This FEWS NET Enhanced Market Analysis (EMA) report presents findings to inform regular market monitoring and analysis in the Centre-Nord and Est Regions of Burkina Faso and the Maradi and Zinder Regions of Niger. This report was prepared concurrently with national Market Fundamentals Reports for Burkina Faso and Niger. Among other uses, the information presented jointly in these three reports can be used to support the design of food security and resilience programs, including but not limited to informing a United States Agency for International Development (USAID) Bellmon determination in advance of FY 2018 USAID Title II or Community Development Fund (CDF) supported development food assistance programs in either or both countries.
This study provides evidence in support of decision making for a range of assistance and transfer modalities (from in-kind Title II commodity transfers to mobile phone-enabled cash transfers) and is based on (1) desk research and (2) fieldwork between April 25 and May 14, 2017, using rapid rural appraisal (RRA) techniques covering anticipated Resilience in the Sahel Enhanced initiative (RISE) II program areas of Burkina Faso and Niger, as well as neighboring communes (municipalities or districts) that are essential to trade and the distribution of humanitarian assistance.
During an average year, the RISE II program areas of both Niger and Burkina Faso are generally self-sufficient in locally preferred cereals (millet for Niger and sorghum for Burkina Faso), export cash crops (cowpeas), and ruminant livestock (small ruminants). Imports of edible oil (mostly sourced internationally) cover the majority of edible oil requirements. Strong trade linkages with neighboring Nigeria make for seasonal variations in the direction and magnitude of trade flows into and out of Niger’s Maradi and Zinder Regions.
By many measures, the chronic food security conditions in the RISE II program areas are among the worst in both countries. Access to and usage of basic infrastructure and services are limited, although of the areas under study, Komanjoari (Burkina Faso) appears to be the most isolated and least developed. Two main livelihood systems are present – agricultural and agropastoral. Periodic food shortages can be especially severe in Maradi and Zinder Regions of Niger, where local agroclimatolgoy and economic conditions in Nigeria drive local food availability, diversity, and access. Food assistance in some form (including food-for-work and school feeding, among others) plays an important role in meeting local food requirements for much of the population, especially in Niger. However, the size of the annual food gap (expressed in grain equivalent terms) varies considerably from one livelihood zone to the next.
By many measures, markets perform well in the RISE II program areas. An analysis of trade flow patterns and price co-movement suggests that local markets are well integrated with neighboring areas of the country (especially for Burkina Faso) and the region (especially for Niger). Prices are typically responsive and traders report being able to respond quickly to increased demand. Physical market access is not a major constraint, with the exception of Est Region in Burkina Faso. The possibility of exogenous market shocks emanating from Nigeria presents unique challenges, especially in the southernmost border areas of Maradi and Zinder Regions.
The RISE II programs areas span several agroeocological zones, with varying environmental conditions, making some areas better suited for agricultural production and livestock rearing than others. All areas share one common agricultural season due to unimodal rainfall patterns, which run from approximately April through October. The peak of the lean season is between July and August, depending on the specific zone. Landcover is largely a mix of cropland and grassland, with pervasive Normalized Difference Vegetation Index anomalies. Droughts, flooding, pest/disease infestation (locusts, birds), and livestock disease are the most prevalent threats to agricultural and livestock production within the region. Gold is heavily present in the soils of Centre-Nord and Est Regions of Burkina Faso and is extracted by local populations using both artisanal and industrial methods.
Despite predominantly agriculture-based livelihoods systems, revenues earned through casual labor activities rank among the most important sources of cash income among poor and very poor households in the RISE II program areas of both Niger and Burkina Faso. In Burkina Faso, households engage with the gold mining sector as both casual laborers (earning wages for tasks completed for mine owners) and as artisanal miners (earning income through sales of gold). Crop and livestock sales are secondary sources of income in many instances. Staple food purchases rank among the top two annual expenses across the livelihood zones studied. Agropastoralists rely on livestock rearing as a source of livelihoods, savings, and cash income. Poor households sell livestock at critical periods of the year when household expenditures are greatest (lean season and when school fees are due).
The RISE II program areas in both Burkina Faso and Niger occupy space within separate but well-defined marketing basins. The marketing basin serving Centre-Nord and Est Regions of Burkina Faso is linked to the major wholesale markets of Fada N’Gourma, Pouytenga, and Ouagadougou (the capital city). The marketing basin serving Maradi and Zinder Regions of Niger is linked to markets in northern Nigeria (Kano, among others), as well as Niamey (the capital city). The degree of integration of marketing within and between the RISE II program areas and their broader marketing basins is generally higher between areas with better road access. Transactions are based on cash, although banks, mobile money operators, and microfinance institutions exist.
Prices for locally produced staple foods are highly seasonal across West Africa, including the RISE II program areas. These trends are driven in part by producer marketing behavior (selling stocks to pay off debts or fees), but also difficulties associated with household and community post-harvest handling and storage practices. Prices of locally produced crops are highly responsive to supply and demand conditions, typically peaking during the June to August period, and then declining with the progression of harvests between September and December, depending on the harvesting level. Imported edible oil and rice prices are far more stable across time and space.
