Sierra Leone: Towards a Better Tomorrow

Situated on the west coast of Africa, bordering the North Atlantic Ocean, is a land endowed with many-colored beaches, glorious rainforest-mountain backdrops, abundant rainfall, substantial mineral resources and extensive marine fisheries, often referred to as Africa’s sunshine secret. This is Sierra Leone, meaning Lion Mountains, a nation of extraordinary natural beauty and heart.

It is historically significant nation. It was not only one of the first places where the western explorers landed during the mid-15th century, making it an important outpost for the Portuguese and Italians, but it was also born of the efforts of freed slaves from Britain, Canada and Jamaica in the late 18th century. With a population of 5.7 million people, governed by a democratically elected president heading the unicameral parliament and a GDP of 2.0 billion dollars, Sierra Leone is all set to leave the ghost of its horrific and bloody civil war past behind itself, and instead take rapid strides on the road to recovery, developing its economy and the government.

The country had a glorious past when the Sierra Leoneans were famous for their education, trading, entrepreneurship and artwork, particularly woodcarving. It was also famous for its gem-quality diamonds. Sierra Leone has one of the world’s largest deposits of rutile, and good deposits of bauxite and gold. It is well endowed with marine and timber resources as well. The other sectors of strategic importance are tourism and cash crops (ginger, rice, coffee, cocoa, palm oil and kernels).

However, this country has experienced some difficult times in the recent past. After the constitution was formed in 1951, independence followed in April 1961. The successive decades saw regime changes, often brought about by armed coups overthrowing previous coup regimes or democratically elected representatives.

By 1991 a small group of men who called themselves the Revolutionary United Front (RUF) had formed, and they started gaining control of the country’s diamond mines. Their dominance over much of the countryside was thwarted in 1995 by the collaborative efforts of National Provisional Ruling Council (NPRC) and mercenaries from a private firm known as Executive Outcomes. May 1997 saw the Armed Forces Revolutionary Council (AFRC), a group of Sierra Leone soldiers, overthrow the civilian presidential government and form a new government along with the RUF, only to be overtaken a year later in 1998 by the Nigerian-led ECOMOG forces.

In July 1999, the Lome Peace Agreement was signed between the warring parties which called for a government consisting of both ECOMOG and the RUF members. An international peacekeeping force run by both the United Nations (UN) and the ECOMOG was also established. However, this peace accord was soon violated by the RUF and this ultimately led to the group being stripped of its positions in government. This politically unstable period was marked throughout by violence and hostilities against the people, until May 2002 when the British and the UN military contingent succeeded in establishing peace, wherein President Kabbah was re-elected for a 5-year term and the RUF failed to win even a single seat. The period between March 1991 and January 2002 witnessed a significant political disturbance in Sierra Leone in which over 50,000 people lost their lives, with a total collapse of the infrastructure and is known as the “Sierra Leone Civil War.”

President Ernest Bai Koroma succeeded President Kabbah following the 2007 national elections and with it the regime has witnessed a transition from an authoritarian one to a democratic (hybrid) one.

Increasing corruption and decline in the mining industry caused a slowdown in the economic growth rate in the 1970s and early 1980s. This decline in economic growth continued throughout the 1990s with a degradation of the economic infrastructure mainly due to poor revenue collection (~$96 million), failure to control expenditure (~$351 million, as of 2000) and a heavy debt. The political unrest and civil disturbances threatened the prospects of economic progress as it became riddled with problems due to balance-of-payments deficit, low production, poor export performance, large budget deficits, shortage of essential goods, unserviceable external debts, a widespread parallel market and inflation (11%).

The mining operations ceased by 1995 due to the rebel activities, seriously affecting the economy. Not only the mining sector, but the banking sector was hit badly too. By the 1990s, six commercial banks were already operating in the country, namely Standard Chartered Bank of Sierra Leone, Barclays Bank of Sierra Leone, International Bank of Trade and Industry, National Development Bank, National Cooperative Development Bank and Bank of Sierra Leone. Most of these banks closed during the rebel invasion. The war compounded with illicit mining, unaccounted trade, depletion of deposits and widespread smuggling of gold and diamonds consumed as much as 75% of the government’s financial and material resources, resulting in extreme shortages of foreign currency and the need to import 70% of its domestic requirements.

Ever since the civil war ended in 2002, Sierra Leone’s economy has seen gradual recovery with a GDP growth rate between 4% and 7%. The government’s economic reform program received a kickstart with the IMF’s approval of a 169 million dollar, three-year Poverty Reduction and Growth Facility (PRGF) Arrangement program in 2001 and also with its eligibility for a 950 million dollar, IMF/World Bank Heavily Indebted Poor Countries (HIPC) debt service relief initiative in 2002. In 2005 Sierra Leone entered into economic cooperation agreements with Iran in which Iran donated 1.5 million US dollars to Sierra Leone as development aid package encouraging it to engage in business involving technology transfer and trading in Iranian gas.

