Women arrive at The Oldonyiro Livestock Market wearing facemasks donated by the U.S Embassy on August 20202020.

USAID LIVESTOCK MARKET SYSTEMS ACTIVITY EXPANDING

ECONOMIC OPPORTUNITIES AWARD

FY2020 ANNUAL REPORT

FEED THE FUTURE KENYA LIVESTOCK MARKET SYSTEMS ACTIVITY EXPANDING ECONOMIC OPPORTUNITIES AWARD (AA1) FY2020 ANNUAL REPORT

Award No: AID-615-L-17-00001 Prepared for United States Agency for International Development/Kenya Chief of Party:

Cover Photo: Women arrive at The Oldonyiro Livestock Market wearing facemasks donated by the U.S Embassy on 13th August 2020.

DISCLAIMER This report is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of ACDI/VOCA and do not necessarily reflect the views of USAID or the United States Government

CONTENTS ACRONYMS LIST ...... III EXECUTIVE SUMMARY ...... 4 YEAR 3 KEY ACHIEVEMENTS ...... 5 AA1 KEY ACHIEVEMENTS (QUALITATIVE IMPACT) ...... 10 Objective 1. Expanded and Diversified Viable Economic Opportunities ...... 11

IR 1.1 Facilitate more competitive, resilient, and inclusive livestock and related market systems to leverage end-market opportunities while insuring inclusion and poverty reduction ...... 11 IR 1.2 Strengthen and diversify productive livelihood opportunities, for men, women, and youth...... 21 IR 1.3 Increase secure access to a range of financial products and services to support livelihood diversification, livestock sector development, and individual and household finance needs ...... 24 IR 1.4 Improved employability and work readiness skills for young men and women ...... 26 IR 1.4 Activities ...... 27 Improved employability and work readiness skills for young men and women using a combination of apprenticeships, internships, partial subsidies, and start-up kits ...... 27 Objective II. Strengthened Institutions, Systems & Governance ...... 28

IR 2.1 Strengthened policy environment for the development of livestock and other market systems ...... 28 Objective III. Collaborative action and learning for market systems change ...... 29

IR 3.1 & 3.2 Strengthened USAID and implementing partners systems for Sequencing, Layering, and Integration and Shared Indicators and Learning to Support Expanded Economic Opportunities ...... 29 AA1 PERFORMANCE DATA TABLE ...... 33 AA1 CONSTRAINTS AND OPPORTUNITIES ...... 34 AA1 PERFORMANCE MONITORING ...... 35 AA1 PROGRESS ON GENDER STRATEGY ...... 35 LMS Gender & Youth Strategy ...... 35 Gender Transformative Youth Inclusive Market Systems Activities ...... 36 Responding to the COVID-19 Pandemic ...... 36 Marking Gender & Youth Related International Events ...... 37 Capacity Building for Improved Gender Integration ...... 37 Improving Service Delivery through Assessments, Desk Reviews, and Technical Assistance ...... 38 AA1 PROGRESS ON ENVIRONMENTAL MITIGATION AND MONITORING ...... 38 AA1 PROGRESS ON LINKS TO OTHER USAID PROGRAMS ...... 42 AA1 PROGRESS ON J2SR ...... 42 AA1 LESSONS LEARNED ...... 43 SUBSEQUENT ANNUAL AA1 WORK PLAN ...... 44 GIS ACTIVITY TRACKER ...... 44

USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 PROGRESS REPORT FOR FY2020 ii

ACRONYMS LIST AA Associate Award NDMA National Drought Management Authority AA1 Associate Award 1 (Livestock Market Systems: NGO Non-Governmental Organization Expanding Economic Opportunities) NLC National Land Commission AA2 Associate Award 2 (Livestock Market Systems: NRM Natural Resources Management Strengthening Community Capacities) PLS Pastoralists Leadership Forum AFC Agricultural Finance Corporation PMC Program Management Committee AMEP Activity Monitoring and Evaluation Plan PMP Performance Management Plan ANDE Aspen Network of Development Entrepreneurs PPG Pastoral Parliamentary Group APS Annual Program Statement PPP Public-Private Partnership ASAL Arid and Semi-Arid Lands PREG Partnership for Resilience and Economic Growth AVCD Accelerated Value Chain Development Program PYD Positive Youth Development B2B Business to Business REAP Rural Entrepreneur Access Program BDG Business Development Grants REGAL Resilience and Economic Growth in the Arid BDS Business Development Services -AG Lands – Accelerated Growth BEE Business Enabling Environment REREC Rural Electrification and Renewal Energy BOM Board of Management Commission CECM County Executive Council Member RFA Request for Applications CLA Collaborating, Learning, Adapting SACCO Savings and Credit Cooperative Organization COP Chief of Party SAMS Sub-Award Management System CSC Community Supervisory Committee SCC Strengthening Community Capacities DQA Data Quality Assessment SOW Scope of Work EDE Ending Drought Emergencies SLI Sequencing Layering and Integration EEO Expanding Economic Opportunities SRC Smart Regional Consultants EIA Environmental Impact Assessments STTA Short Term Technical Assistance EMCA Environmental Management and Coordination TALV Theory of Change Adaptation, Learning, and Act Validation EMMP Environmental Mitigation and Monitoring Plan TCG Government ERF Environmental Review Report TOT Training of Trainer ERR Environmental Review Report TVET Technical and Vocational Education and Training FAO Food and Agriculture Organization USAID United States Agency for International FCDC Frontier Counties Development Council Development GBV Gender-Based Violence USG United States Government GCRF County Revolving Fund VCA Value Chain Analysis GFSS Global Food Security Strategy WASH Water, Sanitation, and Hygiene GIRL Girls Improving Resilience with Livestock WEAI Women Empowerment in Agriculture Index GIS Geographic Information System WEF Women’s Enterprise Fund GOK Government of Kenya WFP World Food Programme HR Human Resources IEE Initial Environmental Examination IM Implementing Mechanism KCB Kenya Cooperative Bank KIM Kenya Investment Mechanism KPLC Kenya Power and Lighting Company K- Kenya Resilient Arid Lands Partnership for RAPID Integrated Development LEAP Learning, Evaluating, Adapting Platform LMA Livestock Marketing Association LMS Livestock Market Systems M&E Monitoring and Evaluation MEL Monitoring, Evaluation, and Learning MSMEs Micro, Small, and Medium Enterprises MOU Memorandum of Understanding USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 PROGRESS REPORT FOR FY2020 iii

EXECUTIVE SUMMARY The Kenya Livestock Market Systems Activity – Expanding and Diversifying Viable Economic Opportunities in Northern Kenya (Associate Award 1) program is pleased to present the Year 3 Annual progress report for the period October 2019 to September 2020. Despite the year being greatly impacted by the COVID-19 pandemic, ACDI/VOCA and partners Mercy Corps, The BOMA Project, and Smart Regional Consultants (SRC) adopted various operational and technical adaptations to accelerate delivery of its activities on livestock enterprise development, diversified livelihoods, improving access to capital, and developing a youth workforce to fill critical skills gaps in the five counties of Garissa, , Isiolo, , and Turkana. The COVID-19 pandemic presented an unprecedented humanitarian and development crisis in addition to what is a significant health crisis, with broader effects on economic activity and livelihoods. Markets and capacity support in the target counties were seriously affected as people could not assemble for business to exchange goods and services. To deliver much-needed support to LMS counties, provide critical supplies, reduce economic hardship and protect emerging gains, AA1 swiftly re- organized, adopting new operational modalities and directing interventions to support the target communities, public and private sector stakeholders in adherence to the Government of Kenya’s policies on social distancing while ensuring the continued flow of essential supplies and services. Quickly adjusting to the “new normal” meant working remotely while under lockdown with limited ability to travel and meet with project participants and partners in person. AA1 staff made multiple adaptations to succeed, including: • LMS with input from the county health officials, local government, and Livestock Market Associations supported livestock market managers with logistics to deliver USAID Marafiki facemasks to markets, market sanitization and trading area demarcation outside the markets in 20 secondary markets and smaller, feeder livestock markets to maintain market operations ensuring continued local trade of goods and services, while also adhering to the set health and safety standards during the pandemic. This became critical to mitigating potentially devastating economic effects, lessening the severity of shocks, and supporting a key structural element linking market system resilience to household-level resilience in the ASALs.

• LMS working together with the respective County Governments Department of Livestock was able to lobby for the reopening of 12 livestock markets that had been closed due to the COVID-19 Pandemic (Marsabit – two, Isiolo – two Wajir – two Garissa – three, Turkana three). LMS did not target REGAL-AG markets only but all livestock markets that were closed.

• In July, a validation survey was conducted to verify the results reported in Year 2 on livestock market users. The survey found that, despite the new challenges caused by COVID-19, 18 months after originally profiling 32,559 people, more than two thirds (67%) continued to use the markets constructed under REGAL AG and further supported by LMS. This was only slightly down from September 2019 (76%). Importantly, there were no obvious shifts in the gender/age balance, with the majority being women and youths at 34%.

• Rapidly adopted our operational and implementation modalities for the delivery of larger investments by improving safety and distancing on sites, shifting to local technical monitors, using virtual monitoring techniques, increasing the role of stakeholders in project delivery and oversight, and using virtual meetings to organize the workflow of completed, ongoing, and pipeline enterprise investments.

• Optimizing the use of technology to maintain relationships with project participants and conduct critical business. LMS rolled out Microsoft Teams to all staff, allowing for real-time training, weekly staff and technical program meetings, HQ coordination calls, and coordinated COVID response communications efforts.

• Convening virtual conferences, workshops, and training online to promote sustained services delivery of the county public sector and agribusinesses. In normal circumstances, county government capacity training and business development services (BDS) for the private sector are provided through face-to-face meetings. During the pandemic, the virtual approach allowed the program to continue all programmed support without delay. For example, in quarter 4 SRC a partner conducted a virtual training of trainer (TOT) where 48 government official and LMS staff across the 5 counties were trained on cooperatives development. This training addressed the capacity gaps of the county co-operative officers since many of them were either not trained in co-operatives management or have little experience. Despite the challenging context, LMS exceeded most of its annual targets for Year 3 and is on track to meet or exceed all but a few of its indicators by the end of the project lifecycle. During this reporting year, LMS supported 6,262

USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 ANNUAL REPORT 4 individuals with market system development initiatives bringing the total amount of individuals directly reached since project inception to 9,227 (77% male, 23% female). Given these individuals represent households, this translates to more than 55,000 people benefiting indirectly from LMS interventions. In addition: • To catalyze increased access to finance for women, LMS furthered the inclusion of women, youth, and disadvantaged groups from Northern Kenya (typically excluded from the conventional financial sector) through the REAP program and formation of REAP groups. As a result, 5,559 women participated in group savings activities, started new business activities, and continue to receive technical support from LMS. Participants show confidence in their businesses and have already achieved substantial incomes and savings. Over the course of the implementation period (April 2018 – March 2020), participants took in as credit for working capital, in credit for goods in new income, as goods in exchange for income. Credit from businesses comes interest-free to help participants also tackle household and other needs with additional incomes. • During the year, LMS facilitated the training of 6,095 individuals from both the public and private sector, across the five counties, on short-term productivity, food security, nutrition, access to finance, business development, workforce development, and management. After completing LMS’s training, Wajir Milk traders initiated innovative methods for handling milk by collecting with clean aluminum cans where milk is tested, pasteurized, and packed in clean one liter and ½ liter milk bottles and distributed directly to supermarkets and consumers. • LMS supported the creation and/or expansion of livestock-related businesses via in-kind contributions using grants. These grants constituted investments in large stock value chains and diversified livelihoods, including fodder, cattle and milk, live animal fattening, fish production, and feed industries. In Year 3, LMS invested and leveraged a cost-share of from private sector investors towards the development of these initiatives. Businesses supported by LMS also accessed in agricultural-related financing during this period.

Journey to Self-Reliance In Year 3, LMS-AA1 has continued to realign its strategy and programmatic activities toward supporting each of the five counties on their Journey to Self-Reliance. Concerted efforts have been directed through a series of co-creation efforts with counties in co-planning, establishing co-investment opportunities, and co-implementing solutions to local development challenges – to foster stable, resilient, prosperous, and self-reliant counties. To date, AA1 has invested a total of in the five counties through a mix of hard investments in infrastructure, production facilities, processing/packaging equipment, and business development skills. AA1 will continue to supplement its strategy with additional data and robust analysis on commitment and capacity needs and leverage the expertise of local actors to gather the information. It will adapt its approach to helping county governments, new partners (including CSOs, FBOs, and NGOs), and businesses/entrepreneurs/SMEs to build their self-reliance and that of the communities in which they work.

YEAR 3 KEY ACHIEVEMENTS Qualitative Impact OBJECTIVE 1: EXPANDED AND DIVERSIFIED VIABLE ECONOMIC OPPORTUNITIES

I.R 1.1: Facilitate more competitive, resilient, and inclusive livestock and related market systems to leverage end- market opportunities while insuring inclusion and poverty reduction

• Supported development of three Public-Private Partnerships one each in Turkana, Isiolo, and Governments to ensure their functionality, viability, and market systems change potential. • Co-designed and secured USAID approval for 18 large/growth grant initiatives with key market actors as a vehicle for co-investment with the private sector in shared value outcomes. Projects are at various stages of implementation. • Trained 56 MSMEs in the review and development of business models with the support of industry experts that helped factor risks and realistic break-even points. This includes 7 REAP groups, 2 mixed groups, 13 youth male individuals/groups, and 34 youth female/groups. • Facilitated 2 PPPs between County governments and private sector actors for the establishment of the Kerio Breeding Center ( ) and Nappelilim Holding ground ) in Turkana, and the placement of 125 acres under pasture production (25,000 bales per year) in Isiolo. • Enhanced market vibrancy by incentivizing 56 businesses to access patient capital, launching three market days in Lowdar, Kakuma, and Katilia in Turkana County to streamline trade, opportunity mapping for cross-border trade, and

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the formation of three marketing cooperatives (Haror Livestock Marketing Cooperative in Garissa, Camel Dairy Cooperative and Walqabana Dairy Camel Marketing Co-operative Society in Isiolo ) strengthening of four existing producer cooperatives to enhance bargaining power and collective action. • Coordinated three business exchanges fora with two insurance service providers (Takaful insurance and Sidian bank- agent for CIC Insurance) on risk mitigation and absorption for targeted 13 enterprises. • Facilitated 57 USAID-supported businesses to access markets, inputs, extension services, and blended finance. e.g. 24 REAP business groups linked to a merchandise distributor and 35 livestock groups/traders linked a major livestock aggregator with access to the terminal market.

I.R 1.2: Strengthen and diversify productive livelihood opportunities for men, women, and youth

• Provided mentorship, business skill training, and linkage to markets to 5,460 REAP groups through BOMA Kenya. • Incentivized 56 MSMEs – involved in poultry, poultry products, milk, fodder, honey, animal feed, Moringa, and cottage meat processing to operate within livestock markets across the five counties, creating ‘hubs’ of economic activity with a defined customer base operating where actors can collectively attract new businesses offering diversified products and services • Co-developed with county health departments, livestock market management, and private sector a rapid COVID-19 response mechanism to sensitize the population on COVID-19 and how to safely prevent its transmission.

I.R 1.3: Increase secure access to a range of financial products and services to support livelihood diversification, livestock sector development, and individual and household financial needs

• Supported Garissa county’s development of a five-year strategic plan to operationalize the County Revolving Fund. • Provided customized training to 49 technical staff of the Garissa County Revolving Fund on public finance management, client vetting, product development, collection, and monitoring. • Leveraged by connecting seven REAP groups with key input suppliers that offer mobile money payments. • Coordinated with USAID-KIM to identify 9 LMS/REGAL-AG businesses that would benefit from the recently launched partnership with AFC bank. Businesses will receive technical assistance, BDS, and access to a working capital loan facility from AFC to jump-start or scale-up production activities. • In partnership with USAID-KIM, supported the completion of AFC’s Shariah compliance policy that will allow participants to receive Sharia-compliant loans. • Completed the ‘'health check’' for 18 cooperatives; developed comprehensive intervention plans that will deepen and scale their impacts on farmers across the five counties.

