was poor, with a single earner participating in the informal economy. The country also had a young population, with 75 percent aged below 35 years. The overall unemployment rate in 2014 stood at 12 percent for people aged 15-64, while those aged 15-24 had an unemployment rate of 22 percent. Financial inclusion was also very low with only 12 percent of citizens having a bank account (the rate dropped to five percent for youth) and only 3 percent (15,000 people) having access to micro-finance. Low levels of education hindered labor force prospects, as the primary completion rate stood at 51 percent in 2013. Women were disadvantaged with a national literacy rate of 39.5 percent compared to 60.1 percent for men, and falling to 22 percent for rural women. About 40 percent of women participated in the labor force, most of them in small businesses in the informal sector. Household responsibilities, traditional gender roles and cultural norms, such as early marriages, hindered education and employment opportunities for women.

4. Despite these challenges, the country benefits from substantial foreign direct investment because of its geo-political positioning and the presence of American, European and Asian military bases, and from its port services for transit trade with Ethiopia. In 2012, the gross domestic product was estimated to grow at six percent per year; however, because of the lack of economic development, the country was vulnerable to fuel and food price shocks and from periodic natural disasters, such as droughts and floods.

5. To address the multi-dimensional development challenges, in 2007 the government launched the National Initiative

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The World Bank Enhancing income opportunities in DJ (P148586)

for Social Development and finalized its “Vision Djibouti 2035”1 in June 2014 (Report number 91695). The key objectives of the National Initiative were to reduce poverty, improve institutional capacity and access to basic services, and develop human capital. The Vision 2035 also prioritized women and youth and focused on promoting human capital to build a healthy and educated workforce.

6. At project appraisal, in 2014, provision of food rations and food subsidies were key components of the social protection system, which had good coverage of the poor. However, the analysis of the existing Social Safety Nets (SSNs), which included pensions, compensation for health care expenses, cash transfers, and tax exemptions on fuel products, determined that these SSNs had limited impact on reducing poverty and inequality due to poor targeting (the programs did not cover the majority of the lowest population quintile) and highlighted the low support provided to the beneficiaries. In addition, programs to enhance the employability and self-employment for women and youth were very limited, even though there was general acceptance by families and society for girls and women to engage in small businesses.

7. The Enhancing Income Opportunities Project (Projet de Promotion de l’Emploi des Jeunes et de l’Artisanat – PROPEJA) funded by the Japan Social Development Fund (JSDF) sought to address the human capital and credit constraints faced by poor, vulnerable and low skilled youth and women and enhance their income-generating opportunities. The Project contributed directly to the first Pillar of the Country Partnership Strategy (CPS, Report number 83874- DJ) for FY2014–2017, “reducing vulnerability” and supported the broader objective of creating jobs; and was also aligned with the World Bank’s Middle East and North Africa Regional Framework, which aimed to enhance shared prosperity and reduce poverty through governance, inclusion, jobs, and sustainable growth; and supported the World Bank’s twin goals of ending extreme poverty and boosting shared prosperity. Finally, PROPEJA responded to concerns raised by local civil society during the CPS consultations that the World Bank had not sufficiently engaged with the Non-Governmental Organizations (NGOs) to build the capacity of community-based associations or worked closely with local NGOs for community mobilization during implementation of projects.

Project Development Objectives (PDOs)

8. In this context, the PDO was to improve access to life-skill, livelihood skills training, and access to finance for at least 3,000 low- and semi-skilled youth and women in poor communities in Djibouti-ville and neighboring Arta, the northern region of Tadjoura, and the southern region of Ali Sabieh.

9. At project appraisal, the three regions were selected to synergize with the areas of intervention of the existing World Bank executed Djibouti Response-SSN Project (P1303282) to enable the two projects to utilize the same implementing agency, l’Agence Djibouti de Development Social (ADDS) and the same Monitoring and Evaluation (M&E) systems. Although the PROPEJA project team always coordinated with the SSN Project team for practical experience that could be replicated (e.g. how beneficiaries were paid), no concrete synergies emerged however

1 Republic of Djibouti High-Level Development Exchange Launch of “Vision Djibouti 2035” Outcome Note, June 20–23, 2014 (Report # 91695). 2 The Djibouti Response-SSN Project (P130328) was approved on June 12, 2012 for an International Development Association (IDA) grant of US$5 million, financed through the IDA Crisis Response Window.

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during implementation. New M&E systems/arrangements were developed for PROPEJA and the Obok and Dikhil regions were excluded, as the World Bank Djibouti Response-SSN Project was operating in these regions. In the end, regions were targeted taking into consideration (i) highest concentration of the extremely poor; (ii) concentration of youth; (iii) a mix of urban, peri-urban and rural areas for accessibility to markets; (iv) existing economic activities and traditional craft skills; and (v) physical accessibility and the availability of basic infrastructure needed to implement the Project. Within Djibouti-Ville, the poorest municipality of Balbala was selected, and in the other targeted regions, the regional capitals and 3–5 surrounding villages were selected.

Key Expected Outcomes and Outcome Indicators

10. The project appraisal document stated that the achievement of the PDO would be measured against the following key indicators:

• Number of direct project beneficiaries (of which 50% female); • Average percentage increase in sales of target beneficiaries receiving access to capital; and • Percentage of beneficiaries that are linked to formal financial institutions.

Components

11. Component 1: Basic Training and Mini-Business Plan Competition for Youth (Original US$1.71 million; Actual US$1.76 million). This component targeted 2,200 poor and unemployed youth who received training in basic life- skills and business skills, including developing business plans, and funding and coaching to group winners of mini- business plan competitions to help them to establish/enhance viable income-generating opportunities (small businesses). All youth aged between 15–29 years residing in the selected poor districts/localities, that were inactive, unemployed or self-employed in the informal sector were eligible for the program (the final list of selected districts/localities is provided in Annex 5). Around 5,500 applications were received, far exceeding the available training capacity of the program. To ensure a fair and transparent selection process, those who met the eligibility criteria were invited to participate in a public lottery in their community. Separate public lotteries were held for girls and boys to determine the final group of participants, which resulted in the selection of 20–24 youth for training in each targeted locality. There were 1–2 training classes per cohort/round of training in each community, and a total of 5–6 cohorts/rounds of training over the course of the program. Two community facilitators were selected from each targeted community and trained to provide life skills and business skills training to the youth and support them through the entire activity cycle (peer-to-peer training approach).

12. To participate in the business plan competition, the youth beneficiaries were required to form groups of three or more with other beneficiaries of the training and/or community members and develop a mini-business plan. The goal was to provide start-up funds of up to US$2,000 to about 1,000 group winners of the mini-business plan competitions, which were assessed by community committees. The community committees3 oversaw the entire

3 Community Development/Management Committees had been created through previous World Bank executed projects, such as the Djibouti Rural Community Development and Water Mobilization (PRODERMO) project (P117355). The committees comprised of local officials, ministerial staff and community representatives, and possessed knowledge of the local market.

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implementation of the PROPEJA activities, including the public lottery to select beneficiaries, assessed the mini- business-plans to select group winners, and decided on the amount of grants to be allocated to each group to start their business. Successful groups then received follow-up assistance, such as individual coaching by community facilitators and meetings with other winners, for approximately 6 months following receipt of the grant. This enabled the youth entrepreneurs to exchange experiences and receive further coaching and capacity building, as needed.

13. Component 2: Handicraft Value Chain Integration for Women (Original US$0.70 million; Actual US$0.56 million). This component supported value chain integration for women’s handicrafts associations4, from production to marketing, to enhance their income-generating opportunities. The Project planned to build the skills of at least 200 women from existing artisan associations with skills in beading and basket weaving, who would then provide step down training to at least three more members from their own association (for a total target of 800 women trained). The targeting involved a two-step process: (i) identifying women’s handicrafts associations to ensure a sufficient critical mass of skills in beading and basket weaving (each association should comprise at least 15–20 members); and (ii) the women’s associations were asked to nominate 2–3 of their best beading and/or basket-weaving artisans.

14. An international NGO, Aid to Artisans (ATA) was contracted to provide training to the targeted artisans to develop new designs/prototypes and improve the quality of their products; organize marketing events; and build linkages to local and international bulk buyers. The project also provided the associations with funds to purchase quality raw materials and to upgrade their business ventures, while advisory support strengthened the internal governance of the associations, as needed.

15. Component 3: Project Management, Monitoring and Evaluation, and Knowledge Dissemination (Original US$0.33 million; Actual US$0.41 million). This component supported ADDS, the implementing agency under the Ministry of Social Affairs and Solidarity (MASS) to implement the Project. Activities included the hiring of consultants for project management and field coordination; enhancing ADDS’ institutional capacity for procurement Financial Management (FM); and supporting M&E activities, including community-based M&E and grievance redress mechanisms, and using lessons to adjust activities.

B. SIGNIFICANT CHANGES DURING IMPLEMENTATION

16. The Government of Japan approved the financing on April 3, 20155. The Grant Agreement was signed on May 20, 2015 and the Project became effective on August 20, 2015. For Component 1, awareness raising activities to mobilize youth participants and the recruitment of community facilitators commenced in the targeted communities in the last quarter of 2015. As the Project activities were new to Djibouti and the ADDS team, a decision was made in early 2016 to phase the implementation to ensure the effective operationalization of the complex Component 1 activities before launching Component 2 activities, with: (i) Component 1 to commence in January 2016 in eight pilot areas and starting from late 2016 to be gradually expanded to all target areas; and (ii) Component 2 to start in late 2016/early 2017. However, the implementation of Component 2 was delayed to October 2017 due to challenges in procuring the services of an appropriately qualified consultant and/or firm to provide the full range of capacity

4 These were formal not for profit organizations approved by the Government. 5 Source: Mission 18–30 April 2015 Aide Memoire.

