Proposed IDA Crisis Response Window Support for the Drought Emergency in the Horn of Africa

International Development Association IDA Resource Mobilization Department (CFPIR)

August 2011

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Acronyms and Abbreviations

AF CRW DRF FAO FPCR GAM GBV GDP GFRP GFDRR GoE HLTF IDA IEG IGAD IMF INDS KHPT MAC NGO OCHA PSNP RDP RHPT WBG WHO UN UNHCR UNSG USG

African Union Crisis Response Window Drought Risk Financing Food and Agriculture Organization Food Price Crisis Response Global Acute Malnutrition Gender-Based Violence Gross Domestic Product Global Food Crisis Response Program Global Facility for Disaster Risk Reduction and Recovery Government of Ethiopia High-Level Task Force The International Development Association Independent Evaluation Group Inter-Governmental Authority for Development International Monetary Fund National Initiative for Social Development Kenya’s Humanitarian Partnership Team Multi-Agency Coordination Non-governmental Organization Office for the Coordination of Humanitarian Affairs The Production Safety Net Program Reconstruction and Development Program Regional Humanitarian Partnership Team World Bang Group World Health Organization United Nations United Nations High Commissioner for Refugees United Nations Secretary General Under-Secretary General

Table of Contents

I. Introduction .......................................................................................................................1

II. Summary of the Horn of Africa Drought Emergency ......................................................4

III. International Support and the World Bank Group (WBG) Response...............................9

IV. Rationale for CRW Support for Crisis ............................................................................14

V. Proposed CRW Allocations and Planned Projects..........................................................16

VI. Conclusions and Recommendations ...............................................................................18

Boxes 1. Steep Price Increases for Staple Foods in Eastern Africa ........................................................6 2. Food Security: A Core Element in IDA Partnership for Ethiopia, Kenya and Djibouti ........12 3. Opportunities and Challenges for World Bank Support to Somalia ......................................13

Figures 1. Horn of Africa: Rainfall Received vs. Long-term Average ...................................................5 2. Somalia: Comparison of Drought Episodes over the last 50 years ..........................................7 3. The World Bank Horn of Africa 2011 Drought Response Plan ............................................11

Tables 1. Overview of Most Affected Countries .....................................................................................4 2. CRW Allocations and Projects Planned for CRW Financing ................................................18 Annex 1. Requirements and Funding to Date per Country ...................................................................20 2. Programming Overview: World Bank Horn of Africa 2011 Drought Response Plan……...21

Proposed IDA Crisis Response Window Support

for the Horn of Africa Drought Emergency

I. Introduction 1. The severity, scale and human toll of the unfolding drought emergency in the Horn of Africa are exceptional in nature and call for concerted international support. Nearly 12.5 million people have been affected so far by the drought in the most affected countries, namely Djibouti, Ethiopia, Kenya and Somalia. The drought has also affected agro-pastoral livelihoods in the semi arid and arid areas of Sudan and South Sudan, Tanzania, Burundi, Uganda, Eritrea and Rwanda, although the impact in these countries has been less severe. In the context of long-term food insecurity for some populations in the Horn, the current crisis reflects a combination of factors that make it the worst drought emergency in over half a century. Consecutive seasons of low rainfall, steep increases in prices for staple foods, and constrained access to vulnerable populations owing to conflict have intensified pre-existing food insecurity to provoke an acute humanitarian crisis, potentially eroding a range of development gains across countries. Timely, coordinated international action remains vital to support the response capacity of the most affected countries.1 The escalating drought emergency prompted the Government of Kenya to declare a national disaster on May 30, 2011, while the Government of Ethiopia outlined the growing crisis situation in a Humanitarian Requirements document in July 2011. The Government of Djibouti declared a state of emergency and issued an international appeal for crisis support on July 28, 2011. The United Nations (UN) confirmed the existence of famine initially in two parts of southern Somalia in July and in three additional areas by early August 2011. In response, the African Union (AU) hosted a pledging conference on August 25, 2011 that raised US$81 million from AU member states.

2. Forecasts for the second half of 2011 point to continued vulnerability and ongoing risks of widespread malnutrition and disrupted livelihoods in the worst affected areas. Depleted pastures, continued high prices for food, ongoing effects of fragility and conflict in Somalia, and the possibility of late or below-average summer harvests have created a difficult context for recovery in the coming months. Effective multi-sectoral intervention will be essential to avert the threat that malnutrition and mortality rates exceed famine thresholds across all of southern Somalia by end-September. In Kenya, rainfall estimates suggest that the emergency situation could worsen through October, while intense food insecurity in drought-hit southern areas in Ethiopia is expected to peak just before the November/December harvest later this year.2 According to UN estimates, there were nearly 120,000 new Somali refugees in Ethiopia, Kenya and Djibouti by end-July, with up to 1,300 new arrivals per day in Kenya and 300 arrivals per day in Ethiopia in mid-August. In the context of scarcity in host communities, the rapid growth of the refugee population has intensified the challenge of adequate resource allocation and emergency response.

1 The Bank is closely monitoring potential effects of the emergency in Uganda, Sudan and South Sudan;

preliminary assessments in Burundi, Rwanda and Tanzania suggest that impact to date of the drought emergency in these countries has been limited.

2 OCHA Horn of Africa Drought Crisis: Situation Report No. 10 (August 18, 2011).

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3. The overall multilateral response to the drought emergency is coordinated by U.N. Under-Secretary General (USG) Valerie Amos at the request of UN Secretary General (UNSG) Ban-Ki Moon. USG Amos has made several missions to the region and is coordinating the multilateral response with the assistance of the Secretariat of UN-High Level Task Force on the Global Food Crisis (HLTF), led by U.N. Assistant Secretary General David Nabarro. Senior Bank management has been engaged in both the HLTF (chaired by the UNSG) and the current coordination effort in the Horn from the start. The Bank’s approach is consistent with the guiding principles adopted by the HLTF to address the drought emergency, including inter alia (a) a country level focus; (b) working through existing mechanisms where these are functioning; (c) scaling up programs that are already working rather than starting from scratch; and, (d) focusing on institutions that have demonstrated a capacity to yield long-term results in ways that make efficient use of resources. In addition the HLTF recognizes the importance of the regional aspects of the crisis and encourages working with regional bodies such as the Intergovernmental Authority for Development (IGAD), which will help implement one of the planned IDA-financed rapid response projects. In addition, the Bank is supporting IGAD in organizing a Heads of State Summit hosted by the Government of Kenya on September 8-9, 2011 to formulate a long term drought resilience strategy for the Horn of Africa. To inform participants, Bank teams will prepare best practice knowledge notes that capture the accumulated global experience in drought management.

4. In close collaboration with its international partners, the World Bank Group (WBG) has defined a comprehensive program of assistance to support national and international efforts to address immediate vulnerabilities and improve longer-term resilience. The drought emergency and the broader challenge of climate change and recurrent drought in the Horn of Africa have sharpened the focus on the need to strengthen social safety nets, restore livelihood systems, and build climate resilience. Bank country and project teams have coordinated their efforts with their respective country-level partners to ensure that Bank activities complement what others are doing to address the impact of the crisis. At the country level, the Bank has fielded missions to Djibouti, Ethiopia, Kenya and Uganda3 in response to the drought. On the basis of extensive dialogue with partners, the Bank has formulated a comprehensive Horn of Africa Drought Response Plan for these countries. The Plan incorporates drought response at the national and regional levels, amounting to an overall drought response package of US $1.88 billion. This package encompasses resources from (a) restructured IDA projects; (b) new IDA projects financed with regular IDA country allocations; (c) proposed resources from IDA’s Crisis Response Window (CRW); and, (d) trust funds (see Annex 2). World Bank Group support would integrate three phases: rapid response, focused on high-impact operations to strengthen safety nets and recovery over the next six months; economic recovery, focused on livelihood recovery, restoration of livestock production, resilience and preparedness over the medium term; and drought resilience activities over the next five years, focused on risk financing, investment in drought resistant agriculture, and climate-resilient investments.

3 Although drought impacts in Uganda are less severe compared to Djibouti, Ethiopia, Kenya and Somalia, a

mission was undertaken in early August to respond to Government of Uganda’s request for preparing a comprehensive drought risk management strategy.

