Sierra Leone is pursuing an ambitious reform program seven years after ending its 11-year civil war. The government aims to develop the private sector and attract foreign investment to diversify the economy away from reliance on foreign aid. Sierra Leone has abundant natural resources and potential for agriculture, fishing, mining, oil, and tourism that have yet to be fully developed. The government is working to promote stability, legal protections, and investor confidence to attract capital to develop these opportunities and transform Sierra Leone's economy.

1. Focus
Focus on
Sierra Leone
PHOTO: AUBREY WADE/GOVERNMENT OF SIERRA LEONE
In association with
Ministry of Finance
Sierra Leone
This is Africa 63

2. Focus
SIERRA S
prawling across several hills foreign development assistance.
and surrounded by the At- “Let me put it this way,” says
lantic Ocean, Freetown, the Dr Samura Kamara, Sierra Leone’s
capital city of Sierra Leone, minister of finance and economic
LEONE
forms a dramatic setting for development, speaking in his office at
a country in transition. the Ministry of Finance in the heart
Since its 11-year civil war was of Freetown. “There has always been a
formally declared over in 2002, Sierra vacuum in most developing countries
Leone has undergone two successive – not just in Sierra Leone up to 2007 –
PHOTOS: AFP/GETTY IMAGES/ AUBREY WADE/GOVERNMENT OF SIERRA LEONE
democratic elections, including a simply because we are never focused on
Seven years since the end of its smooth transfer of power between the
country’s main political parties in 2007.
the drivers of growth.
“In the past we were focused more
11-year civil war, Sierra Leone’s Economic growth has averaged approxi- on domestic resource mobilisation and
government is pursuing an mately 7 percent annually over the
past five years, and under its current
donor resource mobilisation. This time
we are bringing in trade and private
ambitious reform programme, president, Dr Ernest Bai Koroma, who sector development.”
took office in 2007, Sierra Leone may be Mr Kamara emphasizes the level of
with the hope of reinvigorating on the verge of transformation. stability that has been reached in Sierra
its domestic private sector and Under the banner of the Agenda
for Change, a critical part of president
Leone, and the importance of convey-
ing that message to an international
turning the country into the Koroma’s reform agenda is the audience. When asked why the coun-
preferred destination for foreign development of the private sector and
the promotion of foreign direct
try constitutes an attractive business
proposition for investors he has no hesi-
investment in West Africa investment. With a background in the
private sector, he has famously declared
tation. “Investment security, protecting
investors… As long as you provide these
his government’s ambition to “run guarantees, investors will be very much
Sierra Leone as a business” with the interested. They have to be assured, it
aim of ending the country’s reliance on is about trust and confidence. I think
64 This is Africa

3. Country Profile: Sierra Leone
ABOVE: Dr Ernest Bai Koroma, president of
Sierra Leone, with the Prince of Wales
Kabala
BELOW AND LEFT: Freetown, capital of
Sierra Leone
Makeni
Lunsar
Sefadu
FREETOWN SIERRA
LEONE
Bo Kenema
Pujehun
Location: West Africa, bordering Guinea and Liberia.
Capital: Freetown
Area: 71,740 sq km
Population: 6.4m
Monetary unit: Leone
Time zone: GMT
GDP: $1.9bn (2008)
GDP Growth rate: 5.5% (2008 est.)
the government is providing that type In May 2009, African Minerals Ltd, GDP per capita: $900 (2008 est)
of trust and confidence to investors. an Alternative Investment Market-
It is based on legal frameworks; we listed mineral exploration company, GDP composition by sector:
are improving the overall investment announced that it had discovered as
framework in terms of revising and much as 10bn tonnes of iron ore
modernising the laws,” he explains. deposits in the north of the country,
“Sierra Leone offers significant
untapped opportunity,” adds Oluniyi
the largest such deposit in Africa, and
the third largest worldwide. The
49% 31% 21%
Robbin-Coker, the private sector advisor country is also responsible for an (2005 est)
to the Office of the President. Less than estimated 2.5 percent of global
15 percent of the country’s total arable diamond extraction activity, with total
land is currently under cultivation, reserves of 30m carats. Sierra Leone
leaving an estimated 4.5m hectares of also has significant deposits of gold,
arable land waiting to be cultivated. Its chromite, bauxite and titanium ore.