I.R 1.4: Improved employability and work readiness skills for young men and women

• A total of 25 scholarships were awarded across the counties • Supported Turkana county’s development of a policy and framework for managing the internship program within the county public service. Consequently, the Turkana County Public Service Board increased the number of interns from 60 to 90 per cycle and expanded the scope to include artisans and certificate graduates. • Trained 110 final-year students (58 female, 52 male) from Saku and Moyale VTCs in entrepreneurship and innovation. • Partnered with Wadhwani Foundation in Turkana county to develop and implement an “exit training programming” targeting secondary and tertiary learning institutions. 18 government officials were taken through the virtual training platform, while 14 tutors were taken through ToT training to enable them to deliver the training in their respective learning institutions. The program will be replicated in the other four LMS counties. • Facilitated training for the Boards of Management of local VTCs in .

OBJECTIVE 2: STRENGTHENED INSTITUTIONS, SYSTEMS, AND GOVERNANCE

I.R 2.1: Strengthened policy environment for the development of livestock and other market systems

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• Analyzed and supported the development of livestock-related policies and legislations across the five LMS counties. • Via embedded Policy Advisor in FCDC, LMS provided support in Markets Management regulations and the implementation of community land law. • Strengthened county's awareness of community land rights and supported counties in meeting constitutional timelines in the preparation and submission of community land inventories. • Provided technical support to counties to implement Pastoralists Leadership Summit resolutions to increase the development budget share of the livestock sector to 10 percent. • Supported the transition of County Climate Fund from donor to the county in Isiolo, Garissa, and Wajir. • Facilitated review of the 2020 Turkana Trade and Market Bill by line ministries and relevant stakeholders before presentation to the cabinet.

OBJECTIVE 3: COLLABORATIVE ACTION AND LEARNING FOR MARKET SYSTEMS CHANGE

I.R 3.1 & 3.2: Strengthened USAID and implementing partners systems for Sequencing, Layering, and Integration and Shared Indicators and Learning to Support Expanded Economic Opportunities

Co-creation and Validation of Joint Workplans with County Governments USAID rolled out the implementation of a new policy framework, Journey to Self-Reliance. that called for co-creation of annual work plans between Implementing Partners (IPs) and county governments, in line with their sectoral priorities and resource allocations. Such plans required deep coordination with county counterparts to ensure alignment between USAID and county government priorities, as well as their signed endorsements. LMS is committed to demonstrating effective co-creation processes with county governments: i Year 4 Workplan In line with J2SR, LMS worked intensively with county governments to co-create Year 4 of the program. A total of 17 separate meetings were held with County officials (Marsabit–3, Wajir–4, Garissa–3, Turkana–3, Isiolo–4) to develop the work plans. The sessions were beneficial for both County officials and the LMS team and allowed for a deeper understanding of (and appreciation for) each other’s objectives. The joint work planning sessions enabled the identification of county priorities that can be co-invested between relevant county departments and LMS. It also brought increased buy- in by counties to further the success of past LMS investments and initiatives. A key takeaway from the work planning experience was the need to support counties in the development of the ADP across relevant sectors to ensure realistic budgeting. In all counties, governors were regularly briefed on the co-creation process until the signing and approval of the final work plans. ii COVID-19 Response Workplans To address the impacts of the pandemic and specifically on livestock-related activities, LMS is working with county governments to protect and support those affected. To this end, LMS held at least 15 (three per county) coordination meetings with the respective line departments, including agriculture, livestock, and trade as well as the County COVID- 19 Coordination teams.

During this exercise, LMS gained useful insights from counties that informed the response activities. In Wajir, the county response was limited entirely to health-related activities and largely neglected the economic impacts of the pandemic. The experience in Marsabit and Isiolo taught that engaging the County Government at the initial planning stage was crucial in developing ownership, financial commitments, and co-execution of activities. Planning jointly with county government departments leads to precision and optimum utilization of resources as it reduces duplication. In Turkana and Garissa, the team noted that LMS’s budget transparency allowed county staff to be open on their available funding and making commitments.

County Governments Engagements LMS AA1 continued to strengthen its relationship with county governments to strengthen local governance and foster a vibrant civil society and private sector:

• In Turkana, the county government helped progress the implementation of LMS activities. Several review meetings and co-creation sessions were held throughout the year, resulting in partnerships on key priorities. For example, AA1 conducted a feasibility study to assess the viability of the Kerio Breeding center and Napelilim livestock holding grounds, the two are flagship projects of the County’s Ministry of Agriculture, Pastoral Economy, and Fisheries (MAPEF). County

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Leadership also inspected and inaugurated several LMS project sites throughout the year including Victoria Foods launch as well as Kakuma and Katilia Livestock Market launches. • The government's relationship with LMS has been especially strong vis a vis the Ministry of Agriculture, Livestock, and Fisheries. Also, LMS’s PREG leadership role has facilitated good traction from the topmost government officials, many of whom were involved in the co-creation efforts for FY2020 Workplans. AA1 co-created with the county planned support for the Isiolo County Enterprise Development Fund (KES 19 million for the current financial year) which is Shariah-compliant and able to reach SMEs in Isiolo. In Isiolo, the county attended the launch and handover of Bule Dogo Dambicha Feedlot. • The last year saw strides in strengthening the partnership with the Garissa county government. The CECM of Agriculture and Livestock works closely to support LMS, which was nominated to the secretariat of the multisectoral livestock stakeholder’s forum in the county. Additionally, LMS supported the GCRF vetting process for fund managers to increase access to finance by providing a Shariah-compliant product for SMEs. County officials attended the handover and launch of Kamuthe Young Farmers and Filayi Family farms. • In Wajir, the reshuffling of liaison staff within the Ministry of Livestock initially slowed down coordination between LMS and senior government officials. However, engagement with other government officers continued undisturbed. The new county government CECM for the Ministry of Livestock has since revamped collaboration, as evidenced by the county co-investing in youth scholarships. Officials endorsed the LMS Workplan and COVID-19 implementation plan. officials, including the Deputy Governor, attended the launch and handover of Malaba Beekeepers. • Marsabit county government officials actively participated in LMS activities. They can articulate LMS’s work and its impact on communities thanks to constant information sharing. Ongoing efforts with SACCOs resonate well with county officials. In collaboration with the Department of Trade, Industry, and Enterprise Development, AA1 conducted health checks for 13 cooperatives that focused on Internal Management; Organization Operations; Organization Sustainability; Financial Management; Marketing Management; Organization Supply Chain; Organization Enablers.

Strengthening County Government Capacities In Year 3, a total of 320 county staff benefited from the various training sessions conducted by LMS as outlined above of which 125 were female and 129 were youths.

County Group trained Focus area County Government Officials trained Garissa Garissa Sub County GCRF officials Garissa County Revolving Fund Vetting Processes Training; 16 Standard Operating Procedure for Garissa County Revolving Fund processes Turkana Kenya National Chamber of Leadership and Policy advocacy training, governance training, and 24 Commerce and Industry – Turkana Development of the KNCCI Turkana 3 Year Strategic plan Chapter All ToT for county government officials Concept of Trainer of Trainer, Cooperative Business Model, 46 Counties on co-operative development Regulatory framework (Prudential standards), Co-operative corporate governance (Operations management for Co-ops) Marsabit Tutors from various TVET institutions VTC BOG governance training on good practice for effective and 21 efficient management of VTC TVET students and tutors Entrepreneurship and Innovation training 42 Sarimo SACCO members and Governance and leadership training 54 management

Maximizing collective impacts through PREG collaborations • Collaborated and partnered with respective County Governments (Dept. of Livestock, Public health), PREG partners (NAWIRI, K-RAPID), and other stakeholders in the livestock sector (LMAs, KLMC, KNCCI) to resume livestock trade in markets across the five counties taking into account public health regulations on COVID-19. • Consulted with KIM and identified three LMS Activity partners and four REGAL-AG private sector grant beneficiaries that could benefit from KIM’s transaction advisory services by helping in packaging loan application documents in preparation for financing through AFC to finance livestock-related businesses. • To enhance the J2SR, LMS AA1 participated in the virtual PREG 2.0 Orientation and Targeting Workshop for Garissa County. The workshop brought together 7 county government officials and 6 implementing partners (AVCD, Kenya RAPID, WFP, LMS, NIWETU and Save the Children). This workshop explored new approaches between PREG partners and county governments. The targeting framework was also discussed. The new approach will help to identify data and evidence-driven implementation of sites for activity convergence. The overall goal of the orientation process

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was to align and reinforce PREG collaboration and partnership at both national and county levels. The workshop focused on the evolving PREG operating environment and the role and place of the partnership among existing partners. Such evolving dynamics include the renewed focus of USAID on J2SR and how partners will work with USAID under the new partnership arrangements with county governments, the increasing role of county governments, private sector, and local communities, as well as the role of new partners and how these present partnership opportunities.

Quantitative Impact Despite the challenging operating environment, LMS AA1 made substantial progress against annual targets, including reaching a total of 6,262 (76%) participants in the year (94% Female and 6% Male), accessing USD 161,403 in agricultural-related financing (365% of target) for LMS-supported businesses. The table below provides a summary of LMS indicators results in Year 3 as well as for the life of the project (LOP). IR % Cumulative achieved % achieved to Indicator Title FY3_Target FY3_Results against against LOP September FY3 Target 2020 Target All IRs EG.3.2 Number of individuals participating in 8,189 6,262 76% 9,227 54% USG food security programs [IM-level] IR.1.2 and ES.5-1 Number of USG social assistance IR.1.3 beneficiaries participating in productive safety 5,460 6,978 128% 6,978 128% nets [IM-level] IR.1.3 EG.3.1-14: Value of new USG commitments and private sector investment leveraged by the 30% USG to support food security and nutrition [IM-level] IR.1.3 EG.3.2-27: Value of agriculture-related financing accessed as a result of USG $ 37% assistance [IM-level] IR.1.3 EG.4.2-7: Number of individuals participating in group-based savings, micro-finance or 5,460 5,559 102% 5,559 102% lending programs with USG assistance IR 1.1, IR LMS Custom 1: Number of individuals who 1.2, IR 1.3, have received USG-supported short-term 8,927 6,095 68% 7,896 49% IR 1.4 productivity, food security training, or nutrition-related training LMS Custom 3: Number of organizations and All IRs groups receiving USG-funded technical 1,461 2,193 150% 2,331 113% assistance to improve performance HL.9-2 Number of children under two reached with community-level nutrition IR.8 1,037 159 15% 159 17% interventions through USG-supported programs

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AA1 KEY ACHIEVEMENTS (QUALITATIVE IMPACT) LMS IMPACT SNAPSHOT LAYING A FOUNDATION FOR DURABLE ECONOMIC DIVERSIFICATION IN TURKANA In Turkana, USAID support is cementing the emergence of a more formalized, commercial fish value chain, unlocking access to more diversified, higher-value market channels for 100 fishermen and hundreds of consumers. This is stimulating greater availability and affordability of protein-rich foods. This is in support of LMS’ dual nutrition and economic growth goals and their link to strengthened resilience capacities.

Turkana’s fish industry has long been characterized by high levels of informality, little value addition, opportunistic marketing, and low returns. There also exists a wide gap between food requirements and supply due to low production, which is a result of physical and economic water scarcity, cyclic droughts and floods, low pasture fodder and crop production, inadequate technical capacity, poor coordination, and inadequate institutional arrangements. The County Government in collaboration with LMS identified fish and poultry as some of the flagship areas that need more concentration to help improve this challenge of food insecurity, hunger, and poverty through economic diversification and as part of its livestock market systems strategy, and further prioritized fish within its nutrition-sensitive strategy.

As part of this, in January 2018, Victorian Foods approached LMS to co-invest, and after a co-design process that involved enhancing model transformation to specialize in ice flakes and poultry feeds, LMS and Victorian Foods launched a co- investment in an ice plant and poultry feed processing factory in Kalokol, which began operating in June 2020. Victorian Foods has further invested independently in a fish processing plant and is constructing a fish ternary.

In this short time, Victorian Foods has already expanded its sales significantly: for example, sales of 7 Metric Tonnes of fish fillet to clients in Turkana town, , , , , and - up from 1.2 Metric Tonnes before LMS support. Several women are also challenging gender role norms by joining the supply chain for Victorian foods through ownership of boats and fishing nets. In December, Victoria Foods will train fishermen from Nariemet BMU that have received support through FAO and Jomo Kenyatta University, providing training on fish handling, preservation methods, record keeping, and value addition in making sausages, samosa, and other value-added products.

As Victoria Foods continues to expand its processing capacity and improve its business efficiencies, the Activity will also support Victoria Foods in diversifying its marketing channels and social marketing for nutrition. Private sector firms like Victoria Foods can help increase the availability and desirability of these critical animal-source foods for people in last-mile areas.

Now, where there was once a critical missing role in the fish value chain, a true anchor firm operates, producing commercial quality fish that expands market channels and value addition

LMS IMPACT SNAPSHOT QUALITY PREMIUMS INCENTIVIZE SHIFTS TOWARDS MORE COMMERCIAL CAMEL MILK SEGMENTS In Northern Kenya, there is unrealized potential in the camel milk value chain, as producers and aggregators do not have a cold chain and are not well connected to the markets. The camel milk market involves over 1,000 actors in Isiolo and is estimated to be valued at over at the farm level (SNV, 2007). Most consumers are still used to consuming smoked milk, a traditional method of milk preservation. Yet, demand for unsmoked milk is a growing market with significant untapped demand, especially with mid and high-level income earners. Furthermore, the Kenya Dairy Board declared the trade of unpasteurized milk illegal. Smoked milk, therefore, limits diversified, higher-value market opportunities for producers, as they cannot connect to these more formal markets.

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LMS has been tackling this from multiple angles over several years, with these investments now showing fruit. Efforts include: enhancing private sector knowledge of the benefits/business case for the unadulterated milk market segments amongst buyers and processors, working with private actors in creating incentives for producers through quality premiums, supporting demand-creation through consumer campaigns, and addressing constraints in key ancillary services like cold chain and transportation. In April 2019, LMS facilitated a camel milk value chain stakeholder forum in Isiolo, focused on milk hygiene training and analysis of systemic constraints in the camel milk value chain. The forum provided a platform for 79 stakeholders (82% female) - herders, camel owners, motorbike transporters, and Classic Foods Limited - to determine cost-benefit

analysis associated with smoked and unsmoked camel milk, ‘revealing’ the business case for unsmoked milk. - The forum spurred a co-investment opportunity between LMS and Classic Foods Ltd, a camel milk processor, to establish two water pumps in Isiolo to help with animal hygiene. This processor is also offering quality premiums at a liter compared to the other off-takers who take the milk at liter. So far, over 50 suppliers are supplying milk to the processing plant.

- Other processors began crowding in - giving premiums for clean milk - and new cooperatives formed to start supplying the processor. So far, milk suppliers from Kinna, Boji and Kulamawe areas have come together to form one camel milk Cooperative-Walgabana Cooperative which will formalize camel milk supply agreements with the processor. In total, 3 milk cooperatives in the region are engaged. The other already established cooperatives are Tawakal and Anolei.

- These relationships are also spilling over to other products as well, as other processors are also trying to buy from the camel herders.

To further develop a consumer base for pasteurized camel milk, in March 2021 LMS will begin work with private companies to engage in a social and behavior change communication campaign to increase the local demand for pasteurized milk, integrating nutrition messaging on the health and nutritional benefits of pasteurized milk. Lack of aggregation sites and clean containers for milk transportation still impedes the availability of hygienic milk due to the long distances associated with milk transport. So, LMS is also training transporters in safe hygiene transportation. Another group is interested in putting up a cooling facility or customized milk cans to address constraints along the milk value chain. LMS will continue to nurture this shift towards more commercial camel milk segments and look for opportunities to ‘scaffold’ on other advancements for more competitive livestock market systems.

Objective 1. Expanded and Diversified Viable Economic Opportunities IR 1.1 Facilitate more competitive, resilient, and inclusive livestock and related market systems to leverage end-market opportunities while insuring inclusion and poverty reduction

Livestock Marketplace Development Garissa Balambala livestock market was commissioned and officially launched by Garissa Governor Ali Bunow Korane during his sub-county tour in Balambala. SLI with the K-RAPID Program supported the construction of water troughs and the installation of potable water supply to Balambala and Garissa's main livestock market.

LMS facilitated a joint visit to Masalani with officials from the County Department of Livestock (Dr. Haret Hambe – Director of Livestock Development and Mr. Siyat Onle – Deputy Director of Livestock Marketing and Value Chain Addition). LMS worked with Masalani livestock stakeholders to strategize and set on the course the operationalization of the livestock market following the handover to the community by the contractor. The process has already started with LMA spearheading the awareness campaign.