The main types of markets operating in the RISE II program areas of Niger are: large wholesale markets (such as those located in the regional capitals of Maradi and Zinder), smaller wholesale markets that also double as collection and/or assembly markets, and rural retail markets, which also serve collection or assembly roles, depending on the time of year. In Burkina Faso, the main wholesale markets serving the RISE II program areas are located in neighboring provinces, while collection/assembly and retail markets dominate within the zone. Many actors are present at each level of the marketing system, and prices are determined through (and responsive to changes in) the forces of supply and demand, making for relatively competitive markets.
Among traders interviewed in the RISE II program areas, the most frequent barriers to trade cited were fees and taxes and access to financing. While wholesaler taxes and fees vary based on the scale of operations, fees paid by retailers are limited to commune-level fees assessed on market days. Fees associated with livestock trade are usually based on the number of units bought or sold. Households in the RISE II program areas participate in markets primarily as buyers, but also as sellers. Interviewees cited a lack of capital (and of access to credit) as the main obstacle preventing them from playing a more active role as sellers on local markets. In Maradi Region (Dakoro and Guidan Roumdji Departments) of Niger and Est Region of Burkina Faso, households also cited the distance to and isolation from markets as a further barrier to market participation. The travel time to a market can reach up to four hours by foot in some areas. Women’s productive and marketing activities are often determined by male family members, who are also in charge of transport and commercialization activities.
The macroeconomic crisis in Nigeria is of particular concern in Niger due to the deep and longstanding economic ties between the two countries. This includes, but is not limited to, the RISE II program areas. According to interviewees, the economic crisis has affected activities in all markets visited in Niger, for cereals, livestock, and cash crops. Both imports and exports have been disturbed by reduced cross-border activity, as well as attempts by the Nigerian government to curb exports, such as increases in the number of check points and establishment of additional taxes to be paid.
A range of assistance modalities have been implemented in the RISE II program areas of both Burkina Faso and Niger. National food security and disaster management organizations along with the World Food Programme (WFP) have extensive experience with local procurement (via open and closed calls for tenders and direct/strategic purchases from producer organizations). WFP is among the most experienced with direct cash transfers, particularly in Niger. Variants of mobile money have presented challenges in the RISE II program areas, as financial institutions are often not adequately supplied with hard currency for disbursement. Vouchers (paper) have been used successfully used in a number of contexts to meet both emergency food security needs (staple food) and longer-term development and resilience-building objectives (staple food, livestock, and seeds). Information gathered via interviews with various stakeholders suggest little or no structural difficulty procuring required quantities of staple foods from within the country or broader region for direct in-kind distributions or voucher programs. There is no evidence to suggest recent generalized inflationary impacts arising from those purchases, as they are often planned well ahead of time and are anticipated by vendors to occur during well-defined periods of the year. However, the region does have a history of poorly timed and distributed purchases putting upward pressure on prices during crisis years (e.g., the 2011/12 marketing year). During the current round of Title II and RISE programming, several nongovernmental organizations (NGOs) have rolled out seed and livestock voucher programs targeted at participants in producer groups.
Overall, the evidence suggests that in a scenario of increased demand, about half of the traders interviewed are able to increase their stock/supply within a period of two weeks. The main factor influencing traders’ ability to respond to increased demand is their capacity to mobilize financial resources for their operations. The importance of financial liquidity is evident given the fact that all traders interviewed rely on their own resources as the main source of financing. Storage capacity and availability of products in the source markets were cited as the second most important factors for vendors who previously participated in voucher (Burkina Faso) and local purchase programs (Niger). Therefore, improved access to financing and sufficient storage can facilitate a faster or larger supply response. Vendors highlighted several positive effects of market-based response activities including (1) noticeable increases in sales during the program periods, (2) a reported increase in professionalism among market actors, and (3) the reported interest among vendors to potentially take part in future activities, should the opportunity arise. This applies for cereals, cash crops, and livestock, as well as for seeds.
The greatest challenge reported across all participating programs and beneficiary communities is the inevitability of sharing and redistributing food commodities among household members, among neighbors, within communities, and, at times, with traditionally respected leaders. Sharing practices historically played a role in food assistance programming, with documented research demonstrating household tendencies to distribute resources received through assistance programs. This practice is perceived as strengthening the social capital of the household, which can be returned at a later point in time. However, these practices can also dilute the desired impact of assistance for a specific set of beneficiaries, even children. Redistribution and sharing also occurs at the community level and beneficiaries across program areas suggested that oversight of traditional village authorities (chefs de village) is important to assure less graft and mismanagement of commodities.
Market-based modality feasibility is largely determined by the local enabling environment. In the RISE II program areas, agricultural trade is hindered in some areas by poor road conditions and high transport costs. This is especially problematic in the easternmost areas of Burkina Faso, where road access is very poor during the rainy season. Mobile phone coverage is more or less ubiquitous, with service provided in many areas by multiple companies. The adoption and use of mobile phone technology and services is far more intensive among traders than among poor households. Microfinance institutions and mobile money providers are often inadequately supplied in hard currency to support cash transfer programs. Exogenous market forces (such as shocks to market supply and demand from Nigeria) have the potential to greatly affect market prices for food, cash crops, and livestock in the RISE II program areas.