Consultancy for documentation of diaspora business engagement in Somali Regional State, Ethiopia. Request for Quotation No.: RFQ-ETH-006753

Background

Danish Refugee Council (DRC) is a private, independent, humanitarian organisation working on all aspects of displacement in more than 40 countries throughout the world. The mandate of DRC is to protect refugees and internally displaced persons (IDPs) against persecution and to promote durable solutions to the problems of forced displacement – based on humanitarian principles and human rights.

Observing the significant contribution of diaspora in their former home countries, DRC has established a diaspora programme that strives to support and facilitate the constructive engagement of diaspora in these countries.  One of the ways that diaspora engage is through private investments and entrepreneurship, which in turn supports economic development, self-employment, and job creation for refugees / IDPs and host communities.

Most recently DRCs office in Ethiopia, through a grant from the EUTF/MC-CRRF, has included a component on diaspora investment and support to local business with a view to strengthen self-employment and job creation for refugees and host populations in the Somali Regional State of Ethiopia. In November/ December 2019 DRC has conducted an initial assessment describing the legal and institutional framework around diaspora engagement in Ethiopia and confirming the importance of diaspora engagement in the region.

However, the initial assessment did not fully unfold the dynamics of the many ways that the diaspora engages and supports economic development and job creation in the Somali Regional State, which is the purpose of this consultancy.

The initial assessment tentatively identified four distinct diaspora business models:

A.     Partnerships between diaspora investors / diaspora entrepreneurs while still overseas. These partnerships seem largely to be based on clan and family, and investment capital is based on savings between the members of the group. One or two representatives from the group moves to Ethiopia to start up and run the business. These partnerships typically invest in the service industry (mainly hotels), agricultural, and real estate sectors.

B.     Diaspora remittances for start-up support. The regular remittances from diaspora to relatives in the region, including to the refugees in the camps are generally used for consumption, and do not create much economic activity in the region. However, occasionally members of the diaspora transfer larger amounts (1.000 – 20.000 USD) to relatives in the region, supporting them to start-up businesses. Such capital injections are frequently invested in small hotels, real estate development / construction, trade, transport companies.

C.      Single diaspora investor, whereby a successful diaspora businessperson, returns to the Somali Regional State to set up one or several businesses with money saved while abroad.

D.     Partnerships between Diaspora and foreign investors. A few partnerships between diaspora members and a foreign company were identified, whereby one or more persons from diaspora through a good relationship with a foreign company/investor facilitated investments in the Somali Region.

During the initial assessment no partnerships between diaspora investors and local companies were documented. However, such partnerships, or other models for diaspora business engagement may exist, but were not captured during the initial assessment.

Several challenges and issues were identified for diaspora that had engaged through engagement model 1 (mainly around lack of available information, bureaucracy and financing). However, for business engagement model 2 the analysis was considerably weaker, which should be rectified under this consultancy.

Objectives of the consultancy

The objectives of this consultancy are to complement the findings of the initial assessment from November/December 2019 with additional information on existing practices around diaspora business engagement. More specifically the consultancy should confirm the diaspora business engagement models captured during the initial assessment, it should document the details, dynamics, and challenges of each of the models, and finally identify innovative solutions, best practices / lessons learned from each of the models.

The best practices, lessons learned, and main challenges will be used by DRC to inform and inspire other diaspora actors to engage directly or support relatives to establish successful enterprises.

Main research questions:

·        What are the main diaspora business engagement models used by diaspora when engaging in the Somali Region of Ethiopia?

·        How do each of these models’ function, and what are their challenges?

·        To what extent do the regular remittances support business development – in the refugee camps and outside? 

·        What are the best cases for each of the models?

Given the restrictions around COVID 19 this consultancy should be home based and all interviews and consultations should be done on-line.

Consultancy duties and responsibilities

A.     Confirm that the four diaspora engagement models identified in the initial assessment are the most prevalent in Somali Regional State. If additional distinct models are identified, they should be briefly described and, based on the potential for self-employment or job creation, a decision should be made with DRC if the model should be further analysed.

B.     Describe the details, dynamics, and challenges of each of the engagement models 1 and 2, and any additional distinct models identified (see questions attached for minimum information), that are assessed to play, or have the potential to play, an important role in self-employment or job creation.

C.      Verify the limited use of financial services (i.e. credits) from financial institutions under model 1 (one of the findings from the initial assessment report) and explain why this is the case.

D.     For model 2, the impact from diaspora remittances on self-employment and job creation in the refugee camps, should be assessed and documented.

E.      Document individual cases that represent best practices, inspirational solutions, and other examples for duplication under diaspora business engagement models 1 and 2 (or other models that have been identified and agreed to by DRC). This will be used by DRC to make inspirational documentaries to be shared with diaspora and local actors.

F.      Provide a contact list to diaspora communities – within any of the diaspora engagement models.

 Deliverables by the consultancy

The consultant is expected to deliver the following outputs as part of this assignment:

A.     Transcripts from all key informant interviews based on the questions (in reference of  Annex G).

B.     A report consolidating the information from the key informant interviews along with structures (Please see the TOR);

C.      Contact list to allow for follow up with diaspora communities with an interest to engage (within any of the engagement models).

Due to the current Corona restrictions local restrictions should be respected and caution should be made when conducting in-person interviews in Ethiopia. Interviews with diaspora actors outside of Ethiopia should be conducted over the phone, or through web-based communication.

DRC will support the consultant with contact details for key informants in Ethiopia. For key informants outside Ethiopia, DRC will seek to obtain some prior to the consultancy, but will not be able to identify all needed, and the consultant is supposed to obtain contacts through the key informant interviews conducted in Ethiopia.

Presentation of findings should be done at DRCs office in Jijiga – or if travel restrictions are still in place, through a web-based

The consultant should have the following expertise and skills:

-       Full proficiency in Somali and English languages[1].

-       Minimum 3 years of experience from designing and implementing private sector engagement programming – preferably in Somali Regional State of Ethiopia.

-       Minimum 2 years of experience from programming for diaspora engagement for private sector expansion in a Somali context.

-       Documented experience from data collection, processing and analysis on private sector / diaspora programming from a Somali context.

-       Documented track record of written documents / publications on diaspora / private sector development / development / migration from a Somali context.

-       Post-graduate university degree in social sciences / business development or another relevant academic discipline.