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LMS worked with the Chief Officer and the Director for Livestock to lobby for the engagement of the livestock market stakeholders on the full operationalization of the livestock markets out of Garissa town. This was followed by a joint monitoring field visit with county livestock officials from the Department of Livestock to markets in Balambala, Fafi, and Ijara sub-Counties to map out the challenges they are facing. The joint team that included LMS staff, the Director for Livestock Development, and the Deputy Director Livestock Marketing and Value Chain Addition will present the findings and recommendations to the livestock market stakeholders in Garissa to facilitate the operationalization of the three markets and provide the required support to ensure their vibrancy. There have been varying efforts from the departments of Livestock, Revenue, Trade, urban planning to support the operationalization of livestock markets. LMS, with the support and collaboration of the CECM of Agriculture and Livestock, are working together to ensure coordinated and streamlined operations resume in markets.

Three meetings with stakeholders and the interim livestock management committee were held to discuss equitable allocation of the stalls and harmonize two competing lists with 100 small traders/beneficiaries competing to benefit from the distribution. USAID constructed 30 permanent market stalls through the REGAL-AG program at the Garissa main livestock market while 30 additional stalls were constructed by Garissa County Government through the National Government Affirmative action (NGAAF) funding. Due to the stature of the Garissa livestock market, small traders and market actors were drawn from different clans across the county. County officials, LMAs, and the area chief were tasked with distributing stalls to 30 small traders based on the final list of beneficiaries harmonized by the livestock markets management committee. The committee developed the application form and agreed on the monthly rental fee for the stalls. A revenue-sharing arrangement between the county revenue department and the LMAs was also put in place to ensure that the stalls generate income for the county while LMAs receive money to support the maintenance of the stalls.

LMS’s work with the County Department of Livestock to ensure accurate packaging and dissemination of awareness campaigns and market information is ongoing through the LMS COVID-19 Response grant.

The department of Livestock identified five technical staff to be trained on lab diagnostics while LMS held discussions with Analabs Kenya to conduct the skills training on laboratory diagnostics. Due to the MOH restrictions on physical and distancing to prevent the spread of COVID-19, the training has been deferred to Year 4.

Turkana Market days for Lokichar, Kakuma, and Lowdar livestock markets were established, launched, and activated. They began to function successfully until public gatherings were banned due to the COVID-19 pandemic. The department of trade requested the project support the reactivation of market days as soon as the health protocols are relaxed. LMS started engaging stakeholders, through coordination meetings, on the launch of Market Days scheduled for Y4 Quarter 1.

Feasibility and operational plan framework for Napelilim Holding ground and Kerio Breeding center were completed and the report was shared with Turkana County Government. The project engaged Rural Electrification and Renewal Energy Commission and Kenya Power in the electrification of the Kakuma Livestock Market. KPLC has since started the installation of electricity poles and connected electricity cables. Electric connection is anticipated in two months.

Marsabit LMS met with county government officials from the Livestock Department and discussed the activities and budget required to enact this bill into law. Activities and budget requirements have been identified and have been included in LMS Y4 co- created work plan.

LMS conducted visits to the livestock markets (Merille and Moyale) to identify required items/protocols for these markets to operate in the face of the pandemic. Facemasks have been distributed to all the livestock markets (constructed under the REGAL-AG project). A six-month COVID-19 work plan has been co-created with the county government of Marsabit: this plan details how LMS AA1 will protect market users and cushion small businesses against COVID-19 adverse effects. The plan entails providing both assets and skills/knowledge to the market management for future sustainable management of hazards.

Wajir

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The initial draft of the sale yard bill was reviewed by the county Department of Livestock Directors and the LMS county team. The actual activity was not conducted due to restrictions of movement and congregations resulting from COVID-19 guidelines. A consultative meeting was conducted with Kenya Power and Lighting Company, Wajir Station during the reporting period. A field team from the company visited Griftu to assess the requirements to facilitate a power connection for the livestock market. The power connection will now be facilitated upon receipt of a quotation from the company. This activity will therefore continue to Y4Q1.

Isiolo To enhance the management of the Isiolo livestock market, the SACCO manager participated in a cooperative virtual TOT training facilitated by LMS. During the training, the team was taken through features of the cooperative business model, benefits of cooperatives, role of women in cooperative development, the registration process of cooperatives, economic appraisal, and formulation of by-laws. The training will be instrumental for the SACCO manager to improve the performance of the livestock Marketing Cooperative. LMS facilitated the formation of the Isiolo livestock market SACCO to enable the market actors to save and access credit to grow their businesses. The society has 180 members (110 females and 70 males) with savings of with numbers expected to go up.

LMS team facilitated a business plan development session for 12 committee members (six males, six females) from the Isiolo Livestock market SACCO. The facilitation provided technical guidance on the development of the business plan that will see the 181-member livestock marketing cooperative and SACCO engage in other livestock-related activities, such as animal buying and fattening, selling of hay, availing Sharia-compliant loans, and engaging in the animal transport business. All the costs that pertained to the first day of the training were catered by the Isiolo livestock SACCO members.

LMS in collaboration with the trade and cooperative department facilitated three days of training with 41 members (22 female, 19 male) from the cooperative. The training entailed an introduction on the importance of the marketing cooperative, resource mobilization, buying, fattening, and selling of livestock as a cooperative for better prices. The members agreed to contribute a total of by 30th November 2020 to kickstart livestock fattening. The animals will then be sold at Merti and Isiolo livestock market. The group will also embark on the continuous mobilization of other members from the Merti market in joining the cooperative.

Business/SME Capacity Development Garissa Five women’s groups trained on cooperative management including Alijugri, Dadaab, Masalani, Modogashe Milk Women cooperative society, and Hormar livestock cooperative. Provided mentorship to LMAs treasurer from the Garissa livestock market on record keeping, filing, and documentation. Through collaboration with KALRO Garissa and the County Department of Livestock, 25 farmers (15 female, 10 male) from the Kamuthe location were trained on fodder production and management. The training covered all aspects of the fodder value chain – input sourcing, establishment/production, harvesting, seed bulking, conservation, and marketing. KALRO is using facilitating the identification of fodder species suitable for commercial production to bridge the gap in the fodder deficit of 2M bales required in Garissa county. Following the training, the 25 farmers are expected to expand the acreage under commercial fodder production from 10 acres to 50 acres. Kamuthe Young Farmers provide the most ideal site for demonstration and training of local fodder producers in Garissa County following the recent procurement of land preparation, irrigation and fodder harvesting equipment, and construction of a hay ban through the USAID in-kind grant. Seven County Cooperative Officials (two females and five males) were trained as ToTs on cooperative management. The TOTs will coordinate and support capacity-building activities for cooperatives in the six sub-counties of Garissa.

Turkana A sample MoU was shared with the Ministry of Agriculture, Pastoral Economy, and Fisheries for adoption in the privatization of Kerio Breeding Ground.

The team supported the linkage of Victorian Foods (VF) with AMSCO development Solutions LTD for business training, coaching, and mentorship opportunity. The program also linked VF with red and white meat online LTD for access to USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 ANNUAL REPORT 13 market linkages. Red and white meat online had since linked Victorian Foods and Uchumi Supermarket who are offering cold chain storage for ten tons of fish processed and ready for markets.

LMS undertook cooperative TOT training for the County Government of Turkana officials. The officials were drawn from the department of cooperative development and the Livestock Production department. The training was intended to build the capacity of the county officials in cooperative development for the 12 livestock cooperatives that the project intends to establish in the sub-counties.

The team undertook business records training approved grantees in Turkana. SRC and the team developed a business records template and undertook training for 4 small grantees; Mchanganyo mill, Aredena honey, etic women mill, and Owjay consulting.

Wajir LMS facilitated TOT training for the county department of trade and cooperative officials on cooperative management and development. Ten (eight male; two female) technical staff from the department of trade and cooperative were trained during the reporting period. To cascade knowledge to cooperative, the TOTs formed two marketing cooperatives targeting milk and poultry in Bute Wajir North. Training for these cooperatives and existing ones will be conducted in year four of the program.

During the reporting period, a consultative meeting was conducted with WFP to map out honey producers in Wajir North supported by the organization. The same was shared with the Malaba Hills beekeepers for onward support. Equally, two GIRL groups within the Bute area that are engaged in honey production were linked to the Malaba hills to provide training opportunities and set up of apiary.

Marsabit The team completed a grant package for Moyale Camel Dairy Coop which is pending USAID approval for the group to receive milk equipment and skills to enable them to produce, aggregate, and commercialize camel milk in a safe, hygienic, and organized environment.

The team conducted field visits to Songoyo, Jeyjey, and Moyale animal feeds to ensure that construction was completed within the set standards. Jey Jey and Moyale animal feeds have been completed and the owners are conducting preliminary activities to start production. men and also from Songoyo Enterprises Limited.

Isiolo The team facilitated the signing of a renewable five-year MOU between the county government of Isiolo and LMS Grantee Bule Dogo Dambicha (BDD). The objectives of the MOU included the revitalization of the stalled Burat Commercial pasture demonstration farm, providing training and extension services to pastoralists, developing appropriate technologies for pasture management, and running the facility as a model commercial profitable learning center.

BDD Co. Ltd partnered with Kenya Agricultural Research and Livestock Organisation (KARLO Kiboko), Jomo Kenyatta University of Agriculture and Technology (JKUAT), County Government of Isiolo, and Marsabit in using the farm as a model to other livestock producers in the region. The collaboration entails using the LMS supported feedlot and dairy unit, and the 125 acre-leased government pasture unit for communities to learn and replicate similar models. The farm has also been selected by KARLO as one of the pasture seeds producers in the region due to the Certified seeds that were grown at a 10-acre pasture farm for seed generation. The team offered training to the farm on feed formulation and silage making. Training on livestock feed was also conducted.

In collaboration with livestock extension officers, LMS facilitated refresher training to 30 pasture producers (21 females and nine males) from Kinna and Rapsu regions on pasture production, utilization, and conservation. The three days training led to the allocation of 26 acres of land for pasture production expected to yield 10,400 bales of hay annually. A Whatsapp group for the marketing of the hay and grass seeds has been created after the group agreed to form a pasture marketing umbrella group representing 75 pasture producers from the Kinna Commercial group, Rapsu fodder group, Tuttkinisa fodder group, and Malka pasture group. The Training of fodder producers in Kinna. pasture groups indicated to embrace soil and water conservation by using Zai USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 ANNUAL REPORT 14 pits/micro-catchment areas for pasture production as directed by the livestock extension officer. The group currently has 630 bales stored at the Kinna Government hay barn. Draft MOU on the utilization of the Government hay barn by the group was developed that will see signing by the County Government. Access to automated hay harvesting equipment still remains a challenge to the group.

In collaboration with the fishery department, LMS trained a total of 14 fish producers (five females, nine males). The participants included seven fish producers (four females, three males) from the Nasib fish youth group and seven fish producers (six males, one female) from the Samaki traders group. The participants were taken through sessions on pond construction and management, feeds and feeding, harvesting, transportation of live fish, fish handling, and hygiene to maintain fish quality, diseases and predator control, marketing, and held a practical session on pond management. The training was key to the group that currently manages 2,000 fingerlings. The agreed action points were: conducting fish campaigns that will create more fish consumption, opening a fish eatery, and lobbying the county government to ensure the government-owned fish hatchery is rehabilitated Practical session on fishpond management and leased to fish producers for fish propagation. LMS will facilitate access to the during the fish producers training. identified fish market.

In Isiolo, Classic Foods mapped over 1,000 camel milk actors within the region.

All Counties Support to REGAL- AG business and Livestock markets Lodwar Livestock Market The team facilitated the distribution of USAID Marafiki Facemasks at the livestock market. 1,800 facemasks were handed over to livestock, fish, and fresh produce traders in Turkana at a ceremony presided over by the CECMs for agriculture, pastoral economy, and fisheries, as well the one from the Ministry of Trade, Gender and Youth Affairs. A further 600 facemasks were handed over to the Kenyan National Chamber of Commerce-Turkana Chapter officials for further distribution to its members spread across the county. Through the Market Business Support Small Grants, LMS is supporting three businesses at the market, making it vibrant by catalyzing business activities that would enhance livestock trade at the market in the whole county. The three businesses supported include African Queen Beads and Ornaments Shop, Luan Grocery and Cold Drinks Shop, and Jordan Riva Enterprises, who wants to expand the business and introduce phone charging as a business product.

Kakuma Livestock Market The team distributed 400 USAID Marafiki Facemasks for the LMA members and traders at the market. The activity was supported by the Turkana Chamber of Commerce Officials. The facemasks will go a long way to enhance livestock trade as it will protect contacting COVID-19 disease. Kakuma town has experienced a high number of COVID-19 positive cases compared to other towns in the county. Kakuma hosts approximately 180,000 refugees. The host community population is approximately 60,000. As such, there is a lot of crowding, creating an environment for COVID-19 to thrive. The LMA members will have an opportunity to continue doing business amidst the pandemic, allowing them to have the income to cater to their households’ needs. The LMS project is supporting three businesses. The businesses sent their RFAs for consideration and are currently with USAID for approval. Once they start implementation, the businesses will enhance trader activities at the market.

Lokichar Livestock Market The Project has revitalized the Lokichar Market. The market plays a major role in the livestock not only as the anchor market for feeder markets such as Lokori, Kalemngorok, Katilu, and Lochwaa Market but because of its location on the Lodwar- Kitale Road. LMS has supported the market by re-establishing market days and the creation of a Livestock Cooperative Organization. During this reporting period, the project distributed 300 USAID Marafiki facemasks to the livestock traders at the market. The facemasks have seen the traders continue doing businesses amidst the COVID-19 pandemic.

The project through the Turkana County Livestock Marketing Council distributed 300 USAID Marafiki Facemasks to Lokiriama and Lobei Livestock Markets. Through the activation of market days by the Project and Partners, the two markets USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 ANNUAL REPORT 15 have been activated more specifically to serve the cross-border trading among West Pokot and Turkana Counties and Moroto, in Uganda. Continuation of the businesses in the markets is key to the cross-border markets.

Garissa Main Livestock Markets REGAL AG constructed four livestock markets in Garissa through USAID funding. Three of the four livestock markets are operational. However, several issues/ challenges led to the sub-optimal utilization and mismanagement of these markets including; • The short period available for construction and operationalization of the markets – The markets were constructed in the terminal phase of the REGAL-AG project. This provided limited time for REGAL-AG to implement and operationalize the markets after completion. • Disjointed efforts from relevant county departments (Livestock, Revenue, Trade, urban planning) to support operations at the four livestock markets. - Because the REGAL-AG program had very limited time to handover the livestock markets, the county government did not take ownership of the markets immediately after construction was completed to operationalize even though they continued collecting revenue. This untimely exit created confusion as the caretakers (security guards) hired by the contractors were left at the market without an employer. This resulted in vandalism and poor utilization of the markets, especially in Modogashe. • The Masalani market contractor delayed the hand-over of the keys to the market until very recently. Consequently, the market has never been utilized to date. • LMAs suffer from underfunding. To strengthen them, the Livestock Management Bill needs to be fast-tracked to legalize revenue sharing with the county government is required to make LMA strong and active LMAs take over the management of livestock markets.

LMS took the following steps to address these challenges: • Facilitating training for LMAs on best practices in livestock market management. • Engaging the leadership of the sub-counties (town managers, sub-county administrators, revenue officers, local administration, and LMAs) to improve market management to address the prevailing challenges. For example: In Modogashe, LMS and county livestock officials convened a meeting chaired by the Deputy County Commissioner and attended by the area chief, sheik, and 17 elders (all men) from the community to sort out land issues around the Modogashe livestock market where the access road to the market had been grabbed. Following the meeting, the sub-county leadership and security team mobilized to open the road as agreed upon in the meeting without delay. As a result of this intervention, the access road to the Modogashe Livestock Market is now opened and clear. • LMS is advocating for the establishment of a committee to supplement the lack of a legal framework to recognize the role of LMAs in the markets. The effective operation and maintenance of the four livestock markets by the LMAs are hindered due to delay in the enactment of the “Garissa County Livestock Management bill” i.e. Saleyard bill. • The program also spearheaded the formation of an interim livestock market management taskforce at the county level with clear TORs to support improving the functionality and proper management of the livestock markets by objectively engaging the relevant departments involved with the Garissa livestock market and providing technical backstopping to the LMAs. The livestock market task force committee in the interim is providing the surrogate management and mentorship to the LMA at Garissa Main Livestock market while waiting for cabinet approval of the proposed Livestock Market Management bill. • The program also enhanced joint monitoring visits to the markets with the county line departments to map out and address the challenges of management at the market. The latest joint monitoring and support field visit to livestock markets outside Garissa township was conducted two weeks before the end of the reporting period with county officials from the Department of Livestock. The visit mainly focused on operations at the livestock markets in Modogashe, Balambala, Bura, and Masalani. The joint team that included LMS staff (CPM and BDS), the Director for Livestock Development, and the Deputy Director Livestock Marketing and Value Addition will present the findings and recommendations to the livestock market stakeholders in Garissa to extend their support on the operationalization of the markets to sub-counties and ensure the enhanced vibrancy of the three livestock markets.