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5. In support of the Horn of Africa Drought Response Plan, Management recommends that an allocation of US$ 250 million be made available from the IDA16 Crisis Response Window. This recommendation recognizes the exceptional nature of the current crisis and the need to address exceptional emergency requirements without undercutting investment towards long-term development objectives. The proposed US$ 250 million CRW allocation would account for roughly 13 percent of the total US$1.88 billion WBG response plan, emphasizing rapid response operations in the context of the transition from crisis response towards a focus on longer-term resilience. As outlined in the IDA16 report, IDA’s comparative advantage rests in its ability to link short-term crisis mitigation and long-term development objectives. For the four most affected countries, the CRW allocation would complement IDA financing for three new projects and seven ongoing projects.4

6. CRW financing would be additional to IDA16 country allocations, allowing IDA to respond effectively to the emergency while intensifying its ongoing commitment to building long-term resilience in affected countries. Given the regional dimensions of the Horn of Africa drought emergency, which affects several IDA countries and involves a large cross-border refugee population, the CRW would play an important gap filling role for facilitating a regional response in partnership with donors and the United Nations. Accordingly, Management recommends that the CRW allocation include financing for projects at the regional level as well as at the national level. Lastly, it is recommended that US$30 million (or 12 percent) of CRW resources be made available on a grant basis for a Horn of Africa Emergency Health and

Nutrition Project that will be executed by the United Nations High Commissioner for Refugees (UNHCR). 5 This partnership would ensure rapid delivery of essential health and nutrition services in camps for Somali refugees in Ethiopia and Kenya, which are administered by UNHCR. The project would build on the implementation experience of an on-going Bank project financed by the Africa Catalytic Growth Fund and would contribute to the emergency response by expanding implementation of a health and nutrition package of services for refugees in large camps located in Ethiopia and Kenya. The project would be integral to the rapid response phase of the Drought Response Plan while also supporting the sub-region’s medium-term human development goals; UNHCR’s long track record in managing the refugee camps in Kenya and Ethiopia would facilitate the timeliness and efficiency of the operation. In light of the extenuating circumstances of the drought emergency, and at the request of affected governments, the proposed UNHCR execution of the rapid response operation is considered the most efficient and effective approach for delivering results for the intended beneficiaries in the camps and regional clients.

7. The following report presents the main characteristics of the crisis and the WBG response, including the proposed role of CRW finance. The paper’s sections include: (i) a summary of the severity and exceptionality of the crisis; (ii) international support and proposed WBG crisis response; (iii) the rationale for CRW financing; (iv) the proposed CRW allocation for affected IDA-eligible countries and planned projects; and (v) conclusions and recommendations.

4 The overall Horn of Africa Drought Response Plan includes less affected countries like Uganda, while CRW

financing targets the most affected countries of Djibouti, Ethiopia and Kenya. 5 This proposed project would be the first to be financed from the proposed CRW allocation. It will be submitted

for Board consideration in parallel to the proposal to access CRW resources.

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II. Summary of the Horn of Africa Drought Emergency

8. In the context of long-term vulnerability to weather-related shocks across the Horn of Africa, the 2011 drought emergency is exceptional. The Horn of Africa is one of the poorest sub-regions in Africa, with GNI per capita in 2009 of US$620 compared to US$1,125 for Sub-Saharan Africa.6 The economies in the sub-region are vulnerable to a range of weather-related shocks, including recurrent droughts that are likely to become more frequent and intense as a result of climate change. Kenya relies heavily on water for both energy and agriculture, with up to 80 percent of its land defined as arid or semi-arid. Some 8.3 million Ethiopians have long-term dependence on food security programs, and several million are vulnerable to food insufficiency in the event of adverse climatic shocks.7 Djibouti is also highly vulnerable to natural hazards, including extended multi-annual droughts that result in water scarcity for livestock, irrigation and domestic uses. At the household level, smallholders and pastoralists are particularly vulnerable to weather-related shocks, and many face chronic food insecurity. The severity and exceptional nature of the unfolding 2011 drought emergency reflect the convergence of multiple crises, including consecutive seasons of low rainfall, record high prices for staple foods, and a humanitarian crisis aggravated by fragility and conflict. The drought emergency is also having widespread impact on the young, with roughly 2 million children under the age of five in Somalia, Kenya, Ethiopia and Djibouti among the most vulnerable.

Table 1. Overview of Most Affected Countries

Local

Population

Somali

Refugees

Other

Refugees

Total

Affected Areas

Djibouti 146,600 17,600 1,510 165,710 Northwest and southwest pastoral lands

Ethiopia 4,567,256 157,923 80,500 4,805,679 Somali, Oromia, Afar, Tigray, Amhara,

Southern Nations, Nationalities and

Peoples Region

Kenya 3,200,000 476,808 77,777 3,754,585 Upper eastern, north eastern, lower

eastern and south regions: Garissa,

Wajir, Moyale, Marsabit, Turkana

Somalia 3,700,000 3,700,000 Mainly southern Somalia; some areas in

central Somalia also affected

Total 11,613,856 652,331 159,787 12,425,974

Source: OCHA East Africa Drought: Humanitarian Snapshot - Regions Affected (June 28, 2011); Population Affected

Update (August 11, 2011).

9. The eastern Horn of Africa is experiencing the effects of the driest year on record for over half a century. An assessment of the historical range of annual rainfall in pastoral areas in Kenya and Ethiopia that compared annual rainfall from 1950 – 2009 with the period between June 1, 2010 and May 31, 2011 found that 2010/2011 was the driest or second driest

6 Includes Eritrea, Ethiopia, Kenya, Sudan and Uganda (World Development Indicators 2009; comparable data for

Somalia and South Sudan are not available). 7 IDA Country Assistance Strategy for The Federal Democratic Republic of Ethiopia, FY2008 – FY2012,

Washington, D.C., April 2, 2008.

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year since 1950 in all but four of the 15 pastoral zones reviewed.8 Rainfall in 2010/2011 was below average in all reviewed zones (see Figure 1). Across the Horn of Africa, consecutive seasons of significantly below average rainy seasons have resulted in widespread crop failure, increased livestock mortality and contributed to the deterioration of critical resources needed to sustain agro-pastoral livelihoods. Inadequate performance of the March-June long rains in Kenya intensified drought conditions in its northern and north-eastern districts. These drought-hit areas also account for the majority of the refugee population. In Ethiopia, two consecutive seasons of low rainfall related to prolonged La Niña conditions triggered a rapid deterioration of food security in the drought-affected lowlands of southern and south-eastern Ethiopia and in parts of the central and southern highlands. According to the Djibouti Government, the current drought represents the fourth consecutive year of failed rainfall in the northwest and southeast and has severely affected more than 120,000 people in rural areas – equivalent to 50 percent of rural population and 15 percent of the total population. 10. Steep increases in food prices have further undermined food security in the region, with particularly adverse effects on poor households. Failed harvests in the eastern Horn have been intense in the southeastern marginal agricultural areas and coastal areas in Kenya and Ethiopia, partly resulting in lower stocks of locally produced staple foods.9 The increased prices of some staple foods in Eastern Africa reflect higher wheat and maize prices in international markets as well as the impact of unfavorable rains on domestic supply.10 The world price for maize has more than doubled over the 12 months and is approaching the all-time high recorded in April 2011. In Kenya, the price of maize has now exceeded the high levels that prevailed domestically in 2009, jumping by 21 percent since May 2011 (see Box 1). In Ethiopia, the price of teff (a staple cereal crop), maize and wheat have also continued a steady increase, partly influenced by high fuel prices. Staple food prices in Djibouti are 68 percent higher than the five-year average in Djibouti City, while kerosene prices are nearly 50 percent above the five-year average.11 Although alternative foods and imported provisions are available, the associated costs are often out of the reach of the poorest households. Poverty assessments in the region suggest that weather-related shocks have a significant impact on the poorest, with food price and drought as the first and second main drivers of households falling into poverty or deeper into existing

8 Famine Early Warning Systems Network (FEWSNET): “East Africa: Past year one of the driest on record in the

eastern Horn.” June 14, 2011. Note that long term trends in precipitation and rainfall may also reflect climate change.

9 FEWSNET East Africa Food Security Update, August 7, 2011. 10 World Bank Africa Region: World and Sub-Saharan Africa Food Price Update, August 2011. 11 Urban food insecurity in Djibouti is rising due to high levels of unemployment and increased food prices

aggravated by deteriorating terms of trade; the country’s resistance to international food price fluctuations is particularly weak, as 90 percent of food is imported.

