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Final Report February 2004 Delegation of the European Commission in Kenya

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Final Report February 2004 Delegation of the European Commission in Kenya Final Report February 2004 Delegation of the European Commission in Kenya 2002 Annual Report * Cooperation between The People of Somalia and The European Community 2003 Annual review on the implementation of the ACP-EU Conventions and other co-operation activities TABLE OF CONTENTS 1 EXECUTIVE SUMMARY.........................................................................................................1 2 THE POLICY AGENDA OF THE PARTNER COUNTRY ..................................................2 3 UPDATE ON THE POLITICAL, ECONOMIC AND SOCIAL SITUATION.....................2 3.1 Political Developments................................................................................................................3 3.2 Economic situation ......................................................................................................................4 3.3 Social Situation ............................................................................................................................7 4 OVERVIEW OF PAST AND ON GOING CO-OPERATION...............................................8 4.1 Background for EC assistance to Somalia ................................................................................8 4.1.1 Context for project implementation....................................................................................8 4.2 Focal sectors.................................................................................................................................9 4.2.1 Enhancement of good governance, support to reconciliation and sustainable peace building 9 4.2.2 Reduction of widespread vulnerability.............................................................................11 4.2.3 Access to social services ..................................................................................................14 4.2.4 Economic growth and diversification...............................................................................15 4.3 Utilisation of resources for non-State actors (NSA) ...............................................................18 4.4 Other instruments .....................................................................................................................18 4.4.1 Regional Projects..............................................................................................................18 4.4.2 Humanitarian and emergency aid under ECHO management..........................................19 4.4.3 Italian co-financing...........................................................................................................19 5 PROGRAMMING PERSPECTIVE........................................................................................20 5.1 Funding perspective ..................................................................................................................20 5.2 Priority interventions................................................................................................................20 5.3 Outlook.......................................................................................................................................20 6 ANNUAL OPERATIONAL REVIEW – SPECIFIC THEMES...........................................21 6.1 The speeding up of the use of old EDF resources...................................................................21 6.2 Setting indicators and targets for measuring results .............................................................21 6.2.1 Financial indicators ..........................................................................................................21 6.2.2 Sectoral indicators for the four strategic clusters .............................................................21 6.2.3 World Bank Watching Brief.............................................................................................22 6.3 Dialogue in-country with the NAO and non-State Actors.....................................................22 7 CONCLUSIONS OF 2003 ANNUAL OPERATIONAL REVIEW FOR SOMALIA ........23 7.1 Introduction ...............................................................................................................................23 7.2 Political Developments..............................................................................................................23 7.3 Economic and Social Situation.................................................................................................24 7.4 The EC Programme to Somalia ...............................................................................................24 7.5 Indicators of Progress ...............................................................................................................26 7.6 Final Remarks ...........................................................................................................................26 LIST OF ANNEXES......................................................................................................................29 Annex 1: Indicative timetable for commitments and disbursements..........................................29 Annex 2: Financial Data..................................................................................................................29 Annex 3: Somalia - Council Conclusions.......................................................................................29 Annex 4: Security Issues Affecting EC Operations ......................................................................29 Annex 5: List of non-UN Implementing Partners.........................................................................29 i INTRODUCTION This report presents the conclusions of the operational review foreseen in Article 5 of Annex IV of the Cotonou Agreement. The Agreement establishes three main principles for the programming and review process: partnership; rolling programming; and flexibility. The first principle is not however directly applicable in the case of Somalia as, in the absence of functioning institutions to sign and ratify the Cotonou Agreement, the Chief Authorising Officer (CAO) of the European Development Fund is entrusted with the authority of National Authorising Officer, “acting on behalf of the Somali people”. This legal framework was decided by the ACP-EC Council of Ministers in November 1992 and latter confirmed in December 20011; the Council also agreed to grant Somalia access to resources from the 9th EDF with 8th EDF bridging finance under Article 93.6 of the Cotonou Agreement. Although there is thus no joint review in the case of Somalia, the Commission considers it essential to apply the same principles as for other ACP States. This report has been prepared with this aim in view. 1 EXECUTIVE SUMMARY The most important political event of 2002 was the opening on 15 October in Eldoret, Kenya, of the Somali National Reconciliation Conference under the auspices of the Inter-Governmental Authority on Development (IGAD). After protracted and difficult preparations by the IGAD-mandated Frontline States (Kenya, Djibouti and Ethiopia), and with the support of the international community, the major Somali stakeholders – with the exception of those from Somaliland, accepted to embark on a renewed attempt to restore peace. The Conference quickly led to a breakthrough with the adoption of a Declaration on the Cessation of Hostilities among the main warring factions. However, the initial euphoria then became enmeshed in inter-clan disagreements and the Conference lost momentum. Nevertheless, the new Government of Kenya elected at year’s end, immediately confirmed its commitment to put the Conference back on track. On the EU political front, a significant development was the Conclusions of the General Affairs and External Relations Council of Ministers in July 2002 which underlined EU support to the Somali peace and reconciliation process and opened new areas for support, notably to emerging regional governance (full text in Annex 3). Meanwhile Somalia’s economy continued to suffer from a lack of governance, regulation and confidence, restricting diversification of economic activities. The main source of income, livestock, continued to be adversely affected by the export ban to the Gulf States. In addition, following the application of the post-September 2001 sanctions, the remittance industry suffered a considerable shock. Additional remittances were affected in 2002, with partial bans placed in various countries (although the majority of these have since been lifted). The country remains one of the poorest countries in the world, with an annual per capita income estimated at around $200. In terms of EC aid delivery, a number of significant developments took place in 2002. In April, the management of the European Development Fund (EDF) for Somalia was devolved to the EC Delegation in Nairobi, with the objective of increasing programme speed and efficiency. In line with the LRRD2 principles, coordination between ECHO and the EC Somalia Unit was fostered. In June, a 4th Rehabilitation Programme totalling €50 million from the 8th EDF was approved, followed in August by the approval of the EC Strategy for the Implementation of Special Aid to Somalia 2002-2007 (€149 million from the 9th EDF). This flexible and multi-sectoral Strategy has a dual objective: to contribute to the alleviation of poverty and to promote a more peaceful, equitable and democratic society. Finally, €2.8 million were approved under the EC Special Framework of Assistance for Traditional ACP Suppliers of Banana
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