Following LMS intervention and advocacy to develop the market management committee, services, and operations in Garissa, the main livestock market has greatly improved. The revenue collection has also improved. During the year 2019-

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2020, the county government collected in revenue from the Garissa Livestock market despite the challenges created by the COVID-19 pandemic. Garissa Livestock Market handles on average about 3500 cattle, 1500 goats, 1000 sheep, and 500 camels weekly, with traders coming from other counties. Garissa's main livestock market is vibrant with over 100 small businesses crowding the market and about 35 trucks assemble at the livestock market every market day to transport livestock to the external market. Other intermediary support services that currently operate at the market include;

Intermediary Support Services at Garissa Livestock market Sand suppliers (as buffers to reduce shock for Pasture and fodder Transporters loaded animals on transit) suppliers/traders

Food vendors Clothes vendors Electronic shops Milk vendors Vegetable, fruit, Groceries Retail shops and Butcheries Miraa business owners Veterinary input suppliers Tailoring and Berber shops

ISIOLO COUNTY LIVESTOCK MARKETS Isiolo Livestock market The period saw the LMS team handover 1500 USAID Marafiki reusable facemasks to the Isiolo livestock market. The activity was carried out in collaboration with the county government officials from the veterinary department, revenue clerks as well as the LMAs. The market stakeholders appreciated LMS for the provision of face masks to the market users since it is a good intervention measure in curbing the spread of COVID-19. The team also demonstrated the proper way of wearing the face masks to the masses.

Isiolo Livestock Market Association members approached the LMS office in drafting a Handover of USAID Marafiki facemasks in Isiolo market letter to the Livestock Department and Finance Department, working with the County Government to allocate resources for market management. Isiolo has the Sales Yard Act in place and is waiting on the County Assembly to ratify the Isiolo Sales Yard regulations that will see 40% of the revenue collected go towards the community and market management. To enhance the management of the SACCO, the Isiolo livestock market SACCO manager participated in cooperative virtual trainers of trainees, TOT training facilitated by LMS. During the training, the team was taken through features of the cooperative business model, benefits of cooperatives, and role of women in cooperative development, the registration process of co-operatives, economic appraisal, and formulation of by-laws. The training will be instrumental for the SACCO manager for enhanced performance of the livestock marketing cooperative. LMS facilitated the formation of the Isiolo livestock market SACCO to enable the market actors to save and access credit to grow their businesses. The Society has 180 members (110 females and 70 males) with savings of , with numbers expected to go up. • LMS team facilitated a business plan development session for 12 committee members (six males, six females) from the Isiolo livestock market SACCO. The facilitation involved providing technical guidance on the development of the business plan that will see the 180-member livestock marketing Cooperative and SACCO engage in other livestock-related activities like buying and fattening of animals for better margin, selling hay, availing Sharia- compliant loans, and engaging in the animal transport business. All the costs that pertained to the first day of the training were covered by the Isiolo Livestock SACCO members. (It should be noted that LMS facilitated the training of the 180 members of cooperative developments after meeting all the training costs and hiring a manager who was trained on cooperative development by LMS).

Oldonyiro Market

USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 ANNUAL REPORT 17

The year saw the LMS team handover 1,500 USAID Marafiki reusable facemasks to the Oldonyiro livestock market and 500 facemasks to the Kipsing market. The activity was carried out in collaboration with the Oldonyiro Revenue Clerk, LMAs, Ward Administrator, Public Health Officer, and Community health workers from the Oldonyiro area. The market stakeholders appreciated LMS for providing the face masks to the market users since it is a good intervention measure in curbing the spread of COVID-19. The team also demonstrated the proper way of wearing the face masks to the masses. The face masks were later distributed by the LMAs and community health workers, CHW to various market actors.

Handover of USA Marafiki facemasks in Oldonyiro market

The team also monitored the performance of the Oldonyiro livestock market. From the monitoring, the team learned that the market was operating efficiently, and the market management team was keen to ensure that the government directives to curb the spread of the COVID-19 pandemic are strictly adhered to. The livestock, foodstuff, and other commodity markets had resumed following its closure due to the outbreak of the COVID-19 pandemic in the country. Market users can now access clean water for human and livestock consumption. This is a result of a borehole drilled by the Drought Resilience Sustainable Livelihood Project, which pumped into the storage tanks Activities in Oldonyiro market supplied into the market. It was noted that the Oldonyiro livestock market SACCO currently has 110 members (70 females and 40 males) and a total saving of where has been loaned out to 21 members during the COVID-19 pandemic. The SACCO has been audited and plans are underway to present the 2019 audit report to members. The Oldonyiro livestock market SACCO has also opened an M-Pesa outlet as a way of generating income for the cooperative. With the M-Pesa line, the market users will be able to deposit and withdraw money to avoid carrying a huge amount of money which can be stolen along the way.

Business activities in the foodstuff section Service providers at the Oldonyiro market

Merti Market Merti livestock market performance monitoring was conducted and the team learned that though the market is operational, it is functioning at a reduced rate. The reduction has been attributed to the depletion of pasture around the market which has resulted in the migration of livestock to better grazing zones away from the market. The team also learned that there was water available in the market for both human and animal consumption though, storage facilities are a major challenge.

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Activities in Merti livestock market Handover of Marafiki facemasks in Merti market

The team also handed over 500 USAID Marafiki facemasks to Merti livestock markets. The activity was carried out in collaboration with LMAs from this market. Demonstration on the proper way of wearing the face masks to the market actors was done and later, distributed the masks to all market users who commended LMS for provision of face masks since it is a good intervention measure in curbing the spread of COVID-19 pandemic. Eskot Market The market was operational though security issues were reported in the area limiting the number of traders in the market. Duse Market Duse livestock market remains closed during Quarter 4 due to security issues reported in the region. Cooperative and SACCO Establishment and Strengthening In Year 3, AA1 carried out several activities to strengthen and diversify productive livelihoods for men, women, and youth. These activities largely entailed building the capacity of various institutions that provide trading channels/platforms for increased income through cooperatives. Cooperatives have become an effective way for people to exert control of their economic livelihood resources. AA1, through its facilitative approach, intends to use cooperatives as a powerful tool to change lives in Northern Kenya. AA1, therefore, began with commissioning the Health Check for Cooperatives activity which saw 13 cooperatives undergoing a rapid assessment that focused on the following thematic areas: Internal Management; Organization Operations; Organization Sustainability; Financial Management; Marketing Management; Organization Supply Chain; Organization Enablers. During the year, a pilot training on cooperative governance was carried out in the Fisheries Cooperative Society, and Sarimo Multipurpose Cooperative Society. The training was carried out concurrently with overall 106 members being trained on Corporate governance (Sarimo 54 and Loiyangalani 52). Towards the end of Year 3, AA1 embarked on taking a stronger J2SR approach by commissioning a Training of Trainers (ToT) for County Government Officials on cooperative development. A total of 41 (33 male, eight females) mostly cooperative offers and cooperative auditors for three hours per day for six days.

Isiolo LMS in collaboration with the trade and cooperative department facilitated three days of training with 41 members (22 females, 19 males) from Merti livestock marketing cooperative society. The training entailed an introduction on the importance of marketing cooperatives, resource mobilization, buying, fattening, and selling of livestock as a cooperative for better prices. The members agreed to contribute a total of by 30th November 2020 to kickstart livestock fattening. The animals will then be sold at Merti and Isiolo livestock market. The group will also embark on the continuous mobilization of other members from the Merti market in joining the cooperative.

The period saw the LMS team in collaboration with Trade and Cooperative Department and Lay Volunteers International (LVIA) conducted three-day training for Walqabana Camel Milk Cooperative. The training was done by two cooperative officers that had undergone ToT training on cooperative formation facilitated by LMS. The training was a pilot for the young graduates, and they plan on training more cooperatives. The cooperative formation as a result of LMS, Classic Foods Ltd, and LVIA sensitization of the three milk aggregators from Kinna, Kulamawe, and Boji on the formation of the association that currently has 50 members (46 females and four males) members. The camel milk marketing cooperative will ensure bulk

USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 ANNUAL REPORT 19 aggregation of camel milk and improved hygiene standards on camel milk production thus pushing for better prices. All 50 cooperative members underwent the training.

The team supported the Cooperative ToT Training for County Government of Isiolo trade and Cooperative officers. The training saw 5 participants (2 M, 3F) from the Cooperative Department and youth enterprise fund undergo the training. The training is a precursor for the various livestock Producer Cooperatives spread across the county.

Wajir 2 marketing cooperatives were formed during the reporting period targeting milk and poultry value chains in Bute town. Cooperatives targeting the livestock markets will be formed upon the establishment of a market co-management framework with the county government.

Ten ( seven male, three female) county officials from the department of trade and cooperatives were trained as TOTs in the reporting period.

Garissa Seven cooperatives formed including; Alijugri - one milk cooperative society, Dadaab- two milk cooperative societies, Masalani- two milk cooperative societies, Modogashe- two milk cooperative societies, Bura- one livestock fodder marketing cooperative, and Hormar livestock trading cooperative.

Five cooperatives trained on cooperative management including Alijugri, Dadaab, Masalani, Modogashe Milk Wonem cooperative society, and Hormar livestock cooperative. Discussions on the formation of umbrella cooperative along value chains ongoing with the cooperatives took place.

Turkana The team supported the cooperative ToT training for the county government of Turkana’s Livestock Production and Cooperative Officers. The training saw six (five male, one female) livestock production officers and 12 (ten male, two female) cooperative officers undergo the training. The training is a precursor for the 12 Livestock Producer Cooperatives spread across the county.

The project has already engaged the Lokichar, Kakuma, and Lodwar LMAs on the establishment of their cooperatives. The LMAs have already been sensitized and plans are underway to undertake the first Pre-Cooperative training in the month of October 2020.

Marsabit Six male county government officials from the Departments of Cooperatives, Trade, and Livestock have been trained as TOTs to deliver training to the cooperative society as part of the larger plan to strengthen and improve the capacity of these groups to produce value-addition and market livestock produces on behalf of their members.

The team conducted face to face meeting between Moyale Animal feeds and crop farmers from Moyale and Marsabit towns. These farmers were representative from Kandere and Hame Harda Cooperatives societies. The farmers agreed to hold a cooperative meeting to decide on the amount, prices and crop to be delivered to the factory.

AA1 worked with the Loiyangalani Coop Society to identify opportunities that both ultra-modern fish factory (currently under construction in Loiyangalani) and Songoyo Enterprises Limited (that will produce fish in cages) present to the local fish producers (who are mostly members of this coop). The factory will be sourcing fresh fish supplies from the local fisher.

Cooperatives Supported Kandere, Hame Harda, Loiyangalai Fishermen Cooperative Society

Business Growth and Expansion Grants USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 ANNUAL REPORT 20

In Year 3, AA1 has continued to use a mix of supported livestock-related businesses both soft (e.g. facilitation, policy support, capacity building, technical assistance) and hard (infrastructure, equipment, and service-oriented business grants) interventions. Solicitation: Five grant opportunities under AA1 were approved and released during the year.

• Agrovet small grant RFA covering all counties • Behavioral Change Campaigns RFA focused on efficient business practices and quality animal health within the livestock market value chains (covering all counties) • Business opportunities targeted at youth who have undergone internship with the Turkana Public Service Board • RFA aiming at enhancing affordable inputs to various livestock actors in Turkana • Youth scholarship RFAs in Marsabit and Isiolo

During the reporting period, we received approval to support COVID-19 response activities to be implemented through grants. As a result, co-creation discussions with respective county governments were conducted to identify activities for support, which will be issued through a hybrid of in-kind and fixed amount awards to county governments. Grant negotiation activities are ongoing to develop grant packages for USAID submission and consideration of approval. Grants approved: During the year, the grant review process for grants including grant compliance and technical reviews, business assessments, grant negotiations, and packaging of grants for submission to the donor for approval was completed. A total of 106 grants have since been approved. County No. of Total Value Grants (US$) Grants Approved Garissa 21 Isiolo 15 Turkana 13 Wajir 28 Marsabit 22 All (BOMA) 1 Total 106

Grants portfolio review: A total of 27 grants (both approved and under consideration for funding) were reviewed based on the value chain classifications, which include: livestock; milk; fodder production; fish; integrated and greenhouse farming; milk; and honey value chains. The portfolio review focused on system-level constraints, system-level interventions LMS is undertaking, and expected outcomes per value chain. The results will inform the team and identify any missing interventions within the value chains that could be supported through grants, other non-grant system-level interventions that we are conducting or can do to address constraints in the value chains, information that would be useful to capture during monitoring/implementation phase, pitfalls or risks we should be aware during implementation, and how the expected outcomes fit within our existing indicators as a result of the review. Outcomes from the portfolio review included solicitations developed or in discussion to bridge the gap on some of the missing interventions and more informed grant monitoring strategies. Grantee kickoff meetings: Kickoff meetings were conducted for 25 grantees who received scholarship grants, under relevant donor regulations and applicable grant terms and conditions, to build their capacity for managing donor funds.

IR 1.2 Strengthen and diversify productive livelihood opportunities, for men, women, and youth To achieve results, AA1 continued to employ two distinct but complementary approaches to facilitate a more competitive and inclusive market system. These include: USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 ANNUAL REPORT 21

• The implementation of the REAP Model, a poverty graduation curriculum targeting women, adolescent girls, and their households with diversified livelihoods, entrepreneurship, and human capital/skills-building support. AA1 will use small grants to pull these groups formally into the livestock market system. • To strengthen and diversify livelihood opportunities, AA1 continued to disburse small and large grants, as well as the use of short-term technical assistance to build the capacity of grantees who received these grants for Tier 2 types of commodities. These Tier 2 products include beekeeping, honey production, crop production, cow milk, fish and poultry value chains, and their related services in addition to non-livestock small businesses operating in livestock markets.

REAP Via its small grant funds, AA1 will scale up REAP groups’ access to tailored financial services and increase their participation and/or connectivity to cooperatives/SACCOs. AA1 will also link REAP groups to AA1 and REGAL- AG anchor SME firms for inputs. AA1 county teams and STTAs through SRC will also facilitate grantees to register with KAM and acquire required licenses, permits, certifications, and utility/electricity connections to run their businesses.

COVID-19 Update on REAP – the pandemic crisis has depressed the small businesses of most REAP groups through interruptions in supply chains, movement restrictions depressing customer demand, closure and reduced use of livestock markets, and a shrinking economy in general.

Key achievements for REAP groups

In Year 3, the activity engaged and monitored 211 saving groups, composed of 1,080 business groups consisting of 3,240 ultra-poor women. Of this total, 59 groups are in Turkana County, 98 in Wajir County, and 54 in Garissa County. The 3,240 ultra-poor women represent approximately 19,440 household members who have directly benefitted from the businesses operated by the women. Some of the examples of the benefits realized include, payment of school fees, food for the families, and increased household income streams. During Year 3, BOMA focused on supporting 1820 active business groups to grow and sustain their enterprises, enabling participants to diversify their livelihood to access regular incomes.

In Year 3, a total of 1,820 REAP business groups continued their mentoring and improved business performance. Under Mercy Corps, 1,080 business groups across Turkana (300), Wajir (500), and Garissa (280) participated, which led to a 19% increase in business value from in the previous year to 9 as of January 2020. Compared with the value of asset transfer to the business groups, the business value has increased by 55%. Under BOMA’s 740 business groups, 540 REAP businesses in Isiolo, and 200 groups in Marsabit registered improved performance. In Marsabit, the businesses recorded 66% return on investment, outachieving 98% of business groups with a total value meeting the business value graduating criteria of 37,500 in turnover compared to the total amount disbursed in grants to the 70 business groups. This significant progress on business value is a good indicator of participants' resilience on the path towards graduation and building sustainable pathways out of poverty.

All 238 savings groups across the five counties were registered with the Ministry of Social Services during the reporting year to enable formal financial inclusion. REAP participants receiving mobile phones enabled the acquisition of digital financial services providing a critical link for pulling the REAP participants into financial inclusion.

