Jobs challenges and opportunities in Sierra Leone - notes from the field

Sierra Leone is gearing up for recovery after the double shock of Ebola and the crash of iron ore prices and production in 2014-15. The Government of Sierra Leone (GSL) is currently focused on the need to increase job creation, especially for youth, and to improve the image of farm jobs and to shift the expectation that educated youth should all get wage jobs.
 
During a recent trip to prepare the ground for a jobs strategy for the country, the World Bank team met with rice and fish aggregators who are working with large numbers of smallholders and artisan fishermen to better understand the opportunities and challenges faced. Like many countries in Sub Saharan Africa, Sierra Leone does not maximize its arable land.
 

 
Traditional land-extensive cultivation prevails; farmers leave large tracts fallow and then periodically clear them by burning. Subsistence crops grown by smallholder farmers are not bankable, so there’s a vicious circle of low outputs and low inputs. Poor soil management and the lack of investment in machines and modern inputs also result in very low labor productivity. However, if market linkages for smallholders are developed, the agriculture and agricultural processing offer strong possibilities for generating more and better jobs, with promising potential to improve productivity and earnings.
 
What this means is getting smallholder farmers to grow crops they can sell for cash, and linking them to aggregator firms who add value to these agricultural products and take them to the markets. As a result, smallholders can access capital and modern production technology, and gain entry to urban and export markets. The Bank’s new smallholder commercialization project, which was approved in January and is co-funded by DfID, will support four high-potential value chains: rice, cocoa, palm oil and poultry. 
 
Jobs interventions are more likely to be successful when they support market trends. The smallholder commercialization project will reinforce a transformation that’s already underway. One of the aggregators the Bank team met was the West African Rice Company (WARC). This firm, which farms 1,000 ha. in the south of Sierra Leone, purchases grains from 500 smallholders and is looking to expand its out-grower arrangements. WARC started with a modest US$1.7 million investment and has more than doubled productivity by applying modern technology. It also channels financing to Sierra Leonean SMEs, to buy machinery to address labor supply bottlenecks for the preparation of land for planting and at harvest time.
 
The Korean-owned Chung Gang fish plant near Hastings is another case in point. A US$4.7 million investment provides 200 direct jobs and supports 9,000 artisan fishermen working on 300 boats. The large jobs potential of artisan fisheries linked to processors and exporters highlights the need to resolve the challenge of illegal fishing. Access to key export markets such as the EU will be blocked until regulatory compliance is achieved. The Bank’s West Africa Regional Fisheries Project addresses this issue. There’s also high jobs potential in tourism, and new, large, five-star hotel investments by Radisson and Hilton in Freetown are a positive sign. The challenge is to improve the country’s post-Ebola image and to increase hotel capacity and develop attractions outside of the Freetown area.
 
There are many positive signs, but the Bank’s team also identified important constraints that call for policy corrections in order to leverage faster jobs and productivity growth and improve labor market outcomes for young people. These include: reforming land policies; tackling bureaucratic and regulatory constraints (including corruption); addressing skills development; improving access to finance as well as market linkages (physical, organizational and informational); and increasing infrastructure services (especially electricity, roads and water). In the urban labor market around Freetown, transport logistics are also a major challenge for the proper functioning of labor markets.
 
The next step will be for the World Bank team to work with the Government to build on the Sierra Leone Jobs study (produced last year) by analyzing enterprise data and macroeconomic data to complete an in-depth diagnostic of the challenges and opportunities for creating jobs in Sierra Leone. Based on that, we will prepare a jobs strategy that complements the Bank Group’s ongoing activities. Special attention will be paid to reforms that could make a difference to jobs without necessarily incurring fiscal costs.
 
Using the Bank Group’s resources to help improve jobs outcomes is a key pillar in our work in countries affected by fragility, conflict and violence. As the 2013 World Development Report on Jobs notes, jobs can not only boost living standards and raise productivity, but also foster social cohesion. The Sierra Leone jobs strategy will be an opportunity to put flesh on that agenda.

This blog was amended on June 22 at 11.16am.