Figure 1

poverty.12 A mid-August food security update on the drought emergency noted that high food prices have reduced purchasing power among the poor and pointednutrition, including levels of Global Acute Malnutrition (GAM) for underexceeded emergency levels in most districts in Northern Kenya as well as throughout sourthern and central Somalia.

Box 1: Steep Price Increases for Staple Foods in Eastern Africa World food prices remain close to an all time high. Although wheat prices fell by 8.1 percent in July 2011, they remain 107 percent higher than the recent low hit a year ago following its historic peak iprices resumed climbing, albeit marginally, after falling by 3.6 percent in May. The price for maize has more than doubled over the past year and is nearing the allcontinued slide in the US dollar, strong demand, low inventories in the United States, and concerns over possible downward yield impacts in the US of planting delays due to wet weather followed by recent extreme hot and dry weather. Eastern Africa countries are facing intense pressure related to food staples as a result of: (a) the pass through from higher wheat and maize prices in international markets; and (b) unfavorable rains during the short season and ensuing impact on those markets where domestic sucontinued to rise, and are at record levels in Somalia, Ethiopia and Kenya. The flow of refugees from Somalia due to drought- and insecurity-decimated food systems is putting additional pressure on fneighboring countries. The recent exchange rate depreciation in Ethiopia has compounded the domestic effects of world price increases in wheat and maize.

Price Trends for Selected SSA Countries

Source: Country statistical offices, World Bank Development Prospects Group, FAO World Food Situation. (Joint

Briefing by AFTPM and AFTSN).

11. The emergence of famine in Somalia has triggered large scale migration to Ethiopia, Kenya and Djibouti, while conflihumanitarian assistance. Protracted armed conflict in southern Somalia has provoked the worst food security crisis in the world, according to the UN, which declared a state of famine in two regions of southern Somalia on July 20 and verified the existence of famine in three additional regions on August 3. While drought is defined in terms of rainfall, famine is defined

12 2009 Poverty Assessment for Kenya, quoted in IDA Country Partnership Strategy with Kenya (FY2010

March 10, 2010. p. 3.

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August food security update on the drought emergency noted that high food prices have reduced purchasing power among the poor and pointed to key impacts on health and nutrition, including levels of Global Acute Malnutrition (GAM) for under-five children that have exceeded emergency levels in most districts in Northern Kenya as well as throughout sourthern

Price Increases for Staple Foods in Eastern Africa

World food prices remain close to an all time high. Although wheat prices fell by 8.1 percent in July 2011, they remain 107 percent higher than the recent low hit a year ago following its historic peak in March 2008. Maize prices resumed climbing, albeit marginally, after falling by 3.6 percent in May. The price for maize has more than doubled over the past year and is nearing the all-time high set in April of this year. This has been supported by the

ntinued slide in the US dollar, strong demand, low inventories in the United States, and concerns over possible downward yield impacts in the US of planting delays due to wet weather followed by recent extreme hot and dry

es are facing intense pressure related to food staples as a result of: (a) the pass through from higher wheat and maize prices in international markets; and (b) unfavorable rains during the short season and ensuing impact on those markets where domestic supply has an impact in determining prices. Cereal prices continued to rise, and are at record levels in Somalia, Ethiopia and Kenya. The flow of refugees from Somalia due

decimated food systems is putting additional pressure on food markets and prices in neighboring countries. The recent exchange rate depreciation in Ethiopia has compounded the domestic effects of world price increases in wheat and maize.

Price Trends for Selected SSA Countries

Source: Country statistical offices, World Bank Development Prospects Group, FAO World Food Situation. (Joint

The emergence of famine in Somalia has triggered large scale migration to Ethiopia, Kenya and Djibouti, while conflict in southern Somalia has gravely constrained

Protracted armed conflict in southern Somalia has provoked the worst food security crisis in the world, according to the UN, which declared a state of famine in

n Somalia on July 20 and verified the existence of famine in three additional regions on August 3. While drought is defined in terms of rainfall, famine is defined

2009 Poverty Assessment for Kenya, quoted in IDA Country Partnership Strategy with Kenya (FY2010

August food security update on the drought emergency noted that high food to key impacts on health and

five children that have exceeded emergency levels in most districts in Northern Kenya as well as throughout sourthern

World food prices remain close to an all time high. Although wheat prices fell by 8.1 percent in July 2011, they n March 2008. Maize

prices resumed climbing, albeit marginally, after falling by 3.6 percent in May. The price for maize has more than time high set in April of this year. This has been supported by the

ntinued slide in the US dollar, strong demand, low inventories in the United States, and concerns over possible downward yield impacts in the US of planting delays due to wet weather followed by recent extreme hot and dry

es are facing intense pressure related to food staples as a result of: (a) the pass through from higher wheat and maize prices in international markets; and (b) unfavorable rains during the short season and

pply has an impact in determining prices. Cereal prices continued to rise, and are at record levels in Somalia, Ethiopia and Kenya. The flow of refugees from Somalia due

ood markets and prices in neighboring countries. The recent exchange rate depreciation in Ethiopia has compounded the domestic effects of

Source: Country statistical offices, World Bank Development Prospects Group, FAO World Food Situation. (Joint

The emergence of famine in Somalia has triggered large scale migration to Ethiopia, ct in southern Somalia has gravely constrained

Protracted armed conflict in southern Somalia has provoked the worst food security crisis in the world, according to the UN, which declared a state of famine in

n Somalia on July 20 and verified the existence of famine in three additional regions on August 3. While drought is defined in terms of rainfall, famine is defined

2009 Poverty Assessment for Kenya, quoted in IDA Country Partnership Strategy with Kenya (FY2010–2013).

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in terms of human wellbeing – namely mortality rates, the extent of acute malnourishment, and access to food and basic needs.13 Roughly 3.7 million Somalis are facing a severe food crisis, with up to 2.8 million people in southern Somalia potentially exposed to famine in the absence of scaled-up, immediate international relief (see Figure 2, below). The number of internally displaced people in Somalia increased by over 100,000 between June and July as a result of the famine conditions in southern Somalia. Regional spill-over impacts of the famine have been significant: over 120,000 Somalians migrated under extreme conditions to already overcrowded camps in drought-hit regions of Kenya, Ethiopia and Djibouti in June and July 2011.

Figure 2: Somalia: Comparison of Drought Episodes over the last 50 Years Source: OFDA/CRED International Disaster Database

12. The regional dimension of the drought emergency demands action that addresses spillover risks and the particular challenges of refugees and their host communities. The Horn of Africa is home to the largest number of refugees in the continent of Africa. There are approximately 118,300 Somali refugees in the Dollo Ado area of Ethiopia and over 400,000 registered Somali refugees in Kenya’s Dadaab camp, the largest refugee settlement in the world and effectively the third largest city in Kenya. The total refugee population now exceeds 652,000 -- 73 percent in Kenya, 24 percent in Ethiopia, and 3 percent in Djibouti (see Table 1).14 The sheer number of new arrivals, which peaked at 2,000 per day in Ethiopia, has overwhelmed the capacity of existing camps and urged the development of additional camp sites. In response, the Government of Ethiopia (GoE) opened an additional site in the Kobe refugee camp in June that reached full capacity within weeks, prompting the GoE and partners to begin work on a fifth camp to house as many as 40,000 refugees. Similarly, the Government of Kenya has authorized development of an additional site in Dadaab as a result of the drought emergency, and the

13 According to the Integrated Food Security Phase Classification, famine is declared when acute malnutrition rates

exceed 30 percent among children; there are more than two deaths per 10,000 people per day; and there is severe lack of access to food and other basic necessities.

