The document explores alternative investment options for development in the Horn of Africa given recurring droughts. It summarizes that pastoralism remains important but is declining, and discusses expanding irrigated and non-irrigated crop farming as alternatives. Cross-cutting investments like education, infrastructure, finance, and improved drought management could benefit multiple livelihoods. High returns may come from education to improve opportunities, and strategic infrastructure like roads, while finance needs better tailoring to local contexts. Governance is also a cross-cutting issue.

1. FROM DROUGHT TO DEVELOPMENT IN THE
HORN OF AFRICA: AN EXPLORATION INTO
ALTERNATIVE INVESTMENT OPTIONS
Derek Headey, Alemayehu Seyoum Taffesse, Liang You
International Food Policy Research Institute (IFPRI)
1

2. Outline
1. Background
2. Pastoralism
3. Crop farming (irrigated & non-irrigated), natural
products
4. Cross-cutting investments (education, training, finance
infrastructure, urbanization and migration, drought
management, governance)
5. Summing up

3. 1. Background
The Horn has witnessed recurring and devastating
droughts (and floods), seemingly with more
frequency
Perceptions that these regions are on an
unsustainable development path – a nexus of
climate change, resource pressures and conflict

4. Figure 1. A map of estimated food insecurity levels in the current drought

5. Rough estimates of the number of people affected by
droughts in the Horn of Africa: 1970-2010
14000000
Number of people "affected" by drought
12000000
Ethiopia Kenya Somalia
10000000
8000000
6000000
4000000
2000000
0
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010

6. 1. Background
 This context has produced some very polemical views:
those have favor sedentarization, those who want to
see pastoralist livelihoods protected.
 Can either view draw on a strong evidence base?
 Hence IFPRI was asked by USAID to do a stocktaking of
what we know and don’t know about these
economies, with a regional perspective
 Key questions: To what extent is pastoralism
sustainable? What role should other sectors play? What
is the right balance between different investments?

7. Figure 5. Transforming the
Arid and Semi-Arad
Lowlands of the Horn of
Africa
Commercialization of pastoralist
livestock sector?

8. 1. Background
• Some limitations & strengths of this study…
1. This is very much a desk study: we rely on existing
evidence, which is often somewhat weak, and some
new estimates of profitable irrigation potential
2. We chiefly focus on “what”/”where” questions more
than “how” questions (literature stronger on how)
3. Because of 1 & 2 the study falls short of being a
rigorous cost-benefit appraisal of alternatives,
though we work with costs & benefits in mind
4. Some value-added, we think, because there is very
little macro (big picture) work on ASALs

9. 2. Pastoralism:
characteristics, constraints, pote
ntial

10. 2. Pastoralism
• Livelihoods in ASALs still dominated by pastoralism
• In Ethiopia, for example, a recent USAID-DRMFSS
Atlas of Ethiopian livelihoods shows that it is the
major source of cash income, and even dominates crop
income, in all lowlands, and even some highlands
• This is not surprising: in the ASAL landscape where
rainfall patterns vary across an abundance of land,
mobile livestock is a sector of comparative advantage
• Pastoralism is also virtually the sole source of
Ethiopian livestock exports, and faces strong demand

13. 2. Pastoralism
• Despite its importance, there is a declining share of
pastoralism in employment and income over time
• Main problem is that the shift out of pastoralism is more
related to push factors than pull factors, particularly
drought (Devereux 2006 for Somali region; PARIMA Project for Borena and
Northern Kenya).
• In essence there is a herd size threshold, below which
recovery is very difficult.
• Hence pastoralists try to maximize pre-drought herd
size to ensure that post-drought herd size remains above
this threshold; there is no tragedy of the commons

14. Figure 4. Herd size threshold effects that push households out of
pastoralism
Source: Lybert et al. (2004).

15. Figure 3. Cattle cycle and median herd size
Source: Lybbert et al. (2004).

16. 2. Pastoralism
• This view of the world is in contrast to older “carry
capacity” notions that cited overpopulation issues
• A dominant view now is that the increasing
frequency of emergencies is as much related to
mobility restrictions as it is to overpopulation
(Flintan 2011; ILRI 2010): cropland expansion,
fencing, border controls, pests, resettlement policies
• In our view, this remains an unsettled question:
mobility restrictions could partly be a result of
overpopulation; population growth rates very high
(2-3%) & indefinite pop. growth is not sustainable.

