Consultancy assignment for a sector selection and market systems analysis in Lebanon

1. BACKGROUND 

Lebanon has been suffering from a severe financial and economic crisis with long-lasting effects on its economy and its people. With the drastic devaluation of the currency, prices of imported items have risen sharply, and households are now increasingly struggling to cover food needs. The combined effects of the crises have resulted in unprecedented levels of unemployment and pushed both the Lebanese population and the approximately 1.5 million Syrian refugees further into poverty. The Lebanese agriculture sector remains one of few sectors where both Syrian refugees and vulnerable Lebanese host communities can legally find employment as well as vulnerable Lebanese host communities but has been particularly hard-hit by the ongoing crises.

The Swedish International Development Agency (Sida) is therefore funding a project aimed at ‘Promoting Decent Jobs for Lebanese host communities and Syrian refugees’ that will be implemented by the International Labour Organization (ILO). The project will focus on the agriculture and agri-food sector as a key sector for the livelihoods of both Lebanese and Syrian vulnerable population groups and in particular women of both communities and aim to develop specific agricultural and agri-food value chains with potential for decent job creation that will benefit both groups.

The project will make use of the ILO’s Approach to Inclusive Market Systems (AIMS) to safeguard jobs and livelihoods of vulnerable Lebanese and Syrian communities threatened by the crises and encourage decent job creation for both groups in sectors with potential. To that end, the project will use the market systems development approach to address key sectoral constraints to decent job creation sustainably, in combination with more direct interventions to strengthen capacities of vulnerable Lebanese and Syrian communities and safeguard decent work conditions.

The project seeks to achieve four key outcomes with interlinked components:

1.         Enhanced Productivity and Working Conditions in the Horticulture Sector: The project supports farmers in adopting modern greenhouses and sustainable farming practices, improving productivity, crop quality, and working conditions for both Lebanese and Syrian workers.

2.         Upgraded Market Opportunities for Farmers and Agri-Businesses: By identifying and capitalizing on local and international market opportunities, the project helps farmers and agri-businesses in selected sectors to access upgraded markets, fostering inclusive growth.

3.         Adoption of Solar Energy Systems for Sustainable Electricity Generation: To counter the energy crisis, the project promotes solar energy systems for farmers, reducing costs, ensuring stable electricity supply, and leading to environmental benefits.

4.         Capacity Building for Efficient Resource Management: The project empowers farmers and small agri-businesses with essential business management skills, enhancing their ability to plan, calculate profits, and make informed decisions.

Component 2 of the project will focus on using its ‘Approach to Inclusive Market Systems (AIMS)’ to identify sectors and value chains with potential for inclusive growth and job creation and design tailor-made strategies to develop these sectors in a way that benefits both Lebanese host communities and Syrian refugees. This component will place a particular focus on sector and value chains where potential to substitute formerly imported products through local production exits.

The formerly strong Lebanese currency had made imports of goods and services comparatively cheap and hence, up to recently, about 80% of its food items in Lebanon were imported. The recent crises and related devaluation of the local currency have opened up opportunities for local producers as Lebanese products have become more competitive, both on the local and on the international market. As prices of imported items have increased drastically, opportunities exist to replace these imports with more affordable locally produced items. Import substitution opportunity exist for a wide range of previously imported items that includes everything from imported vegetables and fruits, processed agri-food items such as tomato paste, fruit juices and sauces, up to more complex items like shampoos or detergents.

Under this component, the ILO would use its sector selection and ‘value chain development for decent work’ methodology to identify specific opportunities for farmers and agri-food producers on the local, regional and international market and develop tailor-made strategies to help local actors seize these opportunities for inclusive growth and decent job creation. Depending on the specific opportunities identified on the local or international market, the ILO will use its value chain development methodology to design tailor-made and holistic approaches to promote Lebanese products locally and on the international market. This will focus specifically on small producers that are often disconnected from the end market and lack access to the information and capital required to recognize and seize these opportunities.

What is more, support measures will likely need to go beyond direct support to producers but target the whole value chain for inclusive growth and decent job creation. Depending on the situation and the problems identified during the analysis, interventions can focus for instance on:

• Improving access to relevant information such as information about market trends and preferences of end clients for small enterprises and entrepreneurs in the value chain in order to help them exploit their full potential and increase sales and income
• Improving cooperation between different actors along the value chain in order to decrease transaction costs and increase the competitiveness of the value chain for accelerated growth and employment creation
• Developing business development services (BDS) adapted to specific needs of small entrepreneurs in the value chain to help small enterprises develop their full potential, grow and create decent employment
• Strengthening access to necessary inputs of small entrepreneurs in the chain, such as for instance affordable and high-quality seeds and fertilizers in the agricultural sector, in order to increase productivity in the value chain
• Building the business case for the introduction of new innovative technology and/or production practices that would increase productivity while bringing environmental or social benefits
• Promoting cooperatives and associations of small-scale entrepreneurs in order to increase their bargaining power vis-à-vis big buyers and players in the value chain, and ultimately their income
• Improving working conditions and tackling decent work deficits along the value chain and in particular for vulnerable groups

2. OVERALL OBJECTIVE

The overall objective of this assignment is to support the ILO project team in conducting a sector selection exercise as well as a market systems analysis of the selected sector or value chain, as outlined in the ILO’s value chain development for decent work guide, and the ILO-UNHCR Guide to market-based livelihood interventions for refugees and host communities.

