October 21, 2021

Malador Sowe on Doing Business in Sierra Leone

7 min read

Young Sierra Leonean entrepreneur advises business students to start thinking about business ideas and be original, creative and adventurous.



By Ahmed Sahid Nasralla (De Monk)

As an emerging economy one of the key considerations when starting a successful business venture in Sierra Leone is whether your business idea is innovative and sustainable, according to Malador Sowe, CEO of Professional Electrical Company Sierra Leone (PEC SL) Ltd.

“There is a high tendency here (Sierra Leone) for people to copy business ideas thereby increasing supply whilst demand remains stagnant,” said Sowe, “People need to be encouraged to abandon the traditional approach of doing supply and minor construction jobs. They need to think outside the box and breathe life into new and different ideas which can satisfy a shortfall in the country’s economy.”

The 36 year-old businessman was Guest Speaker at a seminar organized by Students reading International Business at the Institute of Public Administration and Management (IPAM) at the Bank Complex on 25th April 2017 on the theme: ‘Celebrating Sierra Leone at 56: The Role of International Business on the Economy’.

More than 2000 students and dignitaries from the Government and business community attended the Independence seminar.

Sowe spoke specifically on ‘Doing Business in Sierra Leone: Benefits and Challenges’, saying that due to the lack of innovation, demand for certain services and products are not being adequately met whilst there is over-supply of others.

There are quite a number of benefits to doing business in our beloved Sierra Leone: Sowe

“Budding entrepreneurs tend to do the usual established forms of businesses. Whilst this is safe because the market for those have already been tried and tested, it is extremely limiting because, as stated earlier, the supply keeps increasing but the demand does not. There is very little room for growth in a situation such as this and the full potential of the market is not fully utilized. A business constantly needs to evolve, people’s needs and wants change, trends change as does the economic climate,” said Sowe, adding that the need for innovation therefore goes beyond the initial stages.

A business, he continued, has to grow and keep upgrading itself in line with the changing needs of its consumers and the operational environment, otherwise it risks becoming stale and out-of-touch.

“But in deciding on the types of product or service to provide, it is worth considering that certain things which are a necessity in developed countries might be classed as a luxury here,” cautioned Sowe.

Sierra Leone has earned an impressive profile in recent times in terms of doing business. The Word Bank Doing Business 2017 assessment ranks the small West African country 148 in the world, three places down from 2016. When it comes to ease of starting a business, it is ranked an impressive 87th; and 22 in Africa ahead of both of its neighbours- Guinea and Liberia, who are ranked 32 and 39, respectively.

Indigo-dyed cloth processing by women                    in Sierra Leone

However, these rankings aside, noted Sowe, one certainty is that Sierra Leone is replete with business opportunities and in the last five or so years a lot of developments have taken place and the business environment has been improving steadily.

“Sierra Leone has a thriving but untapped economy which has the potential to be a paradise for the entrepreneur willing to invest a bit of time, energy and resources to achieving desired goals. In short, hard work and business acumen will take you as far as you are willing to go provided the challenges peculiar to this specific geographical location are conquered,” said Sowe.

Sowe’s utility management company was registered to do business in Sierra Leone in 2013 as a subsidiary of PEC Group South Africa, owned by Tokkie Langeveldt. Sowe and Langeveltdt are shareholders of the subsidiary company.

In 2016, PEC undertook a pilot phase to collect electricity bills on behalf of the Electricity Distribution and Supply Agency (EDSA) through the introduction of a smart meter system. Within only five months, they collected over Le10 billion on behalf of the government agency.

The company also introduced the unique feature of making the smart meter system as a pre-requisite for easy collection of property and other taxes, and they are currently working with major municipal councils in the country to help in the collection of revenue through this model.

Furthermore, because of the promising performance during the pilot phase of the smart meters, countries in the West Africa region including Ghana, The Gambia, Liberia and Nigeria have expressed interest in the unique system and they are currently negotiating with PEC to take over revenue collection of their utilities rec.

Talking on the benefits and challenges of doing business in the country, Sowe said these vary from business to business but certain factors cut across the vast majority of established businesses.

“A lot of times you hear people talk mostly about the challenges of doing business in our country. They bemoan the lack of infrastructure, skills and even the high-risk profile of the country, which sometimes makes it difficult to raise capital. Yet, they keep coming, yet they endure and yet they take unbelievable risks to do business here. An astute entrepreneur will only invest his time or resources in business endeavours that hold promise of great reward. So, yes, there are quite a number of benefits to doing business in our beloved Sierra Leone,” said Sowe.