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building activities to the female artisan associations. An agreement was also reached to implement the training activities for Component 2 in two phases: the first phase was implemented from October 2017 in the two localities of Balbala (PK12) and Damerjog; and the second phase expanded the Project activities to Ali Sabieh and Tadjourah from March 2018 onward.

17. In March 2019, the World Bank provided no objection to ADDS’s request to exceed the category limit for grants under Component 1 and project management costs 1, given ADDS’s assessment that sufficient funds remained to financially support the women’s associations under Component 2. A total of US$0.14 million was reallocated from Component 2, with US$0.06 million allocated to Component 1 and US$0.08 million to Component 3. Funding for Component 2 was reduced after a careful calculation of the estimated funds needed to financially support the women’s associations. First, the project verified the number of associations eligible to receive funding based on the established criteria and then organizations were mapped against the same criteria, which led to 16 associations being selected; and second, the average funding needed per association to purchase the materials was estimated. As a result, the total amount originally budgeted for Component 2 was reduced by US$0.14 million, and the funds were reallocated to scale up the activities of Component 1, mainly to provide additional youth groups with financing to start their businesses, and to Component 3 to provide additional support for the close monitoring of the youth business projects.

II. OUTCOME

Assessment of Achievement of Each Objective/Outcome

18. The Project was successful in achieving its development objective, as all outcome indicators exceeded their original target values. However, two intermediate indicators target values for component 2 were not met, namely: intermediate indicator “Number of beneficiaries who directly received product design training” and “Number of beneficiaries who received step-down training through lead artisans”, while all others exceeded their original target values. The progress against the PDO can be measured by assessing the contributions made to key performance indicators and targets, as set forth below.

Outcome Indicator Name Baseline Original Actual at Percentage Target Completion Change Indicator 1: Number of direct project beneficiaries 0 3,000 3,338 111% Indicator 2: Direct number of female project beneficiaries 0 1,500 1,936 116% (and percentage) (50%) (58%) Indicator 3: Average percentage increase in sales of target 0 20% >100% >500% beneficiaries receiving access to capital Indicator 4: Percentage of beneficiaries that are linked to 0 25% 40% 160% formal financial institutions

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Source: PROPEJA Results Framework, September 2019

19. By Project closing, a total of 3,338 poor and vulnerable youth and women directly benefited from PROPEJA’s activities, having received basic life skills and business skills training. A total of 1,869 people (or 56 percent, including 1,331 youth and 538 women artisans) also benefited from grants to start/enhance their business ventures6. Taking into account the youth who did not participate in the training but received funding as partners of group businesses, the total number of direct and indirect Project beneficiaries was 3,956 people, 57 percent of which were females. Of the direct beneficiaries, 58 percent (or 1,936) were females, against a targeted 50 percent.

20. In 2019, 1–2 years after the receipt of financing, 70 percent of the youth businesses (Component 1) are still operational, with the direct Project beneficiaries realizing an average monthly profit of about US$90. This is a substantial livelihood improvement, as 95 percent of the young beneficiaries were unemployed, working at home, or inactive prior to the Project. Thus, at project closing, the income-generating activities supported by PROPEJA contributed to increasing incomes for youth grant beneficiaries by over 100 percent on average (rising from no income to US$90 per month), against a targeted 20 percent. A calculation of how the estimated increase in income is derived is provided in Annex 4. In regard to Component 2, the handicrafts marketing events organized for the women’s associations generated about US$17,000 in sales, and it also increased direct sales by the women outside of the marketing events7.

21. The Project improved financial inclusion by linking 40 percent (or 1,322) of the youth beneficiaries under Component 1 to formal financial institutions, against a targeted 25 percent8. The linkage to financial institutions took the form of beneficiaries opening an account at the Caisse populaire d'épargne et de crédit (CPEC9 – Popular Bank for Credit and Saving) the national micro-financing entity. In addition, the Project also led to several women's associations opening bank accounts. The opening of bank accounts at financial institutions was a Project requirement for the recipients of the cash transfers under Component 1 and served multiple purposes. First, it enabled the 1,322 micro-project competition winners to open bank accounts for the first time, which is normally very difficult for the youth in Djibouti due to a lack of financial instruments available to them and as they can’t meet the guarantee requirements. Second, it enabled the transfer of cash payments directly to the beneficiaries, which helped them build financial literacy and responsibility. Lastly, it improved financial inclusion for these beneficiaries, some of who reported accessing additional credit from CPEC to expand their business.

22. PROPEJA was designed to achieve its project objectives through two types of interventions, which were delivered through separate components that were targeted to specific poor and vulnerable groups. The performance of the Project can be further judged by assessing the achievement of the following two components:

6 Data derived from April 30–May 7, 2019 Mission Aide Memoire. 7 Source : Etude d’impact de la composante 2 du Projet de Promotion de l’Emploi des Jeunes et de l’Artisanat.

PROPEJA (“Impact Assessment of component 2 of the Enhancing Income Opportunities Project (PROPEJA) by Amina Saïd Chiré, May 2019.

8 Source: Mission April 30–May 7, 2019 Aide Memoire. 9 CPECs are micro financial institutions governed by banking regulations and under the supervision of the Djibouti Central Bank.

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a. Component 1: Basic training and Mini-Business Plan Competition for Youth b. Component 2: Handicraft value chain integration for women

Achievements of Component 1: Basic training and Mini-Business Plan Competition for Youth

Intermediate Indicator Name Baseline Original Actual at Percentage Target Completion Change Number of beneficiaries enrolled in capacity building 0 2,200 2,800 127% activities Number of beneficiaries who received cash transfers ---- 1,000 1,331 133% Percentage of cash transfer recipients being female ---- 30% 49% 163% Percentage of livelihood groups receiving the full transfer ---- 60% 97% 162% amount within 6 months of being selected Source: PROPEJA Results Framework, September 2019

23. The intermediate indicators target values for Component 1 were exceeded. Component 1 activities contributed to helping poor youth, the vast majority of whom were unemployed or inactive, access self-employment opportunities through the provision of training, financing and support for the creation and/or expansion of businesses, which enhanced their income-generating opportunities. During the implementation of the third cycle, the target age range was extended to 35 years, in recognition of the limited skills and maturity of the youth aged between 16–17 years and substantial demand from the higher age groups. In total, 2,800 young people benefited from basic life skills and entrepreneurship training, against a targeted 2,200.

24. The youth received training in basic life skills on topics such as self-confidence and team work; and business skills training, such as understanding market potential, basic bookkeeping, and preparing a business plan. The community- based training was offered in 16 locations across the country. A total of six training cycles were provided in Djibouti City (Balbala) and five cycles in the regions. The first three training cycles used the original curriculum that took four months to deliver10, while the last three cycles applied a condensed curriculum that allowed each training cycle to be completed in about 2.5 months. Of the 2,800 young people enrolled, 1,850 (66 percent) completed the training (with an attendance rate of at least 80 percent). Based on the end-of-training questionnaires, 97 percent of the participants were very satisfied with the training11.

25. The purpose of the business skills training was to help poor groups of youth to identify a viable idea and prepare a mini-business plan to solicit funding for starting or expanding a business: 948 mini-business plans were submitted,

10 The training was provided on a part-time basis, with three training sessions per week. 11 Data for Component 1 achievements is sourced from the April 30–May 7, 2019 Mission Aide Memoire.

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and 445 group micro-projects were approved. A total of 1,331 young people received cash transfers to implement their project, against a targeted 1,000; with 49 percent (or 648) of them being girls, against a targeted 30 percent. The total number of cash transfers beneficiaries comprised 659 people who had participated in the training and 672 youth who were their business associates. Taking into account the 672 young people who did not receive training but received funding as associates of the group businesses, the total number of direct beneficiaries of Component 1 was 3,47212 youth. The types of small businesses financed were related to: (i) retail shops, such as boutiques, kiosk and fruit/vegetable stalls (58.82 percent); (ii) service provision, such as hairdressers, photo studios, telephone booths, restaurants, cyber-cafés, gaming rooms, motorcycle taxis, and electricians (33.33 percent); and (iii) production related activities, including rearing livestock, growing vegetables, and making clothing (7.84 percent). Of the business plan competition applicants who did not receive cash transfers, the majority abandoned their project idea due to a lack of funding.

26. Of the 445 micro-projects approved, 312 (70 percent) were operational at project closing. Among the winners of the first and second cycle, about 90 percent of the projects were still operational 9–12 months after receiving funding; and about 70 percent of the projects were still operational 1–2 years after the receipt of funding13. The businesses that typically succeeded (remained operational) tended to be small local shops, and those run by women, with 53 percent of businesses started by women still operational compared to 47 percent for men. The survival rates for new businesses started in the regions were higher than those in the Balbala area, especially in the Ali-Sabieh region where 90 percent of the youth businesses are still operational. By project closing, about a third of the businesses closed, due to issues such as the high rent and/or availability of commercial premises and conflicts within the groups, which stemmed from factors such as low profitability, and the beneficiary of the training not sharing their technical business knowledge with group members and dominating the group. To address these issues, (i) some facilitators and community committee members accompanied group winners to negotiate the rent for shop premises, as well as purchase required supplies and material; (ii) the material on negotiations and conflict resolution were strengthened in the training and coaching curriculum; and (iii) the project tested options requiring groups to be formed from the participants of the training to ensure power balance within groups; all of which made positive impacts.

27. It is worth noting that 97 percent of the business plan competition winners received the full transfer amount within six-months of their selection, against a targeted 60 percent. This reflects the appropriate use of the first tranche of payments by the group winners to fit-out their business site (building, shelving, electric connections etc.) within the stipulated six-months: while the average time between the first and the second tranche was about 70 days. The second tranche payment was used to buy supplies and/or goods to sell through the businesses.

