By Foday Moriba Conteh
Deputy Minister of Finance ll, Mr Sheku Bangura, on 14th January 2020, at the Radisson Blu Mammy Yoko Hotel, launched the ‘Sierra Leone Economic Diversification Study’ Report. The Report was launched in a bid to complement the Government’s ongoing economic diversification drive and make the over-reliance on the mining sector a thing of the past.
The World Bank’s report outlines sectoral and firm-level analysis of productivity in Sierra Leone; challenges to growth and productivity; and suggestions of what the Government could do in the short, medium and long term to drive diversification and enhanced productivity into sectors for which Sierra Leone can be competitive globally.
The report does not only look at direct interventions, but it also looks at the wider doing business environment and some of the cross-cutting investments that Government should undertake.
According to the Deputy Minister ll, over the years Sierra Leone’s economy has mostly been driven by the mining and agriculture sectors, noting that the limiting effect of having an economy heavily dependent on the mining sector is widely known, mostly due to the lessons learnt from the twin shocks of the fall in commodity prices and the Ebola epidemic in 2014.
He said whilst labor productivity in this sector is relatively high, the capacity to generate jobs and linkages with the rest of the economy has been limited.
He said the agriculture sector on the other hand, despite accounting for 60.3 percent of the Gross Domestic Product (GDP) and employing about 58 percent of Sierra Leoneans, has the lowest levels of labour productivity, noting that there is clearly a need to change the reality.
The World Bank’s Sierra Leone Economic Diversification Study covered both the macro and micro economy.
“It examined historical growth and labor productivity performance by sector and at firm level; outlines determinants of productivity and challenges faced by firms; provides a rationale for diversification; highlights paths to economic diversification; potential sectoral priorities; and also provides lessons from comparators like Ivory Coast and Rwanda on global competitiveness,” he said.
The Deputy Minister ll said as part of their support to improve access to finance, the Ministry of Finance is working with international financial institutions to create new credit guarantee schemes for targeting sectors, noting that they are already working with the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group and have also started discussion with the African Trade Insurance Agency.
He said this year the Government will also re-introduce a national micro credit scheme that will be implemented by commercial banks, micro finance institutions, community banks and Non-Governmental Organisations to support the provision of finance to Small and Medium Enterprises.
Senior Economist and Co-Task Team Lead at the World Bank, Mr. Youssouf Klendrebeogo and Senior Economist at the World Bank, Kemoh Manasaray co-presented the critical findings of the study.
The Team explained that the promotion of economic diversification is important in many respects and not just for economic growth and development, but also crucial for guiding the design of future World Bank engagements in Sierra Leone. They also presented lessons from others that have successfully diversified their economies and possible pathways through which Sierra Leone can replicate appropriate successful strategies.
Representatives from the Ministry of Planning and Economic Development and the Ministry of Trade and Industry stressed the relevance of the report to their respective Ministries.
A panel discussion was held with participants mainly from the business community to discuss the recommendations in the report.