He said there are many benefits for a business implementing innovative management techniques and processes and noted that one of the key aspects of any successful business is the ‘ability to come up with brand new ideas, to maintain fresh, original operations, products and services for their customers’.

“This puts you in a strategic position, in charge of your market, because you are without any competitor,” noted Sowe.

Since Sierra Leone is a vastly untapped market if a business starts and builds early success, Sowe said it can be the premier business in its industry. Furthermore, he said, there is an opportunity for vast expansion which is not usually capitalized on. Businesses, he said, tend to favour the capital city (Freetown) even though the other regions have serious potential for growth.

“The benefits of an innovative business, right through from start-up, growth and development can far outweigh any benefits gained from simply sharing or copying another idea or model,” said Sowe.

Nevertheless, Sowe said the challenges can be daunting and impossible sometimes. Among the biggest challenges in doing business in Sierra Leone he mentioned the high cost of materials and production. He said a lot of raw materials have to be outsourced from far-away places like China and India ‘because we have limited capacity to produce certain commodities’.

There’s also the challenge of low productivity as a result of highly unskilled labour. Because of this, labour cost can be very high as some technical businesses may still need expatriates to do various jobs. Lack of technical skills, he continued, also affects the logistics industry as most workshops are unable to fix certain equipment when they breakdown.

In addition, there’s the troublesome challenge of the devaluation of the Leone against the dollar and other foreign currencies. This, he said, is especially becoming worse because certain transactions have to be conducted using dollars and it increases the running costs of businesses.

Furthermore, he highlighted the perennial challenges of inadequate power supply, unavailability of fast internet services and other infrastructure which are easily accessible in developed countries.

On the legal front, Sowe said there are different types of business entities and deciding which one to start is not always easy because there isn’t enough literature to explain the advantages and disadvantages of each.

These different entities, he said, are governed by different government institutions so there isn’t a one-stop shop for all business needs. Sole Trader and Partnerships, he said, are governed by the Office of the Administrator and Registrar General while companies are handled by the Corporate Affairs Commission (CAC).

“Labour laws are archaic and businesses are mostly guided by trade group agreements. But as long as you adhere to the laws prescribed by the different governing bodies i.e., The Finance Act, Companies Act etc, you will operate with ease,” said Sowe.

In conclusion, the PEC CEO said regardless of type and location, all businesses have their challenges which entrepreneurs have to overcome but whilst these challenges may seem daunting they are not in any way insurmountable.

“Sierra Leone is a wonderful place to invest and offers a lot of opportunities if business people are willing to step out of their comfort zones. Generally, doing business is risky but high risk gives high reward,” said Sowe, adding that it is therefore normally advisable to embark on a joint venture so as to minimize any potential loss.

A key benefit of embarking on strategic partnerships, he said, is that the business tends to profit from the different set of skills and knowledge each partner brings to the table.

Sowe also suggested that the Government should be willing to outsource some of its services to the private sector as there are several advantages to doing that.

“Firstly, it creates massive employment and empowers members of the community to start and grow their own local businesses. Secondly, no doubt, private agencies are generally known to work much more quickly as there are less processes and people to go through. This reduces the timeframe for product/service delivery and ensures that it is almost always certain that deadlines are met. As a part of the work is outsourced, it becomes relatively easier to operate. The Government agencies can carry on with other work and integrate the results to have a much smoother operation. As a separate team is also working on parts of the job, more work can be accomplished in a shorter timeframe,” he said.

Outsourcing, he continued, is also one of the most effective ways of cutting down on total cost. The Government can reduce costs and keep its budget in check by simply choosing the best companies and getting the finest work done at the right rates.

Furthermore, he said the Government can also help strengthen the private sector by subsidizing small businesses.

Finally, Sowe advised the students to start thinking about business ideas and start working on them as they complete their various courses.

“Study the market and find out what’s missing. Be original, creative and be adventurous with the ideas you develop,” he said.



1 thought on “Malador Sowe on Doing Business in Sierra Leone

  1. Entrepreneurship is definitely the new direction for our young university graduates in Africa, if we are to see our continent transformed. This notwithstanding, government must create the environment but providing the infrastructure and policies that favor our young graduates who are to compete with already established companies in the economy.

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