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SECTORAL INVENTORY
This section will outline 12 of the main sectors in which people are employed in urban Hargeisa. All of the figures in this section should be regarded as approximate (the mid-point of a range). The classification of particular `jobs' into income levels was carried out before the household economy assessment had finalised the wealth group information from community-level interviews. Consequently, this section uses a different income classification scale, for individual jobs as opposed to household income, as follows:
-- Very poor: <$70 per month (? SlSh 15,600)
-- Poor: $70-150 (= SlSh 15,600-33,500)
-- Lower middle: $150-250 (= SlSh 33,500-55,800)
-- Upper middle: $250-750 (= SlSh 55,800-167,500)
-- Better off: $750-2,000 (= SlSh 167,500-4,467,000)
-- Rich: >$2,000 (? SlSh 4,467,000)
The very poor groups are roughly the same, but the poor group in this section is larger than that established through key informant wealth breakdowns. In addition, the better off group starts at a higher level in this section. An attempt will be made to reconcile these differences at the end of the section. As mentioned above, the sectoral inventory aimed to classify individual `jobs' or economic activities (rather than households) into particular income categories. In many households, it is common for more than one person to be working, a point to keep in mind when considering the figures in this section, as well as the fact that household-level gifts and remittances are not included.
Livestock Sector
Live Animal Marketing
The main Hargeisa livestock market is the second most important livestock market in Somaliland/Somalia after Burao. Sheep and goats (shoats) and camels are traded for both domestic use and export, and cattle are sold for domestic use (meat). The marketing of each species functions independently and each species
occupies a specific location within the marketplace. The analysis of this sector was conducted according to
livestock species and purpose of marketing separately for each sub sector. There have been a number of major changes in the sector since the first livestock ban was introduced in
1998:
-- Shrinkage of the Hargeisa livestock market, particularly for shoats, due to strengthened export activities via the alternative Bosasso port in Puntland.
-- Shortened marketing chain for shoats, thus reducing the number of middlemen and their incomes.
-- Displacement of the previously prominent large export dealers by dozens of junior shoat export dealers capable of dispatching shipments of 2,000 - 2,500 head each during the peak export periods (such as January 2003).
-- Monopoly of camel export sub-sector by one or two Egyptian/Sudanese nationals.
-- Drastic fall of the number of middle level brokers: approximately 4 out of every 10 have deserted the marketplace.
-- The number of brokers and assistant brokers has remained more or less the same but they have seen a reduction in their income levels.
-- Finally, the number of people dependent on the live animals market in Hargeisa remains only about 50-60% of the estimated figure during 1998 assessment (approximately 2,255 in the table below versus an estimated 3-5,000 in 1998).
Meat Marketing
About 1,100-1,200 shoats, 30-40 camels and over 50 cattle are slaughtered in Hargeisa town each day. All of the camels and cattle and about two-thirds of the shoats are officially slaughtered in the municipalitymanaged abattoir, of which only half of the shoats are properly recorded. All of the information in this section was cross-checked with key informants (livestock brokers, butchers, and hides/skins collecting agents). Regardless of the site of slaughter, there are about 12 market centres where all meat outputs are sold. Over 30% of shoat meat, 75% of camel meat and over 50% of the cattle meat is sold in the central market. The twin markets close to the headquarters of Radio Hargeisa accommodate the sales of over 40% of sheep and goat (shoat) meat, about 40% of cattle meat and less than 10% of camel meat. The remaining 30% of shoat meat is distributed among the remaining nine smaller markets. Only 4 of these 9 markets sell the remaining cattle meat while another 2 markets host the retail of about 5% of camel meat.
Fresh Milk Trade
The total quantity of fresh milk traded in Hargeisa is constant for roughly three-quarters of the year, with the daily supply varying only slightly between 35,000 - 40,000 litres per day. In contrast, the supply of fresh milk during the period between mid January and mid-April drops below 20,000 litres per day (when many consumers switch to powdered milk).
The fresh milk traded in Hargeisa originates from Ethiopia and from rural Somaliland through three main
supply routes:
-- Fresh milk traded by producers (15-20%)
-- Fresh milk supplied to well established market agents (15 - 25%)
-- Fresh milk bought by wholesalers from rural producers (60-65%)
Close to 2,000 people are engaged in the milk trade in Hargeisa, including a number of retailers of various sizes. The following table summarises the urban actors in this sub sector.
