Published On: Mon, Jul 30th, 2012

Solutions to Sierra Leone’s Unemployment Problems.

 

By:  Jesmed F Suma (Policy Research Analyst)

Preamble:

First let me start by giving you an overview of what the unemployment situation is in Sierra Leone, and then I’ll list the problems before suggesting possible solutions.

Jesmed F Suma (Policy Research Analyst)

Jesmed F. Suma (Policy Research Analyst)

I must however hasten to say that this is just a summary of the entire piece I have written on this subject hence this summary does not contain the entire details of my assessment of the whole unemployment situation nor does not include all the possible solutions.

But the solutions I am recommending here would definitely help to considerably reduce the high rate of unemployment both in the short run and in the long run.
In economics there has been a long notion that there is a trade-off between inflation and unemployment.

This is the case in most economies such as the US today. However, in Sierra Leone the situation is some how peculiar in the sense that we still have high rate of unemployment with high rate of inflation.

The reason for this peculiar situation is explained in another piece I wrote on the effect of devaluation on the economy of Sierra Leone, I refer to it as imported inflation, and it is partly responsible for this strange situation in which you have both inflation and unemployment being high.

In the measurement of an unemployment rate economists only consider those people who do not have a job, are able, available, fit, willing and are actively looking for work but could not get a work.

Which in my opinion does not fully capture the true extent of the level of unemployment, since those not actively looking for work even if they are not employed are not included in the statistics.

The unemployment figure is an important measure of the strength of a country’s economy. That is why western economies do have structures in place to keep track of the number of their workforce that are unemployed and most importantly some Govts. do have programs that provides assistance for the unemployed.

In Sierra Leone on the other hand the Govt. does not have any system in place to measure the unemployment rate. Therefore any rate I quote here is an estimate and includes many of those who are unemployed even though they are not considered actively looking for work.

Before 2008 our unemployment rate lingered between 55% to 65%. Then we did not have many of the private companies including mining and agricultural companies we have today.

But despite the many private mining, banking and agricultural companies in Sierra Leone our unemployment rate has still not changed significantly and lingers between the range of 45% and 55% estimated, unfortunately even the World Bank does not have any statistics on SL’s unemployment rate.

Which means our unemployment problem is more structural in nature than cyclical or frictional because our economy is growing but the unemployment is still high.
The question is why?

Why is it that despite the growth in our GDP over the past 4 years due to these new businesses we are not able to address some of the socio-economic challenges we face as a nation such as the high rate of unemployment.

Instead, some of these foreign companies and even certain local  businesses bring in foreign workers from outside Sierra Leone as the Chinese does from China and Ghana or from other parts of the world.

It would be surprising to know that it is costing these foreign companies more to bring in foreign workers than it would cost to employ the average Sierra Leonean. Yet these companies still prefer and are willing to spend more on foreign workers than hire Sierra Leoneans. Now here is why.

Problem:

From my experience in the business community and the business culture in Sierra Leone I can associate the problem of unemployment to three main areas:

1. The Lack of Skilled Workers: Most of the available work force in Sierra Leone lack the basic skills required by the foreign companies.

Most of the jobs available in some of the industries such as the mining industry ranging from simple welders to dewatering operators, Geophysicist, geologists, chemists and diamond drillers requires special training which cost money and takes time to train the workers.

Most Sierra Leoneans lack both the training and disciplines required by these jobs. There is a difference between being an experienced taxi driver and being a trailer driver or grinding operator.

Most job seekers in the mining industry tend to think that if you can drive a taxi then you should be considered qualified to drive tractor trailer. Unfortunately, that is not so as much as being a motor mechanics does not make you an industrial equipment Machinist.

2. The second problem is the Poor Work Ethics of the average Sierra Leonean. Employee Codes of ethics provide employees with a set of clearly defined expectations most of which are implied while some are specifically stated rules or laws that must be followed by those they apply to.

It involves hard work and diligence, being responsible, being respectful to your job such as being at work on time, having initiatives and generally being reliable. When workers conform to such expectations they provide fair value for their wages which would result to more pay and promotion.

