Document Type: Progress Reports

This report is for the first quarter of the second fiscal year of implementation of USAID|REGIS-ER. Regional teams were involved in intermediary activities: training the 70 facilitators in multiple disciplines, diagnostics of wells, formulating bid requests for well drilling and latrine construction, planning for irrigation systems, getting ready for the next habbanayé operation, and more. All of these activities are in preparation for a robust second quarter in terms of results for all components.

While results in terms of percentages achieved remain low, this does not reflect the tremendous effort that was expended in all regions during the quarter. The preparatory phase of strategizing, training, and establishing a clear vision for all components has been completed, especially for the Health and Nutrition Component that is now fully operational in all regions.

In the next quarter, REGIS-ER indicators will be reviewed and potentially modified.

Highlights

• The first general assembly for REGIS-ER/Niger was held in December, 2014, to consolidate accomplishments, discuss lessons learned from the first year and recognize our challenges for Year 2.
• Project staff was bolstered by the addition of two natural resource mapping specialists and the recruitment of a replacement to head the Livelihoods component.
• Climate change information and adaptation is being integrated into all field activities.
• With assistance from REGIS-ER, almost 50 ha of land has been deeded to women for gardening and food production.
• The process of setting up Mother-to-Mother groups was initiated, which will lead to widespread adoption of best practices in terms of health, nutrition, and hygiene especially for women and infants.
• An RFP to set up a comprehensive database was developed.
• A strategy for household poultry was formulated and shared with regions.
• The regional office that was headquartered in Bogandé, Eastern Region of Burkina Faso, was moved to Fada N’gourma, for better access to communications and work at field sites.
• Sizeable grant applications are under consideration for rehabilitation and construction of wells, latrines, habbanayé, and complete packages including irrigation, seeds, and fertilizer for women’s gardens.

Points of Convergence

• A joint mission to monitor the quality of health educator work was carried out by Livelihoods and HealthNutrition specialists in Tillabéri South. The presence of pregnant and lactating women were used as criteria to prioritize locations for Mother-to-Mother groups.
• Burkina and Niger Governance teams worked together to identify cattle corridors linking the two countries.
• A meeting was held with NGO SongES in Niger to deepen our understanding of Husband Schools (Écoles des Maris), how they are implemented, the tools needed, and a potential partnership between REGIS and SongES.
• Vulnerable households that should benefit from grants to build latrines were identified by FFP partners in CLTS villages of Gayéri, Barsalogho, and Bouroum.
• A training research exercise was carried out between REGIS-ER, SAWKI, and NGO Lahia for Digital Green in Maradi.
• REGIS ER continues to work with SAWKI to explore opportunities of collaboration in Maradi and Zinder on SAFE SPACE.
• REGIS administration based in Ouagadougou participated in a workshop on rural women’s enterprise incubators sponsored by ECOWAS on 18 and 19 December. REGIS was identified as a partner in the design and implementation of a pilot incubator project.

Lessons Learned

The participatory approach through involvement of the technical services and local authorities is fundamental to making long-term change and maintaining a solid relationship with partners.

During this quarter, REGIS-ER team setups were completed in the regions as well as at headquarters in both Niger and Burkina Faso. The headquarters were equipped with communications tools, including a dedicated internet line in Niger and mobile telephone group accounts for both capitals. The telephone group account for the remainder of Burkina sites is in the process of being set up.

Now that regional staff have been sent to their respective sites, field activities have begun in earnest in both countries. Centralized training of trainers for REGIS-ER’s approach was carried out last quarter, and the training of field technicians followed this quarter. Field interventions continue as meetings with local authorities and partners continue in the communes. The initial diagnostics in selected villages is ongoing.

An informational and hands-on workshop on REGIS-ER’s monitoring and evaluation (M&E) plan was organized in Niamey from May 19 to 23. The Regional coordinators and regional M&E specialists, Sheladia and Dimagi consultants, and SAREL representatives attended. It was an occasion to harmonize the actors’ understanding of the M&E plan and the tools (forms) that will be used to collect data to report on progress of REGIS-ER. The content of the workshop was communicated at the field level through workshops and training.

A series of workshops on individual Project component strategies was initiated in May and will end in July. Although broad strategies did exist within the components, understanding and consistency of terms and approaches have been enhanced and harmonized by the workshops, leading to better coordination among REGIS-ER actors.

Component activities are summarized in the following paragraphs.

Sustainable Livelihoods Component (SL)

In the context of promoting employment in the rural sector, 383 people (including 305 women) from TillabériSouth built stone water-capturing structures following Project training.

In terms of adaptation to climate change, REGIS-ER gave training in conservation farming for rainfed crops in Niger for 47 producers; and in Burkina Faso for 20 producers.

The Project also trained 15 producers in seed multiplication, setting up 15 demonstration sites for improved varieties on 27 hectares in Niger.

In Burkina Faso, each of the 20 producers who were trained installed three demonstration sites for three farming techniques: manually-practiced conservation farming using compost and mineral fertilizer; plowing the soil with a ripper and using compost and mineral fertilizer; and traditional farming methods.

In all, 94 “simplified BDL” sites were set up in Niger for 906 women belonging to producer groups. The women also received Project support in the form of improved seed: Konni okra, Sadoré senna, and Sadoré hibiscus, as well as small equipment.

The area placed under improved technologies covers 264 hectares in 4 work zones in Niger.

Six irrigation sites were donated in Tillabéri-South. The status still needs to be legalized by securing a deed.

In the livestock domain, a ceremony was organized June 25 in Tillabéri-South (Balléyara) as part of a habbanayé operation. 150 vulnerable women received 3 female goats and 1 male goat with a food supply consisting of cotton seed and wheat bran.

In the context of agricultural and rural credit, three women’s groups from Tillabéri-South received credit in the amount of 7,700,000 FCFA for animal fattening. In Zinder, four women’s groups from two of REGIS-ER’s communes obtained 4,750,000 FCFA in credit for sheep fattening activities.

