Businesses in Sierra Leone urge government to enforce Local Content Policy

Amin Kef: Sierra Leone Telegraph: 21 June 2018:

When the former government and Parliament of Sierra Leone decided to pass into law the 2016, 2017 and 2018 Finance Acts that specifically insisted on enforcing the country’s Local Content Policy, it was because this policy was established to boost the economy.

It seeks to do so by empowering local industries and Sierra Leonean citizens to fully participate in growing the economy.

Key sections of the Local Content Policy

In all enterprises operating in any sector of the economy, at least 20 % of the managerial and 50% of intermediate positions shall be held by Sierra Leonean citizens. The respective ratio will be increased over time and after 5 years of establishment will stand at 60% for managerial positions and 80% for intermediate positions. (Section 6.3.4.4)

A foreign company that partners with Sierra Leonean firms will be granted preferential treatment when competing against companies with no percentage of equity share ownership by Sierra Leonean firms or citizens. (Section 6.3.5)

20% of the equity shares of every registered foreign entity in Sierra Leone should belong to Sierra Leoneans.

The Sierra Leone Local Content Act was passed to promote the development of all sectors of the economy through the incorporation of local content in their productive activities. And the Act provides for the formation of the Sierra Leone Local Content Agency.

It also creates a Fund to support suppliers, exporters and importers, as well as provisions for employment and training of citizens; issues a SLC certification, scorecard, and a performance report; and put in place rules for contract tendering process.

The Act also requires bidders and subsequently operators to submit a Sierra Leonean Content Plan each year to demonstrate compliance with the local content policy requirements.

The Plan must indicate “how an operator or contractor will give first consideration to Sierra Leonean companies, materials, goods and products made in Sierra Leone, including specific examples showing how first consideration is considered and assessed in evaluation of bids for materials, goods and products required by the project, operations or activity.”

One of the main objectives of the former government’s Agenda for Prosperity (A4P) was to attract foreign direct investments (FDI) to the country to boost private sector investment, which is estimated at only 10% of GDP.

The Sierra Leone Brewery Limited (SLBL) is a good example of successful attraction of foreign investment as part of the Heineken Company.

It is the belief of the SLBL management that the agricultural sector in Sierra Leone can boost the manufacturing sector of Sierra Leone, especially if the manufacturing sector is enabled to invest and utilize local raw materials to a significant level in their processes, in order to produce high quality products, satisfying consumer demand and reduce dependence on imported products.

This could have a multiplier effect across the value chain, thereby creating opportunities for local entrepreneurs, thus promoting private sector growth.

With the Finance Act of 2016, it is clear that government is committed to its industrialization programme and efforts to promote Sierra Leone as a foreign investment destination.

The enactment of the Finance Act is a landmark move and a positive regulatory icon to developing a strong private sector. The provisions of this Act encourage the development of the local industrial sector, especially the beverage industry.

Furthermore, developing local leaders through internationalization, investing in the latest technology to produce high quality brands, innovation and community development have so far been some of the major benefits of the implementation of the Local Content Policy.

It could be recalled that in order to enhance sorghum cultivation following the enactment of the Local Content Policy Act, the SLBL introduced the Community Revenue Enhancement through Agricultural Technology Extension (CREATE) Project, supporting the growing of sorghum locally for use as an active ingredient in the production of its local brands.

It is the global aim of Heineken of which SLBL is a subsidiary, to use 60% locally produced raw materials in the company’s production processes.

Currently, sorghum is a viable commercial crop grown all over Sierra Leone and is creating a reliable source of income for over 25,000 farming families. Certainly, the multiplier effect of this on the local economy is huge.

Owners and managers of SMEs across Sierra Leone are now urging the Maada Bio-led SLPP government to enforce the Local Content Policy Act, as it is the new direction which can bring about positive change for all Sierra Leoneans, with particular emphasis on SMEs, as these make up the bulk of enterprises employing local citizens.