In most industry particularly the mining industry the nature of the work is such that segments in the chain of production are interdependent.

What happens in one sector dependence on what happens in other areas in the chain of production. Therefore, a good work ethic becomes a major factor in contributing to the whole line of production.

Hence, a break at any point may lead to serious delays and high cost of production. Those are some of the cost elements companies take into consideration to determine whether it is cost effective for them to either employ a Sierra Leonean or bring in a foreign worker.

Which means the actual labour cost in terms of wages and salary may well be far cheaper for the company to hire the Sierra Leone, but the huge cost associated with having an unreliable and irresponsible worker makes it worthwhile for them to bring in foreign workers.

Would it be fair for us to blame it on our youths today?

I would say, no, because they have not been privileged to undergo any training for any of these job opening. Instead most of them grew up, abused and subjected to heinous acts of violence instead of being disciplined, nurtured and educated.

So we cannot expect any better from them. They live by the examples they see in us. Some would even argue that, before the war most Govt. workers did not have good work ethics.

They would tell you one thing when they actually mean the opposite. They’ll give you an appointment for 12:00 pm while they actually mean 3:00 pm.

A business man has no time and patience for such level of irresponsibility. If they have to, they would rather pay more to bring in a more disciplined foreign worker.

3. The third problem is the high risk involved in hiring Sierra Leoneans for positions of fiduciary responsibility, made worst by the fact that we do not have a reliable system to redress such problems in a timely manner.

Nor do we have a reliable system to redress any labour dispute between employers and employees in a timely manner. For example, if a bank teller or a cashier is alleged to have stolen a huge sum of money, what happens?

The employer would want to know how quickly the legal system would work for him to recover the stolen money, while making sure it does not cost him more money and time to recover the stolen sum.

The employer would not want to have to worry about the risk of such occurrence or reoccurrence. Most importantly the employer would also want to make sure he does not get any additional legal matter to deal with if and when he does decides to fire an employee.

The question is, if each time such incident occurs they are less likely to recover the money, and it may cost them huge sums of money and time in trying to do so, eventually, they would be more likely to bring in someone from outside or hire a family member in the case of sole proprietor instead of employing a Sierra Leonean.

How do we address these problems, what role can the Govt. play to address these concerns. Here are my recommendations.

Recommended Solutions:

1 Providing Skill Workers: It is obvious that the companies especially mining, agricultural and other industrial companies know exactly the type of technical expertise they need.

They know the type of training and equipment required for such training. It is also clear that we do not have technical schools equipped to provide such training.

Which means it is very less likely that these companies would see need to get skilled Sierra Leoneans to fill in these jobs if they are not trained.

To address the problem I would suggest the following common sense solution:
a.) The Government should come up with a structure by which these companies would be encouraged to bring in trainers to train Sierra Leoneans for these jobs and be allowed to write off the cost of training from the company’s taxable income.

Since, the Govt, would be helping to offset the training cost as a deduction from their taxable income, it would serve as an incentive for these companies to train Sierra Leoneans as opposed to hiring foreign workers.

These workers would be trained on the job, with the very equipment they may end up using and exactly as the employer wants them trained. At the end of each training, they should be issued certificates or some form of accreditation and be hired by the company.

b.) With the above being the carrot, there has to be some sticks to guarantee some result from these companies. Depending upon the type of skills to be trained for, the length of period required for these training the Govt, must require these companies to meet certain minimum targets per year to complete these training and meet certain quota to replace foreign workers with trained Sierra Leoneans.

For instance, the Govt may say for all mining companies we would allow you to have up to 70% of all you workers to be foreign workers for both skill and unskilled in year 1, but by year 2 the ration should be 50/50 between foreign and Sierra Leonean workers, by year 3, 40% foreign and 60% Sierra Leonean by year 4, 30% foreign and 70% Sierra Leonean for skilled labour and 100% Sierra Leoneans for unskilled labour.

If any company fails to meet its quota at the end of each year, the company should be forced to pay a fine proportional to the difference.

If the above suggestion is adopted accordingly, in five years the unemployment rate in SL would drop considerable. But this is just part of a series of solutions this alone would not reduce unemployment if the other problems noted above still exist.