The Project is working with ASUSU micro-finance institute (MFI) to provide credit and build capacity for producer organizations and community-based solution providers (CBSP or APS). A memorandum of understanding is being prepared.

Governance and Natural Resource Management Component (GNRM)

Governance Component trained 11 members (including one woman) of the first steering committee, and 47 members (including six women) of the sub-zone committees that are involved in drawing up a Land Use Plan (POAS) as part of a local convention for Tondikandia commune in Tillabéri-South in Niger. The POAS will cover over 222,000 ha. Fourteen types of community-based organizations are involved in the associated fora.

As part of developing the component’s field strategy, a workshop was held on the concepts and approaches used by the five sub-components. The strategy was validated by regional coordinators and governance staff at the workshop.

The four work regions of Niger were found to contain areas wherein people are willing to implement farmer-managed natural regeneration with the Project.

Health/Nutrition and WASH (SN)

The Health Component was able to obtain a map of health and nutrition activities already taking place in two regions of Niger, Maradi and Zinder, thanks to research carried out by other actors.

REGIS-ER carried out an inventory of improved water sources in 130 of the 232 villages in Maradi and Zinder intervention zones.

Regional teams who are carrying out diagnostic studies of our villages also listed the water and sanitation infrastructure status and management situation.  Performance evaluation of management committees was carried out for 60 villages in Maradi region and 46 villages in Zinder Region.

22 villages in Maradi and Niger regions expressed willingness to participate in ATPC activities after their need for improved sanitation infrastructure was identified.

An overall strategy for implementing health, nutrtion, and WASH activities and SBCC has been proposed and is being validated and harmonized for the two countries. A community diagnostic exercise to identify behavior change targets was conducted in five out of 20 women’s gardens in Balléyara (Tillabéri-South), where 19 educators (including 16 women) were trained in infant health and nutrition.

Three workshops (one per region) were organized to inform staff about ATPC in Burkina Faso. They provided a forum for exchanges between the heads of SBCC and WASH and the regional teams, thus providing uniform comprehension of the approach.

During the first full quarter of REGIS-ER implementation, activities carried out in Niger and Burkina Faso focused on recruitment , meeting with GON and GOBF authorities, FFP partners and subcontractors; rental and furnishing of country-level and regional-level offices; procurement; and transitioning field activities in Tillabéri South from Arziki to REGIS-ER. Five regional team members and ten facilitators were hired to continue activities in the four communes of Tagazar, Tondikandia, Imanan, and Filingué.

REGIS-ER’s strategy is to continue and expand successful activities initiated under Arziki and other West Africa projects including USAID|Wula Nafaa, USAID|Yaajeende, and the Moringa Project. In the first few months of operation, complementary field activities are being developed in USAID|REGIS-ER’s agriculture, governance, and health and nutrition components.

In the non-capital regions where the Project is working, three agents were sent to Maradi, two to Zinder, and two to Tillabéri North by the end of March. These initial teams facilitated the selection of communes for intervention and prepared for the arrival of facilitators and regional teams. Intervention zones have been finalized for four work zones in Niger (Tillabéri-Nord, Tillabéri-Sud, Maradi, Zinder) that cover seven departments (Tillabéri, Balléyara, Filingué, Guidan Roumdji, Dakoro, Magaria, Mirriah) and ten communes: Sakoira, Kourteye, Tagazar, Tondikandia, Imanan, Filingué, Guidan Roumdji, Sabon Machi, Bandé, and Droum.

In Burkina Faso, the Program identified a candidate for the Program Representative whose CV has been approved by USAID. The Ouagadougou office has been rented since the beginning of the quarter, and the processes of renting three regional offices and selecting intervention communes in the target regions of Burkina began in February. The final selections of six communes in three regions are:

• Dori and its two communes, Seytenga and Titabé in the Sahel Region;
• Kaya and its two communes, Barsalgho and Namissigma, in the North Central Region;
• and Bogandé’s communes of Manni and Gayeri in the Eastern Region.

Management, administrative and financial procedures are being set up by support missions carried out by the Chief of Party, the Deputy Chief of Party, and the Director of Finance and Administration. The Deputy Chief of Party has been acting as interim Program Representative in the Ouagadougou office since February while awaiting the arrival of the new REGIS-ER Burkina Program Representative. The process of hiring the rest of the regional and field teams will finish in early May. All regional staff participated in an orientation to the Project and its strategy held in Niamey in March.

A summary of the Project’s technical achievements are described by component as follows.

Sustainable Livelihoods (SLC)

The activities of the Sustainable Livelihoods Component focused on selecting key products for processing during the 2013-2014 fiscal year: moringa, dolique, okra, cabbage, and onion.

A profile was developed to solicit Community-Based Solution Providers or CBSP. 71 village animators (VA) applied and were evaluated for their potential to become CBSP in the Tillabéri-Sud work zone. This includes 25 individuals from Tondikandia, 11 from Tagazar, 14 from Filingué, and 21 from Imanan.

During the quarter, five irrigation system models were identified as appropriate to the Project’s goals: oasis garden, piped irrigation, California system, modified California system, and fenced market garden plots. Seed procurement for rain-fed and irrigated agriculture is underway for 2014.

Governance and Natural Resource Management (GNRMC)

The component spent the first quarter contacting Niamey partners, collecting support documentation on vulnerability, and initiating local convention activity in the commune of Tondikandia.

A draft guide on the steps to develop a local convention was developed by a consultant, and Regional team members were trained in the steps. Steering committees are being set up for the communes of Tondikandia and Damana, and four geospatial thematic maps will be produced with assistance from USGS.

