Private Sector Development Forum Opens In Freetown
By Marian Samu

The President, Alhaji Dr. Ahmad Tejan Kabbah, on Monday 25th October, 2004 opened the 2004 Private Sector Development Forum at the Miatta Conference Centre in Freetown. The event attracted representatives of the private sector, entrepreneurs and financing institutions, both local and international.

Welcoming guests and participants at the opening ceremony the Governor of the Bank of Sierra Leone, Dr. James Rogers, who chaired the occasion, said the forum is quite appropriate and timely, particularly at this time of the country's recovery process. He said the forum was organized to bring all the players together to deliberate on the concept, policies, programmes and strategies for the private sector to play its key role of harnessing and distributing financial and other resources to facilitate growth, wealth and job creation.

Dr. Rogers stated that government fully recognizes private sector investment to be the leading stimulus for economic growth and development, but contrastingly, while the GDP has grown steadily from 3.8% in 2002 to 9.4% in 2003, which is reflective of robust economic activity, private sector investment rose only marginally from 1.3% of GDP in 2001 to 1.7% of GDP in 2002. This, the Governor said, compares unfavourably with public sector investment, which rose from 4.8% of GDP in 2001 to 5.3% in 2002. He, however, expressed belief that this forum would address these and other key issues in private sector development.

The European Union Trade Expert, Mr. Trevor Simumba, while giving a brief background to the forum said he was amazed at the kind of development that has taken place in such a short time after the end of the war in January, 2002. He said he was proud to be in Sierra Leone at this period and be part of the process.

Mr. Simumba said he has been working with the Ministry of Trade and Industry for the last few months to put in place a policy framework for business enterprise development in Sierra Leone, and that the forum is an outcome of such work which was made possible with support from the United Nations Development Programme (UNDP). He said an extensive mixed group of both national and international organizations will participate in the forum, including the European Investment Bank, ACP, Pro-Invest, ECOWAS Bank, the International Finance Corporation of the World Bank, UNIDO, Action Aid, Association of Sierra Leone Commercial Banks, Sierra Leone Indigenous Business Association, etc.

Mr. Ibrahim S. Kamara, UNDP Poverty Programme Specialist, said that there has been persistent calls for the development of the private sector to propel the growth of the least developed and vulnerable economies such as Sierra Leone. He noted that no matter how committed the public sector may be towards promoting appreciable levels of economic growth, it will ever remain an illusion since Government, the prime mover of the public sector, cannot do business based on sound economic and commercial principles. The Sierra Leone government, he said, like most other responsible governments has ever since acknowledged the efficacy of passing over this responsibility to the private sector, even against a number of odds. He stated that among the numerous factors responsible for the underdevelopment of the private sector in Sierra Leone is the perennial problem of inadequate opportunities for financing business.

Mr. Kamara, however, said that UNDP will contribute towards private sector leadership through capacity-building and entrepreneurial skills training to small and medium scale enterprises, focusing on women and youth-run businesses. He said they, in essence, will promote grassroots financing, particularly for the majority of the rural poor. Mr. Kamara also sent out a strong message of the need to open up for direct foreign investment.

The Minister of Trade and Industry, Dr. Kadi Sesay, said that the promotion of private sector development is crucial, particularly the small and medium scale businesses and that is why they have organised this forum and brought together national and international financing institutions and business enterprises to address the issue.
Dr. Kadi Sesay said that in collaboration with the World Bank they have been able to develop the Investment Promotion Code, a document for developing business in Sierra Leone.

Talking about the various efforts her Ministry has made in this direction, Dr. Sesay mentioned, inter alia, the development of an Action Plan for dismantling administrative barriers that prevent the private sector from accessing finances, the development of the garments and textiles promotion trade, development of SLEDIC and the transformation of the National Workshop at Cline Town into an industrial estate, which is currently being rehabilitated by the Chinese. The Minister also informed her audience that Sierra Leone has been given access into the AGOA visa arrangement for our textiles and garments to be exported to the United States, adding that discussions have already been held with business enterprises in the U.S. A. and that so far, orders have been placed which are being processed.

Dr. Kadi Sesay, however, lamented that in spite of efforts being made by small and medium scale businesses to expand, financing is still a big bottleneck for them. She cited the ECOWAS Bank as one institution from which no Sierra Leonean has yet benefited.

She also spoke about the OPEC Fund and the OPEC Investment Scheme and said Sierra Leone has signed an agreement with OPEC, so business enterprises can now approach them for help.

She appealed to all financial institutions for a fruitful one-to-one discussion with business enterprises so as to come up with good recommendations to help move the private sector forward.

The President, Alhaji Dr. Ahmad Tejan Kabbah, said he was happy that the Ministry of Trade and Industry, together with donor partners has organized the Forum to exchange ideas on how finance, a major constraint for business promotion and indeed economic growth, can be made more accessible. President Kabbah stated that the inability of our businesses to access finance either because of unavailability or cost has been a matter of great concern to him. Consequently, he said he had requested the State-owned commercial banks during the last two occasions when they presented dividends to government, and during the last annual dinner of the Sierra Leone Chamber of Commerce, that they design lending policies and instruments to make finance less costly and more accessible to a wider business community, including farmers.

He noted Sierra Leone has achieved considerable progress in economic, political and social recovery since the end of the civil war, and that it has now embarked on economic policies aimed at sustainable economic growth and development. The private sector, he observed, plays a key role in this strategy. President Kabbah emphasised the need to remove both fiscal and financial constraints that could impede development, adding that government has already put in place fiscal policies to promote foreign direct investment- the investment code. He said it is now for this Forum to come up with policy recommendations aimed at removing the present financial constraints on capital formation in the private sector, especially for Sierra Leonean entrepreneurs.

President Kabbah also gave assurance of Government's determination to provide a policy environment that will facilitate private sector development, but noted that the lack of capacity to do this effectively is constrained severely by both financial and human resource gaps.

Talking about the important role of the banking and financial institutions, President Kabbah noted the presence of new entrants, like the International Commercial Bank (Sierra Leone) Ltd. from Malaysia and the establishment of community banks countrywide by the Bank of Sierra Leone, in an attempt to bring financial intermediation to the doorsteps of the disadvantaged population in the rural communities.

It is expected that these initiatives, coupled with more innovative policies and strategies to engage the private sector will provide the fuel for the private sector to play its role as an engine of growth of the economy.

President Kabbah, however, expressed concern that access to medium and long-term capital at affordable cost is difficult and in most cases non-existent, particularly, for Small and Medium Scale Enterprises (SMES), noting that growth and the creation of employment would come largely from a vibrant, well-resourced and competitive small and medium level enterprises.

He therefore appealed to all the financial institutions present to promote the establishment of private sector development financing schemes that can provide the financial resources required for our local entrepreneurs to access and develop their businesses further.

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