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Economy of Sierra Leone

Rich in minerals, Sierra Leone has relied on the mining sector in general, and diamonds in particular, for its economic base. In the 1970s and early 1980s, the economic growth rate slowed because of a decline in the mining sector and increasing corruption among government officials. By the 1990s economic activity was declining and economic infrastructure had become seriously degraded. Chronic electricity shortages have hampered Sierra Leone’s development and recovery from the country’s civil war. The coming on line of the Bumbuna Dam hydroelectric project in 2009 is alleviating the power shortage.

Much of Sierra Leone’s formal economy was destroyed in the civil war. Since the cessation of hostilities in January 2002, massive infusions of outside assistance have helped Sierra Leone begin to recover. Full recovery to pre-war economic levels will require hundreds of millions of additional dollars and many more years of serious effort by the Government of Sierra Leone and donor governments. Much of Sierra Leone’s recovery will depend on the success of the Government of Sierra Leone’s efforts to limit official corruption, which many feel was the chief culprit for the country’s descent into civil war. A key indicator of success will be the effectiveness of government management of its natural resources. Besides mineral deposits, Sierra Leone has sizeable marine and timber resources. Both sectors are threatened by limited management and overexploitation.

About two-thirds of the population engages in subsistence agriculture, which accounts for 49% of national income. The government is trying to increase food and cash crop production and upgrade small farmer skills. Also, the government works with several foreign donors, including the United States, to operate integrated rural development and agricultural projects. In November 2009, the Government of Sierra Leone launched the “Agenda for Change,” the government’s new strategic development plan, at a meeting of the Consultative Group of Sierra Leone’s donors. The Agenda for Change will among other things focus on improving agriculture, which employs over half of the workforce, and addressing corruption.

Mineral exports remain Sierra Leone's principal foreign exchange earner. Sierra Leone is a major producer of gem-quality diamonds. Though rich in this resource, the country has historically struggled to manage its exploitation and export. Annual production estimates range between $250-$300 million, not all of which passes through formal export channels, although formal exports have dramatically improved since the days of civil war. The balance is smuggled, where it possibly is used for money laundering or financing illicit activities. Efforts to improve the management of the export trade have met with some success. In October 2000, a UN-approved export certification system for exporting diamonds from Sierra Leone was put into place that led to a dramatic increase in legal exports. In 2001, the Government of Sierra Leone created a mining community development fund, which returns a portion of diamond export taxes to diamond mining communities. The fund was created to raise local communities' stake in the legal diamond trade.

Sierra Leone has one of the world's largest deposits of rutile, a titanium ore used as paint pigment and welding rod coatings. Sierra Rutile Limited, owned by a consortium of U.S. and European investors, began commercial mining operations near Bonthe in early 1979. Sierra Rutile was then the largest nonpetroleum U.S. investment in West Africa. The export of 88,000 tons realized $75 million in export earnings in 1990. The company and the Government of Sierra Leone concluded a new agreement on the terms of the company's concession in Sierra Leone in 1990. Rutile and bauxite mining operations were suspended when rebels invaded the mining sites in 1995, but exports resumed in 2005.

In September 2009, Anadarko, a U.S. oil company, and its partners Woodside of Australia, Repsol of Spain, and Tullow Oil of the U.K., announced that they had made an oil find off the coast of Sierra Leone. This oil deposit, the Venus field, may be similar to the 2 billion barrel Jubilee deposit that Anadarko discovered off of Ghana in 2007. The Venus well was drilled to a depth of about 18,500 feet in about 5,900 feet of water. Only further testing will ascertain whether the area includes commercially exploitable oil and/or gas deposits, and production will be at least several years off.

Since independence, the Government of Sierra Leone has encouraged foreign investment, although the business climate has been hampered by corruption, a shortage of foreign exchange, and uncertainty resulting from civil conflicts. Investors are protected by an agreement that allows for arbitration under the 1965 World Bank Convention. Legislation provides for transfer of interest, dividends, and capital. The government passed the Investment Promotion Act in August 2004 to attract foreign investors and has been working with international financial institutions to lower its administrative barriers to trade. In 2007, the Sierra Leone Investment and Export Promotion Agency was created to assist investors by creating a "one stop shop" for starting a business. In 2008, the International Finance Corporation's "Doing Business" guide ranked Sierra Leone 7th out of 15 West African countries in terms of ease of doing business. Sierra Leone has been top-ranked in West Africa in terms of starting a business, but with licensing, contract enforcement, and high tax rate problems still impeding investment. In an encouraging development, President Koroma’s October 2010 dedication of a Special Economic Zone in Freetown, operated by U.S. company “First Step,” led to the completion in April 2011 of a plant to process fruit for export.