A guide for farmer-managed natural regeneration was developed and given to the regional teams to use for implementation of NRM activities. FMNR is programmed for sites in Balléyara/Tondikandia, Agou, Toumboram Atta, Bangario, Sansani Tabla, and Sourgou Koira/ Kandoum. Preparations for training and refresher courses are in progress.

Agreements to collaborate with Red Cross (to facilitate existing modules for disaster training in Niger) and GENOVICO (to participate in conflict resolution activities) are being finalized.

Health /Nutrition and WASH

The quarter was dedicated to hiring and training staff at all levels. An initial training on improving quality of health services was given in January. Partners and organizations were contacted during the quarter so that all parties could become familiar with the Project.

SPRING conducted an assessment of the status of its stakeholders between November 2013 and January 2014 under REGIS-ER. Results from this assessment will help the component to refine its intervention strategy. An operational strategy for implementing the PTA and a plan for communications for social behavior change are being drawn up.

USAID’s Supporting Access to Justice, Fostering Equity and Peace (SAFE) Program is a five-year initiative to improve citizen access to land-related justice and to strengthen peacebuilding and conflict mitigation.

This Report is organized to track to the program’s progress under the objectives and intermediate results identified in the program’s Work Plan. The Report highlights progress towards planned achievement of milestones and performance management indicators. The Report details the program’s contributions to access to justice and conflict mitigation in Uganda. The Report includes success stories and information on results, challenges, and next steps to be implemented in Quarter 1 of Year 3. Key documents produced in Year 2 are included in the Annex to this Report.

PROGRESS HIGHLIGHTS

During Year 2, the Supporting Access to Justice, Fostering Equity and Peace (SAFE) Program implemented activities to improve access to justice and peace and reconciliation in Uganda, with the deliberate aim of ensuring the sustainability of our activities even after Program ends. SAFE works closely with the Conflict Early Warning and Response Unit (CEWERU) at the Ministry of Internal Affairs during implementation of conflict monitors training, conflict assessment reports and conflict mapping. SAFE’s second round of grants cover multiple districts in the North and West, addressing a range of issues in both Component I and Component II and all have components targeting women and youth. Illustrative progress highlights are described below:

IMPROVED ACCESS TO JUSTICE

• The Program finalized and distributed the Land Rights Hand Book and Sensitization Toolkit to the Ministry of Lands and SAFE grantees.
• The program provided legal aid to a total of 932 beneficiaries (485 men and 447 women) and sensitized a total of 10,305 beneficiaries across the districts of Gulu, Amuru, Lira, Moroto, Kibaale, Jinja and Masaka.
• The program registered 116 cases for mediation. 68 of the cases were completed with Memoranda of Understanding signed between the parties.

PEACE AND RECONCILIATION

• SAFE completed a rapid assessment of the refugee crisis in West Nile region stemming from the influx of refugees from South Sudan. The assessment focused on conflict tensions and triggers and was able to inform grant-making activities through two CSOs.
• 180 conflict monitors from 27 districts were trained in conflict monitoring, analysis and reporting. The training involved a practical session on using the toll-free SMS system to report conflict incidents as they occur.
• SAFE conducted consultations with local government officials, civil society and oil and gas companies in the Albertine region to establish key activities to mitigate conflicts related to the discovery of oil and gas in the area.
• SAFE trained 28 radio journalists in conflict-sensitive reporting, introducing conflict transformation models that integrate diverse voices in reporting of conflict and highlight women’s and youths’ perspectives.

USAID’s Supporting Access to Justice, Fostering Equity and Peace (SAFE) Program is a five-year initiative to improve citizen access to land-related justice and to strengthen peace building and conflict mitigation.

This Report is organized to track to the program’s progress under the objectives and intermediate results identified in the program’s Work Plan. The Report highlights progress towards planned achievement of milestones and performance management indicators. The Report details the programs contributions to access to justice and conflict mitigation in Uganda. The Report includes success stories and information on results, challenges, and next steps to be implemented in Quarter 1 of Year 2. Key documents produced in Year 1 are included in the Annex to this Report.

PROGRESS HIGHLIGHTS

During Year 1, the Supporting Access to Justice, Fostering Equity and Peace (SAFE) Program implemented activities to improve access to justice and peace and reconciliation in Uganda, with the deliberate aim of ensuring the sustainability of our activities even after Program end. SAFE is working closely with the Conflict Early Warning and Response Unit at the Ministry of Internal Affairs during implementation of conflict monitor training, conflict assessment reports and conflict mapping. SAFE’s first round of grants cover multiple districts in the North, addressing a range of issues in both Component I and Component II and all have components targeting women and youth. Illustrative progress highlights are described below:

IMPROVED ACCESS TO JUSTICE

• The Program finalized the Community Legal Volunteers Manual, to be used by SAFE grantees to promote legal aid in poorly served Districts.

ENHANCED PEACE & RECONCILIATION

• The Program finalized a Training Manual for Conflict Monitors and used it to train 14 selected Conflict Monitors.
• Conflict Monitors are supporting monthly conflict assessments in the districts of Moroto, Kibaale, Lira, Amuru and Gulu.
• The Program designed and implemented an innovative SMS-based conflict reporting and monitoring system. This is the first of its kind in Uganda. Conflict Monitors will text incidents to a toll-free hotline and the system will immediately generate questions prompting the conflict Monitor to add more information such as: location of incident, type of incident, parties involved, number of injuries or deaths, etc. The entire question-response, back and forth takes seconds.

SAFE GRANTS PORTFOLIO

• The Program issued a call for proposals for Year 1 on July 11, 2013 and received 199 proposals from 189 Civil Society Organisations. In the first group of evaluations, eight organisations were selected to implement activities under Components 1 and 2 in the districts of Gulu, Lira, Amuru, Nebbi and Moroto.

