Honiara, December 11 – The first signing ceremony of the Memorandum of Understanding (MoU) between three leading financial intermediaries and the United Nations Development Programme (UNDP) marks a significant milestone in the effort to strengthen informal enterprises in the Solomon Islands. This initiative falls under the project on Supporting Informal Enterprises Transition Towards Sustainable Growth and Formalization in the African, Caribbean and Pacific Regions, jointly funded by the European Union (EU) and UNDP.
The Development Bank of Solomon Islands (DBSI), the Solomon Telekom Company Limited (STCL), and the Solomon Islands National Provident Fund (SINPF) have emerged as essential partners, joining hands with UNDP to empower and elevate informal enterprises in the Solomon Islands. Acknowledging the prevalent nature of the informal economy in Africa, Caribbean and Pacific countries, including Solomon Islands, where it constitutes a substantial portion of both economic activity and employment, the need for strategic intervention is clear.
Statistics from the International Labour Organization (ILO) reveal that a considerable majority of the Solomon Islands’ labor force engages in the informal economy, contributing up to one-third of the country’s total GDP. However, this sector grapples with inherent challenges such as low productivity, limited income, and entrenched poverty, primarily attributed to an unfriendly regulatory landscape, inadequate access to public and business services, training, market infrastructure, and financial support.
With the acute understanding of these impediments, the EU and UNDP crafted the Informal Economy project aimed at alleviating constraints across three specific countries – Mozambique, Sierra Leone, and the Solomon Islands. Such endeavor recognizes the intricacies of the challenges faced by the informal sector and underscores the crucial need for collaboration with key stakeholders in the respective countries.
Recognizing the value of this initiative for Solomon Islands, Mr Riley Mesepitu, Permanent Secretary from the Ministry of Commerce, Industry, Labor & Immigration, representing the Government of Solomon islands, expressed gratitude to UNDP and partners for this cooperation. This demonstrates an unwavering commitment to advancing the Sustainable Development Goals, the Solomon Islands National Development Strategy 2016-2035, the country’s Micro Small Medium Enterprise Policy; and the recently launched Solomon Islands E-commerce Strategy & Roadmap 2022-2027.
Francesco Ponzoni, Programme Manager of the European Union in the Pacific, expressed appreciation for the signing ceremony stating that it “demonstrates a clear commitment to engaging partners in collective action, addressing systemic challenges, and nurturing an environment conducive to productive and sustainable growth for these enterprises.” He also encourages the project and its new partners to “ persist in developing tailored financial products, services, and solutions specifically designed to the needs of the informal economy sector, ultimately enhancing their -much-needed access to finance”.
“UNDP remains dedicated to partnering with all stakeholders across various echelons to alleviate constraints impeding the growth of informal entreprises,” expressed Nanise Saune-Qaloewai, Programme Manager, emphasizing the project’s unwavering commitment. “The collaboration with these esteemed institutions will contribute undoubtedly to bridge the financing gap prevalent within the informal sector in Solomon Islands.”
This signing ceremony marks a pivotal moment for the project. The collaborative efforts between these entities aims to bring a meaningful impact, fostering the transition of informal enterprises towards sustainable growth and formalization. This partnership is a proof of the commitment and vision driving collective action to unlock the potential of informal economies within Solomon Islands with hopes of more to follow.
UNDP is the leading organization fighting to end the injustice of poverty, inequality, and climate change. Working with our broad network of experts and partners in 170 countries, we help nations to build integrated, lasting solutions for people, peace and planet. Learn more at www.pacific.undp.org or follow us on social at @UNDP_Pacific and @UNDP_Solomons.
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