28. Overall, the youth businesses funded by the Project generated attractive incomes for the young people, and increased income by over 100 percent, against a targeted 20 percent. According to a survey carried out by the project, the average monthly sales of operational micro-projects was US$496, with an average monthly profit of about US$236 for a group with an average size of 2.5 people, as some members left their groups. This represents an average monthly income per partner of about US$90 for micro-projects in operation; while the average income reported in the follow- up survey by individuals was around US$104 per month. In comparison, the average per capita income in Djibouti is

12 Includes 2,800 beneficiaries of the training and 672 business associates who did not receive the training but benefited from the cash transfers. 13 Source: April 30 – May 7, 2019 Mission Aide Memoire.

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estimated at US$155 (27,488 DJF) per month (according to World Bank data14). Based on the baseline survey, the average monthly income at baseline was about US$11.24; however, the real average income at baseline was likely to be higher, as in reality many benefited some small income-generating activities (e.g. casual work). Recognizing that the real baseline income was likely higher, for example if it were between US$22.50 and US$28 then the increase would be over 100 to 200 percent. Given the lack of precise measurement, a relatively conservative estimate of income increase has been opted for, that is an increase >100%). As 95 percent of the youth who applied for the project were unemployed or inactive and without a source of income prior to the project, this suggests a significant improvement in terms of a steady source of income generation.

Achievements of Component 2: Handicraft Value Chain Integration for Women

Intermediate Indicator Name Baseline Original Actual at Percentage Target Completion Change Number of beneficiaries that directly received product ---- 200 178 89% design training (lead artisans) Number of beneficiaries who received step-down training ---- 600 315 53% through lead artisans Number of beneficiaries who received access to cash- ---- 400 538 135% transfers through the cluster organizations Source: PROPEJA Results Framework, September 2019 29. The Intermediate Indicators target values for Component 2 were partially met. A total of 178 women from artisans associations received training from the international NGO ATA that enhanced their skills and designs for beading and basket weaving products; representing 89 percent of the targeted 200 direct beneficiaries. An additional 315 women received step down training from the direct project beneficiaries, which took place mainly during the production phases for sales events, representing 53 percent of the targeted 600 indirect beneficiaries. In total, 16 associations received cash transfers benefiting 538 artisans, which were used to improve their shops and buy quality raw materials, against a targeted 400 women15.

30. The Project did not meet the targeted number of direct beneficiaries for this component. The selection of beneficiaries relied on the women’s associations to nominate 2-3 of their best beading and basket-weaving artisans for skills training, who would then be provided step-down training to at least three other members of their association. The International NGO ATA trained a total of 193 women. During the first skill building session held in Balbala, however, the PROPEJA eligibility criteria was not strictly enforced on the ground and 15 women who were not targeted by the Project participated in the training. These 15 women were not counted in measuring this indicator, and as it was too late to target new beneficiaries, only 178 women were assessed to be trained by the Project16. The Project subsequently increased communication with ADDS to stress the importance of enforcing the PROJPEA

14 Based on the annual amount of Gross National Income calculated according to the Atlas method: https://donnees.banquemondiale.org/indicator/NY.GNP.PCAP.KN?locations=DJ&view=chart. 15 Source: Rapport d’achèvement du Projet de Promotion de l’Emploi des Jeunes et de l’Artisanat (PROPEJA), juillet 2019 (in English, Completion Report of the Project for the Promotion of Youth Employment and Handicrafts (PROPEJA), or PROPEJA Completion Report).

16 Source: Information provided by Kevin Hempel, Youth Employment Specialist Consultant for PROPEJA.

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selection criteria and training to only the women selected/targeted to participate in PROPEJA: thereafter, the PROPEJA targeting was strictly adhered to by ADDS.

Technical and Basic Business Management Training

31. In regard to the step-down training, while the transfer of know-how within some association took place as planned, in others only a small number of women reported receiving the step-down training. There were several reasons why these indicator target values were not met. There was significant heterogeneity in the abilities of the direct beneficiaries to share the skills they had acquired; and the step-down training may also have been under-reported by women who were not able to pick up the skills or because of inter-personal dynamics, such as dominance by elderly members, lack of ability/willingness to effectively pass on the skills learned, as well as the lack of space and time for mothers with other responsibilities to provide the training. Lastly, local focal points were responsible for collecting the names of the women who were involved in the production phase; however, when compared to the list of women who participated in the training, this list revealed a number of discrepancies, hence the reporting of lower figures.

32. Between October 2017 and March 2018, the International NGO ATA provided three technical training workshops related to making beading and three training for basket weaving products, and a fourth workshop was held in October 2018 to deepen the concepts learned and refine the product range, which included handicrafts such as jewelry, coasters and baskets. The training and technical assistance were tailored by region and association to differentiate designs and products, so as to reduce competition amongst the associations and improve marketability. As a result of these trainings, 495 new products have been developed and are now available in Djibouti17.

33. The impact study of Component 218 found that women who received direct training from the INGO ATA or the step- down training greatly appreciated the benefits they derived from the basketry and beading workshops. They especially acknowledged the innovations the training brought to their profession/art, which introduced new designs, colors and ways of matching colors, and new dyeing techniques. The training helped the women to adapt to market trends and introduce new products according to market demands. Prior to the training, the women made their products without a client group in mind making it difficult for them to sell their traditionally designed products. As the new designs are better adapted to the tastes of urban and international clients, this has led to improved sales and enhanced benefits to the entire association.

34. Although the impact of the training varied according to the initial capacity of the association, the study found that in general it helped the associations to better manage their stock of raw materials and production in terms of both quality and quantity (i.e. compliance with model/prototype size). The training also strengthened business management of the associations. For example, at all sale locations/events each item was labeled with the producer’s name and price. This improved financial accounting and ensured that everyone received her correct dues. Whereas in the past, the associations had little information on whose items had been sold and for how much, which sometimes led women to get into debt.

17 Source: Mission Aide Memoire April 30-May 7, 2019. 18 Etude d’impact de la composante 2 du Projet de Promotion de l’Emploi des Jeunes et de l’Artisanat PROPEJA’

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Institutional Capacity Building

35. A total US$75,500 was distributed to the women’s handicrafts association, with an average grant of US$4,700 per association19. Based on the institutional capacity assessment of the various craft associations, 16 associations received funding, which was provided in two phases: the first phase provided funds to the more developed organizations and the second to those associations in need of capacity enhancement and training to meet the eligibility criteria (e.g. common workspace, bank account). The cash transfers enabled the associations to purchase raw material, equipment and tools for the production, storage and sale of products, and enhance the fit-out of their shop, including setting up sales and storage rooms for their products.

36. Institutional strengthening of the associations consisted of six support activities: (i) raising awareness of association members about the legal status of their cooperative; (ii) analysis of the internal management structure of each association (e.g. decision-making, roles, FM), which made it possible to assess the level of maturity of the different associations; (iii) a three-day training was provided by a national consultant in institutional development (i.e. internal management, financial management, procurement, stock management, product quality control, sales and marketing) that improved the business functions and strengthened the capacities of the handicrafts associations, particularly internal governance and the process of creating and managing a cooperative; (iv) enhancing capacity of marketing managers to arrange displays, communicate with customers, and price products; (v) developing marketing tools for each association (e.g. catalogues, business cards); and (vi) in September 2018, the INGO ATA provided training to improve the internal management and governance of the associations by targeting training to the officers, including the marketing manager, the treasurer (in simplified accounting), and the president. This training also focused on customer service and how to sell at fairs. In addition, the INGO ATA selected the five best artisans to participate in a study tour to Ethiopia, who learnt techniques on basket dyeing, refining beading and basketry, building relations with professional buyers, as well as organizing trade fairs. They were expected to share their knowledge acquired with other beneficiaries.

Marketing Events for Products Developed

37. Several sales events were organized to connect artisans with buyers and accelerate the sale of the handicraft products. Eight sales events were held between December 2017 and May 2019, which included the Djibouti Trade Fair (December 2017 and December 2018), Camp Lemonier (May 2018), the Japanese military base (June and July 2018), within ADDS (August 2018), and the French Institute (November 2018). The last sales event was organized as part of PROPEJA’s closing ceremony in May 2019. The sales generated through these events totaled approximately US$17,000. These events empowered the women by building their confidence and improved their marketing skills, and business skills, such as product pricing, display arrangements, and salesmanship. For example, the women learnt the benefits of smiling to attract potential customers, display photos of themselves with their products, and pay attention to the best selling items at fairs and copy and sell them at future events20. According to the impact study,

19 Source: Mission Aide Memoire, April 30-May 7, 2019. 20 Etude d’impact de la composante 2 du Projet de Promotion de l’Emploi des Jeunes et de l’Artisanat PROPEJA’, 2017-2019, by Amina Saïd Chiré

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the development of business cards, product catalogues and a website on Djibouti's homemade handicrafts products also increased visibility of the associations and their products.

38. The component activities also aimed to improve local distribution channels for artisanal products and set up permanent venues to stimulate the sale of products, but despite a concerted effort by the project with meetings held with local professional/bulk buyers to stimulate support for establishing more permanent value chains/markets, the interest and responsiveness was very low. In the end, the following were established: (i) remodeling a kiosk at the National Tourist Office in Djibouti-Ville’s city center; (ii) the sale of basketry products to the Sheraton Hotel, displayed as wall decoration in the hotel’s restaurant (the hotel also plans to buy small baskets to decorate around 200 rooms); (iii) weekly stands at the main hotels; and (iv) creation of a website to market Djibouti's homemade handicrafts products.

39. In general however, the majority of the associations continue to sell their products in small shops (either existing or new) in places such as Balbala or regional areas, and or participate in fairs. Additionally, no marketing channels were established with international buyers. Given the low capacities and limited organizational structures, a decision was made to focus on the national market, as these associations first needed to build capacity to meet local demand before approaching more demanding customers with more complex logistics involved (international delivery). Even after project completion, there is an understanding that the national market needs further solidifying before assessing the feasibility of linkages with international markets, as recommended by the International NGO ATA based on their international experience.