MONITORING AND EVALUATION

• SAFE implemented the field research component of its baseline assessment from February 18 through March 1 2013. During the period, a consortium of research analysts completed 662 household surveys; 140 surveys of local government offices; 96 surveys of CSOs; 107 key informant interviews of local government officials; and 47 CSO key informant interviews in 20 districts.
• Exit Surveys for Magistrates Courts in 10 Districts carried out in Quarter 4 of Year 1 will provide information needed to measure results in Sub-Intermediate Result 2.3.1
• The Conflict Mapping Methodology, approved by USAID in Quarter 4 of Year 1, will provide information needed to measure results in Sub-Intermediate Result 2.3.2.

The results of the parliamentary elections that took place on the first day of EPI’s third year profoundly changed the political landscape in Georgia and with it EPI’s priorities for economic policy reforms. As the priorities of the new government became clear, a number of EPI’s policy initiatives were suspended. EPI’s support to newly elected leaders across key ministries became transitional, focused on securing buy-in for ongoing reforms and identifying new opportunities to bring Georgian policies in line with international best practices.

Many of EPI’s relationships in government organizations endured after the election, and they ultimately served as a foundation on which to build ties with new senior leaders. Through this period, the quality of EPI technical assistance, the strength of ties EPI has forged between public and private stakeholders, and results in targeted value chains continued to demonstrate EPI’s value as a neutral, supportive partner in Georgia’s economic development. EPI was able to immediately engage with new Government of Georgia (GoG) counterparts as early as two months after the elections.

As a result, in the first quarter of Year 3, EPI was able to support USAID as an advisor to the new government. EPI continued to focus on building sustainable structures between the public and private sectors, strengthening economic governance through dialog and engagement. A focus on mechanisms to engage the public and private sectors together has resulted in tangible, far-reaching policy improvements, and it has catalyzed a sea change in the way the public and private sectors interact in meeting Georgia’s toughest economic and policy challenges. Among them, three activities especially stand out:

• EPI facilitated the development of an agrarian land registration strategy and implementation plan, bringing together three ministries in an effective interministerial dialogue.
• EPI supported the Minister of Finance to establish a sustainable public-private working group to simplify and clarify the Tax Code, a long awaited initiative by the Georgian businesses and taxpayers.
• EPI designed a state property management and privatization strategy and implementation framework. With EPI support, GoG management of state property will become more efficient and transparent, and unproductive assets will be freed or repurposed to support growth.

EPI support also resulted in tangible improvements to the economy in target value chains, where new mindsets and business practices promoted by EPI are taking root. Georgian producers and enterprises have seen improved productivity and revenues, and a new focus on quality and high-value markets as keys to economic prosperity has begun to take hold.

Through the end of Year 3, EPI facilitated a total of USD 196.5 million in domestic finance, including investments and commitments, loans, leasing and other financial products. EPI activities supported a total of USD 280 million in exports, almost doubling the target of USD 150 million. Results included 10,459 new jobs in target value chains, of which close to 90% are in M&S sectors. M&S companies have seen average revenue increases of 35%, or USD 266 million across 593 businesses. EPI’s assistance in Year 3 focused on enabling value chain enterprises to take more ownership of their own capacity building. In addition to the various sector associations that are emerging as focal points for policy advocacy and sector strengthening activities, the seeds of other organizations—like the Georgian National Convention Bureau in MICE tourism or a chapter of the Supply Chain Council in transport and logistics (T&L)—have been sown for development in Year 4.

In the agricultural sectors, estimated revenue increases averaged 63%, to USD 61 million, across 8,577 farms and 301 agribusinesses, and 2,068 new hectares are now being cultivated under improved technology or management practices as a result of EPI assistance. EPI supported the formation of 46 informal farmer groups, and EPI advisors effectively linked agricultural training at EPI’s Knowledge Plots to some 2,000 farmers. The resulting improvements to their access to finance and quality inputs have markedly improved overall productivity and quality, and during the Year 3 mandarin and hazelnut harvest periods these groups have already seen commercial benefits. EPI specifically focused on directly linking the informal farmer groups with processors to create the right market incentives for Georgian producers to increase quality. For the first time, farmers have seen tangible, financial benefits, and the changing mindset that is resulting is one of the most significant achievements facilitated by EPI in its agricultural activities.

In the hazelnut sector, these quality improvements resulted in direct commercial linkages for processors with Ferrero, which is now sourcing an increased amount of hazelnuts from Georgia under quality standards that exceed European Union (EU) benchmarks. EPI also focused on connecting processors, packing houses and greenhouse operators to high-value markets in Ukraine, Belarus, and the EU that increased their incentives to improve management of their operations, adoption of standards, such as GlobalGAP by a mandarin grower association and its packing house, and build trust at the sector level. This level of trust has now manifested in an increased interest by agricultural actors to create associations or cooperatives that will be the focus of EPI’s assistance during Year 4 of the project.

EPI continued to facilitate commercial linkages between value chain enterprises and buyers in domestic and export markets. EPI also focused on strengthening the skills of workers through successful workforce development, especially in the apparel and wine tourism value chains, and support to four vocational colleges (VoCs) introduced public-private partnership models into the workforce development space. EPI training built the skills and improved customer service in tourism and hospitality, and more Georgian educators will seek to acquire internationally-recognized certifications for continuous delivery of courses after EPI ends.

In the T&L sector, EPI supported the GoG to improve the competitiveness of the Caucasus Transit Corridor (CTC), and stakeholders across the public and private sectors have ramped up the development of a national trade data exchange. EPI also supported these same public and private stakeholders’ international linkages at the third regional conference on trade and transport facilitation.

Finally, EPI has itself evolved in important ways. True to the values of “Georgians for Georgia,” Deloitte transitioned leadership of the project and its components to Georgian leadership. These professionals will be among the most powerful agents of sustainability that EPI leaves behind, as they take the skills and experience they have gained under EPI and advance their careers in the public and private sectors.