14 Estimates from UN Agencies, including UNHCR, as of August 11, 2011. (Horn of Africa Drought, Fact Sheet#7, USAID).

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Year of start

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Djibouti government will open the Holl-Holl refugee camp by the end of 2011 to accommodate new refugees and to relocate roughly 6,000 people from the Ali-Addesh camp, which exceeded initial capacity this summer. The rapid growth of the refugee population will pose important challenges related to the scarcity of available resources in already drought-affected areas. 13. The long, hard journey to the camps and the overcrowded conditions upon arrival have heightened the vulnerability of women and children refugees. UNICEF estimates that roughly 80 percent of the 2011 refugee arrivals are children, while 13 percent are adult women and 7 percent are adult males.15 The vast majority of the households arriving in the camps are headed by women. The health and nutrition needs of the refugee population are reportedly dire: a nutritional survey in Ethiopia’s refugee camps, for example, found that 47 percent of the children arriving from Somalia were acutely malnourished.16 In addition, impacts of a rapid and concentrated influx of refugees include increased potential for crime, social tension, and communal violence.17 The UN Office for the Coordination of Humanitarian Affairs (OCHA) has reported that congestion in some of the camps has exposed women and children to increased Gender-Based Violence (GBV), resulting in a call for additional staff related to GBV and child protection. 18

14. Spillover public health risks are also becoming evident. Drought-affected areas are at significant risk of disease outbreaks due to malnutrition, lack of access to potable water, and overcrowding. The percentage of the population in Djibouti that has been affected by communicable diseases such as diarrhea, tuberculosis, cholera and pulmonary infections has increased because of the drought and the World Health Organization (WHO) identified roughtly 200 cases of cholera in urban areas in mid-August 2011. The WHO also determined that the health situation in drought-affected areas in Somalia, Kenya and Ethiopia deteriorated during the month of August, with epidemiological assessments in mid-August reporting an increased weekly incidence of cholera in Somalia along with increased cases of measles in the refugee camps in Ethiopia and Kenya.19 A confirmed cholera outbreak in Mogadishu and the Afigooye Corridor in Somalia was ongoing in mid-August, while the earlier cholera trend observed in Lower Shabelle was considered to be under control.20 The WHO has emphasized the ongoing need for disease prevention, control and early warning, provision of basic health services, and enhanced management of severe acute malnutrition. 15. The economic impacts of the drought emergency are yet undefined but could be far-reaching. The 2011 IEG review of the Results and Performance of the World Bank notes that the degree to which disruptive events have negative impacts depends on characteristics inherent in a country’s natural conditions, economy, and institutional framework among other factors.21 The Djibouti Government has highlighted that the drought is resulting in water and electricity rations and has constrained industrial production due to power rationing. Preliminary IMF

15 UNICEF Ethiopia Weekly Situation Report #4 (August 10, 2011). 16 Drought in the Horn of Africa: Children in Crisis, A Proposal. (UNICEF United States Fund: New York, NY.

2011). 17 World Development Report, 2011. 18 OCHA Kenya Humanitarian Update (August 19, 2011). 19 Horn of Africa Drought Weekly Health Update: No. 2 (August 18, 2011). 20

WHO Emergency Humanitarian Action: Weekly Highlights (August 13-19, 2011). 21 IEG Annual Report 2011: Results and Performance of the World Bank Group (Washington, DC: 2011).

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estimates of the economic effects of the current drought emergency in Ethiopia suggest that the impact on GDP is likely to be modest, potentially as low as 0.5 percent of GDP if rains ahead of the major crop season starting in September follow a normal pattern. However, the drought emergency has increased headline inflation, which in July 2011 reached 39 percent (year on year), by 6 percentage points. Estimates suggest that Kenya’s GDP growth could to be reduced by up to 1 percent as a result of simultaneous shocks to the economy, including the drought, higher international food and fuel prices, and emerging electricity shortages (due in part to the drought-induced need to scale-back hydroelectric generation). Importantly, the high food and fuel prices in Kenya have already translated into higher inflation – now at 16 percent – and have contributed to a sharp decline in the exchange rate.22 The governments of Kenya and Djibouti have also requested technical assistance for drought impact and needs assessments; the Bank and GFDRR are working closely with other stakeholders to support the governments in quantifying drought impacts and defining a more robust drought management and resilience strategy for addressing medium and longer-term risks.

III. International Support and the World Bank Group Response

16. Governments and development partners have outlined priorities and the institutional framework for emergency response. Early warning systems in Ethiopia and Kenya highlighted the potential emergence of drought conditions in October 2010, triggering initial actions by the governments to launch efforts to expand storage capacity and the availability of food assistance for vulnerable populations. In Ethiopia, the Government-led Multi-Agency Coordination (MAC) forum is responsible for the overall coordination of the emergency response, with line ministries and specialized bodies ensuring sectoral and refugee coordination. Kenya’s Humanitarian Partnership Team (KHPT) provides strategic-level direction for response, alongside the Government’s Permanent Secretary Level Crisis Response Centre. The Crisis Consultative Forum, also led by the Government of Kenya, brings together UN-Sector co-leads and technical line ministry representation. The Government of Djibouti has outlined a 7-point drought emergency response plan and has established an inter-ministerial committee led by the Minister of the Interior (co-chaired by the Minister of Finance, Minister of Agriculture and the State Secretary of National Solidarity) to lead the drought emergency response. In Somalia, the Coordination for International Support to Somalia group, co-chaired by the UN and the World Bank, brings together donors, international NGOs and the UN agencies, to coordinate and discuss general development issues, including crisis prevention and response. 17. International support will be essential to forestall a worsening of humanitarian conditions and to address large-scale food security challenges. To date, the grand total of Horn appeal contributions to meet humanitarian needs across 67 bilateral and multilateral donors amounts to US$1.62 billion for relief and early recovery activities in Kenya, Ethiopia, Somalia and Djibouti (see Annex 1).23 African Union member states have committed a further US$81

22

World Bank staff estimates (August 26, 2011). 23 As of August 23, the IMF was in a position to provide budgetary support to the countries in the region (except

Somalia, due to arrears) through existing credit facilities, with loans equaling up to 25 percent of the country’s quota and a two-week timeframe for fast-track disbursement. Djibouti and Kenya have already requested this support.

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million in cash and in-kind contributions. The top five donors and participating organizations include the United States (US$579.9 million); the United Kingdom (US$188 million); the European Commission (US$177.1 million); UN’s Central Emergency Response Fund (US$107.3 million); and Japan (US$96 million). According to OCHA, roughly US$1.04 billion of the total humanitarian requirements remain unmet. The United Nations has provided active support in Djibouti, Kenya, Somalia and Ethiopia, coordinating and prioritizing its support through Humanitarian Country Teams, the Regional Humanitarian Partnership Team (RHPT) and the Food Security and Nutrition Working Group (FSNWG). In addition, a range of international and national non-governmental organizations (NGOs) is working alongside UN agencies and in coordination with the Governments to provide emergency relief. The most active groups include the International Committee of the Red Cross, Mercy Corps, Islamic Relief Worldwide, CARE and World Vision. To date, the private sector has contributed over US$100 million to the drought response, with the greater part of the funds passed on to the various UN agencies and the NGOs with field presence on the ground. 18. In collaboration with international partners, the World Bank Group has affirmed its commitment to help the affected countries to meet the emergency needs and to promote economic recovery and resilience over the longer term.24 The Bank is working closely with the UN, bilateral donors and other development partners to link short-term crisis response with longer-term development objectives.25 The World Bank Horn of Africa 2011 Drought Response Plan will provide immediate, medium and long term support to the worst affected countries through a US$ 1.88 billion drought recovery and resilience assistance package (see Figure 3). The Plan includes fast-track, rapid response operations that respond to the crisis and focuses heavily on medium and long-term investments needed for livelihood recovery, restoration of livestock production, resilience and preparedness, investment in drought resistant agriculture, and climate-resilient investments. This package, which builds on the initial US$500 million support announced in end-July, incorporates a number of ongoing and planned projects that will contribute to a comprehensive drought response. The package is fully aligned with IDA’s ongoing country strategies for the affected countries and will consist of resources from restructured projects in each country’s IDA portfolio (28 percent); new IDA-financed operations (57 percent); trust fund financing (2 percent) and a proposed allocation from the IDA Crisis Response Window (13 percent). 26 19. The three phases of the World Bank Horn of Africa 2011 Drought Response Plan include rapid response over the next six months, economic recovery over the medium term, and drought resilience activities over the next five years. In the first phase, which will extend through early 2012, IDA, the Global Facility for Disaster Risk Reduction and Recovery (GFDRR), and the State and Peace Building Fund (SPF) will provide financing of roughly US$288 million for rapid response activities at the regional and country levels to support the public health response, provide cash for work programs and cash transfers, and support recovery

24 World Bank Press Release No: 2011/039/AFR (July 25, 2011). 25 On July 18, 2011, the Bank participated in an emergency ministerial-level meeting on the Horn of Africa at FAO

Headquarters in Rome where it was agreed that relief and recovery activities were the first order of priority and that medium- to long-term support would also be critical to promote economic recovery in the region.

