Small and Medium Scale Enterprises Development

Transcription

1 Berichte aus der Volkswirtschaft Denis M. Sandy Small and Medium Scale Enterprises Development A Strategy for Poverty Alleviation in Sierra Leone D 46 (Diss. Universitat Bremen) Shaker Verlag Aachen 2003

2 Acknowledgements. Abbreviations. Map of West Africa. Map of Sierra Leone. Dedication. CONTENTS. vii viii-xi xii xiii xiv Chapter 1 - Introduction and methodology of study Introduction Justification of study Objectives, assumptions and hypotheses of study Objectives Theoretical assumptions Hypotheses Scope and methodology of study Scope Methodology of study Data collection techniques Sampling procedure Enterprise survey Secondary data Data analyses Chapter 2 - The Sierra Leone economy and development strategies since independence Introduction Geography Past economic development performance and experiences Period I (Before the reform period) Period II (During the reform period) Period III (Current economic situation) Output and economic growth Exports, imports and balance of payments Government financial operations Prices and exchange rates Debt situation and external reserves External assistance Constraints/experiences on past development efforts Current economic development situation Chapter 3 - Poverty and unemployment in Sierra Leone Introduction. 56 Section 1: Poverty in Sierra Leone Introduction Social indicators of poverty in Sierra Leone

3 3.1.3 Poverty and income inequality in Sierra Leone Measuring economic well being Household income in Sierra Leone Urban income Rural income Household expenditure Household expenditure by region Household expenditure by income group Changes in household expenditure Aggregation of poverty in Sierra Leone Poverty measures Poverty profile Poverty profile by area Poverty by province Poverty brackets The causes of poverty in Sierra Leone Section 2: Unemployment in Sierra Leone Introduction Sierra Leone's misplaced employment strategy after independence Labour force and the distribution of unemployment in Sierra Leone The labour market nexus in Sierra Leone Linkage between poverty and unemployment in Sierra Leone Chapter 4 - Poverty alleviation strategies in Sierra Leone Introduction. 112 Section 1: Implementation of poverty alleviation programmes in Sierra Leone Factors responsible for unsuccessful results Section 2: Poverty alleviation projects over the past decades Some successful ones Section 3: Poverty alleviation strategies in Sierra Leone Introduction Theories Link to poverty alleviation strategies Structural adjustment and poverty alleviation in Sierra Leone Chapter 5 - Small and medium scale enterprises in Sierra Leone Introduction Africa' alternative development strategies related tosmes Concepts and theories on SMEs SMEs definition in the Sierra Leone context Factors responsible for enterprise start-up African entrepreneurs and characteristics of small and medium scale enterprises

4 Ill Location and ownership of structure The structure of SMEs market Sector concentration and gender Employment scenario Education Financial resources Business practices Regulatory framework Growth constraints (factors hindering the development of SMEs in Sierra Leone) Access to capital Relationship with the government Market and technology Enterprise linkages Other hindrances Chapter 6 - The contribution of small and medium scale enterprises towards the national economy and alleviation of poverty in Sierra Leone Introduction The savings and investment scenario of small and medium scale enterprises in Sierra Leone The savings scene The investment scene Innovation and future investment goals The employment and income aspects of SMEs in Sierra Leone The employment aspect The income aspect SMEs and payment of salaries SMEs returns and profits Revenue and profits Total revenue Profit level and net profit Total cost Expenditures Overall net profit Sector net profit Enterprise net profit Contribution to the Gross National Product Microeconomic theory of the firm Summary offindingson the income aspect Determining sector relative efficiency Chapter 7 - Poverty dynamics and small and medium scale enterprises; and determinants of successful entrepreneurs/tip in Sierra Leone Introduction Actors in the SMEs sphere in Sierra Leone The Social Action and Poverty Alleviation