Economic Prosperity Initiative (EPI) project has reached its mid-point. The due diligence activities of conducting over eighty assessments at the project start, followed by targeted action plans, have paid off. EPI was able to identify opportunities for catalytic policy reforms and activities in key leverage points within its value chains and sectors where EPI’s assistance was applied during Year 2 of the project. As a result, several EPI supported policy reforms have been implemented in a broad consultative process, such as financial leasing, risk-based audit, customs warehousing, tax simplification, and e-Governance initiatives, which are already creating a positive impact for the Georgian economy. Similarly, sectors that barely existed when EPI commenced its activities, with very limited knowledge of their potential, such as corrugated paper packaging, heated greenhouse industry, Meetings, Incentives, Congresses, and Exhibitions (MICE) tourism and crop insurance, are truly starting to take off. EPI connected Georgian businesses to the market and helped them adopt the right technology, standards or practices; after which, these businesses saw the potential and made their own investments to seize on these opportunities.

EPI’s targeted approach supported by rigorous impact analysis of all our activities, including policy reforms, enabled the project to made significant progress towards meeting or even exceeding its life of project targets already at this half-way point. EPI was able to achieve this by building partnerships, promoting public private dialogue and facilitating fact-based policy making, as well as by building the capacity of local businesses and employees to adopt international best practices and standards. EPI’s efforts secured USD 109 million in foreign investment and commitments, with an additional pipeline of investment opportunities of USD 559 million. EPI also facilitated USD 155 million in exports, mostly through its efforts in the wine and MICE tourism, hazelnut and apparel sectors, already exceeding its life of project export target of USD 150 million.

The financial leasing reform that EPI implemented through a consultative process with private and public sector stakeholders, the promotion of investments in the heated greenhouse industry, and the launch of a crop insurance industry, resulted overall in a domestic finance increase of USD 125 million since project start. EPI also achieved consistent increases in productivity (40% average productivity increases for all of its value chains), employment (7,050 new jobs) and revenues (annual revenue increase of 27% or USD 11.8 million for agricultural sector, and 61% increase or USD 47 million for manufacturing and services sectors) for all of its value chains.

EPI also ensured that the project activities impact a broad population of farmers and businesses, while building local capacity of Georgian service providers. EPI policy reforms and value chain activities reached 5,666 farmers and 212 agribusinesses, and 588 businesses in the manufacturing and services sectors. EPI also engaged 92 agricultural service providers (in turn reaching another 32,600 farmers and 6,208 agribusinesses), and 42 business service providers (reaching another 877 businesses).

At the same time, EPI created a solid foundation from where additional targeted assistance by EPI can build from during Year 3 of the project. EPI’s world-class apparel industry vocational program will be a key factor for attracting new foreign investment and positioning Georgian apparel factories to expand their exports and create much needed jobs. Further investments in workforce to increase customer service skills and wine knowledge have created ripple effects in the tourism sector to offer higher quality services to incoming floods of tourists. Other trainings, such as large-scale agricultural producer programs created double-digit productivity increases for the agricultural value chains that were previously dismissed as non-commercial sectors as they are dominated by smallholder subsistence farmers. EPI is now working with these farmers to create sustainable commercial linkages between lead farmer groups and higher value markets to generate revenue increases for large communities in Western Georgia.

EPI’s targeted investment promotion function has heightened the Georgian government’s interest to adopt best practices in investment promotion and thereby create sustainability. Not only that, it has also built up a pipeline of actual and committed investments and new investment leads that will bring the needed know-how, market linkages and finance to Georgian productive industries, creating new jobs and opportunities for Georgians, especially in the rural areas.

EPI was able to achieve such results through its “open-source” approach to development. EPI continues to look for opportunities to partner with others who have similar objectives as EPI. Whether it is transitioning its resources to US Treasury team at the Revenue Service, providing training to beneficiaries of USAID New Economic Opportunities (NEO) and USAID Azerbaijan Competitiveness and Trade (ACT) projects or partnering with GIZ to improve the quality of infrastructure, EPI’s top consideration is how to multiply the project impact and effectively use available resources in the country. The focus of EPI activities is first and foremost commercial – the feasibility studies and business plans fully justify any investment that EPI makes in terms of its resources or consulting services. Only when viable, and often tested through small-scale pilots, EPI proceeds with activities, aligning other stakeholders’ objectives and securing and leveraging additional funds and resources to achieve common goals.

In the hazelnut sector, EPI helped USAID establish its first Global Development Alliance (GDA) for the USAID Georgia Mission, leveraging around USD 1.5 million of private funds from Ferrero International to improve the competitiveness of the hazelnut industry. EPI also identified an opportunity to facilitate trade and truly position Georgia closer to its aspiration of becoming a regional trade and cargo hub. Specifically, EPI garnered the support and resources of global shipping lines and port operators, Georgian railways, freight forwarders and Customs to jointly implement a port community system similar to those of the most developed ports, such as Rotterdam and Singapore, to achieve further trade efficiencies for the sector. The new GDA is expected to follow in Year 3.

EPI’s focus remains the same: living up to its principle of “Georgians for Georgia”, building local capacity and ensuring sustainability of all the activities. Starting with trainings and leadership development of its own staff with all the components now fully transitioned to leading Georgian experts, EPI has created a lasting impact for talent development long after EPI ends. EPI’s highly coveted internship program is creating buzz among students as it ensures high job placement rates after only a brief yet challenging internship program with EPI. Over 134 business development service providers, financial advisors, and agricultural service providers are all enhancing their capabilities, with EPI assistance, to provide high value services to its clients. EPI’s focus on women entrepreneurs and fully embedded women-focused community outreach specialists in EPI’s agricultural sector are creating new opportunities and development impact for women that were often excluded from participating in business or other leadership roles.

By now, EPI has fully established itself as the connector, bringing diverse audiences to the table to engage in informed debates and promote participatory and transparent policy-making. While not always easy to quantify its immediate impact, such an eco-system of trust and multi-stakeholder engagement will enable Georgia in the long run to achieve the ultimate goal of EPI – increase competitiveness and bring prosperity for Georgians.

