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Read the Challenges section

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The youth population, aged 15-35, comprises one third of the population of Sierra Leone and youth unemployment was a major root cause of the outbreak of civil conflict in Sierra Leone. Approximately 70% of youth are underemployed or unemployed and an estimated 800,000 youth today are actively searching for employment.

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Life Expectancy, Prevalence of Contraception, Health Expenditutre

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GDP, GNI per capita, % Poverty Line

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Potential investors must consider the Sierra Leone's two omnipresent challenges: the devastation of the 1991-2002 civil war and constraints of extreme poverty. These challenges continue to fundamentally impact almost all aspects of Sierra Leone society. After the war, international focus on Sierra Leone brought considerable foreign aid programs. The Sierra Leone economy today remains dependant on foreign aid, but donors, facing their own economic challenges, are beginning to reduce their programs. The reduction in aid and successfully holding three post-war elections means Sierra Leone is moving beyond the moniker of a "post-conflict country" to one of nascent self-sufficiency. This is an uncomfortable transition for institutions fundamentally fueled by foreign donors. Institutional structures, both government and private, continue to develop, but remain immature and are generally characterized by poor governance and corruption.

The value of Sierra Leone's considerable natural resources still has not been successfully leveraged to improve the lives of Sierra Leone citizens. The country is still primarily agrarian with extremely fertile land, promising fishing sector opportunities, and considerable potential in mining.

War and poverty have caused health and education challenges in the labor force. Over 70 percent of Sierra Leoneans live on less than $1 per day. The life expectancy is 48 years of age and the illiteracy rate for Sierra Leoneans over the age of 15 is 40 percent. Most young to middle-aged Sierra Leoneans (25-35 years old), the prime labor demographic needed by business, government, and civil society, remains victims of the war and poverty. Few have more than four years of education, fewer are trained in a vocational skill, and even fewer have management skills. The result is a critical void of talented Sierra Leoneans available to manage local staff and assist in navigating the cultural, governmental, and logistical challenges which foreign industry faces in the country. The U.S. Government focuses on developing middle-level talent through poverty eradication, education, and capacity building efforts in its diplomatic and development programs. In addition, there is a wide range of charitable organizations investing in Sierra Leone's human resources. Nevertheless, this is a long-term approach. The U.S. Embassy in Sierra Leone has started a program to bring diasporan Sierra Leoneans in the U.S. to return to their country and provide that skilled talent and management expertise so sorely needed.

The Lebanese business community consists of families who have been in Sierra Leone for generations. Lebanese families have fulfilled a critical role in the economy; running logistics, manufacturing, and construction businesses. Lebanese families have interconnected their business to complement their needs-providing assets, capital, and expertise to each other. Lebanese businesses in Sierra Leone are pragmatic and forward-leaning in search of promising opportunities regardless of the ethnicity of potential partners.

There are encouraging signs in Sierra Leone's investment climate. Foremost among them is President Ernest Koroma's sincere and determined priority to boost the market economy. The Government continues work to improve the integration of the private sector to advance modern technologies into the mining and agricultural development strategies as well as to continue to build the industrial base to create more jobs. The mining sector, specifically iron ore production, was the main driving force behind the economy's growth in 2012. Although very promising, the agriculture sector remains characterized by subsistence farming. Agribusiness ventures are often mired in land tenure and socio-political debates. Foreign investors are starting to view challenges such as Sierra Leone's poor electricity grid a business opportunity and U.S. businesses are actively entering the energy sector. An example is Joule Africa, which signed an agreement in 2011 to lead a hydroelectric project to expand the nation's major energy source. Chinese foreign direct investment (FDI) and projects remain the dominant force in infrastructure development in Sierra Leone. The largest road construction project in Sierra Leone's history is ongoing in Freetown under the management of the China Railway Seventh Group Corporation. Other Chinese companies and parastatals are partners in agreements relating to airport improvement, a tender for a new airport, and a hydropower project, building roads and railway lines related to the iron ore industry, and building hospitals. Increased overseas investor interest can also be seen in fishing, petroleum, and tourism.
Policy
The Agenda for Prosperity is the guiding policy document in efforts to advance the country's social conditions and improve the investment climate. It is currently being drafted with a final version expected to be published in late March 2013.

