Eight out of ten Liberians don’t have a formal job. Spend a few moments in the capital Monrovia watching individuals hawk all kinds of items in the streets and this becomes obvious. Employment impacts all levels of life, including health, education and peace. Without a job, how can parents afford to send their children to school or purchase medicine? How can people live a secure and peaceful life? These questions ring especially true when you consider that half the Liberian population lives below the poverty line.
Yet while Liberia faces many social challenges, the country is growing at a yearly rate of 8% of GDP, due to one of the highest foreign direct investment (FDI) rates in the world. This investment is coming mainly from oil, mining and agricultural concessions.
While this is a welcome sign, how can Liberia ensure that the wealth from FDI reaches the average person living below the poverty line without a formal job?
The answer lies with Liberia’s own small and medium size enterprises (SMEs). The World Bank estimates that 86% of the world’s jobs are created by SMEs, and for every dollar spent on a Liberian business, 78 cents will remain in the nation’s economy. By encouraging concessions to do business with SMEs in the country rather than importing the goods and services they need, local businesses can expand, create jobs and bring new investments into the country. All of which translates into poverty reduction and a higher standard of living for average Liberians.
But it’s not as easy as it sounds. Even though concessions know the impact they can have on developing economies through local procurement, oftentimes imported goods are more cost-effective and of higher quality. Additionally, in an economy like Liberia’s, where there is little advertising and hardly any market information available, companies don’t know where to find quality suppliers. To make matters worse, Liberian businesses also don’t know how to find out about contracts or how to successfully bid on them.
This is where Building Markets comes in. We work across sectors and with both large and small companies to support local businesses, build and strengthen local supply chains, and ensure monies spent in Liberia stay in Liberia. We are raising money to support this cause via Crowdrise through Skoll’s Social Entrepreneurs Challenge and sponsored by the Huffington Post. You can donate directly to Building Markets’ Liberia page.
Since 2011, Building Markets supported SMEs to win 199 contracts worth over $12 million and create 471 full-time equivalent (FTE) jobs. Building Markets does this by breaking down information barriers through maintaining the largest online business directory and sending tender announcements straight to businesses via email and SMS, matching buyers and suppliers, and building the capacity of local businesses through a variety of training sessions that teach businesses to better understand buyers’ expectations and contracting procedures.
Facilitating more than $12 million worth of contracts to local SMEs is a big deal for an economy in which 80% of businesses make an average turnover of $20,000. In the next year, Building Markets will have a greater impact by targeting concessionaires and the agriculture supply chain. Donating to our page on Crowdrise will support this work, resulting in job creation, increased livelihoods and poverty reduction.
Building Markets is partnering with the Government of Liberia’s National Investment Commission to produce a report that takes an in-depth look at the procurement needs of each phase of a concessionaire. This information will enable SMEs to tailor their goods and services to meet the demand of each phase of concessions.
The agriculture sector is poised to grow because large buyers, such as the canteens of concessionaires and UN agencies, want to purchase as much foodstuffs locally as possible, but most farmers are subsistence farmers and cannot produce a quantity large enough to sell directly to large buyers. Partnering with local groups that support farmers, Building Markets will help farmers, aggregators, caterers and supermarkets connect with each other.
By identifying new opportunities for Liberian businesses and supporting their ability to capitalize on them, Building Markets supports SMEs’ development and expansion. On an average contract, this means the creation of 13 jobs in a fragile economy with over 80% unemployment. Moreover, Building Markets ensures that local businesses are reaping some of the benefit of the high rate of FDI entering the country. More importantly, when businesses learn how to bid on a contract, learn how to reinvest the money won from a contract back into their business, and create jobs and income for others in their community, their impact is truly sustainable. SMEs are the engines of growth in most economies; Building Markets is just the spark plug. Keep the engine running by donating here.
Tags : Crowdrise FDI Huffington Post job creation Skoll Foundation