This annual report documents the results and progress made in the Economic Prosperity Initiative (EPI) in Georgia, covering the first year of operations, from September 30, 2010 to September 30, 2011. It starts by documenting EPI’s achievements in Year 1 and progress against high-level results and sub-component benchmarks. A detailed summary of completion of outputs and progress against the Year 1 work plan follows. Annexes illustrate the utilization of resources and cooperation with other U.S. government (USG) agencies, local partners and interns and include a table of the performance indicators from the Year 1 PMP.

During Year 1, EPI built the foundation for its value-chain (VC) driven activities and related business enabling environment and policy reforms. Starting with the first phase of the project (October 2010 – March 2011), EPI focused on identifying sectors and VCs in the economy with the greatest probable development impact by conducting macro-level and enterprise-level data analysis, focus group interviews, and surveys. During the second phase (April – September, 2011), EPI engaged with numerous VC groups and ent erprises to develop specific VC action plans. Similarly, during the first phase and continuously during the second phase, EPI analyzed and then prioritized addressable constraints in the business enabling and pol icy environment, creating and sharing several policy action plans with its key GoG counterparts.

While EPI’s focus during the first year has been in the area of analysis and action plan development, EPI also achieved several early successes across supported VCs, the business enabling environment, and crosscutting areas, some of which are highlighted below:

Greenhouse and Cold Storage Investment

• Through its investment promotion activities, EPI stimulated demand and interest among investors resulting in investments and pl anned commitments of USD 21.04 million in greenhouse operations and USD 21 million in cold storage facilities. EPI was instrumental in expediting the decisions by investors to examine Georgian greenhouses and cold storage solutions, instead of other investment plans under consideration. Recognizing that the returns on these investments are relatively risky given the rudimentary knowledge of greenhouse and c old storage facility management in Georgia, EPI is providing targeted technical assistance, such as technology,
  managerial practices and modern agricultural techniques, so that greenhouse and cold storage operators sustain these investments over the long-term period and achieve desired increases in revenues and exports.

Apparel, Wine and MICE Tourism Sectors

• EPI’s strategic activities in the apparel, wine and MICE tourism sectors have catalyzed these areas into focus sectors by public and private sector in Georgia.
  • EPI’s assistance to the apparel industry has already resulted in increased sales for local apparel companies to foreign markets and emergence of first foreign investors to avail their resources, technology, managerial practices and market linkages to Georgian apparel sector.
  • An EPI-funded study tour to the U.S. (New York State and California) for wine and tourism private sector stakeholders resulted in an emergence of a new partnership between the Georgian Wine Association (GWA) and Georgian Incoming Tour Operator Association (GITOA) to share resources and jointly promote development of Georgian wine tourism. As EPI enters Year 2, it will work closely with both associations, who recently entered into a Memorandum of Understanding (MoU) to confirm their commitment to focus on wine tourism
    initiatives.
  • EPI’s analysis of the MICE tourism VC received attention by multiple stakeholders in the tourism and hos pitality industry to start developing and promoting Georgian MICE tourism products, both in the public and private sector. The term “MICE tourism” is used for the first time in business and media communications, differentiating this market segment.

VAT Reforms in the Apparel and Transport and Logistics VCs

• EPI successfully advocated a business-friendly solution for customs treatment of wastage left over
  from imported textiles used in the manufacture of apparel in Georgia, freeing wastage materials from being subject to import VAT. This removes an unnecessary burden from Georgian production. EPI successfully advocated a tax code amendment removing Georgian VAT over international cargo transportation and related services. This brings Georgia in line with international practice.

Implementation of Generalized System of Preferences (GSP+) for Turkish Materials Used in Georgian Manufacturing

• EPI helped the Ministry of Economy and Sustainable Development (MoESD) establish certification rules for bilateral accumulation of origin, allowing goods made jointly in Georgia and Turkey to benefit from the GSP+ program for duty free entry into the European Union (EU).

Best Practices in Business Process Reengineering (BPR)

• EPI conducted a comprehensive BPR assessment in preparation for an intellectual property rights
  (IPR) e-filing system and delivered trainings on BPR methodology to the Ministry of Justice’s (MoJ) Data Exchange Agency (DEA) and other relevant government offices on BPR. This is building capacity of the GoG to plan and i mplement additional egovernment projects.

Customs Warehouse Regulations

• The Parliament of Georgia passed legislation in the fall of 2011, which streamlines customs supervision over customs warehouses providing temporary storage of imported goods. Facilitated by EPI recommendations, the new law provisions allow for simplified technical and s ecurity requirements for customs warehouses, creating a favorable logistics environment for foreign goods.

Investment Promotion Network

• By establishing the Georgia Investment Promotion Partnership (GIPP), EPI has brought together public and private sector players to coordinate to achieve their common goal of promoting investment in Georgia among targeted sectors. EPI is increasing overall capacity of the Georgian National Investment Agency (GNIA) and other government agencies engaged in investment promotion, while also creating the foundation to achieve tangible results in attracting investments into EPI VC sectors, starting with the apparel sector.

Leasing Reform

• The GoG has approved and submitted to Parliament proposed amendments to leasing regulation, which resulted from EPI’s technical guidance among a broad group of public and private sector stakeholders.

The Tanzania SERA Project will assist both the Government of the Republic of Tanzania (GoT) and the private sector in enabling a broad‐based, sustainable transformation of the agricultural sector through policy reform.  The project will focus on current policy and the regulatory environment for agriculture—from the transactional “hot” topics to the needed strategic foundational changes— building capacity of local institutions to lead informed dialogue on policy and regulatory issues in the agriculture sector and advocate for the necessary changes.

