Alfred Duwor (to the right) owns Abundance Class Provision Store i Monrovia. Alfred opened the store when the war ended, using his private savings and loans from a microfinance bank in Liberia.
Better business climate creates new jobs in Liberia
The 14-year-long civil war ended in 2003 after the signing of a peace agreement. Peace has prevailed since, but it’s fragile. The country needs stability and economic growth, and Liberia’s population needs employment and opportunities to pull itself out of poverty. With a very young population (half of it is under the age of 15), an economic development that includes the poor, who make up the majority of the population, is crucial for preservation of peace and continued development.
The World Bank is the world’s largest aid organisation, owned by 187 member countries. Sweden, being one of the member countries, supports its operations with the annual sum of SEK 3.7 billion. International Finance Corporation (IFC) is an institution within the World Bank Group, working with poverty reduction by supporting economic growth in developing countries. This is done through investments in private enterprises, mobilising capital in international financial markets, offering financial consulting and supporting both reforms of the ministries of the private business sector in developing countries.
Improved investment climate
In Liberia, Sida and IFC cooperate through a joint programme that aims to improve the investment climate, the access to financial services and the capacity of small entrepreneurs. The goal is to develop the country’s private businesses and thereby stimulate the increase in employment rates and economic growth. The programme was started in 2006 and Sweden joined as a donor in 2008. It has supported the government reforms to simplify and improve business regulations and legislations. Some of the achievements are: an easier process to register a business without the usual red tape, clearly defined routines for trade and a newly established private-public partnership forum.
Thanks to the reforms initiated by the programme, the situation in Liberia has improved substantially – between 2008 and 2010, nearly 20 000 new job opportunities were created, approximately 12 million dollars were invested in the private sector and the programme has enabled cost savings equivalent to 4.7 million dollars within the private sector. Liberia has climbed 21 spots in the World Bank’s yearly “Doing Business” ranking, from 177 to 149, earning it a spot among the world’s top ten global reformers in 2010.
Sida will contribute 62 million SEK to the programme between 2011 and 2013, through IFC. This makes Sida the sole funder during this extended phase of the programme, where the focus is to further improve the business and investment climate and develop a vibrant private sector.
Facts about Swedish development aid:
The Swedish development cooperation is carried out in two ways: one of them is through a direct financial support to a certain number of countries, the so-called bilateral support.
However, a large part of Swedish support is given through multilateral cooperation where several donor-countries cooperate through international organisations. The Swedish multilateral development work is mainly carried out through the UN, the World Bank and the EU member states.