Providing Microfinance in Africa Literature Review

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Poverty in Sierra Leone

Ever since gaining of independence in 1961, the Leone has been as a nation has been plagued with civil wars and poverty. The country continues to suffer from extreme poverty despite the abundant presence of precious resources such as diamonds and rare minerals.

There are a number of factors that has essentially contributed to the almost never ending poverty of the citizens of the country which include corruption within the government, insufficient infrastructure, lack of education and inadequate civil rights.

According to Sachs et al., (2004) the entire sub-Saharan Africa is prone to poverty due to factors like very high transport costs and small market size, low-productivity agriculture and adverse geopolitics and lack of technological diffusion form the developed countries (Sachs et al., 2004).

In a similar manner, Sierra Leone too suffers from most of these deficiencies. Despite being one of the world's top exporters of diamonds and the existence of so many rare minerals, there is practically no economic market in the country.

It is very costly to transports goods and products from place of the country to another as the infrastructure of the country is extremely weak and the transport costs are very high. The geopolitics of the country and the difficult terrain also inhibit the development of infrastructure in the country and has a detrimental effect o the economy of the country (Chaudhury, 2012).

The general economic backwardness of the country also means that there is very little technology that has been able to percolate or get transferred into the economy which has prevented technology from coming to the aid to solve some of the basic infrastructure problems.

Added to these factors are factors like high population growth and a long civil war that ended only as late as 2002. These factors combine to create a situation in Sierra Leone where poverty remains widespread throughout the country. The social and physical infrastructure of the country was destroyed along with the economy of the country by the civil war leaving the country impoverished.

According to the UNDP Human Development Index (HDI), Sierra Leone is among the last few in the list of the poorest countries in the world. In the list of poor countries, Sierra Leone ranked 177 in the HDI list. Other indicators of poverty like health and nutrition are also among the lowest in the world. The situation of the country is such that there is a threat to the sustainable peace and stability of the country due to the large proportion of youth where most are unemployed.

The landless people and small-scale farmers are the poorest people in Sierra Leone. The refugees who were internally displaced during the war, the young people that include a large number of former combatants, the young women who had been sexually abused and single mothers are among the most vulnerable poor groups (Riddell, 2005).

According to UNDAP estimates, about 70% of the population of the country were recorded to have been living below the poverty line in 2007 and among them about half do not even have a dollar a day to spend for essential items. Most of the poor people in the country -- 80%, reside in the rural areas in the Northern and Southern provinces and in the eastern border provinces. These were the areas which were the worst hit by the civil war.

Corruption continues to be the one of the most basic factors that has resulted in the abject poverty of the nation. And this corruption is rampant in the governmental set up of Sierra Leone. The governments have been dominated by one-dimensional rule that does not allow for opposition and therefore gives rise to rampant corruption. This corruption has resulted in non-existent social programs for the people and the government has not been able to provide its citizens with the most basic needs as the finances for these need have been usurped by government officials themselves. A lot of money was also spent in the arming of forces and fighting the civil war and has left the country depleted of money for the poor.

The rampant corruption has also led the siphoning off of the money that was meant for the development and construction of the infrastructure of the country that could have aided in reduction of poverty. The country has been prevented from conducting trade and commerce in sectors like agriculture and rare and precious metals due to the lack of paved roads and the non-existence of highways which prevents transport goods and products.

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Moreover most of the rural area where the bulk of agriculture takes place, is virtually not connected with any paved roads which almost makes it impossible for the farm products to be traded. The lack of storage infrastructure and facilities also results in losses and aids in increasing poverty (Riddell, 2005).

The prolonged civil war and the empathy of the government have left the country with very few schools -- let alone institutions of higher studies. This lack of education and educational facilities in the country is another major factor that contributes to the poverty of the country. Lack of books and equipment needed to provide basic education to children and the absence of well-endowed alumni to teach students is another contributing factor for the lack of education in the country.

While independence of the country from colonial rule was desirable, it is fact that the independence has caused vicious cycles of poverty and corruption. Critical sectors like education, health, infrastructure and civil rights have been affected acutely (Harber, 2002). The reform and revival process in the country is very slow and inadequate and thus the poverty in the country continuous to exist.

2.2: Anti-Poverty Strategies and Policies in Sierra Leone

A report and vision document prepared by the government of Sierra Leone titled "The Agenda for Prosperity Road to Middle Income Status" details what the government wants to achieve by the year 2035 (THE AGENDA FOR PROSPERITY ROAD TO MIDDLE INCOME STATUS, 2013).

According to the vision document, the government intends to women to contribute to national development through the social, economic and political empowerment of women. The government intends to reduce food scarcity and ensure that less than 5% of people seeking jobs would be without work and thereby lift at least 80% of the population above the poverty line. In terms of education, the government claims to make education free and compulsory education for every child and make over 90% of the population literate. Improvements in the health care and housing sectors are aimed at with a health care delivery system within every 10-kilometer radius. In government executive and judiciary reforms, that can ensure reduction of corruption, the government intends to establish an independent and accessible judiciary that would have the confidence of the people and a system of political governance where governments are voted in and out of power peacefully and remain accountable to the people in terms of their efficiency and public services (Second Poverty Reduction Strategy (PRSP II) 2008-2012, 2008).

Infrastructure development is also on the agenda of the government which has the potential to enhance trade and slowly develop an economic market in the country. The government has set up a policy of development of a modern and well developed infrastructure with reliable energy supplies and a world class ICT. Development of sound macroeconomic fundamentals, with inflation close to 5%, the government has drawn up a policy for creation of a stable, export-led economy. By the year 2035, the government plans to increase government revenues significantly to reach 35% of the GDP of the country.

In the effort to reduce poverty, the government plans has taken up a policy to encourage the emergence and growth of the private sector which, the government hopes, would create value-added products which can lead to jobs for the youth and worthy citizens.

The inhospitable terrain of the country and the often acute weather leading to droughts is a cause for the poverty of the country. The government has also drawn up policies to create and effective environmental management system that would have the potential to protect the biodiversity and would be able to pre-empting environmental disasters and accordingly the government would be able to take preventive and relief measures (THE AGENDA FOR PROSPERITY ROAD TO MIDDLE INCOME STATUS, 2013). This environmental model would also serve as a guide for a responsible policy for efficient exploitation of the natural resources of the country.

In a nut shell the policies of the government are cutely targeted to reduce poverty and enhance social equality and upliftment. The government wants to achieve a robust and consistent level of high economic growth and create a significant progress on governance indicators (Second Poverty Reduction Strategy (PRSP II) 2008-2012, 2008).

In several reports that were prepared by the International Monetary Fund relating to the eradication of poverty in Sierra Leone applauds the focus of the government on rectification of the factors.....

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