SME and Entrepreneurship
The objective of this component is to undertake public goods investment to attract private participation in the Tourism sector and support SME growth and stimulate entrepreneurship in high-growth productive sectors by addressing critical firm-level and sector-level constraints
The tourism sector in Sierra Leone has important natural and cultural assets that can become competitive in attracting visitors. The country has some of the most attractive and accessible beaches in West Africa, offshore islands and historical sites, a mountainous backdrop and home to the world-famous Tacugama Chimpanzee Sanctuary, the country’s tourism potential has been well recognized in global news and tourism media outlets
The tourism sector was hard hit by both the 10-year civil war and the EVD outbreak, the sector has proven to be resilient. After falling to almost zero visitors during the years of active conflict, and dropping again following the Ebola Virus outbreak, the number of visitors to the country over the last three years before the COVID-19 crisis showed a steady recovery, increasing from 51,391 in 2017 to 63,700 in 2019
Growth in the tourism sector has strong connections to agriculture, fisheries and other services that can lead to positive spillover effects in the economy.
Tourism has increased its contribution to GDP from 2.9 percent in 2014 to 5 percent in 2019 and provides approximately 53,000 jobs (about 40 percent of service sector employment) in Sierra Leone, contributing, in addition, with vital foreign exchange
most serious obstacle they face versus 52 percent for men-owned led firms
The country is currently ranked (131 out of 140 countries) in the World Economic Forum’s (WEF) most recent Travel & Tourism Competitiveness Index
Results from a recent tourism enterprise survey shows that women owned businesses faces greater challenges for growth. 73 percent of women-owned firms cite access to finance as the cause of this.
Entrepreneurship is not yet seen as a viable career option. A recent study pointed that less than 3 percent of university graduates think of entrepreneurship as a career option, compared to 44 percent who seek to go into the development organizations, and 38 percent into the public sector
Despite the challenging business environment, connectivity, poor infrastructure and other constraints, an entrepreneurship ecosystem is emerging in Sierra Leone . There is a growing number of entrepreneurship support programs and private sector services ranging from business development services to incubation programs to business competitions and pitch nights. Over the past decade, five venture capital and private equity (VCPE) funds have established ongoing operations in Sierra Leone. Taken together, they have invested over US$50 million in at least 50 companies
To contribute more significantly to economic diversification and the creation of more jobs, the entrepreneurship support system will need to be strengthened. The 2018 Global Entrepreneurship Index (GEI) which measures the quality of entrepreneurship and the extent and depth of entrepreneurship support systems ranks Sierra Leone 132 out of 137 economies, with top performance in ‘product innovation’ and weakest performance in ‘start up skills’ indicator
Component 2.1
This sub-component is looking to address the infrastructure challenges of the tourism sector through investments in strategic public goods to help increase the attractiveness of the sector and sites for investments that would not be carried out by the private sector on its own.
Improvement of 6 destination sites in the country
As part of the improvement of the sites, the project will also work on improving the competitiveness of SMEs and entrepreneurs in the tourism sector operating in these sites, while also helping to renew private sector investment in the wake of COVID-19
Development of a National Tourism Marketing Strategy for Sierra Leone
Development of domestic tourism through the launch of the domestic tourism awareness campaign
The development of strategic plan for sustainable management of tourism resources including the promotion of ecotourism.
Support women entrepreneurship in the tourism sector particularly in arts and craft. Women in tourist sites including those in which the project is investing will be trained to improve their art and craft and business skills and will be provided support to expand their businesses.
Component 2.2
The objective of this sub-component is to strengthen the overall emerging entrepreneurship ecosystem in Sierra Leone, and to provide financial and non-financial support to entrepreneurs (start-ups) and SMEs. Project intervention in this sub-component includes:
Supporting Start-Ups and SMEs : Entrepreneurs that have further advanced their initial business ideas will be able to apply for additional support for the development of their businesses. The support provided under this initiative is intended to help the entrepreneurs turn these ideas into companies with potential for growth, value-addition and job creation
Supporting the Entrepreneurship Ecosystem: To help strengthen the overall nascent entrepreneurship ecosystem, the project will identify and support local institutions, including hubs, universities and NGOs, that are stimulating entrepreneurship to expand their capacities and increase the quality of their efforts
Leveraging additional private investment : This activity will seek to leverage additional private investments for SMEs to help them in their growth stage of development. To help leverage this additional capital and investment support, the project will set aside resources (up to USD 1.5 million) with the aim of investing or co-investing in growth-oriented SMEs and entrepreneurs