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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.

In a country like Sierra

In a country like Sierra Leone, with many vibrant smaller businesses but where larger firms are scarce, having a partner with an on-the-ground presence like Standard Chartered is invaluable. Without them, the loan facility simply wouldn’t have reached the same amount of companies. But businesses need more than just money if they are to succeed in Sierra Leone – they need support in developing the right strategy. Like every country in Africa, Sierra Leone comes with its own unique set of circumstances and as such investors must tailor their approach to the nuances of the investment climate. This is the approach CDC took in our most recent investment in the country – m into Solon Capital Partners, an investment holding company based in Freetown, to grow its existing businesses and invest in new opportunities in Sierra Leone. Solon’s structure and investment strategy takes a creative approach to solving market problems. By using a company structure, as opposed to the private equity (PE) fund model, Solon can offer greater flexibility to the businesses it invests in. Solon investee, Flash Vehicles, a vehicle hire and leasing firm, is an example where this model has allowed the Manager to start-up and invest in the business over a much longer period of time than it could have in a standard PE model. The business has scaled up significantly delivering international service standards in a space where supply had been informal and fragmented. SMART TOOLS FOR SMART BUSINESS Flash’s success and a commitment to reinvestment has enabled Solon to set up Rising Academies, a network of affordable schools in Sierra Leone and Liberia, aimed at improving access to education. Rising is already having an impact. In Liberia, a study was recently carried out to compare schools run by various providers. The study found that, pupils at Rising Academies schools made two to three times as much progress in reading and mathematics as children in some of the other groups. Investment in social infrastructure like education is essential for sustainable development in Sierra Leone. The Ebola crisis meant schools were shut for eight months and parents lost jobs (which paid for tuition fees) disrupting the education of thousands of school-aged children. Organisations which provide teaching at an affordable cost will be vital as the country continues to re-build in the long term. An educated and skilled management and labour workforce is essential to foreign investment as it requires local human resources at each stage of the investment cycle. From the availability of companies and projects in which to invest, to local input in an investor’s evaluation, to managing these businesses and projects. 13 Investing in affordable education is one example of how private sector investments can provide much needed affordable social and public infrastructure. This needs to be replicated in other sectors including affordable healthcare, housing and power. As foreign investors, we are now asking ourselves - and other similar organisations - how can we have a similarly high impact in these other sectors? Essential to the answer is partnering with teams who have a detailed understanding of doing business in Sierra Leone. More investors working closely with more local teams will help establish successful businesses which create quality jobs, build career paths so young people will be encouraged to stay in the country and contribute to government tax receipts, while helping Sierra Leone secure a stable future post-Ebola. Murray Grant is Managing Director, Intermediated Equity, at CDC Group Plc – the UK’s development finance institution. Here he writes about the themes in the Sierra Leonean economy that foreign investment can help overcome and what else is needed to help it flourish. www.insight.sl

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Leone Economic Bumbuna Sector Infrastructure Businesses Kamara Projected Economy Investors www.ftinsight.net