By Mabinty M. Kamara
Native Consortium and Research Center (NCRC) has called on the government of Sierra Leone to prioritize the hospitality industry in its implementation of the $40million World Bank (WB) grants for Small and Media Enterprises (SMEs) in the country.
The World Bank recently announced the support under its SMEs Investment and Economic Diversification scheme geared towards boosting investment and access to capital.
NCRC made the suggestion in a position paper issued early last week.
"Tourism, Entertainment, and hospitality sector has been the hardest hit by COVID 19, therefore, more focus should be given to revamp the industry quickly" it said in the paper issued by its Executive Director, Edmund Abu Jnr.
"SMEs should focus on producing what we consume. We shall closely work with the Finance/Trade Ministry to advocate, monitor and encourage entrepreneurs to go into agro based businesses," it added.
NCRC noted that it had in several meetings held both locally and internationally advocated to the World Bank and the IMF for such support, noting that their economic matrix and arguments to the two international lenders has been consistent over time; that GDP growth rate does not alleviate poverty, rather, it is poverty alleviation that should drive GDP.
"The WB, the Finance & Trade Ministries could recall supporting the SMEs. Financial inclusion by shaking the informal sector has been very crucial. Our report in April 2020 titled "Striking a Trade off between saving lives and livelihoods in combating corona" support to SMEs was one of the five point plan. So we hope the GoSL will not see this as a one off project,” it said.
Among other things, the Consortium also noted that Economic Diversification through value chain addition should be Central in the Non-Mining investment.
"It is purely for SMEs and it should be used on non-mining activity and then to boost economic diversification. In our position paper, we tried to state not only the prescription of the World Bank’s economic diversification but also the value addition that's the second part of our positions," Mr Abu said in an interview with Politico.
The organization is therefore calling on the government of Sierra Leone and potential SME beneficiaries of the grant to be looking at new ways to transform the country's economy through adding value in their chain of production, for instance a one stop shop for cutting and polishing of diamond. It also noted that adding value to agricultural products and processing fish to the final consumer will be an investment with the potential to boost growth.
While appreciating the gesture of the Bank for the support, NCRC also commends the government for winning the trust of the lender, which he noted doesn’t give out cash to a country if they don’t trust their fiscal architecture.
The Sierra Leone Economic Diversification Project, according to a statement on the World Bank website, is to support investment and growth of SMEs in non-mining productive sectors and it is aimed at strengthening the business enabling environment by promoting reforms to facilitate business entry and operation, facilitate strategic public investments to improve competitiveness and private investments, support SMEs and entrepreneurs, and build the capacity of public institutions and private sector operators.
“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 labor income as a sustainable pathway for inclusive growth,” said Gayle Martin, World Bank Country Manager for Sierra Leone, in a statement announcing the grant.
She added: “Promoting economic diversification to reallocate resources from low- to high-productivity sectors can boost growth in GDP per capita and reduce poverty.”
The project, according to the Bank, is in line 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 project is also aligned with the World Bank Group 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.
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