26 This refers to the World Bank’s overall Horn of Africa 2011 Drought Response Plan, which reflects in-depth portfolio reviews of IDA financing in Djibouti, Ethiopia, Kenya, Uganda and at the regional level.

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planning.27 Importantly, this phase will include GFDRR trust funds to launch pilot studies and small investments that may be scaled up to larger programs supported by IDA. The second phase will consist of roughly US$384 million for medium-run investments in economic recovery, including activities to stimulate crop and livestock production and strengthen livelihood recovery. The third and final phase of the overall response will reinforce and amplify the Bank’s longstanding focus in building drought resilience in the sub-region. This will include US$1,210 billion for investments in drought resilient agriculture, risk financing, resilience planning and investments to strengthen social safety nets.

Figure 3: The Horn of Africa 2011 Drought Response Plan

Africa Region

World Bank Response – immediate, medium and long term interventions

Six months to

two years

Two to five years

First six monthsRapid

Response

Economic

Recovery

Drought

Resilience

- Increasing safety nets

- Cash transfer & cash for

work programs

- Recovery planning

- Early livelihood recovery

- Jump-starting crop and

livestock production

- Strengthen health facilities

- Resilience & preparedness

- Investments in drought

resilient agriculture, water

- Risk financing, resilience

planning & preparedness

- Investments in social

safety nets

Phases Timing Interventions

-Scaling up operations

through additional financing

- Reallocating operations

- Projects with contingency

and risk financing component

- New emergency projects

- Additional financing

- Emergency Recovery Loans

- Scaling up focus on drought

resilience through regular

investments

Instruments

Increased

livelihood

protection for

vulnerable

groups

Affected

people’s

livelihoods

enhanced

Impact of

drought

mitigated in the

coming years

Outcomes

$288 Million

$384 million

$1.2 billion

20. The WBG drought emergency response builds on pillars of the Africa Regional Strategy and core Bank instruments, namely knowledge, financing and partnership.28 The Africa Region Strategy, approved in March 2011, includes a pillar on vulnerability and resilience to address shocks like droughts, food shortages, macroeconomic crises, pandemic diseases, and climate change. The Strategy’s proposed interventions focus on provision of financing, global experience, capacity building, and policy support for shock prevention, crisis preparedness, and disaster management. At the national level, IDA’s country partnership strategies with Kenya, Ethiopia and Djibouti each confront the issue of weather-related shocks along with the intensifying challenges posed by climate change (see Box 2). Over the past decade, the Bank assisted Ethiopia and Kenya to respond to the challenges of recurrent drought through early

27 These Trust Funds are self-financing as they do not receive Bank Budget but can be Bank-executed. 28 Africa’s Future and the World Bank’s Support to it (World Bank: Washington DC, March 2011).

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warning systems, social safety nets, risk financing, contingency planning and policies and strategy development. Strategic interventions have focused on sustainable land and water management as well as assisting poor households to graduate from long-term food assistance programs.29 Ongoing IDA operations in Kenya, Ethiopia and Djibouti incorporate a focus on vulnerability issues and productive safety nets; indeed, contingency components in agriculture and social development projects in Ethiopia have been triggered to facilitate accelerated disbursements in response to the crisis.30 In addition, the Bank’s experience in promotion of regional operations is particularly relevant given the cross-country constraints of the drought emergency.

29 Impact evaluations on social safety nets found that many safety net interventions, including conditional and

unconditional cash transfers as well as workfare programs, achieved their primary objectives of raising households’ immediate consumption and reducing poverty (Source: IEG Annual Report 2011: Results and Performance of the World Bank Group).

30 The Productive Safety Net Program (PSNP) in Ethiopia provides regular nutritional support, non-farm income generation, vulnerability assessment and natural disaster management to benefit 7.3 million chronically food insecure households in rural Ethiopia. A 2008 evaluation of the program found that PSNP beneficiaries had greater levels of food security and were more likely than others to use improved agricultural technologies and operate non-farm businesses. The project incorporates a Drought Risk Financing (DRF) Mechanism, an innovation designed to make the safety net more responsive to shocks. The DRF incorporated a rainfall-based index to empirically trigger and scale disbursements in response to the onset of drought in PSNP districts, facilitating early response when needs exceeded available program resources.

Box 2: Food Security a core element in IDA Partnership Strategies for Ethiopia, Kenya and Djibouti IDA’s Country Strategy for Ethiopia (FY08 – FY12) supports Ethiopia in achieving four main strategic objectives: (i) fostering economic growth; (ii) improving access to and quality of basic service delivery; (iii) reducing Ethiopia's vulnerability to help improve prospects for sustainability; and (iv) fostering improved governance. The CAS incorporates analysis of food security, income vulnerability, and the role of agriculture sector in the Ethiopian economy and proposes that stronger support to the agriculture and livestock sectors seems warranted in order to raise the bottom of the growth base. The core objective of WBG Country Partnership Strategy for Kenya (FY10 – FY13) is to contribute to achieving more inclusive growth by supporting activities to: (i) unleash Kenya's growth potential, (ii) reduce inequality and social exclusion, and (iii) address resource constraints and environmental challenges. The strategy identifies “enhancing agricultural productivity, with a special focus on food security” as a key outcome and highlights that sustainable growth in Kenya would need to address the issue of resource scarcity along with a range of other environmental challenges. In line with Djibouti's National Initiative for Social Development (INDS), IDA’s country assistance strategy (CAS) for FY2009-2012 is framed around strategic themes focused on supporting growth; human development and access to basic services; and governance and public sector management. In this context, the Bank has engaged in active policy dialogue with the Government of Djibouti on social protection and food security through: (i) the development of an action plan to improve social safety nets, in connection with the Global Food Crisis Response Program (GFRP) Development Policy Grant; (ii) the financing of basic economic and social infrastructure to increase community development opportunities in poor areas, through the Flood Emergency Rehabilitation and Urban Poverty Reduction projects; and (iii) assistance provided to Pension reform.

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21. Emergency relief and recovery in the worst affected parts of Somalia are an important priority. The Bank has not had an active IDA/IBRD portfolio in Somalia since 1991 and the country, which is in non-accrual status, currently has no access to IDA financing.31 Any financing by the World Bank to Somalia is therefore provided through trust funds (see Box 3). Political instability in Somalia has impeded access by humanitarian agencies and development partners, but UN Agencies like the Food and Agriculture Organization (FAO) and the World Food Programme (WFP) have an ongoing presence in Somalia and the ability to deliver assistance in Somalia’s most affected areas. In the absence of an effective central government in Somalia, the Bank’s crisis-related efforts are closely aligned with Somalia Reconstruction and Development Program (RDP) for 2008-2012. The international community articulated the RDP, an overarching development aid framework for Somalia, following a two-year Joint Needs Assessment (JNA) carried out by the UN in cooperation with the World Bank. The RDP explicitly indentifies the negative impact of frequent natural hazards that threaten the livelihoods of many Somalis and emphasizes the need to address disaster risks.

22. In response to the 2011 drought emergency, a planned Drought Management and

Livelihood Protection Project in Somalia will mobilize US$5.0 million from the GFDRR and an additional US$4 million from the SPF. The project objective is to provide targeted emergency support to drought-affected populations in Somalia through cash-for-work and the distribution of agricultural inputs. Cash-for-work programs will include the construction of infrastructure to build future drought resilience. The project will be implemented by the FAO, which has successfully implemented two emergency livelihood projects for the World Bank in

31 The internationally-recognized Transitional Federal Government does not exercise territorial control over the

whole of Somalia and is not considered to be a “government in power” within the meaning of World Bank Operational Policy (OP) 2.30. Accordingly, any Bank engagement in Somalia is based on an explicit request from the international community, facilitated by the United Nations.