Sierra Leone is a member of the Economic Community of West African States (ECOWAS). With Liberia and Guinea, it formed the Mano River Union (MRU) customs union, primarily designed to implement development projects and promote regional economic integration. Cote d'Ivoire joined in May 2008. The MRU has been largely inactive because of domestic problems and internal and cross-border conflicts in all three countries. The future of the MRU depends on the ability of its members to deal with the fallout from these internal and regional problems, as well as adequately fund the union to carry out sub-regional activities. In June 2010, the Monetary Fund (IMF) approved a 3-year successor arrangement under the Extended Credit Facility (ECF) for Sierra Leone. Sierra Leone’s economic policy has generally shifted from post-conflict stabilization to poverty-reduction efforts, including good governance and fighting corruption; job creation; and food security.

Sierra Leone continues to rely on significant amounts of foreign assistance, principally from multilateral donors. The largest bilateral donors are the United Kingdom and the European Union; others include the United States, Italy, and Germany.

GDP (2009): $2.0 billion.
Real GDP growth rate (2009): 4%.
Inflation rate (2009, CPI): 9.3%.
Exchange rate: U.S. $1 = 400 SLL (Leones).
Natural resources: Diamonds, titanium ore (rutile), bauxite, gold, iron ore, ilmenorutile, platinum, chromite, manganese, cassiterite, molybdenite, as well as forests, abundant fresh water, and rich offshore fishing grounds.
Agriculture: Products--coffee, cocoa, ginger, palm kernels, palm oil, cassava, bananas, citrus, peanuts, cashews, plantains, rice, sweet potatoes, vegetables, cattle, pigs, poultry, sheep, fish. Land--30% potentially arable, 9% cultivated.
Industry: Types--diamond mining; small-scale manufacturing (beverages, textiles, cigarettes, footwear); bauxite and rutile mining; forestry; fishing; flour; cement and other construction goods; petroleum refining; plastics; small commercial ship repair; tourism.
Trade (2009, Economist Intelligence Unit - EIU): Exports--$205.9 million f.o.b.: diamonds, rutile, bauxite, coffee, cocoa, fish. Major destinations of exports (2009, EIU)--Belgium 28.4%, U.S. 12.7%, Netherlands 8.5%, U.K. 7.9%, India 7.2%. Imports--$372.4 million f.o.b.: fuel and lubricants, rice and other foodstuffs, machinery and equipment, chemicals, pharmaceuticals, building materials, light consumer goods, used clothing, textiles. Main origins of imports--South Africa 23.2%, China 12.1%, U.S. 9.3%, Cote d’Ivoire 9%, India 8.3%.

Geography of Sierra Leone

Location: Western Africa, bordering the North Atlantic Ocean, between Guinea and Liberia Map references: Africa Area: total area: 71,740 sq km land area: 71,620 sq km comparative area: slightly smaller than South Carolina Land boundaries: total 958 km, Guinea 652 km, Liberia 306 km Coastline: 402 km Maritime claims: territorial sea: 200 nm continental shelf: 200-m depth or to the depth of exploitation International disputes: none Climate: tropical; hot, humid; summer rainy season (May to December); winter dry season (December to April) Terrain: coastal belt of mangrove swamps, wooded hill country, upland plateau, mountains in east Natural resources: diamonds, titanium ore, bauxite, iron ore, gold, chromite Land use: arable land: 25% permanent crops: 2% meadows and pastures: 31% forest and woodland: 29% other: 13% Irrigated land: 340 sq km (1989 est.) Environment: current issues: rapid population growth pressuring the environment; overharvesting of timber, expansion of cattle grazing, and slash-and-burn agriculture have resulted in deforestation and soil exhaustion; civil war depleting natural resources; overfishing natural hazards: dry, sand-laden harmattan winds blow from the Sahara (November to May); sandstorms, dust storms international agreements: party to - Biodiversity, Endangered Species, Law of the Sea, Marine Life Conservation, Nuclear Test Ban; signed, but not ratified - Climate Change, Environmental Modification

