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Sierra Leone Business: SMEs SECTOR : A KEY DRIVER TO SIERRA LEONE’S ECONOMIC GROWTH AND PROSPERITY

According to The World Bank Small and medium scale enterprises (SMEs) have contributed immensely to the growth and development of the global economy in terms of GDP and employment opportunities. In developed countries for example SMEs account for 60-70% of employment.  High growth SMEs make important contributions to technological innovation, new job creation and productivity growth. In countries like China, India and most Asian tigers SMEs account for 40% of all exports. Women –owned SMEs are growing at a faster rate than the economy as a whole in several developing countries. In developing Sub-Saharan Africa countries like Sierra Leone the role of SMEs have become more crucial as they have the potential to improve the standard of living through employment of youths, poverty reduction and export growth.
In a developing economy like Sierra Leone, Micro, Small, and Medium Enterprises play tremendous role in reengineering the socio-economic landscape of the country. These enterprises largely represent a stage in industrial transition from traditional to modern technology. The variation in transitional nature of this process is reflected in the diversity of these enterprises. Most of the small enterprises use simple skills and machinery as well as local raw materials and technology. Micro, Small, and Medium Enterprises are vital in developing the Sierra Leone economy for the following reasons: social and political role in local employment creation, balanced resources utilization, income generation, utilization of local technology and raw materials and in helping to promote industrial development .
There is growing realization on the part of the Government that instead of the promotion of large-scale enterprises, it should  promote micro, small, and medium enterprises. Until recently, the micro, small and medium enterprises were virtually neglected in the Sierra Leone Economic Development Strategy.
Government must create an enabling and friendly environment in which Micro, Small and Medium Enterprises would flourish, and entrepreneurial instincts aroused so that the entrepreneurs may get maximum output and rewards from their efforts. Radical liberalization and deregulation should be introduced to make the Sierra Leone economy progressively market-oriented and integrated with the emerging global economic structure in a sustainable manner.
In view of the above, the Government has realized the importance of this sector as a catalyst for the growth, productivity and competitiveness of the economy. Not only are they the seedbed for wealth creation, employment generation and poverty reduction, they have been recognized as critical breeding and nurturing grounds for domestic entrepreneurial capacities, technical skills, technological innovativeness and managerial competencies for the development of a vibrant and productive economy.
The present socio-economic development challenges confronting Sierra Leone is exacerbated by the changing demographic profile of the country. The number of unemployed is now at an alarming rate , of which the proportion of the educated youth will also continue to rise. Therefore, the need for strong, accelerated economic growth and development are now more acute than ever.
Sierra Leone’s economic growth has been led by the solid minerals  sector for years. The agricultural, agro-allied and tourism  sectors offer huge potential for job creation. Moreover, the importance of Micro, Small and Medium Enterprises in the growth process is considered to be a key engine of economic growth and development in Sierra Leone. Hence, the development and promotion of this sector holds the key to inclusive growth and plays a critical role in Sierra Leone’s future. With the overall objective of reducing poverty through wealth and job creation and facilitating national economic development, the Micro, Small and Medium Enterprise are perceived as the oil required to lubricate the engine of socioeconomic transformation.
The role includes substantial contribution of the sector to the gross domestic product, employment generation, export, increasing local value addition and technological advancement. Other measures advanced by the advocates of micro, small and medium enterprises development in the country include:
i. The low level of capital required in   the establishment of the enterprises.
ii.The large number of the establishment and their labour intensive modes of operation guarantees employment for a large number of persons (labour intensive).
iii.Inventions, adaptations, and general technological development are common in these enterprises.
iv. A more equitable distribution of income is usually achieved in this sector.
v. Industrial diversification and a relatively more balanced regional development are assured.
vi. The evolution of indigenous enterprise is common amongst these establishments.
vii.General enhancement of the tempo of industrial development is visible among these enterprises.
viii. Tendency among these enterprises to become feeders of large-scale enterprises and service products made by the latter.
Challenges for growth of  SMEs
According to a recent study  SMEs growth and development in most  African nations is severely hampered by the following:
(i)A weakly developed business environment
(ii)Red tape, corruption, complex entry regulations etc
(iii)Access to finance
(iv)Inadequate power supply
(v)Lack of skilled management     manpower
(vi)Access to new market opportunities.
This  has been of great concern to the government, citizenry, operators, practitioners and the organized private sector groups.   Hence it is need of the hour for policy makers of
developing and under developing countries to focus upon aspects as many as possible
that helps the SME sector to become real back bone of their economic
growth. Due to emerging global scale on SMEs  there is need to provide adequate basic infrastructural facilities by government and encourage banks and other financial institutions to give out loans to SMEs operators. The operators on their part should invest more  through the training of skilled labour.
Today’s education should be predicated on the philosophy of creating jobs, i.e. transforming the students from job seekers to job creators. The cardinal objective should be the creation and management of new enterprises.  Entrepreneurship education should be given a pride of place in our educational system and included in the curriculum of the nation’s secondary schools and tertiary institutions in Sierra Leone.
John F Fowler is a business consultant, entrepreneur and youth entrepreneurship development trainer.
He has produced books on various SME business start-ups. For business advice contact him on info@startabusiness.com.ng , www.startabusiness.com.ng, whatsapp +234 802 325 4577.
Monday May 08, 2017.

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