Sierra Leone

Sierra Leone: Emergency Support for Agro-Processing SMEs in Response to the COVID-19 Pandemic

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© Moses Alex Kargbo/World Bank

The Sierra Leone Agro-Processing Competitiveness Project (SLAPCP) provided emergency grant support to 25 agro-processing small and medium enterprises (SMEs) crippled by the COVID-19 pandemic. It helped to ensure business continuity, resilience, and the safeguarding of jobs, incomes, and livelihoods. The project was exceptionally adjusted in terms of the grant requirement, making emergency disbursements for an inaugural cohort of agro-processing SMEs recruited shortly before the outbreak of the COVID-19 pandemic. Twenty-five agro-processing SMEs (of which 13, or 52 percent are women-owned and/or women-led) received targeted grants totaling $1.3 million to ensure business continuity and resilience in coping with the pandemic shock in October 2020.

Challenge

Agriculture, including agribusiness, is a key sector of the Sierra Leone economy, contributing more than half of gross domestic product (GDP) — and accounting for the largest share of labor markets. The sector is dominated by smallholder production of staple crops, which together account for about three‐quarters of the volume of agricultural production. However, low productivity and several failures in market, policy, and institutional coordination dampened agriculture competitiveness. Sierra Leone is a largely import-dependent country, importing over US$529 million-worth of consumer goods annually (World Integrated Trade Solution, World Bank, 2017). The 2020 COVID-19 pandemic has adversely affected the food value chains. The attendant global economic shock and broken supply chains significantly affected the operating ability of SMEs in the country. Specifically, it led to massive layoffs, cashflow pressures, shrinking operations and, in some cases, complete shutdowns.

Approach

The SLAPCP project’s SLAgcelerator is a SME Technical Assistance Facility, which provides solutions to key market failures that firms and SMEs face in Sierra Leone. In response to the 2020 pandemic, the SLAgcelerator conducted a COVID-19 Impact Assessment, including deep-dive analysis. The analysis revealed that over 90 percent of agro-processing SMEs are experiencing critical cashflow shortages because they did not have access to formal lenders for emergency loans due to the pandemic. The findings resulted in the Government of Sierra Leone and the SLAPCP deploying the project resources to keep the SMEs afloat. Several exceptional conditions and procedures were developed for an emergency grant.

Results

  • Twenty-five agro-processing SMEs (of which 13, or 52 percent are women-owned and/or women-led) received targeted grants totaling US$1.3 million to ensure business continuity and resilience in coping with the pandemic shock in October 2020.

  • Some 210 staff of these SMEs were retained together with hundreds of part-time and casual laborers. Raw material supply relationships with 10,000+ smallholder farmers and 500+ low-income retailers were also maintained.

  • Over 10 new products were developed in response to the COVID-19 pandemic, including healthy food variations and alternative packaging to promote better health and safety.

  • The COVID-19 Impact Assessment for Agro-processing SMEs informed the preparation of mitigation strategies and responses of the SLAPCP, the Ministry of Trade and Industry (MTI), and other implementing partners. The Assessment further revealed that the cohort-one SMEs faced serious cashflow and working capital constraints, which were aggravated by the COVID-19 pandemic.

World Bank Group Contribution

The total cost of the International Development Association (IDA)-financed SLAPCP is US$10 million.

Partners

The World Bank collaborated with the Sierra Leone Ministry of Trade and Industry, the Ministry of Agriculture, the Sierra Leone Standards Bureau, the Environmental Protection Agency, the Sierra Leone Investment and Export Promotion Agency, the Small and Medium Enterprise Development Agency and other agencies. This close collaboration supports the development of favorable policies, capacities and other functions for building a vibrant and growing agro-processing sector. The project also partners with other local and global business accelerators, learning institutions and market actors to promote ecosystem building, shared learning and effective engagement.

Moving Forward

Recruiting the second cohort of agro-processing SMEs for incubation and matching grant provision is underway. Through the SLAgcelerator, the project plans to produce a highly productive group of agro-processing SMEs that contribute to agriculture transformation in the country.

Beneficiaries

The first cohort launched by the SLAPCP included 25 SMEs across five regions.