coast also boasts some of the richest, The country may now also be on Agriculture Industry Services
and most under-fished, stocks off the the verge of becoming a hydrocarbon
coast of West Africa. producer. In September 2009, Ana- Market access: ECOWAS, 220m; EU Cotonou
With abundant water resources darko, the US oil group, confirmed Agreement, 456m; US AGOA, 300m
and average annual rainfall in excess that it had found oil deposits off the
of 3,000mm, Sierra Leone also offers country’s coast; a find that is currently
significant hydro electric and irrigation being investigated for its commercial Sierra Leone World Bank
potential. With hundreds of kilome- viability. Doing Business rankings:
tres of virtually untouched Atlantic The list goes on. “We have the 200
coastline, tourism is another one of the benefit of being part of the Mano River 160
country’s under-developed markets. “Of Union which takes us from a 5-6m 120 168 163 156 148
course, you know, we will not disregard population country to something like 80
40
what we have in terms of our mineral 33m. We’re a member of Ecowas and 0
assets,” he adds. that means we have access to 2007 2008 2009 2010
This is Africa 65

4. Focus
West African shareholder protection - markets like Nigeria,” he says. “We have dation tax and professional services tax.
one of the largest natural harbours in It is hoped that the GST will lead
global ranking the world. We’re within easy access of to a more efficient and harder to evade
(World Bank Doing Business report 2010) Europe, the Americas and the rest of tax system, resulting in increased gov-
Africa.” ernment revenue.
All of this leads Mr Robbin-Coker “The aim of this project is to raise
to conclude that “when you take a step [the tax to GDP ratio] by a full 3 percent-
back and look at a country like Sierra age points over the 2008 figure,” says
Senegal Gambia Leone, it’s hard not to be optimistic.” Dr Charlie Jenkins of Crown Agents, an
165 172 Guinea- This optimism is tempered by international development company
Bissau awareness that potential alone does not specialising in public financial manage-
132 automatically spell success for Sierra ment, which is providing technical
Leone. “There are still quite significant assistance to the NRA.
Guinea challenges in people’s everyday lives. Improving the business climate in
Sierra And there are still some challenges Sierra Leone will be just as important
147 Leone
with respect to building out a vibrant as developing the government’s ability
27 economy, attracting both domestic to make public investments, and in this
Ghana and foreign investors,” he says. The respect, Mr Koroma’s administration
41 country’s private sector remains very has been busy.
small, with the bulk of the workforce “In most cases there is usually a
being employed by the state. Unemploy- disconnect when a new administration
ment is high, particularly amongst the comes in,” says Mary Agboli, operations
Liberia country’s youth. officer in the Investment Climate Team
147 Critical public investments in the for Sierra Leone at the International
areas of infrastructure and energy are Finance Corporation. “In this case that
required to facilitate private invest- wasn’t an issue. The president took it
Agriculture ment in the country, he observes; some on wholeheartedly,”
(Estimated contribution to GDP from increased land use of which are already being made. In Working with the IFC, the govern-
at current yields) November the government formally ment has passed several pieces of
commissioned the Bumbuna legislation designed to improve the
11% of arable land under cultivation - $730m Hydroelectric Dam, a project that had country’s business environment. These
been moribund for decades, for many include a bankruptcy act, a bill pay-
(current level) years bestowing on Freetown the dubi- ments act and a companies act. It also
25% of arable land under cultivation - $1.65bn ous honour of being Africa’s darkest created a commercial court in 2008 and
50% of arable land under cultivation - $3.3bn city. abolished a pre-tax for people looking
The dam is now supplying 50MW to set up a business, which constituted
Agriculture contribution of electricity to Freetown out of a total a major hurdle, according to Ms Agboli.