The assignment would hence consist of two distinctive steps:

1. Selection of sectors and value chains with potential for inclusive growth

For this first step, the consultant is expected to conduct a rapid assessment of different sectors and value chains with potential and relevance for both Lebanese and Syrian population groups to identify products and value chains that hold the most potential based on clear criteria and ranking matrix.

The rigorous rating and ranking exercise will ensure that selected sectors and value chains

1. demonstrate a clear potential for inclusive growth and job creation through either import substitution or opportunities for export,
2. hold specific relevance for both Lebanese host communities and Syrian refugees, and in particular women, and
3. show high feasibility for interventions, taking into account the current political and economic environment as well as other ongoing donor-funded projects and interventions.

2. Complete market systems analysis of the selected sector or value chain

A subsequent market systems analysis of the selected value chain and the surrounding market system would then identify new opportunities and specific underlying constraints that currently hinder value chain actors from exploiting their full potential. Interventions would aim to develop the market system in a holistic manner and focus on strengthening the whole value chain, from the producer to the end market, to encourage inclusive growth and decent job creation and improve working conditions along the value chain for the benefit of both Lebanese host communities and Syrian refugees, contributing also to the social cohesion between these.

Information collected and analysed shall include but is not limited to:

1. Trends and opportunities in the subsector (potential to export, unsatisfied demand for products, etc.)
2. Key private sector actors in those sub-sectors and the links and relationships between them
3. Challenges, bottlenecks and constraints in the subsector (low productivity, lack of cooperation, lack of quality business development services, etc.) and their root causes
4. Existing business development services and other supporting functions relevant to the subsectors
5. Relevant rules, regulations and standards that influence the functioning or the potential of the subsector
6. Situation, opportunities and challenges for refugees and hosting communities working in those subsectors
7. Decent work deficits as well as environmental concerns in the value chain

Throughout the analysis, specific attention shall be given to issues related to gender equality as well as environmental concerns, using the ILO Guide to gender-sensitive approach to value chain development and the ILO Guide to environmental sustainability in value chain and market systems development. The consultant shall furthermore closely liaise with the ILO consultant conducting the peace and conflict analysis to ensure conflict sensitivity.

3. SCOPE OF WORK

The consultant will conduct assessments using the methodology outlined in various ILO guides cited above, and with support and strong involvement of the ILO Project team.

For the first step of this assignment focused on the identification of a sector or value chain with high potential for inclusive growth, the consultant is expected to lead the rapid market assessment and conduct background research as well as field research in Lebanon as needed. The consultant will receive remote support and guidance for the ILO Project team throughout the process. This first step should result in a clear idea of the potential, relevance and feasibility of various sectors and value chains, and a clear recommendation on the sector or value chain deemed to hold the highest potential for refugee-inclusive growth and job creation.

For the second step of this assignment focused on a thorough and complete market systems analysis of the selected sector or value chain, the consultant is expected to support the ILO project team as needed for the completion of this exercise. This will include conducting background research and field research independently or together with the ILO project team as needed, advising the ILO project team on matters related to the overall socio-economic and political context in Lebanon as well as on possible interview partners and relevant stakeholders, supporting logistical arrangements and setting-up interviews and visits, as well as actively participating in stakeholder validation workshops and meetings.

4. EXPECTED OUTPUT OF THE ASSIGNMENT

With the above-mentioned activities in mind, the consultant will be expected to deliver:

Step 1: selection of sectors and value chains

• An initial list of 8-10 subsectors or value chains deemed to hold potential for refugee-inclusive growth and job creation

This list will be discussed with the ILO project team who will select 3-5 subsectors for further analysis

• A short report summarizing findings of the rapid analysis of 3-5 value chains with sector selection table that highlights grading and ranking of the value chains

This report and sector selection table will be discussed with the ILO project team and a final decision regarding the sector to be selected will be made jointly

Step 2: Market system analysis

• Workplan outlining key actors and stakeholders and possible interview partners for the field research
• Draft report summarizing findings of the market systems analysis including key constraints and underlying root causes identified and recommendations for the project

5. TIMEFRAME AND ROADMAP

The work will start in early September 2023.

Please refer to the attached ToR to review the tentative work plan

6. REQUIRED QUALIFICATION AND APPLICATION

To apply for this assignment, the consultant shall possess the following qualifications:

• Extensive experience conducting assessments and market/sectoral research including field research
• Knowledge of ILO’s value chain development approach and/or experience conducting market systems analyses would be a strong advantage
• Excellent knowledge of the socio-economic context in Lebanon
• Fluency in Arabic and English.
• Good report writing skills