The vision for this project is twofold: to improve the policy and regulatory environment for agriculture growth and to build a group of public sector institutions, advocacy organizations, and individuals capable of performing rigorous policy analysis in support of evidence‐based advocacy and policy reform. At the conclusion of the project, we expect USAID will leave behind sustainable capacity within the GoT to initiate, develop, and utilize evidence‐based research in policy decisions and implementation, empowering local research and private sector advocacy groups to more effectively use analysis and strategic communications to lobby for change, and building national partnerships that create consensus around agriculture policy and monitor the impacts of policy. The SERA project will focus all activities around priorities identified in collaboration with the Southern Agriculture Growth Corridor of Tanzania (SAGCOT) initiative.

Quarterly Highlights

The Feed the Future Initiative (FtF) in Tanzania began in late May with an Implementing Partners meeting in Kilombero that was attended by the SERA COP, Don Mitchell. The entire Tanzania SERA team was brought together in late June for a work planning meeting and began working full time in July. The Tanzania SERA team included, Don Mitchell as COP, Alex Mkindi as Senior Policy Advisor, Jack Meena as Communications Specialist, and Mary Kabatanga as Office Manager. Implementing Partner Diligent was represented at the work planning meeting by Andy Temu and Rose Mushi. Booz Allen Headquarters staff, Nate Kline, participated in the Implementing Partners meeting and Emily Friedberg participated in the work planning meeting. Violane Konar‐Leacy from Booz Allen HQ became the program manager in September. Jack Meena resigned in September and a replacement is being recruited.

Work Plan for October 2011 – September 2012 Completed – The work plan for the fiscal year beginning October 1, 2011 was completed and submitted to USAID in September. The work plan details work in three areas, policy analysis and reform, communications, and capacity building. The policy analysis and reform identified seven policy areas of focus to be taken up over the next several years and four of these are to be taken up in the first fiscal year. The first year activities will focus on food security, trade policy, credit and inputs. Substantial work has been completed on all of these focus topics, but much remains to be done before the analytical case can be effectively made to the GoT for policy reform. The remaining topics (land policy, business environment, improving markets, and nutrition) will be taken up as resources are available and opportunities to engage the GoT arise. The SERA team will familiarize themselves with the issues in these focus topics in the interim. The communications strategy was being developed by local consultant Jack Meena with support from the SERA team, but Jack resigned in mid‐September. The activity will be taken up again in October when an international expert will work with the SERA team and identify a local candidate to develop and implement the communications strategy for SERA and work with the FtF and SAGCOT communications team. The capacity building activity has been concentrated on improving research capacity, but will broaden to include other topics once the capacity building expert joins the team in January.

Export Ban Analysis – The GoT announced an export ban on food crops in early July and he SERA team immediately began to monitor maize prices in the Dar es Salaam Tandale maize market to determine the impact on wholesale prices. This led to two important conclusions, first that maize prices declined temporarily but quickly returned to the levels prior to the export ban and secondly, that the weekly data provided by the Ministry of Agriculture did not accurately reflect these changes. This was followed by a trip to Arusha by Don Mitchell and Alex Mkindi from August 3‐5 to interview farmers, traders, processors and exporters on the effects of the export ban and these interviews showed that the impact of the ban was much larger than in the Dar market, with farm‐gate maize prices falling by approximately 25% and not recovering quickly as was the case in Dar es Salaam. The interviews also showed that the export ban did not stop exports (but it may have slowed them) and resulted in illegal exports and bribing of government officials and police. This information contributed to a better understanding of the food security issue and the realization that the export ban was ineffective, but used primarily because it was the only policy instrument available to government. The Back‐to‐Office report is attached as Annex 1 and details the information learned and tentative policy conclusions. The trip also resulted in useful information and improved understanding on the seed and agri‐chemical markets.

Food Security – In response to the knowledge gained from the monitoring of maize prices in Dar es Salaam and interviews with stakeholders in Arusha, a one‐page proposal for a Comprehensive Food Security Program was prepared by the COP (Annex 2) as a way to engage the GoT on the need for an alternative to the export ban. This was discussed by the senior management of FtF with P.S. Lyimo in the Prime Minister’s Office and met with a favourable response and a request for a more complete Concept Note. A Draft Concept Note was prepared by the SERA team and discussed with key partners including the World Bank and research group REPOA. Comments were incorporated and a second draft was prepared and is attached as Annex 3. The SERA team is now prepared to work with REPOA to complete a program of work to evaluate the impact of existing polices, estimate the potential market for maize exports in the region, evaluate the food security need and capacity for delivering, and propose alternative policies to deal with food security.

Data Quality Analysis – The SERA team undertook several analyses to check maize price and quantity data to determine its usefulness in evaluating the food security need and current situation. The first check was to compare maize prices obtained from traders in the Dar es Salaam Tandale market with prices collected by the Ministry of Agriculture. The prices obtained from the GoT showed large variability and no clear trend while the maize price data collected from Tandale traders showed less variability, a clear trend, and price movements that appear more consistent with the impacts of the export ban. The second analysis was to compare maize consumption data from the GoT with estimates derived from household surveys and simulation exercises based on macroeconomic and demographic data. Based on this analysis, maize consumption data from the GoT appears to substantially underestimate actual consumption (and by implication production since the balance sheet approach is used to estimate consumption from production, stocks and trade). Household consumption surveys and simulated estimates suggest that consumption and production probably grew at 4% per annum compared to the 1.4% per annum rate estimated by the GoT. The final check was to compare maize wholesale prices obtained from a maize processor in Arusha with price data obtained from the East Africa Grains Council and these two sources were very similar and appear reliable. The analysis of maize prices and consumption and data is included as Annex 4.