Box 3: Opportunities and Challenges for World Bank support to Somalia

There are many risks and constraints to WBG activities in Somalia, which has existed as a "failed state" for the past 20 years. There are basically three different operational environments in Somalia: (i) south-central Somalia, an area of prolonged crisis, with peace and relative order in areas controlled by the Islamist insurgent group al-Shabaab but continuing armed conflict in and around Mogadishu, where the Transitional Federal Government (TFG) supported by African Union forces has tried to establish authority; (ii) Puntland, in the northeast, a semi-autonomous administration and area of deterioration; (iii) and Somaliland, in the northwest, an area of gradual improvement led by a democratically-elected government that has unilaterally claimed independence but is not internationally recognized as independent. While Bank activities aspire to cover all three areas in Somalia, in practice, security constraints concentrate most project activities in Somaliland and, to a lesser extent, Puntland. In the case of the current drought and famine—with its epicenter in south-central Somalia—the Bank relies on UN agencies (primarily FAO), which have staff on the ground and tested partners in Somalia that they can work with. With respect to the choice of financing available to Somalia in a crisis situation, the GFDRR and SPF Trust Funds prove most useful during the current drought and famine. Their choice was determined by: (i) the availability of funds; (ii) the existence of streamlined procedures that allowed for a relatively fast mobilization (but still within the Bank’s due diligence procedures); (iii) relative flexibility in the use of resources; and (iv) an existing history of engagement of the Trust Fund (in case of the SPF) in Somalia.

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Somalia, will use the implementation mechanisms established under the Rapid Response Rehabilitation and Rural Livelihoods Project (RRRRLP), a US$7 million project financed by the Bank in 2008 in the context of the Food Price Crisis Response (FPCR) Trust Fund. The project helped address the impacts of the 2008 food crisis in Somalia and offers pertinent lessons from past implementation experience. 23. In addition, at the request of affected governments, the Bank will provide rapid response support to address pressing public health concerns and nutrition needs of Somali refugees in the camps in Ethiopia and Kenya. The proposed US$ 30 million Horn of Africa

Emergency Health and Nutrition Project would utilize existing execution arrangements of the Inter-Governmental Authority for Development (IGAD) Regional HIV/AIDS Partnership Program, an ongoing Bank-operation financed by the Africa Catalytic Growth Fund in the refugee camps. The rapid response project would be administered by UNHCR and would support the scaling-up of UNHCR’s essential health and nutrition package of services in the targeted refugee camps in Kenya and Ethiopia, with emphasis on the hardest hit populations. As a result of UNHCR’s mandate for aid coordination in a refugee context and its presence on the ground, the program would be closely aligned with other donor interventions and would support rapid delivery of services. More specifically, the project would complement rather than replicate the primarily humanitarian focus of the UN and other development partners by strengthening the link between emergency response and promotion of the sub-region’s medium-term human development goals.32

IV. Rationale for CRW Support for the Crisis

24. The severity, scale and regional dimension of the drought emergency in the Horn of Africa underpin Management’s recommendation to access CRW financing. The main objectives of the CRW are to establish a more systematic approach for IDA to respond to severe crises caused by exogenous shocks; to enhance IDA’s capacity to provide rapid response and effectively participate in global disaster response efforts; and to provide additional and predictable financing to countries hit by crises. The CRW targets events that are exceptionally severe. For recurring events, IDA countries typically rely on existing flexibility to reallocate resources within the existing project portfolio and/or to reprogram resources in the project pipeline. Importantly, the current emergency in the Horn of Africa reflects a convergence of factors that are broader than drought alone, encompassing record high food prices and a humanitarian crisis aggravated by conflict in Somalia. The extenuating circumstances of this emergency warrant extraordinary actions on the part of the affected countries in the context of strong partnership with the international community, including IDA. 25. CRW resources are reserved for exceptionally severe natural disasters, where alternative sources of funding are insufficient. The aggregate level of resources required to address both the short- and longer-term aspects the crisis are very substantial, and in short supply. For the immediate needs alone, estimated at US$2.4 billion by OCHA, there is a financing gap of over US$ 1 billion. The proposed CRW allocation would contribute towards this financing gap and would help smooth the transition from humanitarian relief to resiliency.

32 See Emergency Project Paper on a Proposed Grant to the United Nations High Commissioner for Refugees for the Horn of Africa Emergency Health and Nutrition Project (Report No. 63642-AFR).

- 15 -

As such, the CRW resources constitute an important complement to the efforts made in the overall drought response package to identify undisbursed balances in the existing IDA portfolio as well as new projects to be financed from the regular IDA16 allocations of Ethiopia, Kenya and Djibouti. These two sources account for US$1.60 billion or 85 percent of total financing for the drought package. Crisis related IDA reallocations and reprogramming beyond this level would run the risk of reducing IDA’s support for long-term development objectives as detailed in Country Partnership Strategies in line with Poverty Reduction Strategy Papers (PRSPs); this would essentially divert financing from long-term development objectives toward the emergency response. Furthermore, current IDA country strategies for the affected countries address the problem of vulnerability to recurrent drought and food security issues, and the ongoing program and pipeline are highly relevant for medium-term recovery and long-term resilience, including operations focused on building agro-pastoral livelihoods and strengthening the resilience of communities in arid or semi-arid areas.33 The continued relevance of WBG programming for the medium-term and long-term crisis response thus limits the scope for broad reallocation away from planned or existing programs.34 In the case of Ethiopia, the IDA portfolio was restructured in the context of the global food crisis in 2008; as a result, the Government and the Bank consider the current composition of the portfolio satisfactory in terms of individual operations and alignment with Ethiopia’s current Growth and Transformation Plan.35 On the basis of the review of the existing portfolio and pipeline for the hardest hit countries, and taking into consideration the countries’ own resources and crisis-related financing from the international community, the proposed CRW allocation would meet the test of being financing of last resort. 26. The proposed CRW allocation would amplify IDA’s participation in the international response to this broadly recognized crisis. The scale of the drought emergency – both in terms of vulnerable groups in Kenya, Ethiopia and Djibouti as well as the surging refugee population – quickly overwhelmed the existing emergency response capabilities of the affected countries, resulting in the international appeal for support.36 The proposed allocation would fulfill core CRW principles, including the ability to support and reinforce a strong international response when emergencies occur and the ability to inform the international response in areas where IDA has an existing role and key comparative advantages. Evaluative evidence highlights the importance of effective IDA engagement early in the crisis response, as interventions in the first weeks and months after a disaster (such as choices regarding shelter,

33 Indeed, operations such as the Pastoral Community Development Program (PCDP) in Ethiopia improved support

mechanisms for communities in arid and semi-arid areas while the Water and Sanitation improvement project in Kenya played a role in support of the disaster warning and preparedness in the current crisis.

34 As noted in the 2006 IEG evaluation of World Bank support for natural disasters, reallocation is most useful when the project being reallocated has been made irrelevant; however, reallocation can be impractical for countries with small loan portfolios, such as Djibouti, and can be overused in countries that face recurrent natural disasters, such as Ethiopia and Kenya.

35 With an active portfolio of 28 projects totaling US$4.19 billion, of which US$2.16 billion has been fully disbursed, Ethiopia is one of the fastest disbursing countries in the Africa region. It is estimated that all active projects will be fully disbursed by the end FY16.

36 A joint document by the Government of Ethiopia and Humanitarian Partners noted that “despite ongoing efforts by the Government and its partners, resource shortfalls have impacted humanitarian operations during the first half of 2011. In particular, relief food shortage led to reduced ration sizes and distribution of incomplete food baskets in some areas. The growing food security challenges… necessitate urgent reinforcement of response efforts and scaling up of operations by all actors, including mobilization of additional resources.” (Source: “Humanitarian Requirements” document; July 2011).