Government of Sierra Leone

GOVERNMENT AND POLITICAL CONDITIONS
Sierra Leone is a republic with an executive president and a multi-party system of government with a 124-seat parliament (112 elected members and 12 paramount chiefs). On August 11, 2007, Sierra Leone held nationwide presidential and parliamentary elections for the first time since the departure of UN peacekeepers. In the parliamentary elections, the National Election Commission reported the All People's Congress (APC) won a parliamentary majority taking 59 of 112 seats, while the ruling Sierra Leone's People's Party (SLPP) took 43 seats. The People's Movement for Democratic Change (PMDC) won 10 seats in parliament. In addition to their peaceful administration, the 2007 parliamentary elections were notable for the return to a constituency-based system, as called for in the 1991 constitution. In preparation for the elections, Sierra Leone redrew parliament’s constituency boundaries for the first time since 1985. APC presidential candidate Ernest Koroma won 44.3% of the total 1,839,208 votes cast, while former Vice President and SLPP presidential candidate Solomon Berewa finished with 38.9%. PMDC presidential candidate Charles Margai placed third, receiving 13.9% of the vote. Because none of the candidates got the 55% of the vote needed to win in the first round, a run-off election was held on September 8, 2007. The two leading candidates, former Vice President Solomon Berewa of the SLPP and Ernest Bai Koroma of the APC, contested the second round. On September 17, 2007, Sierra Leone’s National Election Commission declared Ernest Bai Koroma the winner with 54.6% of the vote. President Koroma was sworn in later that day at the Sierra Leone Statehouse.

Sierra Leone’s judicial system consists of the Supreme Court, Court of Appeals, High Court of Justice, and magistrate courts. The president appoints and parliament approves justices for the three courts. Local chieftaincy courts administer customary law with lay judges; appeals from these lower courts are heard by the superior courts. Judicial presence outside the capital district remains limited, which contributes to excessive delays in the justice system. Although magistrate courts function in all 12 judicial districts, magistrates appointed to those courts but not residing there permanently have complained of insufficient resources to do their job. Justices of the peace or customary law partially fill the gap. Civil rights and religious freedoms are respected. A critical press continues to operate, although journalists and editors are occasionally arrested for publishing articles the government considers inflammatory.

In 2000 the Government of Sierra Leone promulgated the Anti-Corruption Act to combat endemic corruption, and a revised version of the law was passed on September 1, 2008. The amendment added new crimes for indictments, stiffer penalties, and gave the Anti-Corruption Commission (ACC) greater independence to investigate cases at every level. The ACC is working to secure convictions of high-level government officials, as well as raising national awareness of the problem and build in safeguards in “corruption hotspot” ministries through anonymous whistle-blowing programs and training on proper procurement procedures. The amended act requires that all government officials, regardless of rank or position, must declare their assets. President Koroma was the first to declare his assets in 2008, and all other government officials have since followed suit. ACC investigations since late 2008 have led to the removal of dozens of officials, including several ministers, the vice president’s chief of staff, a former member of parliament, and a judge. A number of these investigations have resulted in convictions and a few prison sentences. The ACC has recovered almost $3 million for the government. More cases are pending.

The basic unit of local government outside the Western Area has generally been the chiefdom, headed by a paramount chief, who is elected for a life term. In 2004, however, the first local government elections in 32 years were held in 311 wards nationwide. Four years later, local elections were held again in July 2008. There are now 12 district councils and 5 town councils outside the Western Area. The Western Area has a rural area council and a city council for Freetown, the nation’s capital. The local councils are gradually assuming responsibility for functions previously carried out by the central government. As devolution progresses, chiefdom and council authorities are starting to work together to collect taxes. While district and town councils are responsible for service delivery, chiefdom authorities maintain their own infrastructure of police and courts, which are also funded by local taxes.

