The instigation of the private sector’s role in the development of the country has been a key strategy of the Government of Sierra Leone, including in its current Medium-Term National Development Plan (2019-2023), dubbed “Education for Development.” Indeed, in order to meet critical challenges to sustainable development, such as poverty, youth unemployment, local economic development and environmental protection, the governmental efforts need to be supported by the active involvement of private actors, including in financial terms. Yet, the Government lacked the appropriate human resources needed to adequately unleash cooperation and partnerships with the existing underdeveloped private sector.
Towards a Solution
The overarching aims of the Private and Financial Sector Development project are to improve the delivery of public services; to provide inclusive access to financial services; to expand income opportunities for the poor; to meet infrastructure needs; to increase the Government’s revenue-mobilization levels; and to promote and enable market-based public-private partnership (PPP) solutions, at both national and local levels, to help address pressing development challenges.
The main accomplishments of the project so far include:
- The development and finalization of the Public-Private Partnership Act, which was passed in Parliament in 2014.
- The establishment of institutional and regulatory frameworks for PPPs at the Office of the President, including the creation of a dedicated Public-Private Partnership Unit, to play a key role in ensuring that the Government attracts and benefits from private investment projects. The PPP Unit staff have been equipped with skills in economic viability analysis, best practices in procurement and effective negotiation strategies. In particular, four staff of the PPP Unit were trained in Ghana at the African Institute of Management Science in 2018, on identifying and appraising PPP projects and developing PPP policies. Trained staff of the PPP Unit have been deployed for instance in the implementation of two solar- and hydro-power projects, while overall there has been an improvement in the preparation of tender documents by the procurement staff of targeted ministries, departments and agencies, better management of the procurement process and greater participation in negotiations.
- The strengthening of the capacity of Bank of Sierra Leone to supervise and support financial inclusion and access to financial services, as well as to carry out research on inclusive growth and financial-policy analysis. The project has also supported the upgrading of the Bank’s ICT infrastructure, to improve management and oversight of an inclusive digital financial system, which should, in turn, allow the Bank to develop more robust capital-market operations.
- The elaboration of a range of PPP-related literature.
Overall, improved familiarity and expertise with the PPP model have increased innovation in targeted local councils. A variant of the model – public-private-community partnership (PPCP), which explicitly involves the local community – has enhanced local infrastructure and service delivery, increased employment, and improved the revenue base of local councils. Makeni and Kenema city councils, for example, increased revenue collection in 2017 by an average of 50 percent, compared with a 25 percent increase from the previous year.
Under PPCP arrangement, the Community is a party to the PPP agreement. PPCP is ideal for local and sub-national governments. For it to be sustained and replicated, it should be introduced on a pilot basis and rolled-out to other communities based on successive monitoring and evaluation of the activities. It is ideal for revenue enhancement projects and for services, operations and maintenance contracts. PPCP can be sustained if substantial financial, technical and operational risks are transferred to the private partners. The risks of the projects should be balanced and allocated amongst the local authority, community and private partners and other stakeholders best able to manage the risks.
Countries/territories involved: Ghana, Sierra Leone
Supported by: UNDP and UNCDF
Implementing entities: Public-Private Partnership Unit (Office of the President of Sierra Leone) and Bank of Sierra Leone
Project Status: Completed
Project Period: 2011-2016
Name: Milton Korseh-Hindowa
Title: Economics Specialist, UNDP, Sierra Leone