Sierra Leone is situated in West Africa and is bordered by Liberia to the south, Guinea to the east, and by the Atlantic Ocean to the west. The country is relatively poor with about half of the workforce engaging in subsistence agriculture. The nation possesses substantial fishery, mineral, and agricultural resources and is still recovering from the civil war that destroyed most of the institutions. The economic growth in recent years has been primarily driven by mining. The nation’s main exports include iron ore, rutile, and diamonds which make the economy vulnerable to international price fluctuations. Before 2014, the country was reliant on external assistance to fund a significant part of its budget but has since become more independent.
Industry and Manufacturing
According to the World Economic Forum Competitiveness Report 2012-2013, the country had the second least competitive economy globally with manufacturing and industry accounting for 1.8% of the GDP in 2011. The country is ranked position 140 out of 185 nations on ease of doing business by the World Bank. According to the World Bank in 2011, the manufacturing sector in the country was estimated to be growing at the rate of 15% while in industrial production was experiencing growth at a value-added annual rate of 9.7%. The primary industries in the country cover commercial ship repair and petroleum refining.
Mining and Minerals
The country has significant reserves of iron ore, diamonds, bauxite, and gold. The country also has one of the largest rutile reserves in the world. A total of 21 mining companies were active in Sierra Leone in 2011 bringing in an estimated $12 million. Bauxite and rutile are among the most significant contributors to tax revenue accounting for 60% of the total revenues. Some of the other minerals present in the country include chromite, platinum, copper, nickel, clay, zinc, lignite and lead. The government estimates that about 14% of the nation's workforce is employed in the sector. The mineral extraction industry is comprised of large scale diamond production, large scale bauxite and rutile production, and small scale and artisanal precious mineral production which primarily focus on diamonds and gold. The mining sector witnessed a decline due to the outbreak of the civil war that started in 1991 with the sector resuming full production in 2007. The alluvial diamond deposits are mainly exploited by artisanal miners which include young men from across the country who set up camps and spend their days digging for the precious mineral. The mining is often conducted in pairs with one of the miners diving to the bottom of the river bed while the other holds a rope to keep the diver from being swept away by the river's current.
Before the civil war, the country's formal economy was made up of rutile, diamond, and bauxite exports. According to the World Bank, the sector provided 8% of total government revenues before the war which shrunk to 1% at the end of the conflict. Several mechanized mines have resumed since the end of the conflict including Kimberlite Diamond Mines which was owned by Koidu Holding, Sierra Minerals rutile and bauxite mine, and the Sierra Rutile mine. According to government figures, the country exported about 582,000 carats of diamonds in 2006 with artisanal miners accounting for 84% of the exports. According to a study conducted by the government and the World Bank in 2005, the proper realization of the nation's mining potential would result in eight major mines in a decade. Increased global demand for titanium and aluminum is likely to trigger increased production of bauxite and rutile in the country. The government is looking to attract additional investors to explore mineral deposits in the country to boost revenues.
Agriculture, Forestry, and Fisheries
In 2010, the agricultural sector accounted for 49% of the nations GDP making it among the largest sectors in the country. The forestry, fisheries, and agricultural sectors combined accounted for 51% of the nation's GDP in 2008. Agriculture takes up about 47.7% of the land use and employs nearly half of the working population which survives on subsistence agriculture. Some of the agricultural products produced in the country include cocoa, coffee, palm oil, palm kernels, rice, peanuts, poultry, pigs, sheep, and cattle. The mains exports from the sector are coffee and cocoa which are exported mainly to the United States, Belgium, Netherlands, and France.
Sierra Leone has a coastline of 347.97 miles, an Exclusive Economic Zone that measures 60,116 square miles, and a sea shelf area of 11,583 square miles with rich fish resources. Fishing employs an estimated 36,000 people, a majority of whom are artisanal fishermen. Five thousand people are employed in Aquaculture, and about 1,000 people are employed as industrial fishermen. In addition to the number employed directly by artisanal fishing, the sector provides an additional 200,000 jobs in the secondary sector through boat building, fish processing, and marketing. Industrial fishing is mainly export oriented and is comprised of demersal fish, shrimp, and finfish trawlers. Inland fishing is mainly subsistence oriented with catfish and tilapia being the main species caught. Fishery exports in 2007 had an estimated value of $11,000,000.
According to the World Travel and Tourism Council, the tourism sector accounted for 7.3% of the nation's economy in 2011. The country received about 39,000 visitors in 2010, and the tourism sector provided about 6.3% of the total employment in the country with the percentage expected to rise by 2022. The sector's contribution to the nations GDP is expected to rise at a rate of 5.5% per annum over the decade. Some of the notable tourism and travel organizations include Karl Travel Agency, CAS travel Agency, Lion Travel Agency, Paramount Air Travel Agency, the National Tourist Board of Sierra Leone, Karou Voyage, Global Travel Agency, and Freetown Travel Agency among many others.
Electricity and Power
The only distributors of electricity in the nation are Bo-Kenema Power Services and the National Power Authority which are both supervised by the Ministry by Energy and Power. The Bumbuna Hydroelectric power project is among the government main development projects. Electricity supply is mainly limited to main cities such as Kenema, Makeni, Bo, and the capital Freetown. The diesel reliant King Tom Power Station is the main power generating station in the western parts of the country.
Prospects and Challenges
Before the Ebola outbreak in May 2014, the country was aiming at attaining a Middle-Income status by 2035. A drop in international commodity prices coupled with the Ebola outbreak led to the economy contracting in virtually all sectors. Despite the World Health Organization declaring that the country was Ebola-free towards the end of 2015, the country suffered one of the most significant shortfalls in its history due to low commodity prices between 2015 and 2016. In 2017, the country witnessed resumption in economic growth that was supported by higher iron ore exports. The continued economic recovery will depend heavily on the rising international commodity prices and the diversification of the sources of revenue. Sectors outside mining continue facing limitations due to inadequate infrastructure such as roads and power. Undeveloped human capital and pervasive corruption are likely to continue to deter foreign investment.