HomeReportsBureau of Economic and Business Affairs2018 Investment Climate Statements…Sierra Leone

# 					2018 Investment Climate Statements: Sierra Leone			

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													Executive Summary											

                -  Executive Summary 
                -  1. Openness To, and Restrictions Upon, Foreign Investment   
                -  2. Bilateral Investment Agreements and Taxation Treaties   
                -  3. Legal Regime   
                -  4. Industrial Policies   
                -  5. Protection of Property Rights   
                -  6. Financial Sector   
                -  7. State-Owned Enterprises   
                -  8. Responsible Business Conduct   
                -  9. Corruption   
                -  10. Political and Security Environment   
                -  11. Labor Policies and Practices   
                -  12. OPIC and Other Investment Insurance Programs   
                -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                -  14. Contact for More Information   

## Executive Summary

Sierra Leone, with a population of more than seven million people, is located on the coast of West Africa between the Republic of Guinea in the north and north-east, the Republic of Liberia in the south and south-east and the Atlantic Ocean on the west. With English as the official language, generally favorable views of the United States, extraordinary religious tolerance, and political stability since the end of the civil war in 2002, Sierra Leone presents significant opportunities for investment and engagement. The success of the recent democratic transition in the presidency, subsequent to March 2018 national elections and a presidential runoff that enjoyed 81.11 percent registered voter participation, bodes well for the political environment.

Sierra Leone’s economy remains heavily dependent on mineral resources, including significant deposits of iron ore, rutile, bauxite, and diamonds. Real gross domestic product (GDP) growth hit 20.1 percent in 2013, but the economy came to an abrupt halt in 2014, with the largest Ebola outbreak in history coinciding with a slump in global commodities prices, and the economy contracted by 21.1 percent in 2015. The end of the Ebola outbreak allowed modest recovery in 2016 (6.3 percent) with slowing in 2017 (3.5 percent), and the country continues to require significant budget support from foreign donors. Sierra Leone elected a new president, Julius Maada Bio, in March 2018 replacing the outgoing President Ernest Bai Koroma who could not seek re-election due to term limits. President Bio briefly ruled as head of a military junta in 1996 and now steps in as the democratically elected president. His new direction doctrine focuses on revamping the economy with prudent macroeconomic policies, vowing to fight poverty, indiscipline, corruption and underdevelopment, among other urgent needs.

The investment climate in Sierra Leone presents certain challenges. The World Bank ranked Sierra Leone 160 among 190 countries in 2018 for the ease of doing business, identifying particular challenges in constructions permits, access to electricity, registering property, securing loans and small-business credit, trading across borders, and resolving insolvency. Firms have significant difficulty accessing credit and must pay high interest rates; foreign investors generally bring capital from abroad. Corruption is endemic throughout the economy. Investments outside of Freetown require special attention to local dynamics and community needs, particularly due to the influence and significant authority of traditional leaders, the Paramount Chiefs. In the recent past, Mission Freetown received multiple reports of companies that experienced challenges in asserting their investment interests, including in requests for regulatory approvals and in the execution of contracts with the government. While these issues do not necessarily reflect any discriminatory treatment of U.S. interests, they do underscore the challenges of all foreign businesses operating in Sierra Leone.

In spite of the aforementioned issues, Sierra Leone offers great opportunities for investments. Foreign investors are engaged in the energy sector (including renewables), infrastructure, agriculture, fisheries, tourism, and natural resources. In 2017, the government concluded its 24-month National Ebola Recovery Strategy, which sought to rebuild the health sector, strengthen social protection, and restore economic growth. Largely successful in achieving most objectives, the GoSL continues to focus on improving the business environment to attract new foreign direct investments. Sierra Leone benefits from duty-free access to large markets for certain goods through the United States’ African Growth and Opportunity Act (AGOA) and the EU’s Everything But Arms Initiative. Sustained economic growth will depend on Sierra Leone’s ability to diversify its economy, tap into underutilized sectors like agriculture, tourism, and fisheries, and ensure that the country’s considerable natural resources are leveraged to improve the lives of all citizens. The URL for investment information is accessible at: http://investinginsierraleone.com/introduction/

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