Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.
Sierra Leone lacks the infrastructure necessary to support effective commercial activities. Poor quality and limited infrastructure pose major challenges to investment, domestic travel, inland transport, and normal operations. Efforts to construct major roads leading to district headquarter towns and rehabilitate feeder roads linking agricultural suppliers with urban markets remain ongoing. The customs clearance procedure was simplified to reduce clearance time and the major seaport extended to accommodate more vessels. Yet, the government needs to continue to construct other infrastructure including seaports, airports, public utilities, and telecommunications.
Even with the above progress, challenges persist in corruption, skilled labor, accessing land, high interest rates, and contract enforcement. The local content policy instituted in 2016 requires investors to utilize local goods in place of imported goods, promote the employment of citizens, and develop the human capacity of these citizens through training. At least 20 percent of the managerial and 50 percent of intermediate positions must be held by Sierra Leonean citizens, and this ratio should be increased gradually to 60 percent for managerial and 80 percent for intermediate positions in five years. Furthermore, equity shares of every registered foreign entity in Sierra Leone must include 20 percent Sierra Leonean ownership for the government to grant such firms preferential treatment when competing for government contracts.
The World Bank ranked Sierra Leone 163 among 190 countries in 2020 Doing Business Report, a drop from 140 in 2015. The World Bank highlighted challenges in access to credit, resolving insolvency, access to electricity and construction permits, but noted improvements in payment of taxes, cross-border trade and starting a business. Investments outside of the capital city require special attention to local community needs, particularly land issues that are subject to the influence and authority of traditional leaders. While these issues do not necessarily reflect any discriminatory treatment of U.S. interests, they do underscore the challenges facing all foreign firms operating in Sierra Leone. As the government continues to inform investors that the country is open to foreign investment, it has focused on removing constraints on trade and improving the investment climate. Corruption remains a serious impediment to investment.
The disruption of Covid-19 has been widespread. To mitigate the shock and accelerate economic recovery, the government initiated and executed the Quick Action Economic Response Plan which aimed at saving lives and sustaining livelihoods. It maintained adequate stock of essential commodities, supported hardest-hit businesses and labor-based public works, and assisted local production and processing of food items. The central bank also provided $500 million with reduced interest rate to businesses to manage the production, procurement and distribution of essential goods and prioritized the available foreign exchange to ensure the importation of these essential goods.