The economy of Sierra Leone is largely based on agriculture and natural resources, with a focus on minerals such as diamonds, gold, and bauxite. Agriculture is the main source of employment for most of the population, with subsistence farming being the primary activity. The country also has a small but growing industrial sector which includes manufacturing and services.
According to cheeroutdoor, the economy of Sierra Leone has been significantly affected by years of civil war and political instability, which have caused economic growth to be slow and hampered development efforts. However, since the end of the civil war in 2002, there has been a resurgence in economic growth due to increased investment from foreign companies into mining activities as well as government reforms aimed at improving the business environment.
Agriculture is an important part of Sierra Leone’s economy and accounts for around 36% of GDP. The main crops grown are rice, cassava, maize, groundnuts and palm oil. Fishing is also an important activity in coastal regions with many people relying on fishing for their livelihoods.
The mining sector is a major contributor to the economy with diamonds being the primary export commodity followed by gold and bauxite ore. Diamonds account for around 60% of Sierra Leone’s total exports while gold makes up around 15%. Other minerals found in Sierra Leone include rutile (titanium ore), iron ore and chromite which are used both domestically as well as exported to international markets.
In addition to these traditional sectors of the economy, there is also a growing services sector which includes banking & finance, telecommunications & IT services as well as tourism & hospitality services. The government has taken steps to encourage foreign investment into this sector by creating incentives such as tax breaks or streamlined approval processes for new businesses setting up operations in Sierra Leone.
Sierra Leone’s economic performance over recent years has been mixed but overall it has seen some progress towards greater stability and development despite its continued vulnerability to external shocks such as commodity price volatility or political instability within neighbouring countries. The government continues to focus on improving infrastructure such as roads or power grids while also taking steps towards diversifying its sources of income away from its traditional reliance on natural resources towards other areas such as tourism or technology-based industries.
According to COUNTRYAAH, Sierra Leone is primarily an agricultural country, but to a large extent production is for local consumption. Primary industries employ around 60 percent of the population, service provision 33 percent and industry 6.5 percent (2017). Large parts of the country are scarcely accessible due to lack of infrastructure, which also hampers the utilization of the country’s considerable natural resources, including forests and mineral reserves.
The country has major mineral deposits, especially the extraction and export of rutile, bauxite and diamonds. Gold and salt are also extracted. Oil has been detected offshore. Primary industries accounted for 71.1 percent of Gross Domestic Product (GDP) in 2016. The industry is underdeveloped and largely destroyed during the Civil War. It includes most processing of agricultural products for local consumption. The industry accounts for 7.9 percent of GDP (2016). The service industries comprise 21 percent of GDP (2016).
Economic development
Abbreviated as SLE by abbreviationfinder.org, Sierra Leone is basically one of Africa’s economic least-developed countries, despite the fact that the country is rich in resources. The situation worsened during the civil war in the 1990s, which had far-reaching negative consequences for the country’s economy, and inflicted great damage on every part of society. Not least, many were displaced from their homes, many others mutilated for life – and the material destruction was likewise extensive. Large parts of the production industry stopped for several years, including large parts of the food production and mining industry, which generate income in foreign currency. Even before the war, Sierra Leone was one of the least socially and economically developed countries, with very low average life expectancy. During the war was landed by the UN ranked as the least economically and socially least developed country in the world. After the end of the war in 2001, the economy recovered.
Mining and energy
Sierra Leone has significant mineral deposits, particularly the extraction and export of rutile (titanium dioxide), bauxite and diamonds. Sierra Leone has the world’s largest deposits of titanium dioxide. Rutile and bauxite production stopped completely during the war, while diamond mining continued – as the main source of funding for the rebels. In the 1960s and 1970s, diamond exports were the main source of revenue for Sierra Leone; Since then, the Treasury has become less and less as much of the production, which is partly illegally extracted, has been smuggled out of the country. A 2000 report particularly accused Liberia and Ivory Coast to be transit country for large quantities of Sierra Leone diamonds. A UN embargo on rough diamonds from Sierra Leone was implemented in 2000–2003.
Some gold and salt are also extracted. The formerly important iron ore extraction was discontinued in 1985.
The energy is mainly produced from heat power plants that use imported fuels. Oil deposits have been found offshore.
Agriculture, fishing
Sierra Leone is fertile, and 60 percent of the population is employed in agriculture, which is essentially run as a small farm with a low degree of mechanization. It is mainly produced for own and local consumption. The most important food crop is rice, then millet and sorghum. It also grows corn, bananas, sweet potato and more. Production does not meet the domestic need. Coffee, cocoa, palm kernels and piassava are grown for export, but export production stopped during the war, which also forced many farmers away from their farms. Cattle keeping is important, especially in the north. Otherwise, sheep, goats and poultry are kept.
Nearly 30 percent of the total area is forest, and most of the logging goes to fuel. Commercial exploitation of the forests is hindered by inadequate transport.
The fish stocks in the sea are also not fully utilized, and national fishing is carried out by artisanal fishermen. Foreign trawlers have been fishing for a license for many years and it has been a not insignificant thief, with over-taxation as a result. Fisheries have also suffered during the civil war. Two-thirds of catches are taken offshore, one-third in freshwater.
Industry
Sierra Leone’s industrial sector is underdeveloped, and is mainly based on the processing of agricultural products – for local consumption. Much of the industry was destroyed during the Civil War.
Foreign Trade
Minerals traditionally account for most of the country’s export revenue, but mining and legal exports ceased practically in the second half of the 1990s because of the war; before it started up again around 2000. Rutil is the most important export product. Otherwise, diamonds, coffee and cocoa are exported. Sierra Leone traditionally has large trade deficits and is dependent on foreign aid.
Transport and Communications
The country’s infrastructure is poorly developed. There are about 11,300 kilometers of roads, mostly in the coastal areas. Only a small part has a fixed deck. The historically important narrow-gauge railway Freetown – Pendembu was closed down in 1967, the rest of 1974 and 1985. Freetown has a nice natural harbor and international airport in Lungi in the northeast. Much of the transport network expired during the war.
Note: the capital city of Sierra Leone is Freetown with a population of 1.2 million (estimate 2019). Other major cities include Kenema, Bo, Koidu and Makeni.