17. 2. Pastoralism
• Within pastoralism there is also a lot of inequality:
some HHS only a dozen TLUs, others have hundreds
• The larger pastoralists engage with markets/exports
much more (Catley and Aklilu 2010) & choose to
diversify incomes out of choice rather than necessity
• They earn substantial income from exports to Middle
East and to highlands (even recently)
• Some anecdotal evidence that inequality is increasing
• Moreover, not much evidence that commercialization
has benefited poorer pastoralists

18. 2. Pastoralism
• So what do these facts imply about pastoralism?
1. Pastoralism is too big to fail – in the medium term it is
impossible to create enough viable livelihoods in other
sectors & livestock has strong potential
2. Land fragmentation & carrying capacity - Little et al.
(2011) persuasively argue that current policies are not
well informed by rangeland sciences; but indefinite
population growth is not an option either
3. Understanding commercialization: constraints,
engagement with the poor (there is a literature)
4. Improving drought management: destocking,
restocking & interactions with commercialization

19. 3. Non-pastoralist livelihoods
• The share of pastoralism in ASAL incomes is thought
to have been declining for some time
• Recent snapshots also tell us that there is variation
across space, and significant populations are
engaged in sedentary farming (irrigated and non-
irrigated) and firewood/charcoal production,
smaller shares in trade, various types of labor,
shopkeeping, etc.

21. 3. Non-pastoralist livelihoods
• Do sedentary occupations offered more lucrative &
resilient livelihoods, but do they?
• The largest non-pastoralist livelihoods are crop-farming,
following by sale of charcoal, firewood, gum resin
• But they earn less than average than livestock; collecting
natural products earns less than begging!
• Crop-farming earns about the same as livestock, though
this masks high returns for irrigated farming, and
substantially lower returns for non-irrigated farming: see
evidence from Somali region (Devereux 2006), Southern
Ethiopia and Northern Kenya (PARIMA; USAID)

22. Table 4. Average income by livelihood category, and by highest and lowest returns
Source: Devereux (2006).
Activity types Birr/ % HHs Most & least lucrative Birr/
month engageda activities month
Most lucrative activities
Trading 615 3.8% 1. Contraband trader 1,607
Rents 502 <2% 2. Construction worker 1,307
Labor 447 2.4% 3. Carpentry/metal-worker 873
Services 300 10% 4. Khat trader 868
Food /drink proc. 244 8% 5. Selling meat 853
Livestock 216 69.9% Least lucrative activities
Crop farming 210 50-55% 60. Charcoal seller 100
Small industry 182 6.3% 61. Firewood collector 88
Begging 123 <2% 62. Basket/mat maker 88
Natural products 117 25-30% 63. Selling eggs 79
64. Beekeeper 77

23. 3. Non-pastoralist livelihoods
• Picture in northern Kenya is quite different: somewhat
more trade, labor, government employment, and
remittances; households having a wage earner or small
business also seem to be more resilient
Table 5. Sources of income by research site, Northern Kenya, 2000-2002
Source: PARIMA project. Notes: Pastoral income includes livestock sales and sales of livestock products.
Site Pastoral Trade & Wage & Net Crops
income business salary remittances
Logologo 30% 13% 43% 13% 0%
N’gambo 43% 7% 30% 8% 13%
Dirib Gumbo 61% 1% 16% 11% 10%
Suguta Marmar 74% 18% 10% 7% 0%
North Horr 73% 3% 13% 11% 0%
Kargi 81% 3% 9% 7% 0%

24. 3. Non-pastoralist livelihoods
• Rainfed farming in ASALs is also not a more resilient
livelihood because it lacks mobility of pastoralism
• Finally, urban occupations pay well, and are generally
more resilient (but how do you get them?)
• So for settled farming to be an improvement
irrigation is the main option

25. 3. Non-pastoralist livelihoods
• He we look back and look forward.
• Looking back, what are the strengths and weaknesses
of existing schemes.
• Several studies from Ethiopia and Kenya show that
irrigated farmers are better off than pastoralists, on
average.
• However, there is variation according to market
access (Devereux 2006)

26. 3. Non-pastoralist livelihoods
• Behnke et al. (2010) look at irrigation schemes in Afar,
since these are the most mature in the region:
1. State cotton schemes earned losses in half the years;
2. State sugar plantation made big profits, but more
through value addition; raw sugar cane earned the
same as pastoralism.
3. Afar cooperative scheme earned same as pastoralism
• Flintan (2011) & others also cite negatives: prosposi,
reduced access to water & feed for pastoralists,
machine failure, silting

27. 3. Non-pastoralist livelihoods
• Looking forward, we apply a recent GIS-based
“profitable irrigation potential” model for small and
large irrigation to ASALs (You et al, forthcoming in Food
Policy): areas below 1500m in HOA
• Irrigation profitability is a function of groundwater
supply, optimal crop mix, crop prices, market access
(travel times) and assumed irrigation costs
• Large schemes are also a function of elevation, with
only lower altitude areas regarded as profitable
• Note that this is only addition irrigable area, not
existing; also, these estimates might be quite optimistic