- 16 -

resettlement, and distribution of relief) shape longer-term solutions and can have significant consequences for the ability of the poor to recover.37

V. Proposed CRW Allocations and Planned Projects

27. The IDA16 Replenishment report outlines the conditions for accessing CRW resources in the case of natural disasters, specifying that access and allocations are to be determined by Executive Directors in a two-phase process.38 In the first phase, Management consults the Board shortly after the disaster occurs to indicate that access to CRW resources would form part of an appropriate response. This took place in the context of a Board Briefing on the Horn of Africa emergency on July 28, 2011. In the second phase, Management seeks Board approval on the provision of CRW support at a specified level; the CRW allocation request is presented alongside documents for one or more projects to be financed by the CRW. The current report and the accompanying Emergency Project Paper for the Horn of Africa Emergency Health

and Nutrition Project (P127949) fulfill the second stage requirement. 28. Management recommends a CRW allocation of US$ 250 million to support a robust, relevant and timely World Bank response to the Horn of Africa drought emergency. The size of the allocation reflects the severity of the emergency in the affected countries as well as the availability of CRW resources, which are intended to last through the entire three-year IDA16 period. The proposed US$ 250 million CRW allocation would account for roughly 13 percent of the total US$1.88 billion WBG response and would be used to finance all or a portion of ten of the projects expected to contribute to the rapid response phase of the overall drought response package.39 The allocation would make an important contribution to the Bank’s overall response by augmenting IDA financing in areas of comparative advantage in the context of broad international support for the crisis. The distribution of the CRW resources between the country and regional programs is based on a combination of drought impact, refugee influx and the ability of the existing IDA portfolio and pipeline of IDA projects to meet the additional financing needs arising from the crisis. 29. Given the distinctively regional nature of the drought emergency, proposed CRW financing would incorporate an allocation for regional interventions as well as national allocations for Djibouti, Ethiopia, and Kenya (see Table 2). The regional nature of the crisis and the prominence of the cross-border refugee population among the most affected groups will demand regional responses, with benefits that are likely to span country boundaries. 40 An exclusively country-based allocation of CRW financing could run the risk of limiting the Bank’s responsiveness to the demands of the crisis. Subject to the request for regional support by affected IDA member countries, Management proposes that a CRW regional allocation would be appropriate to promote the relevance of the overall WBG drought response. Management also

37 Hazards of Nature, Risks to Development: An IEG Evaluation of World Bank Assistance for Natural Disasters

(World Bank: Washington, 2006). 38 Additions to IDA Resources: Sixteenth Replenishment. IDA16: Delivering Development Results (March 18,

2011). 39 As of August 29, the overall US$1.88 billion drought response plan will include a total of 38 projects. 40 As noted earlier, direct IDA support to Somalia is not possible due to the country’s status as an inactive IDA

member.

- 17 -

proposes that in the case of the Horn of Africa Emergency Health and Nutrition Project, CRW resources would be made available on a grant basis directly to UNHCR, an international organization with a regional purview across the Horn of Africa. Since the IDA16 replenishment arrangements specify that CRW resources are to be made available to countries on the same terms upon which their regular IDA assistance is provided, the use of grant terms requires the approval of Executive Directors. Doing so is permitted under IDA’s Articles and would be consistent with the Board’s call for flexible and rapid response to crises. This would be done on an exceptional basis as other expedient implementation arrangements are not available.41 All CRW-financed regional projects would be subject to the Bank’s operational policy for Rapid Response in Crises and Emergency Situations (OP/BP 8.00).

30. The proposed CRW pipeline consists of a subset of projects within the three-phased Disaster Response Program and will emphasize (a) fast-disbursing operations to meet emergency demands in the initial “rapid response” phase; and (b) operations with regional emphasis. In line with World Bank Group policy, the rapid response phase can include operations to establish and/or preserve human, institutional, and/or social capital; restore the means of production and economic activities; and support the measures to mitigate or avert the potential effects of imminent emergencies or future emergencies or crises in countries at high risk.42 CRW financing will be additional to the regular IDA allocations of affected IDA member countries and would supplement rather than substitute for IDA financing for long-term drought resilience and climate-resilient as agreed in existing country partnership strategies. The CRW allocation would target the additional financing requirements associated with the crisis and would provide added flexibility with which to respond to the drought emergency. Medium-term and long-term priorities for recovery and drought resilience would continue to be financed primarily through pre-existing projects and the IDA16 pipeline. 31. As noted earlier, Board involvement and oversight are essential to the operation of the dedicated Crisis Response Window, including through consultation, approval of resource levels and approvals of specific operations. Subsequent to approval of the CRW allocation for this emergency, Management would seek Board approval of each additional CRW-financed operation. Planned projects for CRW financing include the operations outlined in Table 2 below. Given the emergency context and the complex operating environment in the Horn of Africa, Management will place special attention on assessing, monitoring and mitigating risks in planned projects. Project documentation will provide a transparent discussion of the assessment of operational risks and mechanisms to ensure adequate risk management. Equally, Management will provide an assessment of operational risk in the CRW portfolio in the context of the IDA16 Mid-Term Review.

41 Under IDA’s Articles of Agreement, international and regional organizations can be direct recipients of IDA

assistance. In addition, grants to regional organizations are permitted under the framework of the IDA16 Regional Grant Pilot Program. To the extent relevant in this case, analogous principles to those applicable under the IDA Regional Pilot Program would be applied.

42 See Operational Policy 8.00 on Rapid Response to Crises and Emergencies.

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Table 2: CRW Allocations and Projects Planned for CRW Financing

VI. Conclusions and Recommendations

32. As reflected in the World Bank Group Post-Crisis Directions strategy and the IDA16 Special Theme on enhancing IDA’s capacity to respond to crisis, assisting member countries to manage crises is an important WBG corporate priority. Equally, targeting the poor and vulnerable and strengthening emergency response capacity remain important corporate goals. The unfolding drought emergency in the Horn of Africa is exceptional in scope and severity, with broad impacts for the some of the poorest and most vulnerable groups in the sub-region. The crisis has overwhelmed the response capacity of the worst affected countries, which include Somalia, Kenya, Ethiopia and Djibouti. The World Bank Horn of Africa 2011 Drought Response Plan, amounting to US$ 1.88 billion, would respond to the emergency needs and would focus heavily on promoting medium-term recovery and long-term drought resilience. The proposed US$250 million allocation from IDA’s dedicated Crisis Response Window would contribute to a robust World Bank Group response in the context of a broad international appeal for support to limit further deterioration of the crisis situation. The CRW allocation would play an important role in addressing the regional nature of the crisis in areas of IDA’s comparative advantage and would be grounded in the relevance of IDA’s ongoing country strategies and programming.

Project Name

Short

Term (up

to 6 mo)

Medium

Term (up

to 2 yrs)

Long

Term

(up to 5

yrs)

REGIONAL

(1) Emergency Health/UNHCR: Horn of

Africa Emergency Health & Nutritional

Project New N Y 30 30

(2) Drought Resilience and Livestock

Recovery New N Y 235 185 50

Total 265 185 80

ETHIOPIA

(1) Productive Safety Net Program Ongoing Y Y 537 267 200 70

Total 537 267 200 70

KENYA

(1) Enhancing Agricultural Productivity

Project New N Y 10 10

(2) Water and Sanitation Project (WaSSIP)Ongoing Y Y 50 30 20

(3) Health Sector Support Project

(medicines/medical supplies,treating severe

acute malnutrition at communities) Ongoing Y Y 56.9 0.1 56.8

Total 116.9 0.1 30 86.8

AFRICA TOTAL: 918.9 267.1 415 236.8

DJIBOUTI

(1) Employment and Human Capital Safety

Net Ongoing Y Y 8.6 3.6 5

(2) GFDRR and TFEESD Financed TA Ongoing Y Y 6.2 2.7 3.5

(3) Rural Community Development and

Water Mobilization Ongoing Y Y 7.8 5.8 2

(4) Emergency Project for Diesel/Energy,

Water Pumps and Cooking FuelOngoing Y Y 2.7 2.7

Total 25.3 12.1 13.2

TOTAL (US$ million) 944.2 279.2 415 250

Additional

Financing

(Y/N)

Project

Status

Timeline

IDA16

Allocation

(US$M)

Planned

CRW

(US$M)

Restructured

IDA Projects

(identified)

Total

Project

Financing

Prepared

Under OP

8.0 (Y/N)

- 19 -

33. Given the exceptional nature of the Horn of Africa Drought Emergency, Management recommends that the Board approve:

• An allocation from the CRW of US$ 250 million in light of the severity of the drought emergency and as financing of last resort.

• CRW financing for projects at the regional level as well as at the country level.

• Making CRW resources available on a grant basis directly to UNHCR, an international organization, on an exceptional basis given the lack of viable alternative arrangements for rapid response implementation of the proposed US$30 million Horn of Africa Emergency Health and Nutritional Project.