These companies may provide some of these training through our University system. They may pay for some of their field Chemists, Geophysicist, Geologist to provide training in our colleges providing both hands-on and classroom training to Sierra Leoneans.

2. How to enforce good work ethics:
I would recommend that the Ministry of Labour setup an employment office in each of the regional head quarters across the country to provide a comprehensive program of administration and management support services for those seeking job.

These services should include but not limited to:

a.) Provide complete training on work ethics, employee responsibilities and workers rights.

b.) Provide assistance in identifying and applying for available jobs in each region.

c.) Ensure that each person who is employed through the Min of Labour employment office is required to sign an Ethics agreement to be enforced by the Ministry on behalf of the companies that hire these workers.

d.) To Serve as the primary coordination and control point for liaison activities of those seeking jobs and businesses offering jobs. This would help bring the issue of unemployment in the centre of our debate with respect to creating a Regional monthly Statistics on jobs, the companies that hire Sierra Leoneans and how many are being hired by each company.

e.) To serve as the first point of contact for employers for a swift resolution of any grievance on account of employee behavior or lack of responsibility that may warrants their dismissal.

f.) Promote harmonious relations between employers and employees, investigate grievances of employees and represent to employers such grievances and make recommendations to them in consultation with the employers concerned for an objective timely resolution as opposed to using the court system which is usual very time consuming.

g.) Since the legal system does not work effectively to easily, fairly and timely investigate cases of funds embezzlement from foreign businesses, I would therefore recommend that the Govt. consider setting up a Fiduciary Insurance Policy through any of the insurance companies to cover any Sierra Leonean hired in a position of Fiduciary Responsibility such as Cashiers, Accountants, Bank Tellers and Financial Controllers etc.

The Cost of this policy to be jointly covered by the employee, Employer and the Govt. Therefore, in the event of any abuse of such trust the business is reimbursed of any loss of funds while the Insurance would assume the responsibility to handle the investigation and recovery of monies lost.

This would ensure that such crimes are thoroughly investigated and culpable parties appropriately punished without the company having to worry about the risk and cost associated with such cases.

This would increase the confidence level for companies to hire more Sierra Leoneans and this would lead to the creation of a system in which any Sierra Leonean seeking such jobs must prove that they are insurable.

If no insurance can cover the person on account of previous fraud charges then that person would not be hired.

3. Dispute Resolution: As noted in item 2 above, the employment office under the Ministry of Labour should have as part of its responsibility to handle dispute resolutions by setting up Labour Dispute Commissions as extra-judicial independent labour dispute resolution bodies.

However, the decisions made under mediation should be subject to appeal by either party through the court system.

If someone is culpable of a criminal offense such as stealing company property then, the police can be brought to investigate the matter swiftly.

Any evidence revealed during mediation, should be allowed to enjoy evidentiary privilege and subject to judicial enforcement.

4. Finally: The Govt. must reform our education system such that we would begin to produce for the job market.

If the industry needs Chemical engineer, let’s equip our colleges to produce chemical engineers as opposed to degrees in peace building.

In fact considering the new oil discovery on our coastal areas in Guinea, Liberia, SL and Ivory Coast I would recommend that members of the Mano River Union consider jointly establishing a special Technical college specifically for the Mining and Petroleum industry to be funded by member countries.

Let me conclude by including a list of different types of jobs for which Sierra Leoneans needs to be trained for them to secure jobs in certain industries such as the Mining and construction Industries:

Jobs in Sierra Leone

List of different types of jobs for which Sierra Leoneans needs to be trained for them to secure jobs in certain industries such as the Mining and Construction Industries.

 

About Jesmed F. Suma:  Jesmed is a Policy Research Analyst and the Executive Director of Sierra Leone Policy Watch Inc., an independent Public Policy Think Tank in Sierra Leone and the US.
He is also the President and CEO of:
Business Research and Investment Management Corporation (BRIMCO), a US based corporation.
Jesmed F Suma can be reached on:
JesmedSuma@slpw.org, Sumatuinc@hotmail.com  or  on Tel: 908-759-4332