Principal Government Officials
President--Ernest Bai Koroma
Vice President--Samuel Sam-Sumana
Ambassador to the U.S.--Bockari K. Stevens

Sierra Leone maintains an embassy in the United States at 1701 19th Street, NW, Washington, DC, 20009, tel. 202-939-9261, embassyofsierraleone.net; and a permanent mission to the United Nations in New York at 245 East 49th Street, New York, New York 10017, tel. (212) 688-1656.

Type: Republic with a democratically elected president and unicameral parliament.
Independence: From Britain, April 27, 1961.
Constitution: October 1, 1991.
Political parties: The Political Parties Registration Commission was formed in late 2005 to review registered parties to see whether they still met registration requirements. Most of the parties are inactive. Major parties--Sierra Leone People’s Party (SLPP), All People's Congress (APC), and People’s Movement for Democratic Change (PMDC).

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History of Sierra Leone

European contacts with Sierra Leone were among the first in West Africa. In 1652, the first slaves in North America were brought from Sierra Leone to the Sea Islands off the coast of the southern United States. During the 1700s there was a thriving trade bringing slaves from Sierra Leone to the plantations of South Carolina and Georgia where their rice-farming skills made them particularly valuable. In 1787 the British helped 400 freed slaves from the United States, Nova Scotia, and Great Britain return to Sierra Leone to settle in what they called the "Province of Freedom." Disease and hostility from the indigenous people nearly eliminated the first group of returnees. This settlement was joined by other groups of freed slaves and soon became known as Freetown. In 1792, Freetown became one of Britain's first colonies in West Africa. Thousands of slaves were returned to or liberated in Freetown. Most chose to remain in Sierra Leone. These returned Africans--or Krio as they came to be called--were from all areas of Africa. Cut off from their homes and traditions by the experience of slavery, they assimilated some aspects of British styles of life and built a flourishing trade on the West African coast. In the early 19th century, Freetown served as the residence of the British governor who also ruled the Gold Coast (now Ghana) and the Gambia settlements. Sierra Leone served as the educational center of British West Africa as well. Fourah Bay College, established in 1827, rapidly became a magnet for English-speaking Africans on the West Coast. For more than a century, it was the only European-style university in western Sub-Saharan Africa. The colonial history of Sierra Leone was not placid. The indigenous people mounted several unsuccessful revolts against British rule and Krio domination. Most of the 20th century history of the colony was peaceful, however, and independence was achieved without violence. The 1951 constitution provided a framework for decolonization. Local ministerial responsibility was introduced in 1953, when Sir Milton Margai was appointed Chief Minister. He became Prime Minister after successful completion of constitutional talks in London in 1960. Independence came in April 1961, and Sierra Leone opted for a parliamentary system within the British Commonwealth. Sir Milton's Sierra Leone Peoples Party (SLPP) led the country to independence and the first general election under universal adult franchise in May 1962. Upon Sir Milton's death in 1964, his half-brother, Sir Albert Margai, succeeded him as Prime Minister. In closely contested elections in March 1967, the All Peoples Congress (APC) won a plurality of the parliamentary seats. Accordingly, the Governor General (representing the British Monarch) declared Siaka Stevens--APC leader and Mayor of Freetown--as the new Prime Minister. Within a few hours, Stevens and Margai were placed under house arrest by Brigadier David Lansana, the Commander of the Republic of Sierra Leone Military Forces (RSLMF), on grounds that the determination of office should await the election of the tribal representatives to the house. Another group of officers soon staged another coup, only to be later ousted in a third coup, the "sergeants’ revolt," and Stevens at last, in April 1968, assumed the office of Prime Minister under the restored constitution. Siaka Stevens remained as head of state until 1985. Under his rule, in 1978, the constitution was amended and all political parties, other than the ruling APC, were banned. In August 1985, the APC named military commander Maj. Gen. Joseph Saidu Momoh, Steven's own choice, as the party candidate to succeed Stevens. Momoh was elected President in a one-party referendum on October 1, 1985. In October 1991 Momoh had the constitution amended once again, re-establishing a multi-party system. Under Momoh, APC rule was increasingly marked by abuses of power. Earlier in 1991, in March, a small band of men who called themselves the Revolutionary United Front (RUF) under the leadership of a former-corporal, Foday Sankoh, began to attack villages in eastern Sierra Leone on the Liberian border. Fighting continued in the ensuing months, with the RUF gaining control of the diamond mines in the Kono district and pushing the Sierra Leone army pack towards Freetown. On April 29, 1992, a group of young military officers, led by Capt. Valentine Strasser, launched a military coup, which sent Momoh into exile in Guinea and established the National Provisional Ruling Council (NPRC) as the ruling authority in Sierra Leone. The NPRC proved to be nearly as ineffectual as the Momoh government in repelling the RUF. More and more country fell to RUF fighters, so that by 1995 they held much of the countryside and were on the doorsteps of Freetown. To retrieve the situation, the NPRC hired several hundred mercenaries from the private firm Executive Outcomes. Within a month they had driven RUF fighters back to enclaves along Sierra Leone’s borders. As a result of popular demand and mounting international pressure, the NPRC agreed to hand over power to a civilian government via presidential and parliamentary elections, which were held in April 1996. Ahmad Tejan Kabbah, a diplomat who had worked at the UN for more than 20 years, won the presidential election. Because of the prevailing war conditions, parliamentary elections were conducted, for the first time, under the