The Government's four key priorities:

Provide a reliable power supply to the country by improving the management and regulation of the energy sector, strengthening revenue collection, and increasing generating capacity

Raise quantity and productivity in agriculture and fisheries

Develop a national transportation network

Ensure sustainable human development through the provision of improved social services

Market Overview
Sierra Leone is located on the southwest corner of West Africa. It is home to six million people and provides easy access to a market of 30 million via its membership in the Mano River Union (MRU) with Cote d'Ivoire, Guinea, and Liberia, and a market of over 225 million people in Economic Community of West African States (ECOWAS). Sierra Leone provides duty-free access to large markets like the European Union and United States under treaties such as the EU Everything But Arms initiative and U.S. African Growth and Opportunity Act (AGOA).

Sierra Leone's gross domestic product (GDP) in 2011 was $2 billion. The World Bank estimate gross national income (GNI) per capita for Sierra Leone is $340. This translates to over 72 percent of the population living on less than $1 per day, in extreme poverty.

Sierra Leone remains largely dependent on foreign aid. The current account deficit is forecast to be $339 million in 2013 and $381 million in 2014.

The United Nations Development Program, Human Development Index for 2011, which incorporates dimensions of health, education, and living standards, ranks Sierra Leone 180 of the 187 nations assessed.

Sierra Leone continues to face challenges in improving its investment climate. The World Bank ranked Sierra Leone 140 among 183 countries in its 2013 Doing Business report. Yet, among the subcategories in the report, Sierra Leone ranks 32 nd globally in protecting investors, 76 th in ease of starting a business, and 83 rd in getting credit. The World Bank reported that Sierra Leone requires on average six independent procedures and 12 days to start a business, somewhat above the average in Sub-Saharan Africa.

There is reason for optimism regarding economic growth. Despite tough economic times, the International Monetary Fund (IMF) forecasts the inflation rate to drop from 11.5% in 2012 to 9.1% in 2013. The IMF also forecasts Sierra Leone real GDP to grow at about 35.9% in 2012 and 9.1% in 2013. The decrease in GDP growth in 2013 is due in large part to the production of large scale iron ore export projects that came on line in 2012 which contributed to the higher than normal GDP growth rate.

Support for Foreign Direct Investment (FDI) is a stated priority for the Government. Investment is increasing and the government has demonstrated commitment to reforming trade and investment policies to encourage private sector-led economic revitalization. President Koroma routinely states that the nation's economic growth "should be, and indeed, will be driven by the private sector rather than solely through public sector activities and development assistance."
Market Challenges
The aftermath of the civil war and extreme poverty still have a considerable effect on society.

The labor force is challenged by health concerns, illiteracy, and little training. Middle management skills are difficult to find. Many of the most talented citizens fled Sierra Leone during the civil war and only are beginning to return.

There is a tremendous need and demand for reconstruction of damaged transportation infrastructure including roads, bridges, and ports/airports. Energy, telecommunications, and water infrastructure are also poor. There is little manufacturing capacity.

Institutional structures, both government and private, continue to develop, but are not strong. Private and public organizations are generally characterized by poor governance and corruption.

The value of Sierra Leone's considerable natural resources still has not been successfully leveraged to alleviate poverty.
Market Opportunities
Sierra Leone's great wealth is in its natural resources: the extractive industries of mining and petroleum, and agriculture. Within agriculture, principal growth sectors are expected to be in forestry, fisheries, oil palm, cocoa, coffee, rice, food production, and food processing and storage

The deep harbor at Freetown and its location adjacent to European market shipping lanes has long made Sierra Leone an important trading and refueling location. The Government is in the midst of an extended program to develop Freetown as a trans-shipment global trade hub by beginning to enhance the management and renovation of the port. This will create demand for port services equipment, management expertise, and rehabilitation engineering.

