Sierra Leone Overview: Development news, research, data

Macroeconomic Context

Recent Developments: Growth surprised on the upside in 2023 reaching 5.7%, up from 5.3% in 2022, driven by strong industrial performance, mostly in iron ore production, which more than compensated for a slowdown in agriculture and services. Investment and exports supported growth on the demand side while private consumption remained weak, adversely affected by high inflation’s impact on household purchasing power.

Despite improvements in the primary deficit in 2023, domestic revenue stood at 7.4% of GDP, one of the lowest in the world. The overall deficit decreased only slightly –from 5.3% in 2022 to 4.9% – due to higher-than-budgeted expenditures on security, clearance of arrears and interest payments. The deficit was mainly financed domestically as revenues, despite improvement, remained low. The debt-to-GDP ratio declined from 53.5% to 46.2%, as high inflation reduced the real value of debt.

Monetary policy has been tightened to tackle inflation, which remains elevated despite moderating to 25.5% by August 2024. Banks remain heavily exposed to sovereign risk, as government securities account for about 40% of bank financial assets.

Driven by strong iron ore exports and moderated import growth, the current account deficit (CAD) slightly narrowed from 5.4% in 2022 to 5% of GDP in 2023. The CAD was primarily financed by FDI, but the CAD’s financing overall was partial, causing international reserves to decline from 2.6 months of imports in 2023 to 1.8 months of imports by July 2024.

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Outlook: Growth is projected to slow to 4.3% in 2024, primarily due to declining global iron ore prices impacting the mining sector, the main driver of growth. Over the medium term, growth is expected to converge to its long-run potential of 4.7% over 2025-2026, underpinned by a resurgence in the service sector and improved agricultural productivity. The recovery in services will be supported by easing inflation, which is expected to boost household consumption and enhance retail trade. The agricultural sector will be bolstered by the government's flagship 'Feed Salone' initiative to attain food self-sufficiency.

Risks and Challenges: This outlook is subject to several downside risks. Deviation from the current consolidation efforts would undermine fiscal and debt sustainability. External risks stem from global commodity prices, global demand, and higher imported inflation. Weather shocks may constrain agricultural growth and poverty reduction.

Political Context

Sierra Leone's recent history has been marred by a devastating civil war that ended in 2002. Despite significant economic growth in the years following, the country still grapples with the lingering impacts of the war, recurrent pandemics, and polarized politics that hinder its progress. The majority of Sierra Leoneans are engaged in subsistence agriculture, yet the nation boasts abundant natural resources, including iron ore, diamonds, gold, bauxite, and rutile. Post-war governments have faced the formidable challenge of reconstructing the nation's physical and social infrastructure and promoting reconciliation.

On June 24, 2023, Sierra Leone conducted its sixth general election since the end of the civil war. The incumbent, President Julius Maada Bio of the Sierra Leone People’s Party (SLPP), secured re-election with 56% of the vote. The ruling party also gained a majority in Parliament with 81 seats, surpassing the opposition All People’s Congress (APC), which won 54 seats. The current Parliament, unlike its predecessor which was comprised of four political parties and independents, is now a two-party legislature. Post-election tensions between the ruling and opposition parties posed a risk to national stability. However, intervention by regional organizations such as the African Union and ECOWAS, with support from the Commonwealth, led to the signing of the 'Agreement for National Unity' in October 2023. This accord has been pivotal in maintaining peace.

The government has recently unveiled the new Medium-Term National Development Plan (MTNDP) for 2024-2030 that outlines the administration's short-term and long-term objectives for Sierra Leone's development.

Development Challenges

Until the outbreak of Ebola in 2014, Sierra Leone was seeking to attain middle-income status by 2035, but the country still bears its post-conflict attributes of high youth unemployment, corruption, and weak governanceProblems of weak infrastructure, and widespread rural and urban poverty persist despite remarkable strides and reforms.

Last Updated: Oct 21, 2024

Quality Essential Health Services and Systems Support Project [QEHSSSP] ($60 million - $40 million IDA and $20 million Global Financing Facility): aims to increase utilization and improve the quality of reproductive, maternal, newborn, child and adolescent health and nutrition services, especially for the poor and vulnerable in five districts in Sierra Leone: Bonthe, Falaba, Kailahun, Tonkolili, and Western Area Rural. The project is implementing the “Hub-and-Spokes” model, integrating primary health care into a robust referral network.

Referral mechanisms have been established and supported across 179 health facilities through the National Emergency Medical Services (NEMS), ensuring efficient patient transfers. The project has expanded the ambulance fleet with 14 new ambulances, improving patient referrals.

Rehabilitation works are underway upgrading the hubs' infrastructure to enhance service delivery. Procurement and supply of essential drugs, medical and laboratory equipment, and supplies are ongoing. Access to essential health services has surged, with the number of people receiving services increasing from 643,024 in December 2022 to 2,015,324 by June 2024. Additionally, 114,949 pregnant women attended at least four antenatal care visits, and 147,137 institutional deliveries were recorded since April 2022. Furthermore, 255 healthcare providers have been trained in Comprehensive Emergency Obstetric and Newborn Care (CEMONC) and Integrated Management of Neonatal and Childhood Illnesses (IMNCI). At the national level, the project is strengthening health systems.