President Koroma’s government had declared its commitment to building long-term economic growth with the major overseas based companies. The Africa Growth and Opportunity Act (AGOA) trade agreement was signed with the United States in which duty-free quota-free (DFQF) market access for approximately 7000 product tariff lines to the United States was offered. “Agenda for Change,” the government’s new strategic development plan launched in November 2009, unveiled the future efforts to be pursued by the government in improving agriculture, providing employment and addressing corruption. The European Commission under its Annual Action Plan 2010 (AAP) has approved a grant of 52.5 million Euros to Sierra Leone to aid her in recovery efforts and democratic governance. This would be utilized for infrastructure improvements and agricultural development. In June 2010, the International Monetary Fund (IMF) completed the sixth review and approved a new 3-year successor arrangement under the Extended Credit Facility (ECF) for Sierra Leone.

Today the minerals sector contributes to a full 90% of total export revenue and is almost the only source of foreign exchange. Of this the annual production estimates of gem-quality diamonds range from 250-300 million dollars. The mineral export value potential has been estimated to rise from 142 million dollars in 2007 to 1.2 billion dollars by 2020 providing the much-needed boost to the GDP per capita. Sierra Leone’s high-quality diamond fields are no longer a target of the rebel armies. Various development programs undertaken by the United Nations (UN) focus on growth and poverty reduction via private sector development, microfinance, agri-business stimulus and aid coordination.

The Economic Development Unit (EDU) functioning under the aegis of United Nations Development Programme (UNDP) has the objective of assisting Sierra Leone with policy support, capacity development and technical assistance aimed at attaining the Millennium Development Goals (MDG). Sierra Leone is also a member of the Economic Community of West African States (ECOWAS) whose mission is to promote economic integration in all fields of economic activity, such as industry, transport, telecommunications, energy, agriculture, natural resources and commerce.

With the signing of The Extractive Industries Transparency Initiative (EITI) in February 2008, Sierra Leone entered into an agreement with a coalition of governments, companies and civil society, aiming to increase transparency of company payments and government revenues from the mining, gas and oil sectors. The other development partners engaged in policy dialogue with the Government of Sierra Leone include the World Bank, Department for International Development of the United Kingdom (DFID) and United States Agency for International Development (USAID). Their efforts are mainly directed towards establishing efficient governance of mining sector, restructuring of the Ministry of Mineral Resources (MMR), and reviewing the environmental and social impact of mining. The Ministry of Finance and Economic Development (MoFED) has assumed the responsibility of monitoring the development projects in Sierra Leone.

The non-for-profit and non-governmental organization Supporting Entrepreneurship and Economic Development Sierra Leone (SEED-SL) was formed in 2009 with the objective to create economic partnerships with the poor, by encouraging entrepreneurship, providing direct micro-credit loans in form of equipments, materials and business training to Sierra Leonean war affected victims.

In addition to collaboration with a host of international agencies, Sierra Leone is committed to developing its mining infrastructure. African Minerals has undertaken the biggest investment in the mining sector and has embarked on massive mining projects that would provide employment to thousand’s of people in addition to carrying out corporate social responsibility projects like building schools and funding scholarship programs. Sierra Rutile Limited, a mining company owned by a consortium of U.S. and European investors and the largest nonpetroleum U.S. investment began commercial mining operations near Bonthe in 1979. Being one of the country’s largest private sector employers it produces rutile, zircon and ilmenite and is all set to increase production and expand both reserve and resource bases. The discovery of an estimated 2 billion barrels of oil off the coast of Sierra Leone in September 2009 by Anadarko, a U.S. oil company, and its partners Woodside of Australia, Repsol of Spain, and Tullow Oil of the U.K., has led to new hopes of commercial oil exploitation.

President Koroma has also emphasized on the commercialization of farming in order to enable the country to earn revenues by exporting agricultural products and goods to other countries. Sierra Leone’s agriculture ministry has renewed its emphasis on agricultural productivity, agricultural research, improved market access and providing better land management and reliable water distribution systems. Even though two-thirds of the population is engaged in subsistence agriculture, for their livelihood, agriculture accounts for only 42% of national income. The signing of African Union’s Comprehensive Africa Agricultural Development Program (CAADP) has been a positive step for achieving agricultural development and would also act as a catalyst for socio-economic growth.

Under this program 195 farmer-based organizations (FBOs) were identified and were supplied them with tractors, power tillers, transplanters, fertilizers, insecticides,  food crops like rice, maize and cassava; export crops like cashew nuts, coffee and cocoa. In addition to the above, the introduction of National Sustainable Agriculture Development Plan (NSADP) will strengthen the agricultural productivity of small and medium-scale farmers, promote large-scale farming and promote the development of agri-business as a whole. Under this initiative women farmer groups are encouraged to be the backbone of the private sector by operating as limited companies as for example in the case of Monty Jones a Sierra Leonean researcher who introduced a new strain of rice whose results have been encouraging and can help boost agricultural production. The establishment of a Special Economic Zone in Freetown in October 2010, operated by U.S company First Step has led to the completion of a fruit processing plant.

The areas in and around Freetown have factories which produce cement, nails, shoes, oxygen, cigarettes, beverages, paint, knitted goods, process tuna and palm oil. Oyster farming and shrimp production are important areas of the fishing industry. A number of products such as cloth, rope, sail canvas, boats, wood carvings, baskets, and leather goods are also manufactured by the village craft industry. Manufacturing activities in post-war Sierra Leone have really gathered momentum and appear promising.