Other Benefits

40. Despite the Project not achieving two of its intermediate indicators for this component, PROPEJA contributed to reducing obstacles faced by women artisans that prevented income generation, and helped to improve the quality of artisanal products, enhanced business and marketing capacity, and developed new distribution channels. The Project also improved the visibility of the handicrafts sector in the country and highlighted its potential for income generation. The qualitative impact evaluation21 reports that some craftswomen claimed that their profits have increased by 100 percent following the PROPEJA interventions; and the profits made from organized sales are generally higher than those made by the associations in the regions. PROPEJA also empowered the women by enhancing their ability to generate more income, many of who no longer consider their art as a hobby but as a profession from which they can derive a livelihood.

Overall Outcome Rating

41. The overall outcome rating is rated as Satisfactory. The rating is based on the Project achieving its development objectives and surpassing all of its outcome indicators, and for achieving (or exceeding) all but two of Component 2 intermediate indicators.

21 Etude d’impact de la composante 2 du Projet de Promotion de l’Emploi des Jeunes et de l’Artisanat PROPEJA’, 2017-2019, by Amina Saïd Chiré

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Other Outcomes and Impacts

Benefits to the Broader Community

42. Beyond income generation, the business plan winners diversified their range of economic activities through the profits generated (i.e. from selling SIM cards to selling mobile phones and associated accessories) and increased the availability of products and services for the local population, with the establishment of hardware shops, hair dressers, and cafes.

43. The handicrafts sector in Djibouti is saturated with products from other countries, such as Kenya, Ethiopia and India. The strengthening of the artisanal associations contributed to sustaining traditional arts, crafts and skills, and increased the availability of locally made handicrafts, which are highly sought after by foreigners travelling to the country, especially foreign military personnel. The Impact Assessment of Component 2 and conversations with stakeholders also suggest that there was a benefit of “revitalizing cultural heritage” since Djibouti’s’ artisan products had been very outdated, and the new products contributed to new pride among women and the community at large.

44. The regional committees and community facilitators have built strong relationships with the PROPEJA beneficiaries and a commitment, as a result of the relationships and skills established through the Project, to supporting their community members. Under their contract, facilitators were required to provide follow up coaching twice to the competition winners, many however have continued to advise and coach the beneficiaries beyond Project completion, and shared knowledge of nutritional and reproductive health with members of the broader community.

Resilience building, Poverty reduction and shared prosperity

45. The skills and linkages to financial institutions acquired through the Project have enhanced the beneficiaries’ income resilience, including securing additional financing from the CPEC, with support from the community facilitator, to enhance their establishment. The members of the group enterprises have continued to run their businesses even when partners have left, including to start their own business. Of the operational businesses, 18 percent of the beneficiaries have recruited regular employees, and 50 percent have family members who help without remuneration. Many groups have also accessed additional funds from CPEC to expand and/or diversify their business.

46. Approximately 69 percent of the entrepreneurs reported they were able to save money from the profits generated and 45 percent were able to support their families financially. This component has also helped to prevent negative coping strategies, such as selling of assets and migration from regional areas to the capital. Over half (55 percent) of the business entrepreneurs indicated that the Project also helped them to acquire new skills, autonomy, and social status in their community. Additionally, the subjective wellbeing of the youth improved from 3.9/10 before the Project to 5.7/10, according to the Component 1 Follow-up Survey, which compares to 6.3 among operational businesses and 4.2 for entrepreneurs whose businesses closed22.

22 Based on findings from the Component 1 Follow-up Survey.

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Gender

47. The impact of the Project on women was positive, with 1,936 females benefitting from basic life skills training that increased their confidence and understanding of nutritional practices and reproductive health, as well as business skills to start their own business or enhance the marketability of their associations’ products. The fact that the Project achieved gender balance (58 percent of direct project beneficiaries were women) is an important outcome, as women and girls in Djibouti are largely excluded from the labor market. In addition, girls/women represent 57 percent of the people trained and 64 percent of the recipients of the cash transfers23. Thus, the results are based on intentional efforts to make the PROPEJA project gender-sensitive (e.g. during outreach, girls community facilitators, quota for balanced training classes).

48. The provision of cash transfers also empowered 648 young girls and their associates to start/improve their business and benefitted 538 women artisans to buy quality raw material to produce higher quality products and enhance the setup of their cooperatives.

49. Women also participated in key leadership positions. About 10 out or 20 (50 percent) of the community committee members in position of responsibility in the youth entrepreneurship sub-project were female; and 12 (38 percent) of all community facilitators were also female, who have been empowered through training and have become leaders in their communities. These women can also advocate support for community members from government and private organizations to build basic life skills and income generating opportunities, as well as provide advice on setting up businesses, FM, and opening bank accounts.

Institutional Strengthening

50. ADDS. The World Bank’s support and technical assistance contributed to enhancing the institutional capacity of the ADDS in MASS, which had overall responsibility for the Project. ADDS benefited from the creation of the Project Implementation Unit (PIU), which included a project manager, a microenterprise expert, two assistants to monitor activities of the two components, as well as a procurement officer and a FM officer (who were co-financed by other projects). ADDS’ capacity has been enhanced to facilitate the training of trainers; manage fiduciary responsibilities for micro-financing; and identify and support business opportunities at the local level. By partnering with CPEC, the ADDS is also able to harness expertise and support from the private sector, such as financial institutions, to implement micro-financing/community projects.

51. CPEC. Prior to the Project, only 5 percent of youth aged between 15–24 years had accounts with CPEC, the national micro-finance entity, compared to 18 percent for the MENA region as a whole24. At project appraisal, rural youth and vulnerable populations had very limited access to CPEC due to (i) distance; (ii) guaranty requirements; (iii) high interest rates); (iv) limited range of financial products; and (v) the lack of administrative capacity within CPEC. Partnership with PROPEJA has increased capacity of CPEC and the financial instruments available to youth

23 Source: ADDS PROPEJA Final Report, 2019. 24 Demirguc-Kunt, Asli and Klapper, Leora (2012): "Measuring Financial Inclusion: The Global Findex", World Bank Policy Research WP 6025. Accessed at: http://datatopics.worldbank.org/financialinclusion/country/djibouti.

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entrepreneurs, with some youth participants already having accessed additional financing from CPEC outside of the Project.

III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME

A. KEY FACTORS DURING PREPARATION

52. The World Bank and the Government developed a project design based on sound background analyses of the challenges faced by poor youth and women with low levels of literacy in finding sustainable economic opportunities, as well as the existing capacities of local communities to facilitate a participatory approach to development. The team considered synergies with the Djibouti Response-SSN Project that was under implementation, as well as the benefits of partnering with ADDS. The World Bank also incorporated lessons from other World Bank projects to inform project preparation and identified key risks and mitigation measures. The key factors that influenced preparation are highlighted below:

53. Soundness of background analysis in project design. The Project design was informed by rigorous analyses of the country’s social and economic sectors, as well as direct experience derived from the implementation of the Djibouti Response-SSN Project. Key considerations in the provision of training included the need to enhance life skills, along with building business skills. The Project also recognized that despite being a conservative country, families and society generally accepted girls and women’s engagement in small businesses to supplement household income. Community feedback sought by the Djibouti Response-SSN Project also reported that women largely managed the household finances. Thus, PROPEJA placed great emphasis on girls and women’s participation, as increasing their access to income would empower them.

54. Lessons learned from World Bank-wide experience. The World Bank placed strong emphasis on the lessons learned from implementing youth and women empowerment and community-based livelihood interventions in low-income countries, such as North Uganda and South Asia, including Bangladesh’s BRAC’s Employment and Livelihoods for Adolescents (ELA) program25, and the World Bank and JSDF-financed rural livelihoods programs/projects in South Asia26. The lessons incorporated were as follows:

25 A Roadmap for Promoting Women’s Economic Empowerment, (United Nations Foundation, 2013)25; How to make youth employment programs “girl friendly” (World Bank, 2012b, Report number 81672); and Entrepreneurship programs in developing countries: A meta-regression analysis (World Bank, 2013, Report number 77168). Other interventions that informed the design of the project include BRAC’s Employment and Livelihoods for Adolescents (ELA) program, the World Bank supported Northern Uganda Social Action Fund Youth Opportunities Program. 26 For more information see Bandiera et al (2012). Empowering Adolescent Girls: Evidence from a Randomized Control Trial in Uganda; Blattman et al (2013). The Economic and Social Returns to Cash Transfers: Evidence from a Ugandan aid program; as well as the World Bank’s support for the “Jiyo-Improving Livelihoods for Rural Artisans in India” program and “Making Markets work for the conflict-affected in Nepal” project (P128744).”

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a. It was important to develop an integrated design that built the capacity of vulnerable youth and women and provided them with start-up funds and on-going coaching to enable them to effectively establish income generating opportunities. Based on rigorous evidence, the Project provided seed capital to youth groups, as research found that young people manage cash transfers responsibly to access training and develop a business.

b. In socially conservative and low-income settings, evidence shows that women’s capacity building and income generating activities are more successful when combined with social services. The Project thus accounted for the social context and gender barriers by including life skills in the training curriculum (e.g. to increase girls' self-confidence), having female trainers, and ensuring strong involvement of the community to foster an enabling environment for girls’ participation.

c. Given the high youth unemployment rate of 70 percent, the Project emphasized targeting grants at groups of youth, rather than individuals, to increase the number of beneficiaries reached and to diversify the range of livelihood opportunities that could be supported.

d. Lessons from the JSDF-financed “Youth Livelihoods in Southern Iraq” project (P125102) informed project design, including incorporating (i) flexible funding based on the investment needs of the different business ventures; (ii) guiding youth, and especially girls, in the choice of potential economic activities to encourage diversification; and (iii) limiting self-employment support to those youth who have demonstrated suitability through prior activities, to ensure they had sufficient commitment and a basic understanding of how to set up a business.