system of proportional representation. However, on May 25, 1997 the Armed Forces Revolutionary Council (AFRC), led by Maj. Johnny Paul Koroma, overthrew President Kabbah and later invited the RUF to join the government. In March 1998 the Nigerian-led ECOMOG forces ousted the AFRC junta after 10 months in office, and reinstated the democratically elected government of President Kabbah. The RUF’s renewed attempts to overthrow the government in January 1999 brought the fighting to parts of Freetown, leaving thousands dead and wounded. ECOMOG forces drove back the RUF attack several weeks later. With the assistance of the international community, President Kabbah and RUF leader Sankoh negotiated the Lome Peace Agreement, which was signed on July 7, 1999. The accord made Sankoh Vice President and gave other RUF members positions in the government. Lome called for an international peacekeeping force run initially by both ECOMOG and the United Nations. The UN Security Council established the United Nations Mission in Sierra Leone (UNAMSIL) in 1999, with an initial force of 6,000. ECOMOG forces departed in April 2000. Almost immediately, however, the RUF began to violate the agreement, most notably by holding hundreds of UNAMSIL personnel hostage and capturing their arms and ammunition in the first half of 2000. On May 8, 2000, members of the RUF shot and killed as many as 20 people demonstrating against the RUF violations outside Sankoh's house in Freetown. As a result, Sankoh and other senior members of the RUF were arrested and the group was stripped of its positions in government. After the events of May 2000, a new cease-fire was necessary to reinvigorate the peace process. This agreement was signed in Abuja in November of that year. However, DDR did not resume, and fighting continued. In late 2000, Guinean forces entered Sierra Leone to attack RUF bases from which attacks had been launched against Liberian dissidents in Guinea. A second Abuja Agreement, in May 2001, set the stage for a resumption of DDR on a wide scale and a significant reduction in hostilities. As disarmament has progressed, the government began to reassert its authority in formerly rebel-held areas. By early 2002, some 72,000 ex-combatants have been disarmed and demobilized, although many still awaited re-integration assistance. On January 18, 2002 President Kabbah declared the civil war officially over. In May 2002 President Kabbah was re-elected to a five-year term along with the SLPP, which also won a landslide victory. The RUF political wing, the RUFP, failed to win a single seat in parliament. The elections were marked by irregularities and allegations of fraud, but not to a degree to significantly affect the outcome. On July 28, 2002 the British withdrew a 200-man military contingent that had been in country since the summer of 2000, leaving behind a 105-strong military training team to work to professionalize the Sierra Leonean army. In November 2002, UNAMSIL gradually began drawing down personnel until the end of its formal peacekeeping mission in December 2005. Following the end of the UNAMSIL mandate, the UN established the UN Integrated Office in Sierra Leone (UNIOSIL), which assumed a peacebuilding mandate. In the summer of 2002, Sierra Leone’s Truth and Reconciliation Commission (TRC) and the Special Court for Sierra Leone (SCSL) began operations. The Lomé Accord had called for the establishment of a TRC to provide a forum for both victims and perpetrators of human rights violations during the conflict to tell their stories and to facilitate genuine reconciliation. The Truth and Reconciliation Commission released its Final Report to the government in October 2004. In June 2005, the Government of Sierra Leone issued a White Paper on the Commission’s final report which accepted some but not all of the Commission's recommendations. Members of civil society groups dismissed the government’s response as too vague and continued to criticize the government for its failure to follow up on the report’s recommendations. The Special Court was established by an agreement between the United Nations and the Government of Sierra Leone pursuant to Security Council resolution 1315 (2000) of 14 August 2000. The Court’s mandate is to try those who "bear the greatest responsibility for the commission of crimes against humanity, war crimes and serious violations of international humanitarian law, as well as crimes under relevant Sierra Leonean law within the territory of Sierra Leone since November 30, 1996." The Special Court has issued indictments against individuals representing all three warring factions of Sierra Leone’s civil conflict in addition to the case against former Liberian President Charles Ghankay Taylor. On June 20, 2007, the Court issued its first verdicts in the trial of the AFRC accused Alex Tamba Brima, Brima Bazzy Kamara and Santigie Borbor Kanu all of whom were found guilty on 11 of 14 counts of war crimes and crimes against humanity. The Court issued an indictment against a fourth AFRC defendant, former junta leader Johnny Paul Koroma, who is rumored to have been killed, though his death remains unconfirmed. In the trial against the leaders of the Civil Defense Forces (CDF) accused, on August 2, 2007, the court found Moinana Fofana and Allieu Kondewa guilty of war crimes and crimes against humanity. A third defendant in the CDF trial, Sam Hinga Norman, the former Minister of Interior and head of the CDF died in Dakar prior to the announcement of a judgment. Five alleged leaders of the RUF, Foday Saybana Sankoh, Sam Bockarie, Issa Hassan Sesay, Morris Kallon, and Augustine Gbao, were indicted on 18 counts of war crimes, crimes against humanity, and other serious violations of international humanitarian law. The indictments against Sankoh and Bockarie were withdrawn on December 8, 2003 due to the deaths of the two accused. On March 25, 2006, with the election of Liberian President Ellen Johnson-Sirleaf, Nigerian President Olusegun Obasanjo permitted transfer of Charles Taylor, who had been living in exile in the Nigerian coastal town of Calobar, to Sierra Leone for prosecution. Two days later, Taylor attempted to flee Nigeria, but he was apprehended by Nigerian authorities and transferred to Freetown under UN guard. Taylor is being tried before the Special Court on 11 indictments of war crimes and crimes against humanity.