Type of Activity Upper Middle Lower Middle Poor Very poor Total
Wholesalers 36 36
Market Agents 26 26
General retailers 100 100
Retailers - (A) 450 450
Retailers - (B) 1,050 1,050
Retailers - (C) 85 85
Retailers - (D) 131 131
Total 36 126 216 1,500 1,878
The 1998 Hargeisa assessment described the milk marketing system thus: "There are a number of different types of milk retailers, some of whom diversify into other products during the months that milk availability decreases. The main retailers use fixed market stalls for milk sales and may employ others to sell the milk door-to-door or from smaller stalls, especially during periods of increased availability in the wet season . About two-thirds of Hargeisa inhabitants (better off and middle) consume both fresh milk and imported powdered milk in varying proportions according to the season. In the dry season many people drink powdered milk as fresh milk availability is low, the price is high, and the sellers are more likely to dilute the milk."
Construction Sector
Building construction and associated activities represent the second most important economic sector after the food/non-food trade and services sector. As a result of extensive dialogue with key informants in a few construction companies, the number of ongoing buildings every month has been estimated between 90 - 100. There are about a dozen well-established companies engaged in this sector. The main sources of investment for new building activities include remittances from the Diaspora, local business investment, and projects funded by the UN, INGOs and the Government. Construction activities boom during May to September when most Diaspora members arrive home and initiate their investment plans. This industry is forced to halt activities quite frequently due to restrictions and bans on construction frequently imposed by the central authority to avoid the insecurity risks arising from land disputes.
Khat Trade
Khat trade is the fastest growing sector in the urban economy. There are three main import dealers and numerous individuals engaged in this business. The weekly import volume is estimated at 160 metric tons, of which one company manages almost half. The growth rate of this sector is estimated at about 20% annually and, therefore, the quantity of khat imports has doubled in the period between the two baselines (1998 and 2003). Key informants from the Ministry of Finance quoted that revenue of from khat imports is approximately equivalent to $10,000 every day.
Many of the small-scale retailers of khat are women and income levels depend on the quantity of khat traded per day.13 Net incomes of as high as $3-4 per day are not uncommon.
Fruit and Vegetable Trade
More than half of the fruits and vegetables consumed in Hargeisa are imported from Ethiopia and Southern Somalia. Ethiopia mainly supplies potatoes, onions, garlic and spices, while southern Somalia supplies fruits. The remaining source of fruit and vegetables is local to Somaliland. Almost every market in Hargeisa (large and small) has a fruit and vegetable retail component. Close to 2,000 people are engaged in this sector, ranging from large-scale importers and distributors, to retailers of various sizes (shops, stalls, petty traders).
Food and Non-Food Trade and Services (Formal and Informal)
Over 15,000 people in the city are active in this sector, engaged in both large and small-scale trading and service activities. The Hargeisa Municipality recently conducted a survey of businesses involved in this sector in the main markets in Hargeisa. This was the main source of information on the number of businesses - and their different types - in this sector. Key informant interviews were used to estimate the number of people employed by each type of business and their income levels, and the number of people who are self-employed (including small-scale retail shops, market stalls and teashops). Please see Annex 5 for more details on this sector.
Very rich Better off Upper middle Lower middle Poor Very poor Total
Formal sector 80 803 1625 2779 2415 1707 9409
Informal sector 0 0 0 3091 2568 245 5904
Total 80 803 1625 5870 4983 1952 15313
Public Sector
As shown in the following table, about 10% of the staff engaged in the public sector are categorized as upper and lower middle wealth group (according to the definition of the group in this section of the report). In this study, the survey team only counted the official payments made to the staff members as salary and allowances, not side income. Almost one-third of the upper middle wealth group are members senior members of government.
Upper middle Lower middle Poor Very poor Total
Government Ministries 74 337 1483 1,620 3,514
Ministry of Education (Teachers) 0 24 191 114 329
National Army 150 350 1500 2,000 4,000
Police Force 50 150 800 1,000 2,000
Custodial corps 20 30 100 300 450
Municipality & Hargeisa Water Agency 30 108 250 350 738
Total 324 999 4324 5,384 11,031
In addition to over 320 people involved in the public education sector, private sector schools employ approximately 500 people.
Remittances
In contrast to predictions of a drastic reduction in the inflow of remittance amounts after international currency transfer restrictions were introduced in November 2001, discussions with some of the Hargeisa based money transfer companies suggest an increase in remittance amounts for the period between the two baselines (1998 and 2003). According to estimates made by senior officers engaged in this business, Hargeisa inhabitants receive about $5 million dollars monthly through remittance companies. Dahab Shil manages over 70% of this amount while another 12 or so companies compete for the delivery of the other 30%. Dahab Shil company has 17 sub-offices in Hargeisa City alone where over hundred employees are engaged. After Dahab Shil, Amal and Al-Mustaqbal rank second and third largest in terms of amounts
transferred monthly.