Secured Transactions Financing Reform – Improving access to credit is a high priority for economic growth and the commercialization of the agricultural sector, and the Secured Transaction activity is directed at improving the use of moveable assets, such as machinery or vehicles, as collateral. The Secured Transactions activity, when fully implemented, will allow lenders to register their claim to collateral used to secure loans. The activity has three pillars, the legislation that allows the secured financing to operate within the larger legal framework, the registry that will be a secure record of lenders claims against collateral, and capacity building to increase awareness and encourage use of Secured Transaction Financing. The activity was started under the umbrella activity BizClir funded by USAID and implemented by Booz Allen Hamilton in 2010 but was halted in early 2011. The primary consultant, Yair Baranes, who did the initial work on the activity, was brought back from September 2‐19, under SERA to gauge interest in continuing the work and to further explore the parallel activity being undertaken in Zanzibar. The conclusion of the consultant’s visit was that there is substantial interest among the working group formed in the Bank of Tanzania to restart the work and that the separate system being developed for Zanzibar has not progressed and will not be operational in the near term. It was decided by the consultant and SERA team to continue the work on the activity without including Zanzibar. However, it would still be possible for Zanzibar to join the system being developed for the mainland if they chose to at a later stage. Following the departure of the consultant, a letter was drafted by the SERA team and consultant to the Governor of the Bank of Tanzania and sent under the name of the Mission Director of USAID in Tanzania requesting a meeting to introduce the Secured Transactions Financing Reform and answer questions about its benefit and operation. The SERA team is waiting for a response from the Governor of the Bank of Tanzania. The consultant’s trip report is attached as Annex 5.

Seed Policy – The work on reforming seed policy has mostly focused on familiarization with issues by attending a stakeholder’s workshop in June and meeting with seed companies and experts. A value chain analysis is being considered and a draft TOR has been prepared for discussions with the Seed Unit of the Ministry of Agriculture. A meeting with the P.S. Ministry of Agriculture is being requested and will provide an opportunity to assess the GoT’s interest in seed policy reform.

Developing Partnerships – The SERA team has met with a number of groups to build relationships and partnerships to analyze agricultural policies and advocate for policy changes. These groups include ACT, agra‐alliance, East Africa Grains Council, the Policy Working Group, REPOA, and World Bank. These organizations have similar policy objectives to SERA and provide leverage to the advocacy for policy reform. The SERA team is prepared to work with all of these groups to further efforts for policy reform and working relationships have been established with several. The Policy Working Group is focusing on broad agricultural policy reform, but initially it seeks to engage the GoT on the export ban and the Cereals and Other Produce Board. SERA is supporting this effort with analysis and is prepared to provide limited resources to accomplish critical elements to further the policy reform effort. SERA was also requested by the GoT to work with REPOA to develop the Concept Note on Food Security and is doing so. SERA is also working with other implementing partners of FtF to leverage resources and coordinate activities. These activities include co‐sponsoring a policy research seminar series with iAgra at Sokoine University, and collaborating with NAFAKA on a regional study of the potential demand for maize in East Africa. SERA is also monitoring efforts by the Market Based Solutions (MBS) implementing partner of FtF to support passage and implementation of legislations to establish standards and mandates on food fortification to improve nutrition.

Policy Seminar Series at Sokoine University – As part of its capacity building activity, SERA intends to co‐sponsoring a research seminar series at Sokoine University with iAgra which is the FtF implementing partner focusing on education and research. The SERA COP visited Sokoine University on September 23 to meet with David Kraybill the COP of iAgra and several faculty members of the department of agricultural economics to discuss the seminar series. Don Mitchell and David Kraybill also met with the Director of Research and Post‐Graduate Studies, Professor Muhikambele, to inform him of the interest in sponsoring a research seminar series and ask for his support. Professor Muhikambele welcomed the activity and the follow up activity will be to formally request University support and then meet with interested faculty to discuss launching the seminar series. In addition to the seminar series SERA is also interested in sponsoring interns in agricultural policy and other areas as part of its capacity building activity and a promising candidate was identified.

Office Space and Operations – The SERA team was temporarily located in the Coco Plaza Building from July to September in offices leased from TechnoServe while negotiating for permanent space in the Peninsula Building immediately adjacent. Mary Kabatanga, the office manager of SERA, was able to negotiate a favourable lease rate and additional services including secure parking and the SERA team vacated their temporary offices at the end of September and moved to the new offices. The budget for SERA is limited and the team is struggling to fit the large work agenda into the budget space by co‐sponsor activities with other FtF implementing partners and other groups and organizations.

The SERA project has two main objectives: i) to improve agricultural policies and ii) to build the capacity of individuals and organizations to undertake policy research and advocate for policy change. During the January – March 2012 quarter, the primary focus of efforts to improve agricultural policies were directed at understanding the impacts of the export ban and at identifying alternative policies to deal with food security. In order to accomplish this, three research teams from highly respected organizations travelled to Tanzania in March to collaborate on methodology, capture data, and begin analysis. Their preliminary reports are scheduled to be presented to the GoT in late‐May and a policy options paper will be prepared for the GoT in June. Other policy activities included examining the appropriate role for the COPB and subsequent discussions with MAFC officials; meeting with seed industry stakeholders to develop the case for reduced taxes and duties on seeds and seed packaging; and working with the BOT and MF to develop the collateral registry system. The SERA team also started initial efforts to analyse rice policy in Zanzibar and to better understand the implications for food security in Zanzibar.

In support of SERA’s second main objective, to build capacity of individuals and organizations to undertake policy research and advocate for policy change, SERA focused its activities on continuing efforts to launch the Policy Seminar Series at Sokoine University, and at identifying suitable organizations to begin developing capacity building programs for them. In addition to these activities, our advocacy and communications activities included conducting a stakeholder survey of approximately 100 individuals and institutions involved in the agricultural sector to better understand client perceptions and interests, and initial planning of a SERA website with guidance from FtF Tanzania. As a way of leveraging resources and extending the impact of our expertise, SERA collaborated with other FtF partners and provided leadership in policy analysis.