Thursday, May 24, 2012

The Missing Middle

Yesterday night, after a beer at Jamal's Boulevard Cafe (a quaint open air restaurant opposite old Tubman house on Tubman Boulevard - named after President Tubman before Charles Taylor came to power); I was reading a CFR report on women entrepreneurship in post-conflict regions. The paper highlighted certain salient points that struck home with some of the initiatives of the Ministry of Gender, along with its partners.

To put it in context, around the world, it is largely believed that small and medium term enterprises (SMEs) drive economic growth.  For instance, the Global Entrepreneurship Monitor estimates that ‘140 million entrepreneurs are expected to create at least five new jobs each in the next five years’.

However in aid economies like Liberia, SMEs are unable to compete with bigger firms due to lack of capacity, capital and skills. Liberian examples range from infrastructure projects to oil contracts to the hospitality industry.

Although programs like EPAG (Economic Empowerment of Adolescent Girls and Young Women), a joint pilot project to encourage entrepreneurship among women targets economic empowerment for young women and girls, they are usually constrained to petty trade like selling old clothes, groceries etc.

The main issue here is not with the skill, but with capital and seed money. Risk capital is tough to secure in such economies and especially for these sections of the populace who do not have necessary collateral nor the communal harmony (surprisingly) to take joint risk and pool together joint funds.

The result: a huge gaping ‘missing middle’ where SMEs stay outside private sector development initiatives. I am yet to figure out the possible solutions.

How I got through the 60p report:

Local Monrovian Club Beer and a delicious Liberian dish called ‘attike’ (my version of how it should be spelt on paper) that is their staple cassava (similar to cous cous) with avocado, fried plantain and hot pepper sauce!

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