A total of 211 saving groups with 3,240 women participants were monitored across the counties of Turkana, Wajir, and Garissa. This year the savings group savings increased by 71% from in December 2019 to $ in March 2020. Loan provision to participants also took place this year. A total of was disbursed in loans, and approximately of the disbursed loans are already paid back, while the rest are being paid progressively in line with their repayment plans. 85% of the loans were disbursed in Turkana and 15% were disbursed in Wajir. No loans were made in Garissa. Of the loans provided, 75% were used to expand businesses while the rest was used to pay for medical expenses or school fees.

In Isiolo’s 85 savings groups, the savings continue to grow progressively with a cumulative savings amount of recorded at end of September 2020. In addition to savings, participants continued to show positive uptake of loans from saving groups with a total of in loans disbursed to 399 participants during the year. These loans have been re-invested by participants in individual businesses, household assets, and addressing critical/emergency needs. For Marsabit’s 25 saving groups, participants continued to actively save and loan, with a cumulative savings amount of saved to date and disbursed to 61 participants in loans under the current reporting period.

The groups continued to receive 12 module micro training and linkages. The linkage of saving groups in Turkana, Wajir, and Garissa with the Department of Social Services lead to training for the saving groups on the development and review of a constitution and on business group dynamics. The Department of Social Services also oriented saving groups on existing USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 ANNUAL REPORT 22 opportunities for financial access including the Women and Youth Enterprise Fund, the National Government Affirmative Action Fund, the World Bank-funded Kenya Development Response to Displacement Impacts Project, the Uwezo fund, the County Biashara fund, and County Revolving Funds. One such opportunity was the linkage of the savings groups with the Women Enterprise Fund (WEF), an affirmative action fund set up by the government to encourage disadvantaged groups to access finances and enables them to build and expand their enterprises. Participants also received training on business and financial management enhancing their capacity and confidence to engage formal financial providers. Through this linkage, WEF conducted financial literacy training to seven savings groups in the Ngaremara location and assessed their credit readiness to offer loans in the future.

Additionally, four Saving groups in Sericho location have been assessed and approved to receive a grant totaling from Climate-Smart Agriculture (CSA) grants and training needs on poultry and sorghum value chains and value addition for livestock traders. These grants will enable the expansion of women’s enterprises’ and unlock additional income streams through business diversification and expansion.

In addition to the technical assistance, BOMA and Mercy Corps collaboratively engaged in joint planning, training, round table reflection, and learning sessions. The joint planning enabled better collaboration and coordination in the execution of program activities and strengthened the collective understanding of the program, expected deliverables, roles, and responsibilities of each party. The learning and reflection sessions provided staff with opportunities for assessing progress and re-thinking the best approaches for REAP program improvement.

Strengthening and Diversification of Livelihoods Opportunities Using Small and Large Grants In Year 3, LMS has disbursed in diversified livelihood grants to women/youth entrepreneurs and groups for them to complement existing investments and fill key gaps in value chains. AA1 will expand livelihood opportunities to women and youth with small grants to create approximately 29 businesses in REGAL-AG constructed livestock markets.

Progress

Large grants that focus on diversified livelihoods in Y3 include identifying opportunities to support awareness on health and hygiene standards with traders, producers, handlers, and aggregators of milk and meat products.

Wajir/Garissa/Turkana • In Garissa, LMS conducted a joint monitoring and support field visit with county livestock officials from the Department of Livestock and LMS supported fodder production activities in the Fafi sub-county. with 32 fodder farmers from Bura that were trained in year 2. The farmers were linked to FACTS Agrovet who offered to buy 200kg of Sudan grass seeds harvested during the current season at per kilogram.

• The 32 fodder farmers from Bura in Garissa County were sensitized on the formation of a fodder marketing cooperative and linked to Kamuthe Young Farmers (AA1 grantee) for fodder storage and marketing. Five of these farmers have engaged Kamuthe Young Farmers to help plow 11 acres of land to expand their fodder production farms. The farmers had established 12.5 acres of Sudan grass along River Tana which is ready for harvest during this reporting period. Upon harvesting, the farmers have agreed with Kamuthe Young Farmers to support baling and store the hay in the hay ban for sale as the drought spell advances.

• In Garissa, LMS is partnering with WFP, KALRO, and the County Department of Livestock to support fodder production activities in Kamuthe locations and link other producers to Kamuthe young farmers as the anchor farm. Kamuthe young farmers group recently received a USAID grant through LMS for the construction of a hay barn with a holding capacity for 7000 bales of hay, a solar-powered water pump for irrigation, and farm tillage equipment including a tractor, trailer, plow, leveler, mower, rake and hay baler. Kamuthe young farmers will produce fodder seeds for selling to other producers on their 30-acre farm and help contract farmers to plow 120 acres of land for fodder production. The WFP Agricultural Engineer will facilitate farm layout, structural design for irrigation canals, USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 ANNUAL REPORT 23

and mechanized fodder production and while KALRO supported the training of 25 farmers on fodder production using Kamuthe young farmers as a demonstration farm. The intervention is expected to reduce the gap in fodder deficit for Garissa County, which stands at 2 million, by 726,000 hay bales per year.

• LMS held a planning meeting with the Director of Agriculture in Garissa on improving the ecosystem for bee farming. The meeting discussed collaboration with the department and WFP to support honey production groups along River Tana who received beehives from WFP to grow sunflower for increased flower nectar for bees. Apart from providing flowers and pollen required for bee farming, oil crops like sunflower and simsim will increase the production of oil for human nutrition and oilseed cake for the production of livestock feeds livestock feed. LMS will use grants to catalyze investment in animal feed processing equipment to take advantage of resultant seedcake for the production of feed supplements required by the feedlots.

• In Wajir, fodder farmers trained in year 2 of the program were linked to Dokono ventures in Bute and Al-maaruf in Wajir town as end market or anchor farms in the respective towns. This linkage will ensure trained farmers will receive extra support from anchor farms and establish end market agreement between them. Dokono ventures have already supported a 6 month these farmers in providing storage facilities for their produce.

Isiolo/Marsabit • On diversified livelihoods, the team continued to monitor the performance of hatchery operators' association trained by LMS in collaboration with Kenchic Co. Ltd. From monitoring, it was noted that the Isiolo hatchery operators continued to offer training on poultry management practices to poultry farmers. During the reporting period, hatchery operators managed to train 49 farmers (20 males and 29 females). The adoption of poultry production among the trained participants was noted during the reporting period.

Some of the farmers trained by LMS on hatchery management

• In Marsabit, seven REAP groups (105 participants) were trained on record keeping

• In Marsabit, the team facilitated REAP groups to contribute and develop all the required cost share obligations/documents.

• The period saw Ecotek, an investor in fish farming, supported by LMS, allowing them to establish fishponds and order 1,500 fingerlings, worth KES 22,500, from the Aquaculture Association of Kenya (AAK). That linkage was created by LMS through the AAK workshop done in the county. The fingerlings are expected to be transferred to larger ponds after two months for maturity. The LMS team also linked Ecotek to the Fisheries Department for technical guidance on fish management. The model fish farm is expected to attract more investors in the sector with Ecotek being one of the off-takers of fish from other fish producers.

IR 1.3 Increase secure access to a range of financial products and services to support livelihood diversification, livestock sector development, and individual and household finance needs

USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 ANNUAL REPORT 24

Build the Capacity and Expand the Reach and Connectivity of Financial Institutions In year 3 the project worked to increase access to financial services through the following activities:

• Capacity strengthening for Garissa County revolving fund staff • Facilitate the development of inclusive products (women and youth, and value chain specific enterprises) in Year 3 in collaboration with KIM and the likes of KCB, Equity, and other partners. • Establish a platform for increasing financial access for SMEs FI/MFI network • Link new SMEs identified with LMS’s 25 financial institutions identified in year 2 • Increase the capacity of SACCOs to access end markets • Establish/scale four SACCOs to increase borrowing power and facilitate inclusive access to finance for all members • Roll-out “health checks” for 18 cooperatives; develop a comprehensive intervention plan to deepen and scale their impacts on farmers across the five counties for county department staff managing revolving funds

In Year 3, AA1 conducted a consultative process between the program facilitators and officials from the Department of Trade, Tourism, and Enterprise Development (the CEC, Chief Officer, and The Fund Manager). Through the forum, the department officials mentioned their key concerns regarding GCRF sustainability given the costs being incurred in maintaining the operations at the sub-county level, the capacity of the sub-county committees to manage the vetting process, the need for effective reporting, and the desire to adopt best practices in fund management.

To address these concerns, the program facilitated tailormade technical assistance training to 49 Garissa County Revolving Fund technical staff on public finance management and business development skills. The training worked to improve Fund management in line with the Public Finance Management Act and supported the establishment of standard development processes and procedures to guide the management of the Fund including: • processes for accepting, screening, vetting, selecting, and approving applications for loans • product development, credit, collection, monitoring in line with the Public Finance Management Act • fund management, typical fund structures, and roles of fund manager in overseeing the investment processes • post-investment support to MSMEs and fund sustainability

Garissa County appreciated the role the MSME sector played in employment creation, poverty reduction, and catalyzation of the local economy by putting in place measures to ensure an enabling environment for the MSE operators. One such measure is the establishment of digitalized business incubation resource hubs, which are envisioned to center providing business information as well as opportunities for collaboration and learning. They will offer information and assistance around legislation and documentation of business processes, as well as training on starting up and running of businesses. Garissa County intended to start in the seven sub-counties, but due to funding constraints, they have scaled this objective down to starting with three sub-counties i.e Dadaab, Garissa Township, and Ijara. Special focus will be given to Dadaab where it is recognized that vibrant business is ongoing, but the locals are not equipped to run their businesses efficiently. The county government is working to find partners to assist with the funding, such as UNHCR, and expect the set-up of at least one center at Dadaab. This plan was to be achieved by June 2020 but was delayed by the COVID-19 pandemic.

In addition to technical assistance, the Activity supported the development of a five-year strategic plan to operationalize the Garissa County Revolving Fund.

As for similar initiatives, the Activity held co-creation meetings with LMS and Isiolo County to plan on how best to support the Isiolo County Enterprise Development Fund. This fund is Shariah-compliant with the ability to reach the micro and small enterprises in Isiolo County. The funds availed in the current financial year was . To strengthen their capacity, the fund committee requested support in developing a five-year strategic plan, developing processes and procedures to operate the fund. Plans to support the county were put in place and in Year 4 the project will hire a fund management expert to facilitate technical assistance for technical staff

Provide Linkages to FIs and Technical Assistance and Business Advisory Services to Entrepreneurs

The Project supported institutional strengthening for agricultural finance corporation through the establishment of a shariah- compliant window through hiring a shariah scholar. During the same reporting period and in partnership with USAID-KIM, the process was completed through product development for AFC that will see participants receive sharia-compliant loans.

USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 ANNUAL REPORT 25

The Project also collaborated and partnered with the USAID-KIM project to identify nine LMS/REGAL-AG businesses that could potentially benefit from the recently launched partnership between LMS Activity, Kenya Investment Mechanism, and Agricultural Finance Corporation shariah-compliant products. The businesses will receive technical assistance, BDS, and a working capital loan facility from AFC to jump-start production activities and maintain operations in the fourth year once they meet the bank’s evaluation criteria.

Further on institutional strengthening, the Activity completed the roll-out of “health checks” for 18 cooperatives. This was followed by comprehensive intervention plans that will deepen and scale their impacts on farmers across the five counties through technical assistance to the cooperatives.

In Marsabit County, the team identified existing Marsabit Rural Sacco as a potential FI that can offer loan facilities to rural livestock and crop farmers. LMS will therefore strengthen and build its capacity to realize this function.

In Turkana, the team supported the Turkana Chamber of Commerce members to access the business training organized by Equity Bank and Mastercard Foundation in readiness for Business Recovery Loans targeting businesses that were affected by the COVID-19 pandemic.

LMS IMPACT SNAPSHOT TCC FACILITATES INCREASED ACCESS TO FINANCE FOR LOCAL SMES The Turkana Chamber of Commerce (TCC) had been dormant for over 10 years. The organization’s mandate included advancing the commercial and industrial interests of its members, including facilitating access to finance. LMS sought to revive and work closely with TCC to strengthen the organization and increase the involvement of the private sector in solving pressing challenges.

LMS co-designed and co-invested with TCC to undertake key capacity-building activities, including a rapid assessment of the impact of COVID-19 on businesses in the County (TCC contributed ~ ); and establish linkages of TCC members with financing. This support has increased opportunities for the MSMEs in these marginalized communities to access capital for their business.

The Project supported 900 livestock and non-livestock traders to take the business development and financial literacy training from Equity Bank as part of the Kenya National Chamber of Commerce and Industry (KNCCI) COVID funds – a prerequisite to receiving financing. The COVID-19 rapid assessment provided information on the effect of COVID- 19 on local traders, highlighting their current status and needs. This information provided evidence for TCC to the lobby and effectively for access to finance from multiple sources: • KNCCI-Equity Bank KES 200Billion loans deal; • A no-interest loan from the Master Card Foundation (MCF) and KNCCI deal; and • The proposed business grants ( for business funding) from Kenya National Highway Authority (KeNHA) for traders.

These funds will go toward providing working capital for traders that have been adversely affected by the cessation of movement, closure of markets, and inability to reach end markets. Increased availability of working capital will enable traders to buy more from local producers, stimulate economic activity in a stressed supply chain, and help traders and producers build resiliency for future shocks.

IR 1.4 Improved employability and work readiness skills for young men and women AA1 recognizes that youth require improved employment and employability skills as they move out of pastoralism. Improving the status of young people is therefore central to the implementation of LMS. The project commits to strengthen and diversify livelihood opportunities through activities that support market-based technical and transferrable skill development for youth, such as scholarships, internships, and apprenticeships. LMS also prioritizes youth through youth

USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 ANNUAL REPORT 26 works force development initiatives, GIRL models, livelihood and enterprise development support, and work readiness activities, including the active promotion of grants facility and enterprise opportunities.

During the reporting year, LMS conducted a two-day staff training on Positive Youth Development (PYD) for Turkana county staff between 28th and 29th May 2019 where 19 participants (11 female, eight male comprising of staff members and partners) participated, with representation from key county government departments. The training is expected to translate into improved staff ability to recognize the concepts of PYD and its implications in programming in their work and to facilitate identification of services, opportunities, and support mechanisms for youth engagement giving due consideration to youth concerns in programming, thereby leading to better-informed interventions and decision-making, as well as improved organizational practices towards improving employability and work readiness for young people.

To address these opportunities, AA1 will use a combination of the following five strategies to achieve results: Update: The strategy and plans for this IR could change substantially. Much of the scholarship work was done or underway when the COVID- 19 crisis started but substantial work remaining using the strategy below (for Year 4 as well) is dependent on schools and dormitories reopening to students. Furthermore, it will depend on the plan’s schools have for remote learning or adaptions to the virtual curriculum identified by LMS. For example, LMS has already identified a virtual training program for entrepreneurship which is planned to be rolled out across multiple counties. That adaption is being piloted in Turkana and if successful will expand.

a) Apprenticeships combined with county govt and TVET capacity building to enhance the quality and outcomes of these programs b) Internships supported by policy development and technical assistance to improve PSB’s procedures, management, and staff capacity to provide meaningful on-the-job training c) Partial subsidies, including leveraged financial support from county governments for students to attend select vocational institutions and university programs to upgrade their skills and expertise and enter public service in high priority livestock market systems related positions (succession planning) d) Partial subsidies provided to youth employed in county government departments and TVETS to attend NITA courses and learn/absorb new techniques and familiarize themselves with the latest technologies, to modernize curricula and training programs in the education and public sector e) Start-up kits for young entrepreneurs, to be awarded in a contest format, to stimulate innovative solutions to old problems, with a focus on climate-smart agriculture, resilience, and environmentally friendly large stock related businesses.

IR 1.4 Activities Improved employability and work readiness skills for young men and women using a combination of apprenticeships, internships, partial subsidies, and start-up kits Turkana The team in conjunction with Wadhwani Foundation supported county government officials and national government officials drawn from the Ministry of Education, Tertiary Institutions, and selected private colleges in undertaking a ToT training in readiness for Workforce Development Training. The 14 ToTs (ten male, four female) were selected from colleges and institutions that will offer the training to the youth undertaking various courses. The training will strive to enhance workforce readiness upon graduation from the institutions. Wajir/Garissa/Turkana

• In Garissa, LMS reviewed budgets for five youth identified for support for agrovet startup kits. Support was made possible through small grants, subject to USAID approval. If approved, the start-up kit will enable the youth to establish agrovet business in remote locations of the county providing farmers access to animal health services and input supply. The youth have been linked to FACTS as the anchor Agrovet for mentorship. All Counties • In Isiolo, a total of 11 candidates have been selected to undertake various courses such as two are undertaking a certificate in meat inspection, five to undertake Diploma in Fisheries and Aquatic Sciences, two certificates in Dairy Technology and Management, one diploma in leather technology and one to undertake a diploma in Agronomy. Two participants

USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 ANNUAL REPORT 27

did join the institutes before COVID-19 and the remaining nine now await government directive in joining the various institutions. • In Marsabit, 14 candidates have been selected to receive a scholarship to study livestock-related courses in technical colleges/universities where these courses are offered.