55. Assessment of Risks and Mitigation Measures. The community-based livelihood programming was new to Djibouti and ADDS lacked prior experience in providing cash transfers to youth groups and value chain development. The overall risk rating for the Project was thus rated “Substantial”, reflecting ADDS’ capacity, governance, systems for monitoring group projects at the local level, and the reliance on international experience to design a project relevant to Djibouti.

56. Overall, the participatory approach helped mitigate some of the risks by taking the following measures:

a. The Project design focused on building capacity of the implementing agency, ADDS, through the establishment of a dedicated PIU and provision of training to staff.

b. Building capacity at the local level through periodic training of community facilitators and community committees to support the implementation of the micro-projects and monitor progress. Through the community facilitators and their close monitoring and association with group members, the project had better and quicker knowledge of what was happening on the ground with the implementation of the micro-business projects (i.e. when a youth group tried to misuse funds) and through the close involvement of local community leaders. The Project also had some leverage to respond quickly to issues at the local level.

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c. Funding market research to inform Component 2 activities and enhance integration of artisan women in the handicrafts value chain. The International NGO ATA’s study, Évaluation du Secteur de l’Artisanat à Djibouti (Assessment of the Handicrafts Sector in Djibouti), July 2017, informed the research-based programmatic approach to component activities. These consisted of the following: (i) training in product innovation by international designers; (ii) production support; (iii) organization of sales events; (iv) development of distribution channels at the national level (and as far as possible at the international level); (v) strengthening of women's groups (internal management, creation of cooperatives, etc.); and (vi) financial support for groups (e. g. for the purchase of supplies, tools, raw materials).

B. KEY FACTORS DURING IMPLEMENTATION

57. Overall, the Project was well conceptualized, and it clearly identified two of the most important interventions to enhance income opportunities of poor youth and women, namely training and financing. PROPEJA provided not only important life and business skills training and financing, but also on-going support from business planning to marketing and sales in a coordinated and strategic manner. Furthermore, the Project addressed the gaps in financial inclusion, (i) with 1,322 of the youth beneficiaries (Component 1) linked for the first time with formal financial institutions, as they opened accounts at CPEC, which is normally a challenge for youth, due to stringent guarantee requirements; and (ii) some artisanal associations opened bank accounts for the first time. The PROPEJA financed market research on the artisanal sector in Djibouti. Between May and July 2017, the International NGO ATA conducted a first time market study on the state of the craft sector (basketry and beading sectors) and found that despite existing crafts skills and a potential market (including the Djiboutian middle class and foreigners working in Djibouti), the sector suffers from several weaknesses that limit income generation for women craftswomen, in particular: (i) lack of innovation in product design; (ii) insufficient product quality (finishing); and (iii) insufficient marketing. These results were shared at an outreach event that increased awareness of government, private sector and civil society, and informed the design of Component 2 activities.

58. Government Commitment: The Government, MASS, and particularly ADDS were highly committed to the Project, and publically promoted the opportunities provided by PROPEJA to mobilize youth to register for the program by communicating the importance of youth and female entrepreneurship in the target areas. The Project was officially launched on March 2, 2015 at the Palais du Peuple (People's Palace) and was attended by the Minister of Finance, the former Secretary of State for National Solidarity, the Ambassador of Japan and a World Bank representative. The official launch of the Project, the training of facilitators, the launch of training in the localities, completion of training, and announcement of the business plan competition winners were all covered by the press and broadcast on television.

Component 1: Basic Training and Mini-Business-Plan Competition for Youth

Support to community facilitators and community groups

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59. Enhancing support to Community Committees: The regional committees were trained on its operating mandates and responsibilities and provided with standard templates/documents to assess the proposals and validate their decision on the business-plan competition. As community committees did not have the technical capacity to assess business plans, technical committees were set up in all participating regions to support the community committees. The technical committees comprised representatives from ADDS, Chamber of Commerce, local community, and CPEC who reviewed the mini-business-plans and made recommendation to the community committees on awarding funding. This ensured transparent and informed decisions to be made on the selection of business-plan group winners and awarding of grants.

60. Heterogeneity in facilitators’ capacity and motivation. During the first phase of the rollout of the training, substantial disparity among the community facilitators were observed, with several facilitators lacking sufficient capacity to facilitate the training, while others had not reviewed or prepared the course material. To address these quality issues, additional training was provided to the facilitators; and the duration of the facilitators' contracts were reduced from 32 months to 6 months27, with the caveat that the contracts for those who performed well would be renewed for 12 months. In addition, performance-based pay was introduced (bonuses) for high performing facilitators. These measures helped to increase capacity and motivated the facilitators to better prepare for the training sessions.

61. Clear and transparent selection of youth beneficiaries for training. The outreach campaign effectively communicated the eligibility criteria for the youth program, requiring the youth, inter alia, to be a resident of the selected locality; aged between 16 and 29 years; not involved in regular training or apprenticeship; not participating formal employment; interested in the development of a revenue generating activity as a group; and committed to participate in the entire training. The communication campaign resulted in the submission of over 5,500 applications, and the information collected included name, age, occupations, and educational level. The local facilitators checked the registration forms for eligibility and most applicants were assessed to be eligible for the program. The subsequent public lottery (held separately for girls and boys) with oversight provided by local community leaders was thus an efficient way to select the beneficiaries from the thousands who were eligible. These steps not only expedited the targeting process, but also raised the transparency and credibility of the program; reduced skepticism of government implemented programs; and ensured a higher level of success for the youth business ventures.

62. Clear and transparent assessment of micro-business plans and selection of winners. The initial project design planned to fund 1,000 youth groups (this was later increased to 1,331 groups). To participate in the business plan competition, the youth groups were required to have at least one member with a minimum attendance rate of 80 percent in the training. During the training, facilitators provided information on projects that were eligible (small-scale trade, agriculture, fisheries, trade, crafts, etc.) and non-eligible (i.e. projects that harm the environment, involve child labor, rely on the construction of new infrastructure, require complex operations, etc). The facilitators also helped the groups to identify specific business opportunities; assisted them to develop and fill in their project forms, including the micro-business plan; helped them gather supporting documents, such as certificate of residency; and verified the eligibility criteria for youth groups (as well as the

27 The 16 facilitators recruited for the first training cycle of in the eight pilot areas had received 32-month contracts for part- time work (about 3 days per week on average).

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eligibility of additional group members who did not participate in the training). Then the technical committees assessed the micro-business plans and made recommendation to the community committees about sound and viable projects. These committees then assessed the business plans based on the selection criteria developed for the micro-projects, which considered economic viability, financial viability and adequacy of the requested budget, motivation and skills of group members, and the group’s personal contribution to the project (space, material, etc). Each project was assessed out of 100 points. Only the projects that received 60 points or more were considered for funding, and these were also judged in comparison to the quality of the other projects submitted, and available budget for the cash transfers. This process ensured that a multi- layered, transparent, objective and informed assessment of the micro-business plans was followed for the awarding of funding.

63. Overwhelming responsibilities for the PIU. The planned assessments of local business opportunities to inform the choice of youth projects were not conducted, as the PIU was too busy with other implementation priorities, such as monitoring the appropriate usage of first tranche payments by the youth groups. Nevertheless, the PIU and community members approved diverse business enterprises and, along with ADDS, provided advice on the variety of businesses that groups could start to limit market saturation, which facilitated sustainability of the micro-projects.

Ongoing monitoring and adjustments

64. Close monitoring enabled timely adjustments. ADDS closely monitored all project activities through data collection and beneficiary feedback to quickly identify and resolve issues. A training checklist and a participant questionnaire were developed, and tablets were used to collect monthly information on the quality of the training in the various target localities. For example, during the registration of the first training cycle, gaps were identified in the registration form on key data, such as employment status and income. Subsequently, the registration questionnaire was updated, and the facilitators were given additional training with practical simulations to improve the quality of data.

65. Direct beneficiaries preferred to select group members from outside of the training. Contrary to initial expectations, the training participants generally did not choose their associates from participants who received training but from outside. This phenomenon posed several challenges, including (i) a higher workload for facilitators to prepare case files for the group business plans; (ii) a high workload for committees to assess the group business plans; (iii) a larger number of projects that could not be funded and beneficiaries who were disappointed; and (iv) a power imbalance within the youth groups in favor of the training participant as well as conflicts within the group, as the majority of the direct beneficiaries did not systematically share their learning with other group members and tended to dominate the group. To address these issues in several locations, the project started testing a group-based selection (i.e. groups had to be formed at the beginning of the training) to ensure that all members received the business knowledge training in order to reduce the power imbalance. As there were tradeoffs to this design, (i) having to form groups from the start put more vulnerable people at a disadvantage, especially girls as they have weaker networks, and (ii) there would be

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fewer indirect beneficiaries (i.e. those who were not trained but would receive funding and coaching if part of a winning group), this method was not implemented everywhere but only tested in limited areas.

66. Tranche payments to winning groups based on appropriate use of fund. To get the second and final tranche payment, the group winners had to submit an application with supporting receipts and attestation from facilitators and a community committee member to demonstrate that the first investments had been used as planned. As not all group winners of the first phase kept their receipts, in the subsequent phases, the facilitators accompanied the groups while they made their purchases and used a follow-up sheet to collect information on the development of their business. Although this was time-consuming, it led to more appropriate use of the funds by the group winners and resulted in better business set up and sustainability.

Component 2: Handicraft value chain integration for women

Collaboration and coordination

67. Collaboration between government agencies. To ensure effective knowledge sharing and collaboration with relevant stakeholders about the Project, relationships were established with the Ministry of Economy and Finance in charge of Trade, Small and Medium Enterprises (SMEs), Handicrafts, Tourism and Formalization, and the Ministry for Women Affairs, which was implementing the Women's Empowerment and Community Building Project administered by the UNDP and financed by USAID (until August 2018). Collaboration was tested by other ministries, which pushed their beneficiaries into participating in the first workshop training. As these women did not meet eligibility criteria for participation in PROPEJA, the project stepped up communications efforts to ensure that all entities were fully aware of the PROPEJA targeting criteria, and to signal that the targeting criteria would be strictly enforced.