Almost one-third of the amount remitted every month is channelled towards investment in the construction industry and related business activities, and the remaining two-thirds contributes to the livelihoods of more than a quarter of households in Hargeisa directly. Key informants suggested that about 10-20% of households may be relying almost entirely on remittances. Discussions with companies suggest that $100- 200 per month is a typical amount received at household level. This corresponds with information provided during interviews with focus groups of middle households.
NGO/UN Employment
There are around 120 institutions/organizations in Hargeisa town, including national and international NGOs and UN agencies. Most of these organizations have different levels of workers, including skilled and nonskilled. During the survey, the team met with representatives of key organisations to get an understanding of:
-- Number of staff
-- Permanent and temporary staff based on their category (senior, middle and low)
-- Staff salaries (from highest to lowest)
Staff numbers per organisation vary between 3 and 40, and staff salaries range between US$80 - 800 per month. After consultation with key informants, it was decided to use an average of 500 employees in this sector. The table below shows a breakdown of these staff by income category.
Water Sector
The Hargeisa Water Agency is responsible for distributing water pumped from Geed-Deeble (about 40 kilometres north of Hargeisa) to the town. To date, about 10,000 households (or about one-fifth of Hargeisa inhabitants) access tap water while the rest rely on public kiosks (of which there are 504) and water deliverers (1,500 - 2,000 donkey-carts).
Transport Sector
The table below summarises the actors in the Hargeisa transport sector. Within the city bus and taxi category are the vehicle owners, drivers, conductors and facilitators.
The number of large trucks (over 18-ton capacity) in Somaliland is estimated at about 1,500, of which 40% are owned by Hargeisa inhabitants. Before 1999, there were only about 300 of these trucks, of which the same 40% were owned by Hargeisa dwellers.
The EU has used Berbera port for the delivery of relief food to eastern region of Ethiopia from 1999 - 2002. However, most of the truck owners missed the opportunity for transporting food aid. This situation deteriorated further after the restrictions imposed on the Ethiopian border in October 2002. At present about 20% of the trucks owned by Hargeisa residents (120) have double registration and have the opportunity of either working in Somaliland or Ethiopia. Regarding the remaining 480 trucks, only about 30 trucks owned by the import/export dealers and middle-level traders are fully utilized as they are engaged in the delivery of owner's commodities from Berbera to Hargeisa/Borama and Tog-Wajale on a daily basis.
Charcoal Sector
Charcoal production and trade has increased during the livestock ban, as rural households seek a means to make ends meet. About 200 metric tons of charcoal are consumed every week in Hargeisa and over 1,900 persons are engaged in this sector. Most of the charcoal consumed in Hargeisa is brought from Ethiopia.
Summary of Sectoral Inventory
As noted at the beginning of this section, the sectoral inventory aimed to classify individual `jobs' or economic activities (rather than households) into particular income categories. When considering the figures in this section, keep in mind that it is common for more than one household member to be working, thereby augmenting total income at the household level. Also keep in mind that household-level gifts and remittances are not included in this inventory of jobs by income classification.
The sectoral inventory aimed to classify the majority of income-generating activities in Hargeisa, not every single job. It is probable that about 20% of active individuals are not included in the above summary. Furthermore, inactive households - both those that are destitute and those that rely purely on remittances - are not included. The number of destitute is quite small - perhaps 1-2% of households in Hargeisa - but the number of households mainly relying on remittances may be between 10-20%.
Nearly one-third of the jobs above are classified as `very poor.' However, those households that have more than one person working in `very poor' jobs and that also receive gifts may shift up into the `poor' wealth category. This is also true for the `poor' category: in many households, more than one person is working and gifts are received from relatives and neighbours, thus shifting the household up to the low end of the middle group. In short, the sum of income of household members with low-paying work can shift that household into a higher wealth category.
A further factor that should be kept in mind when looking at these findings is that the wealth groups are defined differently from the wealth breakdown section above. Individuals holding jobs classified at the top of the `poor' group in this section (Sectoral Inventory) are in fact members of households considered to be at the low end of the `middle' group according to the household economy results (`wealth breakdown'). The same is true for those with jobs in the `upper middle' group in this section - many of these are part of the `better off' wealth group in the wealth breakdown section above.
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