Tourism is another area that is set to benefit as a result of the present government’s economic policies. Tourism in Sierra Leone is highly beach oriented, the prominent ones being Sulima, Turner’s Peninsular, Sherbro Peninsular, Shenge, Freetown Peninsular, Lungi Beaches and Scarcies Estuary. Other places of interest are Tacugama Chimpanzee Sanctuary and its beautiful eco-lodges, Tiwai Island Wildlife Sanctuary and the Banana Islands. More than 5,000 tourists set afoot to Sierra Leone last year mostly via packaged tour deals, and this number is expected to see a rise in the coming years.

President Ernest Bai Koroma has promised to open the doors of Sierra Leone to foreign business and cut down on the barriers to business. Sierra Leone is a member state of the WTO and starting or operating a business in Sierra Leone has increasingly become less cumbersome nowadays. The investors are protected by an agreement allowing for arbitration under the 1965 World Bank Convention. Safeguards against nationalization are in place and repatriation of capital, profits and interest is allowed. The investment of foreign private capital in agriculture, for the development of plantations and other worthwhile enterprises is being highly encouraged.

Sierra Leone has come a long way since the end of the civil war. Today there are no more diamond wars. The problem of “conflict diamonds” or “blood diamonds” mined illegally by warlords and sold to buy weapons and pay soldiers has largely been fixed such that, it now constitutes an almost negligible part of the diamond trade. This was brought about largely by the diamond-policing mechanism instituted in 2002 known as Kimberley Process. The United Nations Security Council also ended sanctions against Sierra Leone. On September 1, 2008 the revised version of the Anti-Corruption Act was passed which called for indictments, stiffer penalties and gave the Anti-Corruption Commission (ACC) greater independence to investigate graft cases at every level. Sierra Leonean companies have also embarked on creating an effective web presence to enable a better sharing of knowledge with the rest of the world as is case of Otolo Web Solutions.

In spite of all this, Sierra Leone needs to improve itself further. Improvement in revenue management system, reducing corruption and establishment of a securities exchange are some of the goals to be achieved. A large number of ex-combatants need to be fully reintegrated into society or accepted by their families. Communities need to forgive and forget each other’s individual wrongdoings and reconcile in order to be able to move ahead progressively. Illiteracy and health care are two sectors needing immediate attention. Infrastructure development in the areas of power generation, water supply, accommodation, roads, airports, ports, etc, have been undertaken but would still need some real investment.

Freetown International Airport being constructed under a UNDP assisted program will soon be an important point of transit. Transfers to and from the nearby Lungi Airport have also improved significantly. Communication systems (internet and cellular) and media operations (radio and TV) have started operating in Sierra Leone, but still need to be improved. The construction of Bumbuna Dam hydroelectric project in 2009 has helped alleviating the power shortage problem to a great extent. Despite its hardships, Sierra Leone’s physical and social infrastructure is set on the road to recovery and towards a better tomorrow.

By Anu R. Osta

Abbreviations:

  • AAP – Annual Action Plan
  • AFRC – Armed Forces Revolutionary Council
  • AGOA – Africa Growth and Opportunity Act
  • CAADP – Comprehensive Africa Agricultural Development Program
  • DFID – Department for International Development
  • DFQF – Duty-Free Quota-Free
  • ECOMOG – Economic Community of West African States Monitoring Group
  • ECOWAS – Economic Community of West African States
  • EDU – Economic Development Unit
  • EEF – Extended Credit Facility
  • EITI – Extractive Industries Transparency Initiative
  • FBO – Farmer-Based Organizations
  • GDP – Gross Domestic Product
  • HIPC – Heavily Indebted Poor Countries
  • IMF – International Monetary Fund
  • MGD – Millennium Development Goals
  • MMR – Ministry of Mineral Resources
  • MoFED – Ministry of Finance and Economic Development
  • NPRC – National Provisional Ruling Council
  • NSADP – National Sustainable Agriculture Development Plan
  • PRGF – Poverty Reduction and Growth Facility
  • SEEDSL – Supporting Entrepreneurship & Economic Dev. Sierra Leone
  • UN – United Nations
  • UNDP – United Nations Development Program
  • USAID – United States Agency for International Development
  • WTO – World Trade Organization

References:

  1. http://en.wikipedia.org/wiki/Sierra_Leone
  2. http://www.sierra-leone.org/
  3. https://www.cia.gov/library/publications/the-world-factbook/geos/sl.html
  4. http://www.state.gov/r/pa/ei/bgn/5475.htm
  5. http://news.bbc.co.uk/2/hi/africa/country_profiles/1061561.stm
  6. http://www.visitsierraleone.org/
  7. http://www.globalissues.org/article/88/sierra-leone
  8. http://www.africa.upenn.edu/Country_Specific/S_Leone.html
  9. http://www.africaneconomicoutlook.org/en/countries/west-africa/sierra-leone/
  10. http://www1.worldbank.org/publicsector/pe/HIPC/Sierra%20Leone%20AAP%20Final.pdf