World Bank approves $40 Million to boost Sierra Leone’s SMEs and diversify the economy 

Sierra Leone Telegraph: 30 July 2020:

The government of Sierra Leone today received another major grant support from the World Bank’s International Development Association (IDA),  to boost investments in the country’s Small and Medium Sized Enterprises (SMEs) involved in the non-mining productive sectors.

Sierra Leone’s economy must be diversified to enable sustainable growth and the creation of much needed jobs for the millions of people languishing in poverty.

The $40 million approved today by the World Bank Board of Executive will also fund the government’s Economic Diversification Project which is aimed at strengthening the business enabling environment by promoting reforms to help new business start-ups, facilitate strategic public investments to improve competitiveness and private investments, support existing SMEs and entrepreneurs, and build the capacity of public institutions and private sector operators.

If implemented and managed effectively, the Economic Diversification Project will help transform Sierra Leone’s economy from decline to a dynamic and vibrant engine of growth and prosperity.

According to the World Bank’s announcement today, SMEs are currently facing challenges to growth in Sierra Leone, including: low access to information, poor infrastructure, limited access to finance, and weak capacity to scale up businesses.

These constraints the World Bank says, disproportionately impact women entrepreneurs, and the project hopes to address them through public goods investment, SME and start-up acceleration, and early-stage financing.

“Harnessing Sierra Leone’s potential to meet the growing demand for jobs and sustainable and equitable growth will largely depend on its ability to diversify the economy. There is a critical need to boost the competitiveness of growth sectors such as manufacturing and services to create jobs and generate labour income as a sustainable pathway for inclusive growth,” said Gayle Martin, World Bank Country Manager for Sierra Leone.

“Promoting economic diversification to reallocate resources from low- to high-productivity sectors can boost growth in GDP per capita and reduce poverty,” Gayle Martin said.

According to the World Bank, the project is consistent with the Government’s Medium-Term National Development Plan (2019-2023) and its strategic objective to prioritize private sector-led growth for job creation, poverty reduction and economic diversification.

The World Bank also says that the project is aligned with its Africa Region Strategy, and the World Bank’s focus on Maximizing Finance for Development (MFD) and Jobs and Economic Transformation (JET IDA 2019), and consistent with the priorities for sustainable growth and poverty reduction as outlined in the Systematic Country Diagnostic (SCD, 2018).

The project is a key part of the World Bank’s support to the Government of Sierra Leone, as articulated in the most recent Country Partnership Framework (FY21-FY26), which prioritizes support to Economic Diversification and Competitiveness with Resilience.

In its announcement, the World Bank indicated that “given the context in which the project will begin implementation, many of the initial project activities will directly support the government’s immediate efforts to address the economic impacts of the COVID-19 pandemic, in particular its impact on SMEs in hard-hit sectors, such as tourism.

“The project will contribute significantly to the COVID-19 recovery phase, with its focus on increasing diversification, strengthening resilience of economic sectors outside of mining and de-risking the country to make it more attractive to investments.”

What remains to be seen, is whether the government has the technical capability and expertise to successfully deliver this transformational project. Will the funding go where it is inrended?

3 Comments

  1. Reallocating resources from low to high productivity sectors will boost economic growth and lift millions out of proverty. Diversification of our economy is what is needed. If implemented and managed effectively, the framework to support small and medium size businesses in the non mining sector, will transform the economic prospects of many of our fellow Sierra Leoneans. Take agriculture, at the moment, the government spends millions of dollars to import our staple food rice. If the government can support our famers and boost productivity, it will not only help to feed the population, but also the government will use some of the funds to support and boost other sectors and create more competitiveness in these sectors. And the way to do it, is government should challenge our local farmers – district to distric, to produce enough to feed our population.

    Give them the necessary support, at the same time announce to the general public, after two years the government or any one in the private sector will no longer be allowed to import rice. That will put our famers on notice to improve productivity, because the country will be relying on them to feed the nation. That way, our country will be self sufficient on the things that we can produce.

    I am afraid that is a big “IF” with capital letters. The IMf and other financial institutions have always fulfilled their part of the agreement made by diffrent governments both past and present. Their willingness to help is never in doubt. The only people that have always fallen short of honouring their part of the bargain, are our ineffective, greedy and coruupt politicians that have little, or no intrest in seeing our tiny country lifted out of the depths of poverty.

  2. Of course the funding will not go where it is intended. But since you have already asked such a critical life-changing question, I will tell you where it will go – Prepare to grind your teeth in anger and be ready to kick up some dust in disappointment when this is over, because it is all bound to become a bizarre mindless charade, a carefully orchestrated fleecing scheme by a criminal SLPP Cabal, that is guilty of the worst kinds of malfeasance ever known to man.

    Have you ever seen a worthless fruitless mismanaged exercise purposefully being flushed down the drain of unproductivity, that is aided by rampant corruption? Well, that is certainly going to be the end result of all the saddlebags full of money this government has already received, not to mention the high interest loans on already exhausted poverty-stricken horses and now suspicious grants resembling defective malfunctioning elevators that could leave you stranded anytime in the middle of nowhere (lol). Mark my words, wherever arrogance and incompetence are nurtured and groomed like suckling infants and given pre-eminence over diligence and assiduity, there also will you surely find abject humiliating failure, stagnation and lack of tangible progress. Trust me there is nothing this dysfunctional inadequate government is going to do now that the game is far gone, that will enable them to turn things around 360 degrees for the better; Nope not happening. That which could have and should have given them an economic lifeline for a country desperately in need of help, was allowed to slide and glide away foolishly like a giant fish caught with the hands in a flowing river that somehow easily escaped, because they were busy and engaged in endless, time consuming debaucheries, witch-hunts barbarism and profitless binge palm wine drinking, that ended up accomplishing absolutely nothing of value that is sustainable and viable to our beloved nation.A bunch of Good for nothings,that’s who they really are!(lol)

    • Unfortunately, sadly, you are absolutely right in every aspect. I mourn for this country’s citizens.

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