Private Sector Development in Sierra Leone

Jobs and Industrialisation

Private Sector Development in Sierra Leone

Briefing
Posted on: 17th January 2015

Before Ebola struck, Sierra Leone was one of the fastest growing economies in the world. Growth took off in 2012/2013 with the commencement of large-scale iron ore mining, reaching over 20% in 2013 and forecast to reach over 11% in 2014.

This positive trajectory took two significant hits in 2014 – an unprecedented Ebola outbreak and the collapse of the iron ore sector due to record low global iron ore prices.

While this has created significant new challenges for the country, the fundamentals remain the same – the country’s natural resource endowments, for example in mining, agriculture and its deep natural harbour, mean there is huge potential for growth, but there is a need to diversify the economy and create jobs to reduce poverty.

The crisis has also reminded us that government resources and capacity are constrained, and that poor infrastructure, such as roads, energy and water, make it costly or even impossible for the private sector to drive growth and job creation.

President Koroma has recognised these challenges in his Agenda for Change (2007-2012) and Agenda for Prosperity (2013-2017) which aim, among other things, to create a positive enabling environment for the private sector.

In supporting the President’s vision AGI has embedded Advisers in various arms of government in the past to identify and address the main bottlenecks to achieving this aim.

We have worked with the President’s Private Sector Adviser in State House and with the Ministry of Trade and Industry to analyse the actions required to boost Sierra Leone’s Doing Business ranking, such as improving access to credit information by establishing a public credit registry and making it easier to register property by introducing a fast-track procedure. 

We supported the implementation of such actions by creating a coordination and tracking system across government to ensure improvements were pursued with more urgency and the President was regularly briefed on progress or lack thereof. Sierra Leone's ranking in the Doing Business Index has since improved by 16 places.

Complementing the legislative and regulatory changes which make doing business difficult and time consuming in Sierra Leone, AGI has pursued improvements in infrastructure, particularly unreliable and insufficient power supply. 

AGI Advisers have also worked through the Revenue Taskforce chaired by the Minister of Finance and Economic Development to address bottlenecks at the Freetown port, engaging with a range of stakeholders to identify the problems, map out an action plan and support the Minister to intervene where required. Often the problems are relatively small matters – ensuring that the police post at the Port has power or the Customs office has internet so their central data management system can be utilised have often been the kinds of critical constraints that have led to major efficiency improvements.

Helping the private sector to recover from the shock of Ebola, creating opportunities for new businesses to thrive in the absence of a strong mining sector and encouraging large-scale domestic and foreign investment that ensures growth that benefits the whole country will be a major government focus. The AGI team is continuing to work with the Government to drive this recovery. 

 

 

The work described here was carried out by the Tony Blair Africa Governance Initiative, it is now being continued by the Tony Blair Institute for Global Change.

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