Objective II. Strengthened Institutions, Systems & Governance IR 2.1 Strengthened policy environment for the development of livestock and other market systems IR 2.1 Strategy To achieve results under this IR AA1 uses the following strategies: 1. Support ASAL county livestock policies 2. Supporting county governments, primarily through FCDC, to harmonize, develop, review, and roll-out policies and governance/institutional strengthening interventions related to livestock market systems IR 2.1 Activities The bulk of ASAL counties do not have their livestock policies in place. AA1, based on discussions with AHADI, identified their urgent finalization as a priority in Year 3. AA1 will provide technical assistance through AA1 staff and STTA for the formulation, finalization, and implementation of these policies. AA1 Gender and Youth Advisor will also build government capacity to apply a gender and youth-related approach in policymaking and budgeting. This support will include guidance on policy development around gender and youth. AA1 will begin this support in Isiolo where we are facilitating county government efforts in formulating its Gender Policy. AA1 continues to support county governments as they roll-out policies, governance, and institutional strengthening interventions related to livestock market systems via embedded policy advisor and STTA. As part of its J2SR alignment efforts, AA1 is supporting county governments, primarily through FCDC, to harmonize, develop, review, and roll-out policies and governance/institutional strengthening interventions related to livestock market systems, focusing on those that will bring about the most need changes/reforms needed for pastoralists, and have the highest potential for addressing constraints. In Marsabit County, the technical team met with livestock officials and identified activities and budgetary allocation that need to be implemented to move this document to the next stage of implementation. The identified activities/processes have been included for implementation in the LMS Y4 Work plan. In Garissa, LMS participated in a sensitization meeting for key stakeholders facilitated by the Department of Livestock on the proposed Livestock Management and Rangelands bill. The executive recommended a merger of the two bills (Livestock Management bill and Rangeland Management bill) into one before it is presented to the County Assembly for approval. The Livestock Management and Rangeland Bill provides for the legal framework for the implementation of multi-sectoral and sustainable development of rangelands and livestock sub-sector. The meeting, therefore, sought to sensitize the County Assembly Agricultural committee, seek their input, and get their buy-in for support when the Bill will be presented through the three-stage legislative process in the county assembly. 24 participants attended the meeting including, eight members of Garissa county Assembly House Committee for Agriculture and Livestock chaired by Daud Aden Dabar.

LMS supported the GCRF administrator (Mr. Mahat Shiekh Salah) to the five-day ANDE Investment Manager training that was held in Kampala, Uganda through cost-share arrangements with the County Government of Garissa. The five-day intensive course covers all aspects of investing in small and growing businesses, from the identification of businesses, due diligence processes, portfolio management strategies, to divestment strategies. The training positions him with the necessary skills to administer both the Garissa county Revolving Fund and Garissa Investment Fund.

LMS-FCDC collaboration to strengthened institutions, systems, and governance

The Activity is currently in Year 3 of the collaboration between LMS and FCDC to strengthening the policy environment for the development of livestock and other market systems in the region by supporting county governments, primarily through FCDC, to harmonize, develop, review, and roll-out policies and governance/institutional strengthening USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 ANNUAL REPORT 28

interventions related to livestock market systems. The LMS-FCDC collaborative governance and policy work is developed through an array of institutional partnerships with county governments, county assemblies, and the National Assembly’s Pastoral Parliamentary Group (PPG).

FCDC promotes, facilitates, and supports demand-driven policy support and development dialogue at the county level through its various sector forums composed of the County Executive Committee (CECs) members of different sectors. The FCDC policy vision is shaped by the work and priorities set at the annual Pastoralists Leadership Summit Forum (PLS). PLS bring together all the pastoralist members of the national parliaments (MPs, CWR, and Senators) and county leadership (governors, speakers, and Members of County Assemblies) and ASALs professionals to mainstream the pastoralists’ agenda within the local, national political, and policy process. In the reporting year, the following are key highlights:

• Supported the FCDC county governments in the preparation of County Emergency Funds legislation to respond to the COVID-19 pandemic and other hazards. The average allocation for the fund for the FY 2020/21 in the FCDC region was • Provided technical backstopping for the NDMA-FCDC assessment of the impacts of multiple hazards on the FCDC region’s economy with a focus on the short- and long-term impacts on the livestock sector. This included supporting the NDMA in the preparation of the revised Long Rains Assessment (LRA) data collection tools with provisions for COVID-19 impacts on the livestock sector. The 2019 LRA now includes a chapter on the current and forecast impacts of the COVID-19 pandemic on the livestock sector which has been used to prepare a multi-hazard response plan for the region. • Supported the National Cohesion and Integration Commission (NCIC) in rapid assessment of the conflict in Marsabit and Wajir counties, including drafting of the proposed FCDC regional Peace and Cohesion policy. The draft policy has been presented for validation by the FCDC Peace and Cohesion Sector Forum in September 2020. • Led the preparation of the FCDC proposal to the World Bank for the Kenya Accountable Devolution Program (KADP II). The FCDC proposal seeks resources to build the capacity of the FCDC Secretariat to coordinate devolution under the Council of Governors as well as achieve regional integration results for the region. • During the year, the FCDC supported and peer-reviewed Garissa County Livestock Bill with FCDC Sector Forum for Agriculture and Livestock. • Supported the preparation of the USAID’s Policy Technical Working Group work plan. Support included providing key policy priority areas for the FCDC region. Objective III. Collaborative action and learning for market systems change IR 3.1 & 3.2 Strengthened USAID and implementing partners systems for Sequencing, Layering, and Integration and Shared Indicators and Learning to Support Expanded Economic Opportunities IR 3.1 Strategy To achieve results under this IR AA1 uses the following strategies: 1. As per recommendations from the USAID-led stock-taking report, the CLA function, initially housed under the Leader Award, has been devolved to Associate Awards.

2. Intentional sequencing, layering, and integration with AA2, other relevant AAs including AA4, and other USAID programs.

IR 3.1 and 3.2 Activities Finalization of the Draft CLA Framework AA1 will finalize the draft CLA framework, generate a CLA plan, and implement it. Within the CLA plan, AA1 will capture learning based on learning questions identified in the CLA Plan. AA1 for IY3 aim to develop learning around:

USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 ANNUAL REPORT 29 a. Which incentives/disincentives for behavior change have been most effective in facilitating the adoption of technology/practices, systemic change, and resilience capacities for markets, women, and youth? b. Which innovations/ technologies/ infrastructures are having the greatest impact on households and are easily adopted? Update: the learning question approach was to use focus groups, in-person interviews, and significant travel. The plans have been delayed and will need to be pushed into Year 4. Alternative methods are being assessed. Also, more immediate learning questions have shifted towards needs assessments for businesses due to the COVID-19 crisis. Survey work is underway in Turkana as a partner to the Chamber of Commerce and with project business stakeholders to better learn how to protect the investments made by USAID in the region. Sequence, Layer, and Integrate with AA2 and Other USAID Programs Under the PREG umbrella, AA1 has been involved in County Steering Group meetings where new projects have been introduced from non-USG partners ensuring that USG resources are not duplicating assistance. For Year 3, AA2, AA4, KIM, AVCD, KRAPID, KCD, and WFP will be primary PREG partners for AA1 to engage within SLI/CLA activities. Progress Report Q4 Isiolo County On co-creation with Isiolo County Government, the team engaged the Livestock Department (CEC livestock, chief officer livestock, and Directors) and the chief officer and Director of Education to provide their input into the business stimulus RFA and youth employability and workforce development RFA. The County teams applauded the intervention as it is geared towards promoting economic opportunities in the region. The team assured LMS of county support towards their sustainability. The team participated in the PREG 2.0 meeting organized by the Resilience and Learning Activity team. This session was attended by 33 participants from PREG partners, the RLA team, USAID, and county government officials representing various sectors. The sector working groups presented priority activities identified by the relevant department of the County Government. PREG partners and county officials in these sectors provided their planned COVID-19 activities and budget commitments. The final document was compiled, revised, and submitted to the county government for signing. This document will form the basis for collaboration between the county government of Isiolo and PREG partners to respond effectively to the COVID-19 pandemic. County teams and PREG partners were mobilized to engage in PREG 2.0 Session 1 of the Isiolo County FY21 Joint Work Planning Workshop facilitated by RLA and the USAID team. In attendance was the CEC livestock, Chief Officer trade, chief officer water and WASH, Directors from the Livestock, Fisheries, Veterinary, Trade, Environment, Planning, Health, and Education Departments. The sessions provided platforms for the teams to engage in layering discussions that will see efficient collaboration among PREG partners and County Government for a common impact. 12,600 USAID Marafiki reusable face masks donated through LMS were distributed by Isiolo county officials. The event was attended by Isiolo County Secretary, County Executive Committee Member, CEC Livestock and Agriculture, CEC Trade and Cooperative Development, County Director, and Deputy Director Veterinary Services, head of Isiolo abattoir and COVID-19 response committee chair. The county government welcomed the initiative and appreciated LMS’s support in the region. This was followed by distribution of the face masks to various LMS supported businesses that included Tawakal camel milk coop Society, Nyirnyir camel meat processing women group, Invems Ltd, LMS supported poultry businesses, REAP and GIRL participants, Isiolo hatchery operators, and various actors in the livestock markets. The participants were taught how to properly wear facemasks and wash them after use to facilitate reuse. The initiative is expected to contain the spread of COVID-19 disease. The team initiated a meeting between the CEC livestock, Ngaremara LMAs (four females, 11 males), and Kenya Livestock Marketing Cooperative (KLMC) representative. The objective of the meeting was to deliberate on the most appropriate market day for the Ngaremara livestock market to address issues raised by Isiolo LMAs regarding the newly launched Ngaremara livestock market. The market was taking place on Mondays which is the major market day for the secondary Isiolo livestock market. It was decided that the Ngaremara market day will be held on Wednesdays to avoid overlapping days for the two markets. LMS team also distributed 1,000 face masks to the livestock market users. The tabling of the Isiolo market days bill is at the County Assembly and LMS will be working with the Livestock Department in following up on the enactment to avoid overlapping of market days. The team presented the LMS Year 4 work plan to the County Government of Isiolo for validation. In attendance were Chief Officers from Agriculture, Trade and Cooperatives, gender, social services, Culture, and Environment Departments. Directors from Livestock production, Veterinary, Gender, Education, Water, Environment, Coordinator KCSAP (Kenya Climate Smart Agriculture Program), head of Isiolo abattoir, and officers from Veterinary and Co-operatives Department

USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 ANNUAL REPORT 30 also attended the session. The team was taken through LMS achievements for the previous year that was followed by a presentation of the LMS Year 4 Workplan. The County team appreciated LMS-USAID support in the region and committed to joint budgetary allocations for the sectors that will see a collective impact. The period saw Isiolo PREG participate in a final joint validation workshop with the County Government representatives from different sectors that were facilitated by RLA. The session was attended by CEC Livestock, CEC Trade, Cooperative, and Tourism Development, CEC Health Services, Chief Officer from Water and Directors from Veterinary Services, Fisheries, Water, Environment, Education, Trade, Cooperative, and Tourism Development. The USAID team was also in attendance. The work plan now awaits signing by the County Governor and this will provide a tool for joint monitoring and evaluation by PREG partners and County Government and acts as a prerequisite for Isiolo County’s Journey to Self-Reliance. Marsabit County LMS AA1 facilitated three sittings with county government officials from the departments of MOALF, Trade, Industry, and Enterprise Development, Health Services, Economic Planning, and office of the Governor (represented by Deputy County Secretary-Mr. Tari Doti) where they collaborated to review, co-create and endorse both LMS Y4 and the COVID-19 six- months work plan. The county government spoke highly of the LMS initiative to involve the county in the development of these plans, thus fostering a strong sense of ownership and commitment from the county government to put resources (both human and financial) for joint implementation of priority activities that have been explicitly detailed in these documents. Through the involvement of the Deputy County Secretary in these consultation meetings, these documents, and their respective action plans have been escalated to the executive arm of the county government making the County Governor cognizant of their existence. To harness this robust and inclusive approach, LMS technical team in Marsabit will continue to consult and engage respective county government departments during the implementation of these work plans. The County Government officials engaged and consulted this process include CECs, COs, Directors, principal officers, County Secretary, and other technical officials within the departments. Marsabit's technical team participated in 3 virtual PREG meetings facilitated by the resilience and learning teamThe meeting brought together PREG partners working in the county and relevant county ministries that include Health Services, Economic Planning, Trade, Industry, and Enterprise Development, Agriculture, Livestock & Fisheries, Water, Environment, and Natural Resources. In these consecutive virtual meetings, the team was able to develop and endorse a multisectoral joint COVID-19 response work plan that demonstrated symbiotic synergies between IPs vis-a-vis county departments that will act as a cornerstone for sequencing, layering, and integrating all COVID-19 responses in the county to avoid duplication and eventual loss of scarce financial resources. This joint work plan is in its initial stages of implementation, and IPs report the progress of their planned activities to the respective departments who will in turn disseminate this to other county departments and stakeholders through sector groups and CSG meetings. Marsabit team participated in one face to face and two virtual CSG meetings hosted by NDMA. Both meetings were chaired by the Deputy Governor and NDMA chairperson. In these meetings, the county government of Marsabit was able to affirm its strong stand to combat COVID-19 spread and mitigate its adverse effects on the local economies. It further reiterated to the IPs to abide by the existing COVID-19 protocols when implementing activities within the county while at the same time urging the stakeholders to cushion the vulnerable households against economic hardships caused by the pandemic. Through these meetings, the team was able to understand and take lessons learned on how various partners in the county are combating locust invasion and mitigating the spread of COVID-19. The meetings also provided a plenary for the LMS team to provide the progress of implementation of its activities and COVID-19 response plan to the County government and other stakeholders in the county. Garissa County In Garissa LMS Coordinated IPs in the consolidation of the PREG 2.0 COVID-19 program response sector work plan for Agriculture, Livestock, Rangelands, and Livelihoods and the Joint Work Plan for Agriculture, Livestock and Environment sector FY20/21 for Garissa County. Five IPs provided input to including AVCD, LMS AA1 & AA2, WFP, World Vision, and IUCN. The two work plans capture IP activities proposed for implementation FY20/21 in line with the county priorities and SLI. Both the FY20/21 and PREG 2.0 COVID-19 work plans were developed through a co-creation process with the county government.

LMS team participated in stakeholder meetings for the closure of the USAID Funded KRAPID Project in Garissa. The Kenya RAPID program shared key achievements, challenges, and lessons learned during its implementation period. Attended the Garissa County Steering Group (CSG) meeting for the month of September 2020. NDMA presented the drought situation update report and introduced the Hunger Safety Net Program (HSNP), a new program in Garissa that came on board in July 2020. HSNP is a flagship program of the Government of Kenya under the Ministry of Devolution and ASALs. The program is implemented by NDMA as part of the wider Kenya social and economic inclusion project

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(KSEIP). It has been running in Wajir, Turkana, Marsabit, and counties since 2008. The program will implement a scaled-up, integrated, effective government-led, and financed safety net program which complements the Feed the Future initiative for addressing global hunger.

Participated in the USAID/Kenya SE Coordination Partnership Meeting. The virtual meeting focused on updates from partners on current coordination and joint programming with the counties LMS held a validation meeting for the Year 4 work plan with officials from the Garissa county government. The work plan was shared with the senior county government officials and deliberations were made for the final adoption. The county government was represented by 12 senior officials including; (Deputy County Secretary), (Chief Officer for Trade, Tourism and Enterprise Development), (County Director for Livestock), (Director Special Programs), (Department of Donor Coordination and Partnership), (County Director Budget for Dept of Finance), (Department of Planning), (Deputy Director Livestock Marketing and Veterinary Service), (Director for Gender and Youth), (SDLP), (Sub-county Officer). The validation meeting discussed County Government contribution and ensured that the LMS Year 4 work plan is aligned to the county priorities.