The project has facilitated the training of 523 health personnel from the University of Washington. Technical support has been provided to tertiary institutions to increase the number of essential health professionals. A new curriculum in Health Economics has been approved by the University of Sierra Leone. Other curricula in dentistry, public health, medico-surgical nursing, and midwifery & obstetrics nursing are being developed. As part of ongoing efforts to improve animal health, the project supported the development of a new curriculum in Para-Veterinary medicine as well as paying tuition and other charges for 30 para-veterinary students at Njala University.

Free Education Project ($50 million) and Additional Financing ($35 million): The project aims to improve the management of the education system, teaching practices, and learning conditions in primary and secondary education. The Second Additional Financing adds $35 million for further strengthening outcomes, including the provision of services to out-of-school children and the implementation of the Zero Learning Poverty Plan. The grants will facilitate the introduction of country-wide foundational learning program for about 800,000 pupils and facilitate 120,000 out-of-school children enrolled into formal and non-formal learning programs. To improve the teaching and learning environment, the project will build an additional 500 furnished classrooms by its end date. A total of 1.8 million students, 56,000 teachers, and school-management committee members in 7,900 primary and secondary schools have benefited from the project.

Skills Development Project ($20 million): The project supported increased access to demand-led skills training and helped build the foundations for a demand-led skills development system. A total of 18,277 students benefited from the training, out of which 7,565 are currently enrolled, and 10,712 completed training as of August 2022. The Technical and Vocational Education and Training Management Information System (TVET MIS) is under development. It will become the main data platform for evidence-based policy and decision-making planning in the TVET sector. The project has further supported the development of the Competency-Based Education and Training (CBET) curriculum in the TVET, with curricula and standards developed for 25 occupations in various sectors, including agriculture, construction, fisheries, mining, and tourism.

Productive Social Safety Net and Youth Employment (PSSNYE) Project ($42 million): The PSSNYE Project, which became effective in June 2022, aims to improve access to social safety nets and income-generating opportunities for targeted beneficiaries. The project is scaling up the SSN cash transfers to the extremely poor while providing services to help them establish a foundation for income generation. For the youth, the project supports sustainable and green labor-intensive public works programs, support for youth-led entrepreneurship, and an information platform for youth employment. From the commencement of the project, 35,000 households have received income support through mobile money transfer.

Energy Sector ($228m): The World Bank is committed to a long-term engagement and has stepped up its support to energy with an integrated strategy focusing on: (i) ensuring regional energy trade with ECOWAS countries, (ii) ambitious targets for grid and off-grid energy access, and (iii) turnaround of energy sector utilities to enable private sector investment in power generation. World Bank support in the energy sector totals $228 million currently, focusing on: (i) regional integration for the security of supply, (ii) financial turnaround and governance reforms in utility (EDSA), and (iii) energy access in rural areas.

Smallholder Commercialization and Agribusiness Development Project (SCADeP) and Additional Financing ($70m): The project has facilitated the increase in marketed volumes by producer organizations to agribusinesses with the targets being surpassed (170% for rice, 113% for maize, 131% for cocoa, 112% for oil palm, 129% for birds, and 131% for eggs). The number of out-growers linked to project-supported agribusinesses increased from 3,663 in 2017 to 61,424 by end of November 2023, and the volume of crops sold to agribusinesses by out-growers has exceeded 130,000 metric tons. So far, the project has supported the rehabilitation and maintenance of 310 kilometers of feeder roads and the construction of 408 culverts and 10 bridges, providing year-round access to farms, markets, schools and health centers for 77 communities in 10 districts. The number of direct project beneficiaries is 128,746 of which 56,290 (47%) are women. This has exceeded the project target of 40%.

West Africa Food Systems Resilience Program (FSRP - $135m): The project has so far reached 351,900 beneficiaries, which is 37.3% of the targeted number of overall project beneficiaries. Of the total beneficiaries so far, 54.95% are women. In particular, the project has made significant progress with the government’s school feeding program through which 114,390 children (46.26% of whom are girls) across 584 pre-primary and primary schools have been reached with food and nutrition support. To boost local food production and reduce food insecurity, the project has supported 14,100 households to crop 13,609ha, benefiting about 84,600 people. The project, through the National Commission for Social Action (NaCSA), has reached 72,000 vulnerable food insecure beneficiaries (of which 75% are women) with cash transfers to enable them to access food through the market.

Key DPO Achievements: The World Bank's support for structural reforms in Sierra Leone has been channeled through the Development Policy Operation (DPO), facilitating advancements across various sectors. Key landmark legislation enacted under this initiative include:

The Sierra Leone Mines and Minerals Act, 2022: This aims to promote transparency, accountability, and good governance in the mining industry.
The Customary Land Rights Act, 2022: This Act seeks to reform customary land practices and promote equal rights and participation for men and women in land inheritance.
Gender Equality and Women’s Empowerment Act, 2022: Designed to promote gender equality and empower women, fostering their active participation in socioeconomic development.
Basic and Senior Secondary Education Act, 2023: Aims to improve access to education, particularly at the foundational and secondary levels, thereby enhancing human capital development and promoting inclusive growth.

These legislations collectively strive to address systemic challenges, promote social justice, and facilitate sustainable development by fostering transparency, inclusivity, and empowerment across various facets of society.

Last Updated: Oct 21, 2024