Enhancing Agribusiness Performance and Livelihood Outcomes in Fragile Contexts: A Case Study of Somalia’s Agricultural Value Chains

This study investigates the relationship between agribusiness performance and livelihood outcomes in fragile contexts, with a particular focus on the agricultural value chains of Somalia. By adopting a holistic framework that combines Porter’s Value Chain with the Sustainable Livelihoods Framework (SLF), this research highlights the importance of different livelihood assets—human, social, natural, physical, and financial capital—in mediating this relationship. Applying structural equation modeling to data from 400 respondents in the agribusiness value chain, the results indicate that improved agribusiness performance significantly raises incomes, food security, and resilience. The findings indicate that agricultural performance exerts a direct and substantial beneficial influence on livelihood outcomes (β = 0.396, p < 0.001), especially in enhancing income, food security, and resilience. It markedly improves livelihood assets (β = 0.714, p < 0.001), including human, social, natural, physical, and financial capital. These assets significantly affect livelihood outcomes (β = 0.495, p < 0.001) and partially mediate the association between agribusiness success and enhanced livelihoods (indirect impact β = 0.353, p < 0.001). The model demonstrates substantial explanatory power (R² = 0.682 for outcomes), hence supporting the employed frameworks. Based on these findings,, policymakers should focus enhancing agriculture performance and livelihood assets. Targeted initiatives encompass the expansion of Sharia-compliant microfinance, investment in rural infrastructure and irrigation, enhancement of extension services, and fortification of market connections. The advancement of social capital via inclusive involvement in value chains, particularly for women and youth, is crucial. Climate-resilient techniques, like soil conservation and drought-resistant crops, must be integrated into mainstream approaches. These measures are essential for attaining inclusive and sustained rural development in Somalia.