Sierra Leone - Country Commercial Guide
Investment Climate Statement

The Investment Climate Statement Chapter of the CCG is provided by the State Department. Any questions on the ICS can be directed to EB-ICS-DL@state.gov

Last published date: 2021-09-14

The U.S. Department of State Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world.  They analyze a variety of economies that are or could be markets for U.S. businesses.

Topics include Openness to Investment, Legal and Regulatory systems, Dispute Resolution, Intellectual Property Rights, Transparency, Performance Requirements, State-Owned Enterprises, Responsible Business Conduct, and Corruption.

These statements highlight persistent barriers to further U.S. investment.  Addressing these barriers would expand high-quality, private sector-led investment in infrastructure, further women’s economic empowerment, and facilitate a healthy business environment for the digital economy.  

Executive Summary

Sierra Leone, with an estimated population of over 8.2 million people (World Population Review), is located on the coast of West Africa between the Republic of Guinea in the north and northeast, the Republic of Liberia in the south and southeast, and the Atlantic Ocean on the west, with a land area of 71,740 square kilometers. Since the civil war ended in 2002, the country has been politically stable with extraordinary religious tolerance among its people. Sierra Leone presents potential opportunities for investment. The March 2018 democratic transition in the presidency concluded with a runoff that recorded 81 percent registered voter participation. President Julius Maada Bio, who ruled briefly as head of a military regime in 1996, replaced President Ernest Bai Koroma on May 12, 2018. His “New Direction” doctrine promised a comprehensive reform agenda to revamp the economy and overturn the persistent imbalances on the current account, currency depreciation, high inflationary pressure, untenable debt distress, and high unemployment.

The economic landscape was challenging when the new administration took power in March 2018. Nonetheless, to achieve fiscal sustainability and medium-term growth objectives, the new government took up revenue mobilization and expenditure control and initiated a re-activation of the suspended ECF with the IMF, to overcome emerging challenges and improve the prospects for growth projected to rebound to three percent , according to the World Bank Economic Update of August 5, at https://www.worldbank.org/en/news/press-release/2021/08/05/sierra-leone-s-economy-is-recovering-from-covid-19-contraction-although-uncertainties-persists. The government hopes the MTNDP, built on human capital development, economic diversification, and increased competitiveness in agriculture, fisheries, and tourism, will facilitate the transformation of the country from a fragile state to a stable and prosperous democracy that achieves middle-income status by 2039.

Foreign Direct Investment (FDI) plummeted in 2014/15 following the Ebola outbreak and the fall in commodity prices. After the outbreak, capital flows reached $599 million from its lowest level of $129 million in 2017 and with volatile inflows attributable to mining multinationals. According to UNCTAD’s 2020 World Investment Report, the stock increased to $2 billion by end of 2018 as the country was seeking to attract investment in agriculture, fisheries, tourism, natural resources, and through public-private partnerships for projects in energy, water, telecommunications, and other infrastructures.

Sierra Leone, endowed with substantial natural resources, had long relied on its mineral industry, dominated by countless miners, as minerals account for more than 80 percent of exports and contribute 2.7 percent to GDP. The current president is reviewing mining contracts and considering changes to the law that would ensure the country benefits from its natural resources, a promise he made during his campaign. In 2019, the government canceled the mining licenses of the two major iron ore companies – the Chinese Shandong Iron & Steel Company and the U.S.-owned Gerald Group’s Sierra Leone Mining Company. The GoSL claimed that the companies were not paying all royalties. In 2020, Gerald Group subsequently brought a lawsuit against the government in an international tribunal. The government refused to recognize international arbitral rulings against it and was not complying with legal determinations, until May 2021, when Gerald Group reached a settlement with the government.

While these issues do not necessarily reflect any discriminatory treatment of U.S. interests, they do underscore the challenges of foreign businesses face operating in Sierra Leone. Despite these issues, Sierra Leone offers great investment opportunities, and the government is looking for investment in all sectors of the economy and hopes for economic growth and development to be led by the private sector. To achieve this, the government continues to focus on improving the business environment to attract new foreign direct investments. Opportunities exist for investors as the country benefits from duty-free access to the Mano River Union market of more than 30 million, the African Continental Free Trade Agreement of about fifty-four African countries with a combined population of more than one billion, the European Union’s Everything But Arms initiative and the United States’ African Growth and Opportunity Act (AGOA). Achieving sustained economic growth will depend on Sierra Leone’s ability to diversify its economy, tap into under-utilized sectors like agriculture, tourism, and fisheries, and exploiting the country’s considerable natural resources in a manner to improve the lives of all citizens.

To access the ICS, visit the U.S. Department of State Investment Climate Statements website.