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AA1 PERFORMANCE DATA TABLE

% achieved Cumulative to % achieved against LOP IR Indicator Title FY3_Target FY3_Results against FY3 September 2020 Target Target

All IRs EG.3.2 Number of individuals participating in USG food security programs 8,189 6,262 76% 9,227 54% [IM-level] IR.1.2 and ES.5-1 Number of USG social assistance beneficiaries participating in IR.1.3 5,460 6,978 128% 6,978 128% productive safety nets [IM-level] IR.1.3 EG.3.1-14: Value of new USG commitments and private sector investment 30% leveraged by the USG to support food security and nutrition [IM-level] IR.1.3 EG.3.2-27: Value of agriculture-related financing accessed as a result of USG 37% assistance [IM-level] IR.1.3 EG.4.2-7: Number of individuals participating in group-based savings, micro- 5,460 5,559 102% 5,559 102% finance or lending programs with USG assistance IR 1.1, IR LMS Custom 1: Number of individuals who have received USG-supported 1.2, IR 1.3, 8,927 6,095 68% 7,896 49% IR 1.4 short-term productivity, food security training, or nutrition-related training LMS Custom 3: Number of organizations and groups receiving USG-funded All IRs 1,461 2,193 150% 2,331 113% technical assistance to improve performance

HL.9-2 Number of children under two reached with community-level nutrition IR.8 1,037 159 15% 159 17% interventions through USG-supported programs

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AA1 CONSTRAINTS AND OPPORTUNITIES There are food & feed shortages due to suppressed production reduced focus on other emerging crises (locusts and flooding), and depressed demand/supply. This has created the need for a renewed focus on local production and leveraged technology and distributed financial services to link value chain actors. These actions can position the informal sectors as an engine for growth, productivity, and increased incomes/livelihoods. Strengthening the capacity of the county public sector and private market actors: there is a continued need to provide county government capacity and business development services (BDS) for the private sector actors through adoption and leverage of modern technologies. For example, virtual training and conferencing to maintain relationships with participants and conduct critical business Integrated extension services: to adhere to the government COVID-19 containment measures, LMS AA1 will provide support to mass media e.g. local radio and phone messaging with behavior change content for inclusive business and trade practices, as well as access to finance and nutrition content. This will ensure continued knowledge transfers and advisory services for continued business performance and production activities. Market accessibility: several livestock markets were closed and the few that remain open have very low business volume. LMS AA1, in collaboration with county governments, will continue to support innovative approaches that increase access to markets and supply of goods and services to prevent the total collapse of these markets, while at the same time maintaining COVID-19 control measures. Such approaches may include but are not limited to extended trading hours to compensate for the reduced number of people; expansion of trading areas where traders are allowed to trade outside the designated trading areas; using existing small, informal, or mobile markets that people can access without transportation. This intervention will also leverage the use of digital tools such as mobile money (MPESA) for payments. Strengthening of cooperatives and livestock marketing/producer associations: AA1 is moving forward with a robust cooperative development agenda to enhance the capacity and commitment, along with the collective bargaining power and SACCOs and their members. The original budget submitted by Mercy Corps went through several changes as recommended by the donor, significantly affecting operation lines and therefore impacting the program delivery. The changes did not always reflect the change in scope, leading to the following budgetary challenges:

Vehicles and operation costs: While Mercy Corps is implementing AA2 in five counties, we have only budgeted for two vehicles whose budget value was reduced by the donor1. Although Mercy Corps contributed three vehicles to be fully used by LMS (in addition to ad hoc use of Nairobi-based vehicles to support when available), the workload is significant and requires frequent travel across large counties. The same vehicles are being used to implement the REAP model under AA1 and implemented by Mercy Corps in the three counties of Wajir, Garissa, and Turkana. An additional three vehicles were given to Mercy Corps by ACDI/VOCA in year 2. As such, Mercy Corps continued to incur vehicle running and maintenance costs, which were not budgeted for.

Staff salaries: Mercy Corps’ budget for staff salaries under AA1 REAP model omitted time spent by the AA2 Chief of Party, Deputy Chief of Party, and County Project Coordinators. Moreover, when we received three more vehicles to support the REAP model, we had to hire three drivers who were not included in the original budget.

Whilst Mercy Corps was in discussion with ACDI/VOCA on budget realignment, Mercy Corps shared a realigned budget in January 2020 in line with the remaining funds. The budget proposed a reduction in the scope and ended the contracts of all mentors in Wajir, Turkana, and Garissa since there were no funds to retain the mentors. All the mentors proceeded on their annual leave in February 2020 as their contracts came to an end in March 2020. Fortunately, in late March 2020, Mercy Corps’ Omo Delta Program (ODP) took over management and funding of all LMS REAP activities in Turkana. The actions of ODP relieved the LMS program of some of the financial constraints and provided the opportunity for the program to recall 15 REAP village mentors in Wajir and Garissa counties for three months, while ODP recalled REAP Village mentors in Turkana County. The available budget thus allowed limited activities to be carried, including remote mentoring and monitoring of activities until the program came to close in September 2020.

1 Although Mercy Corps budgeted for the two vehicles based on historical purchases, the approved budget was reduced by nearly 50%. However, the actual is now almost 50% more therefore requiring MC to re-align the budget to accommodate the difference.

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AA1 PERFORMANCE MONITORING The main activity conducted by MEL in collaboration with the Leader MEL team in Quarter 4 was the planning and execution of the participants-based household survey and Organization Performance Index (OPI) data collection. The data analysis from data collected through a household survey commenced in the quarter and the results will be completed and reported in USAID’s reporting system, DIS. The OPI survey targeted businesses supported by LMS and the information collected will be used to report on the annual indicators related to organizational capacity development to understand the current operation status of businesses, set up baselines, and measure change in organizational performance over time. The OPI data analyzed showed 13% of the LMS supported business had a higher score comparing FY3 and FY2 results. Also, the AA1 MEL Manager supported the AA3 team in training of County government staff on the fundamentals of M&E, the support included training material development and facilitating one session during the one-day training. During this financial year, AA1 commissioned a survey to assess the impact of COVID-19 on MSMEs in Northern Kenya to refine interventions. The survey found that 93% of businesses interviewed indicated that the measures put in place to curb the spread of COVID-19 have negatively affected their operations. Major effects include a 77% reduction in sales volumes, 52% reported transport disruptions, and 43% reported an increase in the cost of doing business due to higher transport costs. The pandemic has negatively impacted the financial health of businesses which recorded declining sales, low productivity due to interrupted supply chains, and reduced working hours due to the national curfew and restrictions of movement. With these findings, LMS is implementing a response plan with county governments to ensure past USAID investments can withstand the immediate consequences of the pandemic and prepare for a return to normal operations. In July a validation survey was conducted to verify the result reported in FY2 on livestock market users even given the COVID-19 context, 18 months after we originally profiled 32,559 people, 67% of individuals that were using the markets constructed under REGAL AG and further supported under LMS continued to use them. This was only slightly down from numbers as of September 2019 (76%). Importantly, there were no obvious shifts in the gender/age balance. The AA1 MEL team will continue to provide routine technical support to technical field teams which will include data collection, data validation, tools review, and field monitoring activities.

AA1 PROGRESS ON GENDER STRATEGY The project remains cognizant of the implications of gender inequalities in access to and utilization of livestock markets and services and the implementation of gender and social inclusion considerations as cross-cutting issues in LMS interventions. This has ensured the achievement of youth and women’s social and economic empowerment, including expanded access to basic services, financial services, and non-financial assets, jobs, and livelihoods, within an inclusive market system framework. Through its commitments to gender equality, LMS continues to monitor its gender integration efforts to ensure that all interventions make principal or significant contributions to gender equality and to move beyond activities that engage women and youth as participants, to more systematically benefit and empower them. These have been done through facilitative support to county governments to implement policy reforms that eliminate structural barriers to youth and women’s social and economic empowerment. LMS Gender & Youth Strategy During the reporting year, the project completed the gender and youth strategy to commit and align its intervention to support women’s and youth’s participation in both livestock and alternative livelihood options for improved household economic security. The strategy has also guided the grant process by including gender as a key criterion for approval of grants, thereby ensuring that an equitable representation of men and women is achieved at different parts of the allocation process. To further ensure that the outcome of the projects grant funding contributes to increased gender equality, gender considerations have been mainstreamed in the LMS grants portfolio. For example, an impact checklist for grantees was developed and integrated into the monitoring process (see Table below). Despite these efforts, women, and youth in the north are still faced with financial constraints and most are not able to meet the LMS cost-share requirements to qualify for large grants. This led to the activity taking intentional steps and developing women and youth-focused small grants solicitation aimed at promoting women and youth participation in vibrant opportunities within the livestock market as well as in alternative livestock market, for example, poultry, hatcheries, fisheries, small kiosks, tailoring and beadwork, economic activities.

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Table: Gender Integration in Grantee Performance Key Dimensions and Input Variables Exploratory Questions Institutional Capacity: Accountability to gender outcomes Does the grantee have the capacity in gender integration to address gender issues throughout the business processes? Access to Finance: Access to and decisions on credit Are there any gender differences in access to capital, credit, and savings? Usage of credit; bank accounts; constraints in accessing credit/financial services; financial literacy Associations: Group memberships/Networking What type of social, community, and farmer organizations exist in the project area, and does the grantee participate in any? Advocacy: Outreach to women and youth communities Does the grantee advocate for the inclusion of women and impacted by the business youth as participants of their business where appropriate?

The Gender and Youth Strategy has provided a framework for responding to the persistent gender inequality in education in the project zones. LMS has adopted a two-pronged approach, which combines both gender-targeted and gender- integrated interventions. The gender-targeted interventions are carried out through the GIRL model which covers both life skills and mentorship and has as a specific focus to address barriers to education and other cultural and livelihood inequalities, such as early marriages and FGM faced by girls and herding for boys. The gender-integrated intervention, on the other hand, focuses on identifying and responding to the gender-based issues/challenges youth scholarship solicitation, application review, and approval processes, within the grant’s portfolio. This has led to more girls taking up courses that were previously male-dominated such as meat inspection. The Gender and Youth Inclusion Strategy also informed the design of activities to improve women’s access to finance. Although a challenge for both men and women in LMS counties, women continue to be disproportionally affected by limited access to finance. To enhance financial access for women, LMS explored external opportunities for funding within the REAP model in Marsabit county, seeking to incentivize best performing REAP saving groups to expand their businesses. The funding was aimed at supporting businesses to scale up their operations, participate in organized markets via collective action, and enhance their financial position to bargain in markets. Further, the grant targeted vibrant saving groups with scalable ideas to position the saving groups as vehicles to pull money.

Gender Transformative Youth Inclusive Market Systems Activities AA1 documented the progress made by implementing the Youth Inclusive Market Systems (YIMS) approach, giving due consideration to the differentiated impacts and adaptations for young women. The interventions and activities designed under YIMS also focused on promoting entrepreneurship as an option that allows young women to have flexible working conditions, and the primary outcome anticipated from this approach was an increased motivation among young women to participate in entrepreneurship as a viable and sustainable livelihood opportunity. Lessons learned to date indicate that integrating gender considerations into the design of interventions, particularly interventions that seek to improve youth employability and work readiness, has led to gender equity in the uptake of the scholarship opportunities. For example, girls taking up courses that were previously male-dominated such as Meat Inspection. Additional highlights from this gender- integrated YIMS approach include: • 5,460 REAP graduates have been awarded small business grants to help them upgrade, innovate, and add value to their products and services to match market demand, grow their market share, and create new market opportunities. • Other young women have been linked to internship and scholarship opportunities to improve and increase their practical skills, knowledge, and quality of workmanship, thus increasing their chance to access new markets and/or employment networks as a support mechanism for their transition into the formal economy. • The GIRL graduates have equally received asset transfers to promote their ability as young women and girls to continuously adapt to the ongoing shifts in the market

Responding to the COVID-19 Pandemic The LMS Gender and Youth strategy was updated to guide how the project responds to the COVID-19 pandemic. This involved incorporating information on the potential differential impact of COVID on women, men, and youth, and

USAID/KENYA LIVESTOCK MARKET SYSTEM ACTIVITY AA1 ANNUAL REPORT 36 identifying priority areas for support to build their capacities for reduced risk and adaptation beyond the pandemic. Examples of provisions for mitigating the impact of the outbreak that has been included in activities planned to increase economic opportunities and social advancement of women and girls are listed below. • To improve women’s participation in market development and access to markets in the event of a pandemic, LMS will facilitate their access and linkage to information on cash transfers and other social protection assets. This will ensure that women have access to basic income which they can control as well as promote the recovery of local markets while advocating for delivery mechanisms that are designed and implemented with due consideration to the safety and needs of women and the vulnerable in mind. • To improve women’s participation and decision-making power, LMS will continue to promote the socio-economic empowerment of women within the frameworks of strengthened institutions, systems and governance, by encouraging and strengthening women’s voices, participation, and leadership particularly within the platforms that seek to address the pandemic outbreak, including planning for recovery efforts. • Considering that women and men farmers generally have different, yet complementary, responsibilities for agricultural production and food security, LMS will continue to advocate for and facilitate linkage to economic recovery measures that support sectors, businesses, and value chains that employ women, youth, and the marginalized in the community, while liaising with governmental and financial institutions, to support, promote and encourage financial services that meet the needs of women during and beyond the pandemic.

Marking Gender & Youth Related International Events During the reporting year, the project participated in key gender and youth-related international days and events to advance community awareness on gender equality and social inclusion towards improving the status of women and youth. The specific events marked across the focus counties included the zero-tolerance to FGM/C, International Day of Women and Girls in Science, International Women’s Day, and the International Youth Day. These events provided the project with an opportunity to: • identify and celebrate change-makers of all ages and genders during the event • stimulate debate and build knowledge on gender, youth, and inclusion, as well as mobilize community action to step up efforts on gender equality and human rights of all women and girls. • advance dialogue among community members on innovative pathways that can remove barriers and drive positive changes to accelerate progress for gender equality and social inclusion. • expand the network of LMS champions and advocates of gender equality and share key considerations, challenges, gaps, and opportunities towards promoting and sustaining gender equality and women’s empowerment • share success stories as outcomes of LMS interventions.

To mark International Women's Day 2020, LMS, together with Marsabit County officials, had a mentorship session with 90 girls. Focusing on the importance of education, the team talked about the importance of women in society & the rights of girls. Capacity Building for Improved Gender Integration LMS’s Director of Gender Youth and Inclusion also participated in several webinar sessions and virtual partnership meetings to gain/acquire capacity for enhanced gender integration during the COVID-19, and also to reinforce institutional capacities for long term gender mainstreaming in the face of pandemics. These sessions focused mainly on the following,

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• Exploring the impacts of the pandemic on women’s economic empowerment • Identifying possible solutions including using data to mitigate these impacts. • Addressing financial inclusion in the face of COVID-19 • Exploring the gendered and social dynamics of digital savings group • Exploring women-led resilience strategies • Identifying opportunities to make the most of gender-based financing

Improving Service Delivery through Assessments, Desk Reviews, and Technical Assistance To continue improving women’s participation and decision-making power, LMS commenced a desk review on women’s participation and leadership in cooperatives. This was done to promote the socio-economic empowerment of women within the frameworks of strengthened institutions, systems, and governance, to ensure sustainability. This is in recognition of the fact that cooperatives in Kenya have had a key role in creating the necessary capacity for fighting poverty and promoting equity, while also facilitating the mobilization of savings and investments through the provision of affordable loans, resulting in a huge impact on financial deepening among women. LMS conducted a Rapid Survey on the impact of COVID-19 on businesses in Northern Kenya, with key gender considerations integrated to ensure a better understanding of the perceived gender disparities and the potential solutions. Key highlights from the rapid survey include: • The interviewed businesses showed a near parity distribution of both genders (53% female 47% male). Women however were shown to play a critical role in the value chains represented by the businesses. The LMS grantees participating in the livestock value chain, both livestock trade and milk processing, benefit significantly from women’s input. • Since most MSMEs in Northern Kenya largely depend on local supply chain networks of women, COVID-19 has adversely affected women producers and aggregators in the various value chains. • Women-owned businesses were also reported to be the first ones to suffer capital loss because women are responsible for feeding their families and they do so by withdrawing from their business capital. • Government interventions at the national level were not gender-specific (did not target gender-specific needs) so that women-owned MSMEs were likely to not benefit from the stimuli packages designed for all businesses. LMS equally supported the Turkana County government on their journey to developing a county gender policy by providing technical support in reviewing the draft gender policy. This policy once completed will provide the county with the framework to conceptualize, design, implement, and monitor gender integration efforts across the county programs and departments. Further technical support was also provided in reviewing the Turkana County Chamber of Commerce Strategic Plan (2020-2022), to ensure gender integration and social inclusion considerations are streamlined. The implementation of this strategic plan on completion will help facilitate gender equality and social inclusion in businesses across the county.