People of Sierra Leone

The population includes 20 African ethnic groups. The Temne in the north and the Mende in the south are the largest. About 2% of the population are Krio, the descendants of freed slaves who returned to Sierra Leone from Great Britain and North America and from slave ships captured on the high seas. In addition, about 4,000 Lebanese, 500 Indians, and 2,000 Europeans reside in the country. In the past, Sierra Leoneans were noted for their educational achievements, trading activity, entrepreneurial skills, and arts and crafts work, particularly woodcarving. Many are part of larger ethnic networks extending into several countries, which link West African states in the area. However, the level of education and infrastructure has declined sharply over the last 30 years. Nationality: Noun and adjective --Sierra Leonean(s). Population (2009, United Nations): 5.7 million. Annual population growth rate (2010 est.): 2.216%. Ethnic groups (2008 census): 20 African ethnic groups--Temne 35%, Mende 31%, Limba 8%, Kono 5%, Creole 2% (descendants of freed Jamaican slaves who were settled in the Freetown area in the late 18th century; also known as Krio), Mandingo 2%, Loko 2%, other 15% (includes refugees from Liberia's recent civil war, and small numbers of Europeans, Lebanese, Pakistanis, and Indians). Religions: (est.) Muslim 60%, Christian 30%, animist 10%. Languages: English, Krio, Temne, Mende, and 15 other indigenous languages. Education (2004): Literacy --35.1%. Health: Life expectancy at birth (2010 est.)--55.7 years. Infant mortality rate --80.16 deaths/1,000 live births. HIV infection rate for adults, ages 15-49 years (2007 est.)--1.7%. Work force: Agriculture --52.5%; industry --30.6%; services --16.9%.