Solomon Islands Launches National Action Plan for Formalization

Solomon Islands Launches National Action Plan for Formalization

 

Honiara, 25^th March – Solomon Islands takes a significant step towards inclusive growth and economic transformation with the launch of the National Action Plan for Formalization, a strategic framework aimed at supporting informal enterprises’ transition towards their sustainable growth and formalization.

The country heavily relies on the informal sector, with over 70% of its workforce engaged in informal and subsistence activities. Recognizing the vital role informal businesses play in driving employment, income generation, and poverty reduction, the Ministry of Commerce, Industry, Labour and Inmigration (MCILI) supported by the European Union -funded project Supporting Informal Enterprises Transition Towards Sustainable Growth and Formalization in the African, Caribbean and Pacific Regions aims with this initiative, to harness the potential of the informal economy for inclusive growth and transformation.

At the launch, Riley Mesepitu, Permanent Secretary of the MCILI, expressed “how this National Action Plan for Formalization marks a pivotal moment in empowering the informal sector and fostering economic resilience as a fundamental pillar of the National Development Strategy 2016-2035 (NDS). The NDS seeks to grow the economy by improving the social and economic livelihoods of all Solomon Islanders.”

UNDP Program Manager, Nanise Saune-Qaloewai, highlighted that “the Supporting Informal Enterprises Transition Towards Sustainable Growth and Formalization in the African, Caribbean and Pacific Regions project aims to understand the drivers and challenges of the informal sector, such as limited access to finance and the need for a favorable regulatory framework”. She emphasized that the Action Plan is “a strategic comprehensive response to optimize procedures concerning informality and formalization, guaranteeing that stakeholders can readily obtain essential assistance and resources to shift towards sustainable development and formalization”.

ILO representative, Helen Kirsch, also highlighted the importance of the Action Plan “as the result of a big teamwork effort representing the expertise of a diverse range of actors, who have contributed to this exercise, such as the government, employers’ and workers’ organizations, civil society and development partners.”

The National Action Plan for Formalization is led by ILO with the support of UNDP and offers pathways to the Government of the Solomon Islands and other stakeholders to support formality for informal enterprises, while also providing a gender-sensitive framework with strategic priorities that the government can lead in partnership with its social and development partners. It seeks to increase the number of enterprises in Solomon Islands that choose to formalize and grow.

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.

The ‘Supporting Informal Enterprises Transition Towards Sustainable Growth and Formalization’ project aims to alleviate constraints faced by the informal sector across three specific countries :Mozambique, Sierra Leone, and Solomon Islands by addressing the intricacies of the challenges encountered by informal enterprises in these countries.

 

For more information or media inquiries please contact:
Daniel Gonzalez, Communications Specialist, UNDP Solomon Islands Office, daniel.calderon.gonzalez@undp.org, +677 7740 740 +677 656560270