Annex 1: OCHA Requirements and Funding to date per country

- 20 -

Annex 1: OCHA Requirements and Funding to date per country

Annex 1: OCHA Requirements and Funding to date per country

- 21 -

Annex 2: Programming Overview – Horn of Africa Drought Response Plan Activity Project Resources

identified for

Drought

Response Plan

Funding Source Horn of Africa Drought

Response Strategy: Phases

Restructured

IDA Projects

(identified)

IDA-16 CRW Trust

Fund

Short

Term

Medium

Term

Long

Term

(US$m) (US$m) (US$m) (US$m) (US$m) (US$m) (US$m) (US$m)

Regional Regional -- Health

Short-term

Provision of nutrition to lactating mothers and babies and improving sanitation facilities

Horn of Africa Emergency Health & Nutrition Project

30 30 30

GFDDR support for Technical Assistance for drought recovery as well as grants for stimulating long term drought resilience

GFDRR-financed TA 4 4 2 2

Regional -- Agriculture (crops & livestock)

Medium to Long-term

Drought Resilience and Livestock Recovery

235 185 50 50 185

Regional Total 269 185 80 4 32 52 185

Ethiopia Ethiopia -- Social Protection

Short, Medium and Long-term

Conditional cash grants and food for work schemes to promote a sustainable environment and smooth income fluctuations

Productive Safety Net Program (Phase III)

267 267 64 100 103

Productive Safety Net Program (Phase III) Additional Financing (FY 11)

270 200 70 70 200

Delivery of key services to drought -affected people.

Protection of Basic Services (Phase II) including Additional

68 68 68

- 22 -

Activity Project Resources

identified for

Drought

Response Plan

Funding Source Horn of Africa Drought

Response Strategy: Phases

Restructured

IDA Projects

(identified)

IDA-16 CRW Trust

Fund

Short

Term

Medium

Term

Long

Term

(US$m) (US$m) (US$m) (US$m) (US$m) (US$m) (US$m) (US$m)

Financing

Protection of Basic Services (Phase III) (FY13)

200 200 200

Ethiopia -- Agriculture (crops & livestock)

Long-term

Diversify livelihoods of pastoralists and natural resource management.

Pastoral Community Development Program (APL II)

37 37 17 20

Pastoral Community Development Program (APL III)

100 100 100

Improve farmer’s incomes so as to improve their resilience to climate shocks.

Agricultural Growth Program

75 75 75

Ethiopia -- Environment

Long Term

Reduce land degradation in agricultural landscapes and improve the agricultural productivity of small-holder farmers.

Sustainable Land Management

10 10 10

Reduce land degradation in agricultural landscapes and improve the agricultural productivity of small-holder farmers.

Sustainable Land Management II (FY 14)

50 50 50

Ethiopia -- Water Supply & Sanitation

Long Term

Increased access to sustainable water supply and sanitation services for rural, drought

Water Supply & Sanitation SIL

33 22 11 33

- 23 -

Activity Project Resources

identified for

Drought

Response Plan

Funding Source Horn of Africa Drought

Response Strategy: Phases

Restructured

IDA Projects

(identified)

IDA-16 CRW Trust

Fund

Short

Term

Medium

Term

Long

Term

(US$m) (US$m) (US$m) (US$m) (US$m) (US$m) (US$m) (US$m)

vulnerable, users.

Increased access to sustainable water supply and sanitation services for rural, drought vulnerable, users.

Water Supply & Sanitation II (FY 14)

25 25 25

Ethiopia Total 1,135

479

575

70

11

134

185

816

Kenya

Kenya -- Agriculture (crops & livestock)

Short-term

Scaling up farmers’ grants Kenya Agricultural Productivity Project (KAPAP)

1 1 1

Seed multiplication and supply of planting materials

Enhancing Agricultural Productivity Project (EAPP)

10 10 10

Long-term

Diversify livelihoods of pastoralists and natural resource management*

Northern Kenya Pastoral Project

50 50 50

Kenya -- Health

Short-term

Enhancing disease surveillance East Africa Public Health Laboratory Networking Project

0.15 0.15 0.15

Enhance supply of medicines and medical supplies (procurement, storage and distribution)

Kenya Health Sector Support Project (KHSSP)

56.9 0.12 56.78 56.9

Kenya -- Water Supply & Sanitation

Medium-term

- 24 -

Activity Project Resources

identified for

Drought

Response Plan

Funding Source Horn of Africa Drought

Response Strategy: Phases

Restructured

IDA Projects

(identified)

IDA-16 CRW Trust

Fund

Short

Term

Medium

Term

Long

Term

(US$m) (US$m) (US$m) (US$m) (US$m) (US$m) (US$m) (US$m)

Rehabilitation of water supply, water trucking, plastic tanks distribution, water treatment, drilling emergency boreholes

WaSSIP Additional Financing (FY12)

50 30 20 20 30

Long-term

Improving decentralized water storage facilities

Kenya Water Resources Development Project (FY13)

50 50 50

Kenya -- Social Protection

Short-term

Increase cash transfers to households affected by food prices

Cash Transfer for Orphans and Vulnerable Children (CT-OVC)

9.6 9.6 9.6

Medium to long-term

Comprehensive program to address chronic poverty and crises

National Social Protection Project (FY13)

50 50 50

Kenya -- Energy

Medium and Long term

Addition of 290MW of generation capacity (4 Independent Power Producers)

MIGA, IFC and IDA Partial Risk Guarantee

30 30 30

Addition of 280MW of geothermal generation capacity and network expansion

Kenya Electricity Expansion Project

26 26 26

Wind Generation (Lake Turkana Wind 300MW)

MIGA, IFC and IDA Partial Risk Guarantee

2 2 2

Geothermal generation expansion, mini grids and network expansion

Scaling-Up Renewable Energy Program (SREP) & Power System Development

48 48 48

- 25 -

Activity Project Resources

identified for

Drought

Response Plan

Funding Source Horn of Africa Drought

Response Strategy: Phases

Restructured

IDA Projects

(identified)

IDA-16 CRW Trust

Fund

Short

Term

Medium

Term

Long

Term

(US$m) (US$m) (US$m) (US$m) (US$m) (US$m) (US$m) (US$m)

Project (IDA)

Enhancing power flows between countries of the EAPP

Regional Eastern Africa Power Pool Project APL1

24 24 24

Kenya -- Disaster Risk Management

Medium term

Livelihood Recovery and Drought Resilience

GFDRR 2 2 1 1

Kenya Total 410

37

284

87

2

99

133

178

Uganda Uganda -- Social Protection

Short-term

Agricultural Sector Support Project (FY13)

34 31 3 1 2 31

Uganda Total 34

-

31

-

3

1

2

31

Somalia

Support to drought affected populations in Somalia through cash-for-work to construct infrastructure that builds future drought resilience and distribution of agricultural inputs, livestock feed and veterinary services.

Drought Management and Livelihood Protection Project

9 9 9

Somalia Total 9 9 9 0 0

- 26 -

Activity Project Resources

identified for

Drought

Response Plan

Funding Source Horn of Africa Drought

Response Strategy: Phases

Restructured

IDA Projects

(identified)

IDA-16 CRW Trust

Fund

Short

Term

Medium

Term

Long

Term

(US$m) (US$m) (US$m) (US$m) (US$m) (US$m) (US$m) (US$m)

Africa Region Total

1,857

516

1,075

237

29

275

372

1,210

Djibouti A safety net program to enhance coping capacity by linking livelihoods resilience to improvement of nutritional practices and includes developing cash transfer mechanisms

Employment and Human Capital Social Safety Net

8.6 3.6 5 5 3.6

Strengthening community resilience to enhance agro-pastoral resource management and strengthen rural livelihoods through income generating activities such as fisheries and handicrafts.

Rural Community Development and Water Mobilization

7.8 5.8 2 2 5.8

Repairing/replacing diesel pumps for groundwater pumping system or installing solar or wind powered pumps

Emergency project for diesel/electricity

2.7 2.7 2.7

Supporting rapid assessment of water supply system, drought early warning system, support, emergency contingency fund mechanism, and strategy for climate resilience innovations

GFDRR and TFEESD financed TA

6.2 2.7 3.5 3.5 2.7

Djibouti Total 25.3 12.1 0 13.2 0 13.2 12.1 0

- 27 -

Total Drought

Resilience

Needs

Funding Source for Drought Recovery Drought Response Strategy

Existing IDA IDA-16 CRW Trust

Fund

Short

Term

Medium

Term

Long

Term

(US$m) (US$m) (US$m) (US$m) (US$m) (US$m) (US$m) (US$m)

1,882

528

1,075

250

29

288

384

1,210