By George M.O. Williams
Freetown, Sierra Leone – October 31, 2024
In a significant move towards economic transformation, the United Nations Development Programme (UNDP), in partnership with the Ministry of Trade and Industry, the European Union, and other collaborators, launched the National Action Plan for the formalization of informal enterprises on October 31, 2024, at the Atlantic Hotel in Freetown.
This new roadmap aims to transition the informal sector into the formal economy, fostering sustainable growth and improved economic resilience.
The National Action Plan outlines critical strategies to integrate informal enterprises, which make up a substantial portion of Sierra Leone’s economy, into the formal sector. This initiative, led by the Ministry of Trade and Industry with expertise from the International Labour Organization (ILO), and supported by the UNDP, the European Union, and the Organization of African, Caribbean, and Pacific States (OACPS), seeks to address barriers informal businesses face such as limited access to credit, markets, and resources.
UNDP Resident Representative, Fredrick Ampiah highlighted the vital role of technology in this formalization effort, stating that digital innovation could bridge gaps in education, market access, and financial inclusion. “By leveraging technology, we accelerate the growth of enterprises while ensuring their alignment with sustainable practices, thereby contributing significantly to the United Nations Sustainable Development Goals (SDGs),” Ampiah said.
The ILO’s Country Director for Nigeria, Ghana, Liberia, and Sierra Leone, Dr. Vanessa Phala, noted that this transformation is essential for developing Sierra Leone’s private sector, creating jobs, widening the tax base, and improving public services.
Phala emphasized the ILO’s ongoing commitment to support enterprise formalization in Sierra Leone and across 50 countries through a dedicated Action Programme.
Sierra Leone’s Minister of Trade and Industry, Alpha Ibrahim Sesay, described the formalization initiative as pivotal for economic transformation and sustainable development. Sesay emphasized that while the informal sector constitutes around 90% of Sierra Leone’s economy and provides employment to a large share of the population, it faces challenges like limited financing, market opportunities, and social protection.
“The formalization process involves registering informal businesses with relevant authorities and ensuring compliance with legal and regulatory requirements, alongside expanding their access to financial services and social protection,” Sesay explained. He added that the action plan aligns closely with Sustainable Development Goal (SDG) 8, promoting sustainable and inclusive economic growth with decent work for all.
European Union representative Reuben emphasized the thorough consultations with stakeholders across Sierra Leone in developing this roadmap. The EU co-funded project awarded grants of $150,000 to LAPO Microfinance and Apex Bank to create innovative financial products aimed at accelerating the formalization of MSMEs. Additionally, technical assistance is being provided to financial institutions and fintech companies to stimulate enterprise development in the country.
The Action Plan, supported by targeted solutions like streamlined registration, improved financing, and business support, represents a hopeful step toward creating a more resilient, inclusive economy. The Ministry and its partners are optimistic that these efforts will drive long-term benefits for Sierra Leone’s economic landscape.