capacity of 350MW, and has had an The IFC also participated in the
to national economy immediate impact. One local trader creation of the Sierra Leone Business
even exclaimed that he loved the Forum, a medium for the private sector
government, before joking that he was and government dialogue, as well as
45% 66% 25%
so overwhelmed by having a 24-hour
energy supply that he was tempted
the Sierra Leone Investment and Export
Promotion Agency.
to switch off the lights. Several major On the back of these reforms,
roads connecting the country are also Sierra Leone’s international standing
under construction, but more has been improving. According to the
investment is needed. World Bank’s 2010 Doing Business
GDP Employment Exports “We need to accelerate govern- Report, it was in the top five for ease
ment’s ability to make public of starting a business in sub-Saharan
PHOTOS: AFP/GETTY IMAGES/ AUBREY WADE/GOVERNMENT OF SIERRA LEONE
Key crops investments,” Mr Robbin-Coker says. Africa and second only to South Africa
Improving domestic tax collection for investment protection.
Cocoa&Coffee is one way in which this is being done. Despite scoring below the regional
Rice Sierra Leone’s current tax to GDP ratio
stands at just 10.1 percent according to
and continental average in 2009, Si-
erra Leone has also been Africa’s most
14,000MT IMF estimates, limiting funds improved country for governance over
800,000MT and 18,000MT at the government’s disposal to the past two years, according to the
produced produced carry out critical public invest- Mo Ibrahim Index. Its current ranking
in 2007 respectively ments. of 30th out of 53 countries has been
in 2007 To address this, the Na- helped by the establishment of an inde-
tional Revenue Authority has embarked pendent anti-corruption commission.
Palm Sugar on a comprehensive modernisation
programme of the country’s tax laws.
Over 17,000 public officials, including
the president, all ministers and parlia-
Oil 70,000MT
A goods and services tax is due to be mentarians, have declared their assets
implemented in January 2010, which to the ACC.
36,000MT produced will replace seven existing but outdated “I think we’re at a real turning
produced in 2007 taxes: import sales tax, domestic sales point for Sierra Leone. In the last seven
tax, entertainment tax, restaurant and years there has been a huge lot of work
in 2007
food Tax, messages tax, hotel accommo- done by governments to get the coun-
66 This is Africa

5. try to a stage where there are now huge
business opportunities,” says Gareth
Thomas, the UK’s minister of state for
international development. This was
the message the government gave
to a sell-out audience of international
investors at a major trade and invest-
ment forum held in London on Novem-
ber 18th.
Here, too, the sense of optimism
“We are about developments within Sierra
Leone was palpable. Originally
improving the expecting no more than 250 people
overall investment to attend the event, the organisers
ended up with a waiting list of more
framework in than 700 people. There were roaring
terms of revising endorsements of the president’s reform
and modernising programme from the likes of Tony Blair
and George Soros.
the laws” The event came a week after CDC
Dr Samura Group had announced a $5m private
equity commitment to the Sierra Leone
Kamara Investment Fund, which is managed
by Manocap, a Freetown-based private
equity firm; the first such investment
by a development finance institution
since the end of the civil war.
“Looking at the president’s strategy
overall, the biggest thing to note there
is that he has a private sector driven
agenda which is paramount. That in
itself sends jitters to detractors,” says
Evelyn William, managing director of
SBTS Group, an ICT consultancy with
operations in Sierra Leone.
“I have noticed a positive trend in
terms of establishing and operating a
business in Sierra Leone,” adds
“I think that Gaiva Lavaly, managing director of
International Consulting Services,
we‘re at a real a Sierra Leonean engineering firm,
turning point for who says that the commissioning of
the Bumbuna Dam has significantly
Sierra Leone” improved the business landscape.
