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Insight Magazine Issue 3 2017

  • Text
  • Leone
  • Economic
  • Bumbuna
  • Sector
  • Infrastructure
  • Businesses
  • Kamara
  • Projected
  • Economy
  • Investors
  • Www.ftinsight.net
Sierra Leone's most authoritative business and investment magazine. Interviews with Henry Macauley, Joule Africa, Abu Kamara, Joseph Fitzgerald Kamara and more.

INVESTMENT Abu Kamara

INVESTMENT Abu Kamara highlights the local content requirements of every PPP deal, which are structured to encourage the maximum use of local content and technology transfer. “As much as possible, we encourage linkages with local industries and the private sector and promote Sierra Leonean participation in private sector consortia,” he says. “After all, the end goal of all this is to grow our economy and develop the skills and capacity of Sierra Leoneans.” Making the PPP process in Sierra Leone more responsive to these needs is a priority of Abu Kamara’s. A team which includes the development arm of the Ministry of Finance and Economic Development and the Public Investment Unit as well as the PPP Unit, evaluates projects from the various Government ministries, departments and agencies (MDAs), with the aim of developing a long term infrastructural development plan and identifying projects with PPP potential. “The intention is that we can take the initiative, package PPP deals, and go out to market with them on a competitive basis”. Social as well as economic benefits are an important indicator of success says Kamara. He quotes a colleague who says that PPPs should come with a fourth ‘P’ - which stands for people. “Look for example at a project for a deep sea transhipment container port that we are currently working on. It will be able to berth 150 cargo vessels and will create over 20,000-30,000 jobs. The Bumbuna II hydro project will create 2,500 jobs in the construction phase. These big projects are transformational– they stimulate manufacturing, create jobs and improve livelihoods,” he explains. The Unit also encourages community PPPs. Kamara points to a DFID funded waste and recycling service in Bo and Makeni, which is providing jobs, keeping the cities clean and promoting recycling. “We hope to replicate the scheme in Kono and Kenema,” he says. Where the risks of a project are higher than returns, development partners can step in, if the project is delivering vital services. Kamara points to work that the Unit is currently doing on setting up diagnostic centres. “The capital required to set up well-equipped diagnostic centres and run them as commercial enterprises, would put their services beyond the reach of average Sierra Leoneans. Under these circumstances, bringing a development partner in with a grant for the initial capex, and then charging fees for opex makes their services more affordable,” he explains. Foreign investment in post-Ebola Sierra Leone Murray Grant, CDC Group Plc The Ebola crisis had a major impact on businesses in Sierra Leone. The World Bank estimates that Gross Domestic Output fell by as much as 22 per cent during 2014-2015 - as a result of the crisis, and the dramatic dip in the price of iron ore. This economic contraction could have been worse had it not been for the necessary mobilisation of international aid and non-governmental organisations boosting demand for goods/services and injecting much needed foreign currency into the economy. While GDP growth has picked up since then – to just over 4 per cent in 2016 – the long term economic outlook remains a key question in a post-Ebola environment, where the private sector is significantly weaker and inflows from aforementioned international workers all but gone. Working alongside local teams, foreign investment can play a crucial role in reducing some of the constraints businesses face in order to drive economic performance. One of the main constraints is the lack of capital available to small and medium-sized businesses. During the crisis, many of the few remaining capital providers, mostly banks, had a temporary financing moratorium leaving businesses even more susceptible to the economic downturn at the time. In order to help, CDC partnered with Standard Chartered to develop a million loan facility for local firms. The loans enabled borrowers to continue operating and to keep providing jobs. The CEO of Benco Trading, one of the beneficiaries of the loans, said: “It allowed us to actually maintain our workforce. Because we were at a time where we were going to have to lose half of our staff.” Last year, CDC provided a second loan facility and many of the same companies, including Benco Trading, borrowed again to drive growth now the economy had started to recover. The company has since created 50 new jobs and is still hiring. What Benco Trading shows is that successful businesses create jobs. This is particularly important in post-Ebola Sierra Leone, where youth unemployment is around 70 per cent. If local businesses can access capital, they can grow and provide employment to the many young Sierra Leoneans looking for work. 15 There is a full pipeline of PPP projects, dominated by the energy sector. “Energy is a powerful driver of economic growth,” he says, “and it has taken close to 55-60 percent of my working time.”. As well as Bumbuna II, he has the TCQ Freetown Heavy Fuel Oil project almost at completion stage. Together these two will bring in an additional 200+ MW. Smaller solar projects, which should be completed mid next-year are intended to add another 50 MW to the grid. Transport is another key area with the aforementioned transhipment port on the horizon, and phase two of the Bolloré concession already underway. The unit is also working closely with agriculture “to see how best we can develop largescale commercial farms that can take care of our domestic consumption,” he says. Under this sector, the Unit is in the final stages of concluding a PPP deal for an extensive oil palm plantation in Mattru. Abu Kamara highlights the local content requirements of every PPP deal, which are structured to encourage the maximum use of local content and technology transfer. “As much as possible, we encourage linkages with local industries and the private sector and promote Sierra Leonean participation in private sector consortia,” he says. “After all, the end goal of all this is to grow our economy and develop the skills and capacity of Sierra Leoneans.” www.insight.sl

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