Local Governments in Puntland creating decent jobs through Promotion of the Micro Small and Medium Enterprises (MSME) Sector
In Somalia like in most post conflict and emerging economies, where the public sector is still struggling to recover from the effects of war, the private sector and in particular the MSMEs has been the key driver of employment and growth.
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However structural and institutional challenges exist that are curtailing sustainable growth of the MSME sector and thus the need to create a favourable environment for this sector to thrive has been an important agenda for not only the central government institutions but also the districts (local governments) in a bid to promote local economic growth and employment generation.
Under the Joint Programme for Local Governance (JPLG), local governments in Puntland through the Local Economic Development (LED) initiative have developed LED strategies, identified, set up and implemented initiatives that are geared to create an enabling environment for private sector growth. These include streamlining business licensing application procedures with the introduction of an automated system to ensure that businesses can be registered within the shortest time possible and acquire licenses for operation, introducing a favourable business licensing tax regime to encourage compliance and incentivize formalization of small businesses, delivering of vital infrastructures such as roads and markets which have a multiplier economic effect, and implementing schemes to enhance the entrepreneurial and business management skills of small scale traders and linking them with financial institutions to access micro credit to boost their businesses.
Local governments are faced by a mammoth task to deliver the huge service delivery demands within their mandate against the limited financial resources at their disposal. Moreover, there is increased public expectation for local governments to perform, resulting from the sustained awareness campaigns carried out under the JPLG civic education program and public private dialogue initiated and driven through the LED forums. As a result local governments have to generate enough revenues to meet the huge gap in service delivery and without a thriving private sector mobilizing these resources is infeasible. The fundamental notion therefore is local governments have to stimulate the growth of the private sector which will in turn provide the resource base for them to tap into through levying of taxes and fees on businesses.
The LED component within the JPLG program supports districts to implement projects derived from their LED strategies which aim to promote local economic growth and create jobs for the local population. The projects allows multi stakeholders such as municipalities, central government, private sector and JPLG to pull resources together for funding.
In 2014 - 2015, Bosaso and Qardho districts are implementing projects which will support 72 existing small business owners (market vendors) who are primarily women to receive a comprehensive package of entrepreneurial, business and financial management training in addition to financial support through administering of micro loans. The business management training was delivered by East Africa University Start and Improve Your Business (SYIB) certified trainers who received a 3 months Training of Trainers (ToT) training from ILO and have become the first ever group of certified and recognized entrepreneurship trainers in the whole of Somalia1 . The SIYB trainers will also provide additional support to the entrepreneurs which will include provision of continuous mentoring and business counselling for a period of 6-9 months to improve their business performance and growth. The districts have also partnered with Amal Bank to set up a revolving microfinance scheme which will provide collateral free and zero interest micro loans of up to $ 1,000 to the business owners which will be repaid within a period of 6 – 12 months. The loans will allow the entrepreneurs expand their businesses, increase turnover and profit margins which will in turn impact positively in their livelihoods and welfare. The target group of this intervention are informal micro ventures and it is envisaged that through this initiative, they will scale up and formalize in turn providing the local governments more revenue source to tap from through issuance of new business licensing permits. At the end of the one year project cycle, another group of entrepreneurs will be taken up to benefit from the same scheme.
On average, each year local universities in Puntland produce between 1,500 – 2,000 graduates in various disciplines. Due to low absorption capacity of the local labour market and mismatch between skills and available job opportunities most of these young people are often rendered unemployed. Moreover lack of entrepreneurship culture and interest amongst young graduates has further complicated the problem, with preference being to secure white collar jobs rather than taking self-employment. In light of these situation, the Garowe municipality has partnered with East Africa University, Amal Bank and the Chamber of Commerce to provide alternative employment opportunities to university graduates. These include provision of entrepreneurship training using the SIYB toolkit, business plan development, access to finance and job placement opportunities.
Calls for application were sent out requesting students to apply for the limited available opportunities which were offered on competitive basis to either to receive entrepreneurship training, prepare a business plan, receive financial support through micro loans and start up a business or secure an internship position in a private company/institution. A job placement and career development centre has been established at East Africa University which provides students with entrepreneurship training, business plan development, career guidance and counselling and linkages with employers for internship or employment opportunities. The project has benefited 27 graduates, out of which 12 received entrepreneurship training, developed business plan and given interest free micro loans of $2,000 each by Amal bank, while 15 students were placed with various organization in the private sector for a period of 5 months to gain job experience to enhance their skills and can be either retained by their current employers or seek employment elsewhere in the future.
Bender Bayla is a coastal district and its inhabitants depend mainly on fishing as their key productive sector for a source of livelihood. Local fishermen are handicapped by both geographical and infrastructural challenges restraining their capacity to produce sufficient fish stock and access local market for their products. Despite the district having one of the largest fishing grounds along the Somalia shores, productivity has been low and this is solely due to lack of quick access to markets owing to the long distant proximity of Bayla to major towns along the main tarmac road, poor road network, lack of fish handling, cooling facilities and inadequate fishing equipments. The district together with the LED forum have designed a project which will address these bottlenecks by supporting the establishment of fishing cooperative to manage the affairs of the fishermen such as storage and marketing, provide better fishing equipments and procure a cooling van which will be used to transport fish from the source to local markets. The initiative will enable fishermen increase their productivity and access markets much quicker than before translating to increased income and improved livelihoods of the local population while a booming fishing sector implies more revenues to be generated by the local government through taxation of the trade.