Gareth ABOVE: The provision of electricity is a cornerstone of the government’s “The previous regime did a lot
of legislative framework in terms of
Thomas infrastructure development programme
BELOW: Former UK prime minister Tony Blair speaks at a Sierra Leone conducting business,” observes Wilfred
investment conference in London, 2009 Sam King, owner of the recently
opened Taia Resort hotel in Freetown,
and one of Sierra Leone’s best-known
“I believe the entrepreneurs. “That framework was
government’s quite vital. However, implementation
and acting on those strategies was a
Agenda for bottleneck problem,” he continues.
Change seriously Turning his attention to the
administration of president Koroma,
needs to be he begins with a cautious endorse-
supported” ment. ”I think they are in office for
nearly two years now. It is absolutely
Wilfred unfair for anyone to just wake up and
Sam King say they have not done well. They need
time,” he says, adding that “This gov-
ernment is coming in under a very dif-
ficult situation. [Because of the global
economic downturn] They don’t have
easy access to funds that the previous
government had.
“Steps are being taken, and
This is Africa 67

6. Focus
MAIN: Sierra Leone is
hoping to develop its
fisheries industry as a key
sector of the economy
Hydro power potential: Bumbuna Dam for me that is where I believe the gov- businesses, so understanding of the
ernment’s Agenda for Change seriously private sector is limited.”
needs to be supported, until such a Mr Sisay also emphasizes the
time that it becomes practically and vis- importance of partnership with the
Kabala ibly clear that they cannot deliver.” government. “I have worked in a lot
Sipping from a cup of tea in of African countries, usually [govern-
BUMBUNA London’s upmarket Fortnum & Mason ments] are very aggressive, they don’t
department store on the eve of the understand you and there is always an
Makeni
Lunsar investment forum, John Sisay, the Chief adversarial relationship between
Sefadu
Executive of Titanium Resources, Sierra company and government. We don’t
FREETOWN SIERRA Leone’s larget private sector employer, have that. That is not to say we don’t
LEONE begins his assessment of the country’s have our fights, of course we do. But we
Bo Kenema private sector development prospects can have our fights and laugh after-
with an ominous warning. wards.”
Pujehun “In the next few years the govern- He does, however, reserve some
ment has got to decide whether it’s criticism for the government in an area
interested in wealth creation or wealth in which he feels that more action is
Current demand: appropriation. When you have coun- needed in order to improve the private
200MW(74MW met) tries the size of Sierra Leone that have sector’s business experience in Sierra
Potential supply: mineral wealth, government generally Leone. “The one thing that’s missing –
tend to lean towards appropriation. By and they are going to hate me for PHOTOS: AFP/GETTY IMAGES/ AUBREY WADE/GOVERNMENT OF SIERRA LEONE
1200MW
that I mean they tax more, and have saying this – is the civil servants. They
cumbersome administrative are, in my view, the biggest stumbling
Transport infrastructure investment frameworks,” he adds. “I think this is block to development. I know that this
the biggest challenge for them now. It is something they have been thinking
potential (road construction) about, but in terms of government
really is a case of the brave shall win
the day in terms of the kind of policies working efficiently, they just need to
895km - paved roads at present they bring in.” have a massive civil service reform.”
3,724km - roads in need of refurbishment/rebuild- Looking at the government’s track This, however, does nothing to
ing at estimated cost of $913 record so far, his tone is decidedly opti- dampen his optimism about Sierra
mistic. “There is no question that they Leone’s development prospects in the
•$499m out of $913 worth of projects funded understand the need for the private coming years. “I think Sierra Leone is
•$266m of this yet to be contracted sector. In terms of understanding the poised to take off. The people are at
•$233m contracted so far private sector they’ve got some work to that place where they are not willing
6681km - roads in need of refurbishment/ do, to be honest,” he says, but is quick to accept anything less. The confidence
rebuilding for which no project has yet been to add that “this is not a criticism, it I have about Sierra Leone is that the
is just the fact that you are looking at people are so hungry for a change that
developed-implemented a country where you haven’t had a lot any leadership that wants to take it
•$1.6bn estimated total value of people who build corporations and backwards will not be allowed to.”
68 This is Africa