5 IV Unit (SAPA) The Sierra Leone Export Development and Investment Company (SLEDIC) The National Industrial Development and Finance Organisation (NIDFO) The Ministry of Development and Economic Planning (MODEP) The National Commission for Social Action The Sierra Leone Opportunities Industrialisation Centre (SLOIC) The Non-governmental Organisations (NGOs) Reactions of some entrepreneurs/beneficiaries to Government poverty alleviation programmes on SMEs promotion in Sierra Leone Trade sector Restaurant and Bars sector Service sector Manufacturing sector Self organisation and Networking of SMEs in Sierra Leone Poverty dynamics and SMEs development in Sierra Leone Working poor? Consumption by the poor? Relationship between poverty dynamics and Small scale industrialisation Role of the State and NGOs SMEs future prospects Determinants of successful entrepreneurship in Sierra Leone Contributors to the concept of entrepreneurship The early thought on entrepreneurship The classical school on entrepreneurship The neoclassical school on entrepreneurship Alfred Marshall Joseph Schumpeter Frank Knight Isreal Kirzner Translating theoretical determinants into empirical determinants of successful entrepreneurship in Sierra Leone Comparing characteristics of classic theories to empirical research results Chapter 8 - Strategies and policy interventions for small and medium scale enterprises development and New Agenda for Action in Sierra Leone Introduction Strategies and policy interventions for SMEs development in Sierra Leone

6 V Macroeconomicframeworkand an enabling environment Access tofinancialresources The encouragement of clusters and collective efficiency Human resources development Policy coherence and private-public sector dialogue Support to female entrepreneurs NGOs and donor intervention New Agenda for Action in Sierra Leone Commitment to policy implementation Conflict prevention Private sector participation External agencies and NGOs Resettlement and rehabilitation programmes Development of small and medium scale enterprises. 319 Chapter 9 - Conclusions and Recommendations Introduction Conclusions Recommendations List of graphs: i. Graph Trends of GDP and GNP per capita growth rates of the Sierra Leone economy (1970/ /2000). 33 ii. Graph Trends of the structure of demand of the Sierra Leone economy ( ). 33 iii. Graph Export and import trends of the Sierra Leone economy from iv. Graph Trends of the central government finances of the Sierra Leone economy from 1990 to v. Graph Average annual r percentage growth rate inflation trend of the Sierra Leone economy between 1990 and vi. Graph Official and parallel exchange rates of the Sierra Leone economy between 1990 and vii. Graph Trend of the total external debt (including long term and IMF credit) of the Sierra Leone economy between 1990 and viii. Graph Trend of the gross international reserves of the Sierra Leone economy between 1990 and ix. Graph Trend of the aid dependency of the Sierra Leone economy between 1990 and x. Graph 3.1- Average wage trend in the public and private sectors. 64 xi. Graph Rural and urban poverty in Sierra Leone (1989/1990). 75 xii. Graph Regional headcount poverty contribution to national poverty in Sierra Leone (1989/1990). 78

7 xiii. Graph Employment in economic activity by sex (1989/90). 100 xiv. Graph Age distribution of employment in Sierra Leone ( ). 102 xv. Graph Unemployment by level of education in Sierra Leone. 105 xvi. Graph Scenario of the salary scene of SMEs, minimum wage and poverty thresholds in Sierra Leone. 225 xvii. Graph SMEs revenue generation potential per month in Sierra Leone. 230 xiii. Graph SMEs expenditure outlay per month in Sierra Leone. 233 xix. Graph SMEs contribution to the GDP of Sierra Leone. 242 Appendices: i. Appendix 3.1- Calculation of the values of the poverty indices to determine the contribution to national poverty in Sierra Leone. 338 ii. Appendix Calculation of the values of the poverty indices to determine the contribution of the various provinces to national poverty in Sierra Leone. 339 iii, Appendix 5.1- Computation of the arithmetic mean for the enterprise establishment year. 340 iv. Appendix Computation of the standard deviation for the enterprise establishment year. 340 v. Appendix Statistical test of significance for the displacement hypothesis on the establishment of SMEs in Sierra Leone. 341 vi. Appendix Calculation of the arithmetic mean for the employment generation potential of SMEs in Sierra Leone. 342 vii. Appendix Calculation of the arithmetic mean for the salary situation of SMEs in Sierra Leone. 342 viii. Appendix Calculation of the product moment correlation coefficient for the level of employment intake and SME net profit. 343 ix. Appendix Presentation of the sector variable contribution. 344 x. Appendix Sector variable relative efficiency presentation Work questionnaire References