UNCDF supports sustainable finance for agriculture in the Somali Region of Ethiopia
  • March 24, 2015

In the recent decades the small towns of Ethiopia's Somali Region have seen important demographic and economic growth. This has encouraged a wealth of innovations to spread as pastoralists seek to strengthen ties with local markets. In the region, camels are the most important signifier of wealth and determinant of one’s status in the community. Whereas, their milk was mainly used for domestic purposes, one of the innovations that has spread all over the region is the commercialization of camel milk.


In the Jijiga Woreda, UNCDF through the UN Joint Programme for Developing Regional States has established financial mechanisms to enable small producers to sell their camel milk to local and cross-border markets. One of the beneficiaries of this programme is the Bawarqo cooperative, that works in the milk production and trade, and counts 150 members, 130 of whom are women.



In collaboration with the Regional Bureau of Finance and Economic Development (BoFED) and the woreda authorities, UNCDF together with the other partners established a system that allows local authorities to develop evidence-based and informed solutions to plan and budget for local economic development, including support to micro- and small enterprises. Regional BoFEDs and woreda authorities have been the main conduit for the application of UNCDF capital investment grants. By combining these grants with own revenues and private investments, the target woredas have seen a significant increase in their capital development expenditure. As a result, the local government and communities’ ownership of the capital investments has strengthened and the institutional sustainability of the programme has improved.



The Bawarqo cooperative was launched with the support of a capital grant of 25,000 Birr as start capital and 19,770 birr as in kind contribution used to establish the cooperative’s infrastructure and to procure relevant equipment. The supply of this capital made it possible to improve the quantity and quality of the milk produced and sold. It also secured the economic sustainability of the project, supporting the cooperative in generating revenues employed to maintain the existing investments and, in the longer term, to make new investments. The project helped to strengthen the market linkages of the cooperative with other relevant economic actors, in particular through the work of the UNCDF regional and national value chain facilitators and thanks to the organization of training sessions and stakeholder meetings.



As established during the recent field visit to the cooperative, the farmers have seen their income levels grow since they joined the cooperative. This led to multiple benefits for the local community. For example, school attendance rates have increased as farmers rely less on the work of their children to take care of the livestock. In addition, local resilience to economic shocks has improved as the cooperative started supplying households with various utilities and essentials such as sugar, rice, biscuits and shoes.