AA1 PROGRESS ON ENVIRONMENTAL MITIGATION AND MONITORING Environmental assessments for large grants, small grants, and agrovets was undertaken, and Environment Reform Forms (ERF), Environmental Review Report (ERR), and Environmental Mitigation and Monitoring Plan (EMMP) drafted for submission to USAID for review, clearance, and approval. Environmental Impact Assessment (EIA) was conducted, and reports submitted to the National Environmental Management Authority (NEMA) for review and issuance of EIA license to permit construction works. Environmental monitoring during the construction phase was halted in March 2020 due to the COVID-19 pandemic. However, field visits and monitoring activity resumed in September 2020. Below is a summary of environmental compliance for grants and activities under AA1. a) Large Grants There are 35 large grants identified for support in all five counties. So far eighteen ERFs, ERR & EMMP have been, submitted, cleared, and approved by USAID. Five have been submitted awaiting approval. Work is in progress for 12 grants. An environmental assessment has been conducted and ERF/ERR/EMMP reports are being drafted. Currently, 21

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Environmental Impact Assessments (EIA) have been conducted, and EIA licenses are obtained from NEMA. 14 projects are either under construction or are complete as shown in the table below:

County Reviewed, Cleared, and Approved Submitted Awaiting Work in progress (drafting of Clearance and Approval ERF/ERR/EMMP ongoing) Garissa (7 1. Kamuthe fodder production under solar-powered irrigation and 1. Dahir shafe (horticulture) grants) conservation* [-0.758765,39.823877(Kamuthe Solar for Fodder Prod) - 0.753958,39.83509 (Kamuthe Haybarn)] 2. Frontier camel zero graze unit* 2. Parlong Trading company 3. Sanjab feedlot and fodder production* 3. Farmers Agri system capacity (Animal health services) (FACT) 4. Filayi Bee-keeping and honey processing* [-0.242804,39.480206 (Filayi Apiary) -0.232,39.485 (Filayi honey processing unit)] Marsabit (8 5. Songoyo fish cage farming at lake Turkana, Loyangalani* 1. Camel Milk Value 4. Jirime poultry production. grants) [2.776545,36.704607(Songoyo Fish Cage Farming)] Addition (Alive and Young Skin Care)ë 6. Jeyjey dairy farm* [2.243462,38.027252 (Jeyjey Dairy Farm)] 5. Marsabit camel butchery 7. Moyale Animal Feed Ltd* [ 3.48072222,39.10085278 (Moyale Animal feed 6. Moyale camel milk dairy processing unit)] cooperative society limited 8. Agricultural Finance Corporation (AFC). Access to credit Wajir (9 9. Al-Maaruf- Fodder production, conservation (Haybarn) * [1.743621, 2. Nomads nourishing Milk grants) 40.028081 (Al-Maaruf Fodder Prod.& Hay Barn)] processing and marketing* 10. Dokono Fodder production and conservation (Hay Barn) * 3. Danwathag farm – Dairy [3.353033,39.424558 ] farming*. 11. El- harar- Fodder production under irrigation and conservation (Hay barn) 4. Feedlot and fodder *[3.353033,39.424558] production (Hirtis) * 12. Malaba hills (Ahmed. H.,) Beekeeping and honey processing* 5. SGT-Fodder production [3.3653321,39.397875](Malaba Hills Apiary) and conservation (Hay Barn) * 13. Wajir Milk Traders Isiolo (7 14. Fish farming (Aquaculture) by Ecotex venture Ltd* [0.34570556, 7. Sheep and Goats feedlot (Ghada grants) 37.56331389 (Ecotex Fish farming)] Moji Ventures limited) 15. Dairy and Feedlot production for BDD* [0.394628,37.58583] 8. Burat Ekeunos farmers Marketing Cooperative Society Ltd 9. Adhesi Self Help Group 10. Le Kod Cham Ltd (Animal Health) 11. Nyir Nyir Women Group Turkana (5 16. Nagis Butchery park* [3.36073056,35.44250000 (Nagis Butcher 12. Integrated farming (Emperor grants) Park), 3.363276,35.437938 (Nagis Slaughter House)] Scorpion). 17. Marian Johns Company Ltd- Aquaponic poultry farming* [- 30 44’29” N, 350 49’38”E] 18. Victorian Foods- Turkana ice production and animal feed processing plant* [3.660, 35.826 (Victorian Foods-Ice Flakes & Poultry Feeds Production * 20 EIA license obtained from NEMA

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 1 EIA excepted 14 Project under Construction and Implementation

b) Small Grants under Enhancing Market Efficiency. There are 20 small grants under this component in four counties apart from Garissa county. Nineteen (19) grants ERF, ERR & EMMPs have been submitted, cleared, and approved by USAID. Only one grant from Turkana is yet to be reviewed and approved. See table below

County Cleared and Approved Submitted pending review by USAID

Marsabit (6) 1. Purchase of milk handling equipment for Mt. Marsabit women 2. purchase of milk handling equipment for Songa women Groups 3. Purchase of fodder production and hay baling tools and equipment for (Salad Abdullahi Dida’s Hay Fam), 4. Amina Ibrahim Mohamed Pasture/Fodder Producers and Livestock Marketing Cooperative Society Ltd 5. Tulu Pasture/Fodder Producers and Livestock Marketing Cooperative Society Ltd 6. Purchase of tools and equipment for Moringa production in Moyale Isiolo (6) 7. Procurement of Hatchery for local chicken production (Nabulaa Raap) 8. Procurement of Hatchery for broilers production (Nelly Poultry Farm) 9. Procurement of equipment for local chicken (Umaimma chicken World) 10. Procurement of equipment for local chicken (Kitamnae Kilimo) 11. Procurement of equipment for broilers production (Elimmlin) 12. Procurement of equipment for broilers production (Nameyan) Garissa (0) None

Wajir (4) 13. Procurement of proposed solar-powered deep freezers and butchery equipment for Nadhif 14. Procurement of proposed solar-powered deep freezers and butchery equipment for Gurai Koche 15. Procurement of solar-powered milk cooling and related equipment for Maziwa Women group 16. Procurement of solar-powered milk cooling and related equipment for Manza Milk Traders Turkana (3) 17. Fodder Milling Machines for Owjay consulting ltd 1. Animal processing Equipment for 18. Honey processing equipment for Aredana Honey Mchanganyo Mills 19. Milling and fortification Equipment for Etic Women group

c) Small grants within Livestock Market Sale Yard. Small and medium enterprises (SMEs) operate within stalls in some livestock markets constructed by REGAL-AG during market days. Thirty (30) businesses have been identified to be supported in kind with tools of the trade. So far only one ERF/ERR & EMMP (Kuniso restaurant at Balambala livestock market) has been cleared and approved. Another grant ERF/ERR& EMMP has been submitted pending clearance and approval (table below).

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County Submitted pending review, clearance, and approval Marsabit (5) 1. Lino Chudukle- Phone charging and repair 2. Samuel Lekorima-A startup Garage business 3. Restaurant business for Rosemary 4. Philip Leparmarai Restaurant business 5. Eunice Galwaha Restaurant business Garissa (9) 6. (Printing & Phone repair) Nur Ala Nur Communications 7. (Butchery) Barwaqo Digital Butchery Consolidated ERF/ERRs 8. (Butchery) Marian Butchery Shop 9. J ra (Juice making) Johara Juice Making & Fruit Enterprise 10. (Baking business) Abshira Vitamin Cake 11. (Tailoring) Ugbaad Ubax Tailoring 12. (Ice-cream)- Maizma General Shop 13. Ikram Adan Abdi in (restaurant) Ikyam Fries Enterprise- Balambala livestock sale yard 14. Kuniso restaurant at Balambala livestock market (APPROVED) Wajir (4) 15. Kush cyber and center 16. Twins planet 17. Nimcaan women group 18. Gaza Shop Griftu Isiolo (7) 19. Shamane Self-help group Fruit blending 20. - Hilal Dairy Enterprise Dairy, Restaurant, and Butchery 21. ~Food Kiosk /restaurant 22. Restaurant Consolidated ERF, ERR & EMMP 23. Restaurant 24. ~Restaurant Turkana (6) 25. (Fruits and Fresh Juice) 26. (Phone Charging and Cold Drinks) 27. (Phone Charging and Cold Drinks) 28. Jubilee Youth Group (Grocery) 29. Pelekech Moru Self Help Group (Restaurant and Outside Catering) 30. Grace Erupe (bead making)

d) Agrovets grants ERF & ERRs. There 24 identified agrovet identified and selected for support in all five counties. Work is in progress on environmental assessments and documentation (Table below)

County ERR/ERR & EMMP- Work in Progress Garissa (5 Agrovet) 1 2 3 4 5 Marsabit (6 Agrovet) 6 7 8 9 1 1 Wajir (8 Agrovet) 1 1 1 1 1 1 1 1 Isiolo (3 Agrovet) 2 2 2 Turkana (2 Agrovet) 2 2

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AA1 PROGRESS ON LINKS TO OTHER USAID PROGRAMS LMS-AA1 participated in the USAID PREG 2.0 orientation and targeting workshops in the respective counties' PREG partners. LMS is working with Scaling the Impacts of USAID Resilience Programming Through Local Systems to deliver Public Financial Regulations training to County Directors of Finance, Budget, and Planning to ensure a thorough understanding of Public Financial Management regulations, especially for emergency programming.

AA1 PROGRESS ON J2SR In Year 3, LMS-AA1 has continued to re-align and re-orient its programming activities and interventions to improve how it’s supporting each of the five counties on their Journey to Self -Reliance. Concerted efforts have been directed through a series of co-creation interactions with counties in co-planning, establishing co-investment opportunities, and co-implement solutions to local development changes. This is to foster stable, resilient, prosperous, and self-reliant counties.AA1 have and will continue to support USAID Mission on J2SR through re-aligning its approaches going forward to focus on; LMS Support to Cooperative initiative: Working with eight selected cooperatives/ producer organizations/Livestock marketing/ SACCOs- A platform for Inclusion (women & youth) access to extension services, livestock/ livestock products aggregation/ processing. Joint activities with County Governments: Capacity strengthening (virtual training) to County officials (TOTs) in the Cooperative Department; Garissa County Revolving Fund management/Operations -to disperse funds, Turkana County Government- Public Service Board & operationalization of the Kerio Breeding Centre Operationalization of the Livestock markets: Ensure the livestock markets and businesses within the markets are operational/open where feasible/safe-by providing business stimulus grants, or at a minimum ensuring local supply/demand- procurement of goods and services. All these markets have been operating at various capacities at the same time adhering to the health and safety standards.

The activities and investments of AA1 are directly aligned to the J2SR, as they are aimed at:

• fostering local solutions and building local systems by strengthening local producer organizations, cooperatives, communities, and entrepreneurs to increase their access to resources and networks, and to articulate what they need and what they can contribute to developing their communities; • supporting fair practices and access to information in livestock trade and marketing and in animal quality standards, therefore eliminating “cartel-like” behaviors that currently persist; • increasing incomes by creating a “pull” effect for poor communities, through access to viable markets, trade opportunities, diversified livelihoods, and financial services tailored to their needs; • enabling women and youth to fully participate in economic activities and build resources that help to protect them from falling back into destitution in times of shocks, stresses, and crises; • strengthening the business environment for the development of the local private sector, institutions, and other actors engaged in livestock market systems; • financing self-reliance by supporting access to a range of financial products and services to support the growth and expansion of enterprises and enhanced private sector engagement; and • promoting inclusive development and lessening the economic gender gap by identifying specific opportunities for women and youth.

On inclusive development, AA1 is promoting social group equality, in the private sector sphere, with deliberate efforts to include all social groups as recipients of AA1 resources/funds, while maintaining high compliance standards via competitive grant solicitations and STTA consultant recruitments. LMS -AA1 is intentionally promoting increased women’s participation in the labor force and local economy with deliberate/targeted efforts via REAP and the identification of business opportunities. AA1 is striving to extend Sharia Compliant Services and products to Muslim entrepreneurs in ASAL counties via the joint consultancy with AFC and KIM.

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AA1 LESSONS LEARNED Capacity building and support of livestock producers and livestock market association members, either through increased government extension assistance or private industry extension officers are needed to further enhance livestock production and market administration. Small grants to livestock producers will serve to stimulate faster scaling up of production within targeted value chains.

Access to finance remains to be a key challenge to many actors in the Counties, hence the need to develop tailor-made and context suited financial products. i.e. the development and roll-out of Sharia -Compliant financial services and products have increased the appetite for adopting financial services.

Using its strong networks of local access to finance partners, AA1 will continue to support the development of inclusive lending/credit products for the marginalized, excluded, disadvantaged, poor, vulnerable, etc. to access capital. This support is being extended not only to non-AA1 grantees, but to all ASAL residents, for them to enhance their capacity to help prevent and adapt to shocks and stresses, and recover from crises.

There is growing demand and interest in the production and conservation of fodder such as hay. Fodder production in northern Kenya, especially grass production, does not optimize productivity. AA1 will support the fodder farmers supplying hay to grantees with training and capacity building to optimize production.

Sub-county-based cooperatives have a higher rate of sustainability due to the homogeneity of the local community that will ensure acceptance and ownership. In Year 4, LMS will support the formation of 13 primary producer cooperative societies and nine Subcounty level secondary cooperative societies, rather than County-level cooperative societies, and link them to two Cooperative unions facilitating SACCO activities.

During year 3, The outbreak of the COVID-19 pandemic in Kenya and the subsequent containment measures deployed by the government presented challenges to the normal running of our business operations. The adaptability of business operations and swift deployment of comprehensive and consistent communication and support to participants, staff, and stakeholders was a key lesson this year. That we were able to quickly adjust and consistently support basic business operations was a key indicator of the dynamism, flexibility, and adaptive management practice which is recommended for the operations in such fragile ecosystems. The ability of the REAP businesses to weather the market and economic disruptions is a clear indicator of their adaptive capacity and resilience in the wake of these unprecedented shocks. Even though known, we realized the importance of linkages as a critical piece in supporting business success. The business connections made opened up alternative supply chains that are critical in pivoting the value and volume of traded goods. We will continue running these measures and intensify the good practices including enhanced adaptability as the COVID-19 situation evolves. The linkages of participants to different value chains within the market system present viable opportunities that participants can pursue to connect to and learn from larger suppliers/players within the market systems enabling them to increase their income streams enhancing their livelihoods which underscores the importance of layered interventions within market value chains as a means of sustainability of the markets eco-system and availing pull opportunities to the ultra-poor to ensure sustenance of the push strategies.

The engagement under the PREG partnership provided BOMA with the opportunity to participate in PREG activities and co-creation meetings with the County government on key development needs and priorities. This ensured the LMS priorities and planning process is aligned to key County sector priorities envisioned to strengthened collaboration, coordination, and co-creation of activities. Under this approach, BOMA presented the REAP model approach to the County Ministry of Trade and Enterprise development with the intermediate result being a discussion on the integration of the REAP model to its Enterprise development Fund and other social protection systems to achieve impact at scale. These approaches and engagement speak to USAID guidelines on enhanced coordination and co-creation with government, a key pointer on Journey to self-reliance.

In working to scale and ensure the sustainability of the REAP model, LMS engaged the county governments of Garissa, Wajir, and Turkana intending to influence the establishment of revolving funds for women, youth, and the most vulnerable, and also to encourage the counties to adopt REAP model’s beneficiary selection approach. The discussions are still ongoing and will be continued with the proposed transition of implementation to the BOMA Project and ACDI VOCA.

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The BOMA project team led the data management system with a strong feedback loop, which enabled mentors to coach businesses based on need until January 2020 before the mentors’ contracts came to an end due to financial constraints. Later, the Mercy Corps Omo Delta project funded the cost of REAP in Turkana which allowed Mercy Corps to recall all the mentors in July 2020. When the mentors came back, remote monitoring was adopted to align with social distancing regulations due to the COVID-19 pandemic. Remote monitoring was limited to savings group data collection on the phone; this data will need verification by the BOMA Project and ACDI VOCA once COVID-19 subsides.

SUBSEQUENT ANNUAL AA1 WORK PLAN

AA1 Year 4 Workplan Narrative

GIS ACTIVITY TRACKER

GIS Activity Tracker

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www.feedthefuture.gov

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