28. Figure 6. A map of
profitable irrigable
areas by lowland and
highlands of eastern
Africa
Source: Authors construction from data and methods described in Liang et al. (forthcoming).
Notes: Lowlands (highlands) are defined as areas below (above) 1500 meters in altitude. This is a standard definition in Ethiopia, but may perhaps be too high in Kenya. IRR refers to internal rate of

29. Table 6. Profitably irrigable area in the arid and semi-arid lowlands of eastern African countriesa
Source: Authors’ estimates based on the data and methods described in Liang et al. (forthcoming).
Cost Countries Profitable Rural ASAL Percentage of 6-person Percentage of 6-person
scenarios c rural HHs that could
increase in population in rural HHs that could
irrigated ASAL 2020 work 1 irrigated work 2 irrigated
areas (Ha)b (millions)d hectaree hectarese
Low Ethiopia 217,060 22.7 5.7% 2.9%
cost Kenya 291,486 19.7 8.9% 4.4%
Djibouti 7 0.2 0.0% 0.0%
Somalia 14,297 7.3 1.2% 0.6%
Total 522,850 49.9 6.3% 3.1%
Medium Ethiopia 159,568 23 4.2% 2.1%
cost Kenya 152,869 20 cost 4.7% 2.3%
Djibouti 7 0 0.0% 0.0%
Somalia 8,245 7 0.7% 0.3%
Total 320,689 50 3.9% 1.9%
High Ethiopia 156,030 23 4.1% 2.1%
cost Kenya 108,762 20 3.3% 1.7%
Djibouti 0 0 0.0% 0.0%
Somalia 1,293 7 0.1% 0.1%
Total 266,085 50 3.2% 1.6%

30. 4. Cross-cutting investments
• Some investments could clearly benefit multiple
livelihoods/sector
• We argue that the highest returns are probably in
education, followed by roads, and finance. Why?
• Education outcomes are appallingly low, even though it
yields multiple benefits: increased opportunities for
urbanization, migration, skilled employment; improved
governance; reduced fertility rates; female
empowerment
• The question is how best to deliver these services:
boarding schools, mobile schools, distance learning, etc

31. Figure 7. A map of literacy status in Ethiopia by pastoralist and non-pastoralist woredas

32. 4. Cross-cutting investments
• Infrastructure is also important, but in low population
density environments infrastructure investments need
to be strategic.
• New roads have been transformative in Borena,
Garissa, and other parts of the region
• But roads in lowland areas have sometimes been
criticized for low rate of usage (low benefit-cost ratios)
• Also, there is an argument for more strategic use of
space in general; e.g. clustering road, water and feed
resources, markets, government services

33. 4. Cross-cutting investments
• Issues of finance are also important.
• Not a great deal of evidence, but many argue that
much more tailoring is needed to local livelihoods
and culture
• Also, not clear that microfinance will lead to
diversification unless additional training and
extension is offered.
• Linking to weather insurance is one avenue being
explored for pastoralists, but not obvious that this
will address the major constraints

34. 4. Cross-cutting investments
• Drought management, emergency relief and safety
nets are also important because there is an increase
overlap with development initiatives (food aid critique)
• It appears that emergency destocking has been quite
successful when implemented well; but this suggests
that better access to market is the deeper constraint
that needs to be addressed in the long term
• Productive safety nets also widely cited, but so far the
productive component has not worked well in ASALs
• So what makes for a well targeted & productive safety
net program in ASALs is still an open question

35. 4. Cross-cutting investments
• Finally, governance is a cross-cutting issue
• Unique livelihoods and cultural divides mean that
bottom up policymaking is essential, but elite capture
also needs to be minimized
• Conflict resolution is also essential, both local,
national and regional
• And how can pastoralist issues get better traction at
the highest levels, on issues like land fragmentation,
trade, and so on?

36. 5. Summing up
• An economic interpretation of the evidence suggests
that a balance development strategy is needed.
• Pastoralism has significant advantages, but we need
to work at downsizing risks and transition some
pastoralists into other sectors
• Sedentary farming is constrained by natural
resources, by profitability and by implementation
issues; only one pillar, not a central one
• Cross-cutting investments also offer high returns,
though implementation issues are obviously key

37. 5. Summing up
• Finally, we should revisit the evidence base:
1. We need some transition out of pastoralism, but
how much? (environmental sustainability meets
economic viability; more macro modeling)
2. How can drought management and development
strategies be made more coherent & compatible?
3. What are the best implementation strategies for
ASAL investments?
There is an evidence base to inform all of these
questions, but in relative terms it is certainly quite weak