AFFORD BUSINESS CENTRE

Wednesday, April 26, 2017

IMPACT OF THE EBOLA OUTBREAK ON BUSINESS IN SIERRA LEONE

Resilience of local, diaspora SMEs and international enterprises 

EXECUTIVE SUMMARY

Resilience of local, diaspora SMEs and international enterprises

One of the strategic goals of the African Foundation for Development (AFFORD-UK) is to expand and enhance the role of the diaspora in job creation in Africa in the face of the continent’s growing youth population and demand for employment.1 AFFORD-UK has been especially active in post-conflict Sierra Leone, where it works in partnership with African Foundation for Development in Sierra Leone (AFFORD-SL) to facilitate the creation, protection and maintenance of jobs through practical support for small and medium-sized enterprises (SMEs). In Sierra Leone, SMEs account for approximately 70 per cent of the economy,2 and denote enterprises of between 5 to 50 employees.

AFFORD-UK and AFFORD-SL were jointly commissioned by Comic Relief to undertake an ‘Enterprise Development in Africa’ project, in the context of Sierra Leone. The AFFORD Business Centre (ABC) was set up in 2011 as a social enterprise to support fast-growing SMEs in Sierra Leone that were likely to create between 10 to 50 jobs. The programme, now in its fifth year, is due to conclude in September 2016. The ABC has made significant gains over the years, supporting the creation and protection of over 400 jobs in Sierra Leone through comprehensive business development support, via its enterprise hub based in the capital, Freetown.

The outbreak of Ebola virus disease (EVD) which struck Sierra Leone in May 2014, and lasted until November 2015, brought with it a tragic death toll, as well as devastation of families and communities and disruption to social life. The 18-month crisis had an equally devastating effect on the country’s economy and businesses, particularly its SMEs. The various domestic and international interventions imposed to contain the outbreak, including restrictions on travel and trade, and emergency measures to curtail movement and gatherings, increased economic hardship and impacted diaspora and foreign investors with operations in the country. In addition, the collapse in commodity prices during the Ebola outbreak, including the global price of iron ore, affected the mining sector, and also had a significant economic impact resulting in decline in government revenue, job losses and drop in income for SMEs in the supply chain.

This study was commissioned by the ABC to gauge the impact of the recent Ebola outbreak on SMEs in various sectors and across the four main regions in Sierra Leone. It also assesses the impact of the Ebola outbreak on existing and potential diaspora and UK-based investments into Sierra Leone.

The study was conducted in parallel in Sierra Leone and the United Kingdom, between September 2015 and March 2016. It aimed to understand how ABC could better support its SME clients and diaspora investors going forward and to address immediate challenges as Sierra Leone focuses on post-Ebola economic recovery.

The study’s findings provide a deeper understanding of the effect of the outbreak on local and foreign businesses operating in the country, with a view to accelerating business recovery and jump-starting economic growth post-Ebola. Furthermore, the findings provide a valuable resource, through in-depth analysis of primary quantitative and qualitative data, extrapolated with findings from other studies, particularly on business strategies in connection with disaster preparedness, mitigation and response.

The study commenced with secondary research by way of a review of existing literature and relevant public documents. The primary research component consisted of both quantitative and qualitative elements. In Sierra Leone, 250 businesses were surveyed and five focus group interviews were held with SME participants in the key towns across the four regions. In the UK, an online SurveyMonkey questionnaire was used, which received 58 responses, of which the 50 respondents who indicated that they were existing or potential diaspora or other UK-based investors formed the sample group. Three focus group interviews were also held with the same group.

Click link below to download full report:

ABC_StudyReport2016.doc_10.05.16_darUDCFINAL_UpdateTimeline.pdf