Under the Joint Programme for Local Governance (JPLG), local governments in Puntland through the Local Economic Development (LED) initiative have developed LED strategies, identified, set up and implemented initiatives that are geared to create an enabling environment for private sector growth. These include streamlining business licensing application procedures with the introduction of an automated system to ensure that businesses can be registered within the shortest time possible and acquire licenses for operation, introducing a favourable business licensing tax regime to encourage compliance and incentivize formalization of small businesses, delivering of vital infrastructures such as roads and markets which have a multiplier economic effect, and implementing schemes to enhance the entrepreneurial and business management skills of small scale traders and linking them with financial institutions to access micro credit to boost their businesses.
Local governments are faced by a mammoth task to deliver the huge service delivery demands within their mandate against the limited financial resources at their disposal. Moreover, there is increased public expectation for local governments to perform, resulting from the sustained awareness campaigns carried out under the JPLG civic education program and public private dialogue initiated and driven through the LED forums. As a result local governments have to generate enough revenues to meet the huge gap in service delivery and without a thriving private sector mobilizing these resources is infeasible. The fundamental notion therefore is local governments have to stimulate the growth of the private sector which will in turn provide the resource base for them to tap into through levying of taxes and fees on businesses.
The LED component within the JPLG program supports districts to implement projects derived from their LED strategies which aim to promote local economic growth and create jobs for the local population. The projects allows multi stakeholders such as municipalities, central government, private sector and JPLG to pull resources together for funding.
In 2014 - 2015, Bosaso and Qardho districts are implementing projects which will support 72 existing small business owners (market vendors) who are primarily women to receive a comprehensive package of entrepreneurial, business and financial management training in addition to financial support through administering of micro loans. The business management training was delivered by East Africa University Start and Improve Your Business (SYIB) certified trainers who received a 3 months Training of Trainers (ToT) training from ILO and have become the first ever group of certified and recognized entrepreneurship trainers in the whole of Somalia1 . The SIYB trainers will also provide additional support to the entrepreneurs which will include provision of continuous mentoring and business counselling for a period of 6-9 months to improve their business performance and growth. The districts have also partnered with Amal Bank to set up a revolving microfinance scheme which will provide collateral free and zero interest micro loans of up to $ 1,000 to the business owners which will be repaid within a period of 6 – 12 months. The loans will allow the entrepreneurs expand their businesses, increase turnover and profit margins which will in turn impact positively in their livelihoods and welfare. The target group of this intervention are informal micro ventures and it is envisaged that through this initiative, they will scale up and formalize in turn providing the local governments more revenue source to tap from through issuance of new business licensing permits. At the end of the one year project cycle, another group of entrepreneurs will be taken up to benefit from the same scheme.
On average, each year local universities in Puntland produce between 1,500 – 2,000 graduates in various disciplines. Due to low absorption capacity of the local labour market and mismatch between skills and available job opportunities most of these young people are often rendered unemployed. Moreover lack of entrepreneurship culture and interest amongst young graduates has further complicated the problem, with preference being to secure white collar jobs rather than taking self-employment. In light of these situation, the Garowe municipality has partnered with East Africa University, Amal Bank and the Chamber of Commerce to provide alternative employment opportunities to university graduates. These include provision of entrepreneurship training using the SIYB toolkit, business plan development, access to finance and job placement opportunities.
Calls for application were sent out requesting students to apply for the limited available opportunities which were offered on competitive basis to either to receive entrepreneurship training, prepare a business plan, receive financial support through micro loans and start up a business or secure an internship position in a private company/institution. A job placement and career development centre has been established at East Africa University which provides students with entrepreneurship training, business plan development, career guidance and counselling and linkages with employers for internship or employment opportunities. The project has benefited 27 graduates, out of which 12 received entrepreneurship training, developed business plan and given interest free micro loans of $2,000 each by Amal bank, while 15 students were placed with various organization in the private sector for a period of 5 months to gain job experience to enhance their skills and can be either retained by their current employers or seek employment elsewhere in the future.
Bender Bayla is a coastal district and its inhabitants depend mainly on fishing as their key productive sector for a source of livelihood. Local fishermen are handicapped by both geographical and infrastructural challenges restraining their capacity to produce sufficient fish stock and access local market for their products. Despite the district having one of the largest fishing grounds along the Somalia shores, productivity has been low and this is solely due to lack of quick access to markets owing to the long distant proximity of Bayla to major towns along the main tarmac road, poor road network, lack of fish handling, cooling facilities and inadequate fishing equipments. The district together with the LED forum have designed a project which will address these bottlenecks by supporting the establishment of fishing cooperative to manage the affairs of the fishermen such as storage and marketing, provide better fishing equipments and procure a cooling van which will be used to transport fish from the source to local markets. The initiative will enable fishermen increase their productivity and access markets much quicker than before translating to increased income and improved livelihoods of the local population while a booming fishing sector implies more revenues to be generated by the local government through taxation of the trade.
1Certified SIYB trainers all over the world are registered and can be tracked online on the ILO SIYB gateway website