68. Market study helped to identify gaps in Djibouti’s handicrafts sector and raised awareness. The International NGO ATA’s market study, Evaluation of the Handicrafts Sector28, conducted from May to July 2017, revealed the challenges facing Djibouti’s handicrafts sector, such as: (i) limited number of associations focused on handicrafts; (ii) lack of innovation in product design; (iii) poor quality of finished products; and (iv) insufficient marketing by the associations. The results of the study were shared and raised awareness of the challenges in the sector, and informed project activities.

69. Exposure to sales events improved women’s marketing skills. The various sales events enabled women from different associations to observe and learn from each other, which improved their marketing capacities, including product display, price determination, tailoring designs to meet demand, and playing music to create a festive atmosphere. The women’s associations also strengthened their institutional capacity by identifying the women with the best skills to speak with buyers and manage the business’ accounts.

28 Evaluation du Secteur d'Artisanat à Djibouti, 2017, by ATA, (Assessment of the Handicrafts Sector in Djibouti, 2017).

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70. Limited provision of step-down training: As noted earlier, the achievement of the project's objective relied heavily on the sharing of skills acquired during the training sessions with international experts with other women craftswomen in their respective associations. However, this did not occur to the extent expected, including for reasons related to: (i) internal dynamics, as older women tended to dominate the associations, and many did not want to share the skills learnt; (ii) heterogeneity in skills of beneficiaries and lack of sufficient ability to train others; and (iii) lack of common workplace to facilitate skills development of others.

IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME

A. Bank Performance

71. Project preparation focused on critical gaps and opportunities for intervention in Djibouti’s employment sector. During preparation, the Bank considered the adequacy of project design and all major relevant aspects, such as technical and institutional capacity, including procurement and FM. The Bank also capitalized on the implementation arrangements established for the Djibouti Response-SSN Project and partnered with ADDS to implement project activities in localities within and around regional capitals to ensure that the youth enterprises and women’s associations would be in close proximity to markets, while Component 1 activities were also implemented in some of the same regions targeted by the Djibouti Response-SNN Project, namely Arta and Balbala. Major risk factors and lessons learned from country experience and Bank-wide experience with community-driven development approaches to safety net programs were considered and incorporated into the Project design. While minor adjustments were inevitably required during project implementation, the project design was adequate, and the approach remained appropriate throughout implementation.

72. The Bank was proactive and identified issues and worked closely with ADDS to find solutions. The fiduciary teams provided regular support, while the technical support focused on maximizing the Project’s development impact and resulted in continuous adjustments. The Bank’s technical assistance led to updating registration forms, revising the training schedule, close monitoring of funds expended by group winners, and periodic training of facilitators to ensure effective and relevant support was provided to the beneficiaries. These measures ensured that key project deliverables were met on time.

73. The Bank also carried out regular supervision missions to work closely with Project stakeholders and produced clear and detailed aide-memoires and followed-up with the government when required. Project locations and sites were visited to oversee workshops and training and the progress made on setting up businesses by group winners; and marketing events were attended to gauge the success of the sale of the new artisanal products. Regular Implementation Status Reports and aide memoires were produced that were candid, detailed, and provided relevant information and actionable items and helped to advance Project activities. The Bank performance in the identification, preparation and appraisal led to the development of a sound project design, with sufficient steps taken to build project management, procurement and FM capacity of ADDS. The overall Bank performance is assessed to be Satisfactory.

B. ENVIRONMENTAL, SOCIAL AND FIDUCIARY COMPLIANCE

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Environment and Social Safeguards

74. The Project was rated “C” as it did not trigger any safeguards policies. PROPEJA created positive social benefits by generating income and facilitating social and economic inclusion of poor and vulnerable youth and women, and thus contributed to reducing their marked disadvantage in the labor market. The targeting of poor communities, including in rural areas, increased their access to the service sector with the creation/ enhancement of shops, cafes, and hairdressers for traditionally underserved groups. Moreover, the Project yielded a positive impact on youth with a very strong focus on gender, including the provision of gender sensitive training to ensure equal participation of girls and women. Therefore, compliance with safeguards is rated as Highly Satisfactory.

Fiduciary Compliance

75. At project appraisal, the fiduciary risks were rated “moderate.” Although the ADDS had prior experience implementing World Bank projects and was familiar with its guidelines and procedures, there were weaknesses identified in ADDS’ FM and procurement processes. By project closing, on-going training and technical assistance from the World Bank helped to substantially improve fiduciary capacity, and compliance is rated Satisfactory.

76. Financial Management. The Minister of Economy and Finance in Charge of Industry was the Grant Recipient, and its Department of External Financing opened a Designated Account (DA) at the Bank of Africa in Djibouti in US Dollars on behalf of ADDS, the implementing agency for PROPEJA. At project appraisal, the World Bank team assessed ADDS’ FM arrangements and capacity to be satisfactory, but rated the overall FM risk to be Moderate, due to: (i) delays in the submission of the Interim Financial Reports (IFRs); (ii) lack of a fixed assets list for World Bank financed projects; and (iii) delays in the submission of the internal auditor’s reports. The PIU at ADDs was responsible for FM for PROPEJA, and the World Bank strengthened the PIU’s FM capacity through training and on-going support. The PIU opened a DA at the CPEC for the transfer of cash payments to the beneficiaries and negotiated the same transfer fees as set for all youth. Accounts were opened for all group winners of the business competition and for the women’s associations, although this incurred some delays due to limited availability of branches in rural areas and the need to provide guarantees to CPEC. Delivery of payments to the targeted youth entrepreneurs and women’s associations were made on time and CPEC provided monthly bank statements verifying the payments and prepared bank reconciliation statements.

77. The Project financed expenditures for consulting services, goods, workshop and capacity building; and financial reporting requirements included quarterly IFRs, annual Project Financial Statements and annual audit reports. The IFRs were provided on time; however, as inaccuracies related to expenditures by activity were identified in the IFRs for the second and third quarter of 2017, all previous IFRs were revised. Although ADDS internal audit department was strengthened with additional staff, no internal audit reports were submitted

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by ADDS, because of human capacity constraints and because priorities were given to other activities funded by the government. An external auditor was hired and prepared annual audit reports, all of which had an unqualified auditor’s opinion and were submitted on time.

78. Procurement. The project appraisal also identified some weaknesses in ADDS’ procurement processes, including delays in developing acceptable bidding documents; evaluation reports not being exhaustive; lack of contract management; and procurement plans not updated and made public. The Project procurement of goods and consultancy service supported the following activities: (i) basic life-skill training and coaching for business plan development through community facilitators and technical training for youth; (ii) contracting an international consultant that provided training product development and supported marketing events for the artisan associations; (iii) technical assistance for institution building of women’s associations, and functional literacy training for female beneficiaries; and (iv) workshops for the community facilitators and regional committees in all target regions. The lengthy contracting process to identify an international consultant to support Component 2 delayed implementation of this component. Local and regional bids failed to identify consultants or firms with the full range of skills required to support the value chain integration for women’s handicrafts associations. In late 2017, the International NGO ATA was contracted through a single source selection. The World Bank team’s continuous training and close monitoring of procurement activities ensured compliance with World Bank standards and processes and enabled the Project to meet its objectives.

C. MONITORING AND EVALUATION

79. The initial idea was to monitor the key outcome and intermediate indicators for the project using the M&E system, Management Information System and Grant Reporting and Monitoring modules set up for the Djibouti Response-SSN Project. However, after assessing the SSN Program’s M&E system that was under constant change at the time, PROPEJA decided to use its own system and used existing cloud-based server for data collection and management (the KoboToolbox, which is commonly used in humanitarian contexts). Subsequently, the M&E processes and forms developed were unique to PROPEJA and allowed ADDS to collect data at the individual beneficiary level, as well as on the group businesses, and enabled the agency to prepare half-yearly progress reports for the World Bank. The community facilitators were responsible for collecting data, using registration and beneficiary satisfaction forms, and the business-plan assessment forms used by the community committees.

80. The following assessments were undertaken to inform PROPEJA activities and evaluate Project impact and performance:

a. A market research was undertaken by the International NGO ATA for Component 2, “Évaluation du Secteur de l’Artisanat à Djibouti: dans les régions de Djibouti, Balbala, Damerjog, Tadjourah, Ardo and Ali Sabieh — 2017–2019,” was completed by the International NGO ATA in July 2017 (Assessment of the Handicrafts Sector in Djibouti) in July 2017, which informed the design of Component 2 activities.

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b. A quantitative evaluation of Component 1 was completed in 2019 by ADDS, “Rapport d'analyse: Enquête de suivi de la composante 1 du PROPEJA”, (in English, Analysis Report: PROPEJA Component 1 Follow-up Survey).

c. A qualitative evaluation of Component 2, “Etude d’impact de la composante 2 du Projet de Promotion de l’Emploi des Jeunes et de l’Artisanat PROPEJA: Dans les regions de Djibouti, Balbala, Damerjog, Tadjourah, Ardo and Ali Sabieh”, was conducted between 2017–2019 by Amina Saïd Chiré, (in English, Impact Assessment of Component 2 of the Project for the Promotion of Youth Employment and Handicrafts PROPEJA: In the Djibouti, Balbala, Damerjog, Tadjourah, Ardo and Ali Sabieh regions)29.

d. A PROPEJA final evaluation was undertaken by ADDS, “Rapport d’achèvement du Projet de Promotion de l’Emploi des Jeunes et de l’Artisanat (PROPEJA), juillet 2019” (in English, Completion Report of the Project for the Promotion of Youth Employment and Handicrafts (PROPEJA), or PROPEJA Completion Report).

81. To monitor the capacity and quality of training and technical assistance, periodic capacity building training was provided through Component 1, and the facilitators were subjected to regular normative assessments to ensure they delivered the desired quality of training and oversight. The phased implementation with feedback from the beneficiaries and facilitators and committees, as well as the findings of the evaluations, facilitated on-going assessment of PROPEJA activities. This allowed timely adjustments to be made, such as reducing the duration and curricula of the training and helping groups to identify diverse business ventures so as not to saturate the market. The M&E rating for the project is thus rated as Substantial.

D. RISK TO DEVELOPMENT OUTCOME

82. PROPEJA was designed as a pilot project with the objective to test new approaches to inform future public policies and programs. The PROPEJA project approach has been institutionalized in two new projects financed by the World Bank, enabling sustainability and scale-up. First, the Development Response to Displacement Impacts Project in the Horn of Africa (P164101), implemented by ADDS, has adopted the same methodology for promoting youth, with support from the PROPEJA team. Second, the Djibouti Support for Women and Youth Entrepreneurship Project (P165558, IDA credit totaling US$15 million, approved on June 8, 2018), implemented by the Centre for Leadership and Entrepreneurship (CLE), is using the PROPEJA approach for basic entrepreneurship training throughout the country. The project will support over 2,300 new SMEs entrepreneurs with a combination of training and access to finance, the consolidation and expansion of key business services, help identify and link entrepreneurs to competitive value chains. This will be implemented

29 Etude d’impact de la composante 2 du Projet de Promotion de l’Emploi des Jeunes et de l’Artisanat PROPEJA, juillet 2019 (Impact study of component 2 of the Project for the Promotion of Youth Employment and Handicrafts PROPEJA, In the Djibouti, Balbala, Damerjog, Tadhourah, Ardo and Ali Sabieh regions) by Creative Learning, Aid To Artisans.

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by the newly established CLE. The Government of India provided financing to the Government of Djibouti for the establishment of the CLE and for drafting of a conceptual framework for a “MSME (Micro, Small and Medium Enterprise) Policy for Djibouti.” The CLE is intended to be a physical and virtual platform to support MSMEs through the provision of a resource center, services for MSMEs, a business park, and competitive sector development services. The CLE will facilitate access for entrepreneurs to vital services, networking opportunities, and market linkages. The new project implemented by the CLE seeks to have differentiated services, which also target more disadvantaged groups using the PROPEJA approach.

83. The survival rate of youth business activities two years after funding is 70 percent, indicating a relatively high sustainability of activities, with the direct beneficiaries realizing an average monthly profit of about US$90; and all of the targeted women’s handicraft associations remaining fully operational. For component 2, although the International NGO ATA identified new distribution opportunities within the country for the sale of artisanal products, limited links to local market chains have been established, with no linkages established with international buyers. Therefore, the sustainability of the limited marketing channels created under component 2 is unclear and marketing events have ceased without the on-going support of the International NGO ATA.

V. LESSONS LEARNED AND RECOMMENDATIONS

Component 1: Basic training and Mini-Business-Plan Competition for Youth

84. Importance of using local structures. The success of the Project relied heavily on working with facilitators from the target communities and organizing support activities in the communities where the beneficiaries live. The facilitators were selected from the same communities as the beneficiaries, and the community-based entrepreneurship training made it possible for the facilitators to work closely with the beneficiaries and monitor progress, which developed community capacity and also fostered mentoring relationships.

85. Importance of an integrated approach. In line with international experience, the Project confirmed that disadvantaged youth in Djibouti need integrated support that builds their skills (training), provides access to capital (financial support), and provides ongoing coaching to increase the probability of survival of activities (support). The close support provided by the facilitators to the group winners throughout the activity cycle, and especially during the withdrawals of funds and purchases for their micro-project, made it possible to limit the diversion of funds and strengthened the establishment of the business.

86. Gender approach. The Project put in place several strategies to encourage the participation of girls in the project, such as quotas, flexible training schedules, the recruitment of female community facilitators, safety measures, as well as family outreach and an awareness campaign to get buy in from families and the

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community. This facilitated a high participation rate of young women; and micro-businesses managed by girls were also more successful (sustainable) than those started by boys.

87. Transparency in the targeting process. Given the strong demand from youth to participate in Component 1 activities, it was essential to set up a simple and transparent selection process. As a result, the public draws to select beneficiaries worked very well and was appreciated by all stakeholders.

88. Participatory approach with local actors. Inviting local actors to actively participate in the different phases of the Project, such as involving the community committees to raise awareness, select beneficiaries, assess business plans and award funds for micro-projects, and monitor funded activities, helped to anchor the Project at the local level.

89. Monitoring of group grant expenditure were time consuming and costly. ADDS needed substantial human and monetary resources for monitoring to ensure that the youth group winners did not misuse the funds. ADDS recommends that future operations consider options for ADDS to contract the suppliers for the provision of materials to help the youth groups to set up their business premises, rather than giving the money directly to the youth to buy the material. This would potentially reduce time and costs for ADDS to monitor the appropriate purchase of materials by the youth groups, which was required for the delivery of the second tranche payments.

90. Negotiation and conflict resolution. Among the group businesses, the common challenges included teamwork, high rents, and problems with suppliers (e.g. machines that fail after purchase). To help the groups to better manage these issues, the Project incorporated negotiation and conflict resolution modules with suppliers in the follow up coaching to group businesses.

91. Factors beyond the Project’s influence. Most difficulties and challenges faced by the winning groups can be explained by structural reasons that could not be easily influenced by the Project. These factors include: excessive rents and lack of legal protection, for example for the poor quality of purchased tools and equipment. To address these challenges, continued support is required on several levels. For issues related to profitability, rent/premises, and poor quality of local goods and equipment, solutions for all the businesses could not be identified; however, time limited provision of further cash transfers, advice and training may help to alleviate some of difficulties.

Component 2: Handicraft value chain integration for women

92. The potential of the handicrafts sector has been demonstrated. The Project demonstrated the economic and social potential of the handicrafts sector. Thanks to the marketing events, a strong interest/demand from customers (foreigners and the Djiboutian middle class) was noted for the new basketry and decorative bead products developed by the participating women’s associations. However, distribution channels remain underdeveloped, with no links established with international buyers. To perpetuate sales events in the future,

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it will be important to deepen business relations between the associations and local professional buyers (e. g. hotels) and establish other permanent sales points in strategic locations (e. g. at the airport).

93. Step-down training constrained by internal dynamics. A qualitative study on Component 2 found that communication between the direct beneficiary and other members of their association was not strong; inter- personal dynamics limited the sharing of skills and knowledge; association members lacked a common work space to share expertise; and there was heterogeneity in the skills of the direct beneficiaries to train others and within members of the associations, which made the effective transfer of skills challenging. These dynamics must be taken into account in the design of future support activities.

94. Importance of tailoring support to varying capacity levels. The assessment of handicrafts associations found substantial differences between the associations, in terms of maturity and capacity, including availability of production and marketing space, management and internal organization, and technical and marketing skills. To address this heterogeneity, the more mature and developed associations were provided cash transfers to immediately start improving their business set up and purchase raw material, while less mature associations were provided artisanal and business training before they were provided the cash transfers. An integrated approach was needed to improve the capacity and other constraints faced by the associations. Thus, the combination of training, production support, institutional strengthening, and marketing activities was essential.

95. Need for innovative designs, technical training and continuous coaching. PROPEJA and international experience highlights the need for continuous support for several years to help consolidate skills and the adoption of new techniques and practices by the women artisans and their associations. For example, women still need in-depth training on dyeing natural fibers, reinforcements for marketing products, as well as continuous coaching, such as for product quality/finishing, sample management, pricing, and storage.

96. Local establishments must have sufficient organizational capacity and structure before targeting international markets. The low capacities, under-developed business processes and limited organizational structures of the associations made it unrealistic and risky to target international markets, as failure to deliver quality products in sufficient quantity on time would jeopardize the sector’s reputation. The associations need to first build sufficient capacity and maturity to serve and meet the demands of the local market, which will require additional efforts, before attempting to establish connections with international markets. .

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ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS

A. RESULTS INDICATORS

A.1 PDO Indicators

Objective/Outcome: The PDO was to improve access to life-skill, livelihood skills training, and access to finance for at least 3,000 low- and semi-skilled youth and women in poor communities in Djibouti-ville (Balbala) Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Direct project beneficiaries Number 0.00 0.00 3000.00 3338.00

01-Jun-2015 20-May-2019 20-May-2019 20-May-2019

Female beneficiaries Percentage 0.00 0.00 50.00 58.00

01-Jun-2015 20-May-2019 20-May-2019 20-May-2019

Comments (achievements against targets):

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Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Average percentage increase in Percentage 0.00 0.00 20.00 100.00 sales of target beneficiaries 01-Jun-2015 20-May-2019 20-May-2019 20-May-2019

Comments (achievements against targets):

Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Percentage of beneficiaries that Percentage 0.00 0.00 25.00 40.00 are linked to formal financial institutions 01-Jun-2015 20-May-2019 20-May-2019 20-May-2019

Comments (achievements against targets):

A.2 Intermediate Results Indicators

Component: Component 1: Basic training and Mini-Business Plan Competition for Youth

Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion

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Number of beneficiaries Number 0.00 0.00 2200.00 2800.00 enrolled in capacity building activities 01-Jun-2015 20-May-2019 20-May-2019 20-May-2019

Comments (achievements against targets):

Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Number of beneficiaries who Number 0.00 0.00 1000.00 1331.00 received cash transfers 01-Jun-2015 20-May-2019 20-May-2019 20-May-2019

Comments (achievements against targets):

Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Percentage of cash transfer Percentage 0.00 0.00 30.00 49.00 recipients being female 01-Jun-2015 20-May-2019 20-May-2019 20-May-2019

Comments (achievements against targets):

Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion

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Percentage of livelihood Percentage 0.00 0.00 60.00 97.00 groups receiving the full transfer amount within 6 01-Jun-2015 20-May-2019 20-May-2019 20-May-2019 months of being selected

Comments (achievements against targets):

Component: Component 2: Handicraft value chain integration for women

Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Number of beneficiaries that Number 0.00 0.00 200.00 178.00 directly received product design training (lead artisans) 01-Jun-2015 20-May-2019 20-May-2019 20-May-2019

Comments (achievements against targets):

Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Number of beneficiaries who Number 0.00 0.00 600.00 315.00 received step-down training through lead artisans 01-Jun-2015 20-May-2019 20-May-2019 20-May-2019

Comments (achievements against targets):

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Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Number of beneficiaries who Number 0.00 0.00 400.00 538.00 receive access to cash-transfers through the cluster 01-Jun-2015 20-May-2019 20-May-2019 20-May-2019 organizations

Comments (achievements against targets):

Unlinked Indicators

Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Beneficiaries of Labor Market Number 0.00 0.00 3000.00 3338.00 programs (number) 01-Jun-2015 20-May-2019 20-May-2019 20-May-2019

Beneficiaries of Labor Market Number 0.00 0.00 3000.00 3338.00 programs - Supporting entrepreneurship (number) 01-Jun-2015 20-May-2019 20-May-2019 20-May-2019

Beneficiaries of Labor Market Number 0.00 0.00 1500.00 1936.00 programs - Female (number) 01-Jun-2015 20-May-2019 20-May-2019 20-May-2019

Comments (achievements against targets):

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. .

ANNEX 2. PROJECT COST BY COMPONENT

Table 1: Project cost by component

Component Name Amount at Revised Allocations Actual at Project Approval (US$) Closing (US$) (US$) (March 19, 2019) (May 20, 2019)

Component 1: Basic training and Mini- 1,705,178 1,763,254 1,763,254 Business Plan Competition for Youth

Component 2: Handicraft value chain 696,725 557,108 557,108 integration for women

Component 3: Project Management, 328,097 409,638 409,425 Monitoring and Evaluation, and Knowledge Dissemination

Total 2,730,000 2,730,000 2,729,787

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ANNEX 3. RECIPIENT, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS

(This section presents a translation of the Executive Summary of the Borrower’s completion report, Rapport d’achèvement du Projet de Promotion de l’Emploi des Jeunes et de l’Artisanat (PROPEJA), July 2019.)

1. The project for the Promotion of Youth Employment and Handicrafts (PROPEJA) was approved on May 20, 2015 and closed on May 20, 2019. The project, worth US$2,730,000, was funded by JSDF, administered by the World Bank, and implemented by the ADDS. The project took place in a socio- economic context marked by a high level of poverty and high and persistent unemployment among the populations residing in the outskirts of the capital and the inland regions. Young people and women are the most affected by poverty and unemployment. This situation is of great concern to the Government of Djibouti, which particularly targets these two groups through its policies, particularly in its Vision 2035 and the Accelerated Growth Strategy for Employment 2015–2019.

2. PROPEJA’s objective was to improve access for 3,000 young people and women to opportunities to create income generating and employment generating activities through training and financing of their projects. The idea was to train and support at least 2,200 youth and 800 women from vulnerable groups, equip them with skills, and insert them into the market. PROPEJA is divided into two components: Component 1 provided business skills training to young people and funding to group winners of mini-business plan competitions to start their own micro-business projects; and Component 2 focused on the integration of women into the craft value chain. PROPEJA identified the following areas for intervention: five localities in the commune of Balbala in Djibouti city, four localities in the Arta region, four from the Tadjourah region and four from the Ali Sabieh region. Component 1 covered 16 localities and Component 2 covered 6 localities.

3. The project has demonstrated good relevance in its design, its consideration of the economic and social context, and remains consistent and relevant with national strategies and policies for combating poverty and unemployment among youth and women. In addition, the project has achieved very good results in its technical objectives. The number of beneficiaries of the project is 3,956 people, 57 percent of whom are women.

4. Under Component 1, the project generated a keen interest in the training provided among the youth. More than 5,500 young people expressed their interest in participating in the training; 2,800 registered; and 1,850 completed all the different cycles of training. Nearly 1,322 youth, 49 percent of them women, benefited from cash transfers to start their micro-business projects. The project achieved very good results and exceeded the desired objective. Under Component 2, the project directly or indirectly trained 508 women. A total of 538 women from 16 women’s associations

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received cash transfers to cover capital expenditures and inputs into the manufacturing of artisanal products. In addition, the women's associations benefited from institutional capacity building under the project, the organization of sales events and the diversification of marketing channels for their products. The achievements by this Component remain quite satisfactory despite delays in the implementation of the programmed activities.

5. At the institutional level, the following bodies supported the project: a National Advisory Committee, an Implementation Unit, Local facilitators, and Regional Management Committees. Apart from the National Advisory Committee, PROPEJA achieved its objectives to institutionalize the key bodies for project execution and deployment in a highly satisfactory manner.

6. The financial management of the project was assessed on the basis of financial and cost analysis. The financial analysis showed that the financial needs were fairly well covered through the disbursement rates. The distribution of funds by year and category and the balances show the efficiency of the project. However, in 2017 and 2019, there were some overruns of the provisional budget and with significant underestimation of the funds required. The cost analysis shows that indirect costs remain lower than direct costs which demonstrates project efficiency. Nevertheless, the cost analysis shows the risks associated with the variable costs, including for goods and the transfer of funds, which confirms the overruns observed. However, the overall execution of the project was never comprised.

7. The project's impacts on beneficiaries are numerous and positive. These impacts arise from the training that has improved the skills of beneficiaries in the field of entrepreneurship and business management; through access to financing for the development of micro-enterprise projects; and finally, by creating jobs and additional income. The project also had a significant impact on women by seeking to give them as many, if not more, opportunities than men. For example, women represent 57 percent of the people trained and 64 percent of the recipients of the cash transfers. Similarly, the survival rate of micro-business projects is higher for those led by a woman. In the medium and long term, a majority of the micro-business projects established under Component 1 suffer from a lack of profitability that compromises the survival of the activity and motivates the business partners to leave. Most of the beneficiaries of the crafts association under Component 2 will face challenges such as access to new markets, intergenerational transfer of artisanal skills and capacity building. Whether in Component 1 or Component 2, the question is whether there will be further/on-going support of PROPEJA beneficiaries after the project closing.

8. The continuity of PROPEJA's spirit is ensured by the launch of the project to support Women and Youth Entrepreneurship (P165558) of the World Bank with CLE, another institution of the Djibouti government. Nevertheless, the necessary support and accompaniment for PROPEJA beneficiaries for the sustainability of their micro-business projects do not seem to be guaranteed.

9. PROPEJA introduced two important innovations that facilitated its smooth implementation: the community approach with the involvement of the community and authorities; and the integrated approach combining training, financial support and advisory support.

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ANNEX 4. CALCULATION OF INCREASE IN INCOME FOR YOUTH ENTREPRENEURS

Estimating increase in income for youth business-plan-competition winners (Component 1)

1. The percentage increase in income was estimated based on two main information sources: the follow- up survey of the youth business-plan-competition winners (Rapport d'analyse. Enquête de suivi de la composante 1 du PROPEJA), and the baseline survey of youth. Based on the follow-up survey, it is estimated that average monthly sales achieved by the operational micro-projects was US$496 (88,251.49 DJF), and the monthly profit margin was generally half of the average monthly turnover at US$236 (41,946.04 DJF). The high monthly profit margin may be explained by the fact that the majority of these microenterprises bear little structural costs. The business sites are often located in a room in the family home (43); in a low-cost room (40); on the street; or in the market.

2. The profits were shared among the members of the group that averaged 2.5 persons in size, following the departure of some group members. Based on this, the average income per person would have been US$90 (16,000 DJF), while beneficiaries reported an average personal income of 18,473.94 DJF or US$104 per month in the survey. If one were to include all the failed projects into the calculation for average income, then the average group profit would be around 30,000 DJF (US$169), and the average individual monthly income would be around 12,000 DJF, or US$67. In comparison, the average per capita income in Djibouti is estimated at US$155 (27,488 DJF) per month (according to World Bank data30).

3. Given that 95 percent of the youth who applied for the project had indicated that they had been unemployed or inactive without a source of income prior to the project, these figures indicate a significant improvement in terms of income generation for them. In order to estimate percentage increase in personal income, the baseline collected income data, which is not completely reliable. Almost everyone reported they were unemployed, and hence earned zero income, although in reality many may very well have had some small income-generating activities (e.g. casual work). Based on the baseline survey, the average monthly income at baseline would have been less than US$11.24 (2,000 DJF); however, the real average income at baseline was likely to be higher.

4. Using the US$11.24 (2,000 DJF) as baseline, then (i) based on the lower average income number that includes all the failed projects, of US$67 (12,000 DJF), one would see a six fold increase; while (ii) If one were to recognize that the real baseline income was likely higher, for example 4,000–5,000 DJF (arbitrary decision to double it), then the increase would still be over 100%–200%.

30 Based on the annual amount of Gross National Income calculated according to the Atlas method: https://donnees.banquemondiale.org/indicator/NY.GNP.PCAP.KN?locations=DJ&view=chart.

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5. Given the lack of precise measurement, a relatively conservative estimate of income increase has been opted for, that is an increase >100%), which holds true under all scenarios. If one were to use different numbers, then the estimated increase would likely be higher.

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ANNEX 5. LOCALITIES/ DISTRICTS PROPEJA ACTIVITIES IMPLEMENTED

Region/Commune Localities/Districts of Localities/Districts of Component 1 Component 1 Balbala PK12 PK12 (Djibouti-ville) Quartier 5 Hayabley Layabley Moustiquaire/ Warabaley

Tadjourah Tadjourah-ville Tadjourah-ville Randa Adaylou Ardo

Arta Arta-ville Damerjog Damerjog Douda Weah

Ali-Sabieh Ali Sabieh-ville Ali Sabieh-ville Assamo Hol-Hol Assamo Ali-Adde Total 16 6

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