Promising business sectors include financial services, travel, tourism, and telecommunications.
Market Strategy
Business market entry strategies should carefully assess the specific risks presented by poor governance and corruption, immature infrastructure, the lack of training, extreme poverty, and illiteracy in the labor force.

Specifically, potential investors in extractive industries should take into account the likelihood of international condemnation of any venture that might even appear to exploit Sierra Leone's natural resources without adequate compensation to the country. Of course, this extends from the brutal history of diamond exploitation in Sierra Leone, but might also be a source of criticism for other mining and oil industries if downstream processing of those materials does not include Sierra Leone assets and labor. For example, offshore oil extraction in Sierra Leone could meet with demands that the oil be refined in Sierra Leone.

Potential investors may contact the Sierra Leone Ministry of Trade and Industry and the Sierra Leone Investment and Export Promotion Agency (SLIEPA) for more information and guidance. SLIEPA is the country's official agency focusing on developing policies and programs to stimulate local and export trade, improve the investment climate, encourage expansion and diversification of exports and promote the development of small to medium enterprises (SME).

Investors also can contact the U.S. Embassy Commercial Office and the American Chamber of Commerce in Sierra Leone.
Market Sectors
Agriculture: Over 50 percent of Sierra Leone's GDP is related to agriculture, 23 percent to industry, and 26 percent to services. Only about 15 percent of the 5.4 million hectares of farmland is used for agriculture. The Government estimates the 15 percent level will need to rise to 27 percent to supply future domestic consumption demand. In November 2011, the Swiss company Addax Bioenergy opened its Greenfield sugar cane plantation, ethanol refinery, and biomass power plant factory in the Bombali District. The facility will produce about 30 MW, supplying about 15 MW of electricity to the local grid, and using the remainder 15 MW to run its own equipment. The Addax project is the first large-scale agricultural project launched in Sierra Leone in the last decade.

Airports: Freetown Lungi International Airport is 7.5 miles from Freetown on the opposite side of an estuary and accessible only by ferries, water taxis, and occasional hovercraft and helicopter services, all of varying reliability and uncertain safety. This increases travel time by about five hours depending on the mode of transport. Unfortunately, this difficult logistical challenge is the first impression of Sierra Leone for a foreign investor and it has a significant negative impact on business and investment.

The Ministry of Transport and Aviation secured a grant of $8.9 million from the World Bank to upgrade the Lungi International Airport. Rehabilitation is ongoing and will include a new terminal building, a modern car park, construction of a new runway, and repair to the existing terminal and runway. Barrows Construction Company Ltd. and Ovie Arup completed improvements to the passenger terminal in late December 2012. Group Europe Company was awarded a contract to improve passenger and cargo handling.

The Minister of Transport and Aviation signed an agreement in December 2012 with the China Railway International Consortium to finance construction of a new $190 million airport near the village of Mamamah on the Freetown side of the estuary.

The Resident Representative of the African Development Bank (AfDB) in Sierra Leone has been the champion of an effort to secure investment for a Tripartite Investment Programme (TIP) to construct a new bridge from Freetown over the estuary to the Lungi airport site, design the capital city to incorporate growth, and construct a new airport on the Freetown side of the estuary.

Energy: The Government has set the goal of developing between 700 and 1,000 MW of power within the next five years. This will include second phases of Bumbuna Hydro and Bekongor Hydro projects which will deliver another 350 MW and 100 MW respectively. Construction of a United Nations supported hydro power plant in north-west Sierra Leone commence in April 2012. The plant's expected capacity will be three MW. The UN Industrial Development Organization is conducting a feasibility study for a ten MW power plant. An increasing number of foreign companies looking at solar energy options in Sierra Leone, including an American company, SunTrough Energy, which has reportedly entered into a $250 million Energy Power Purchase Agreement for a 130MW thermal power plant and upgrade of the Freetown transmission network.

Mining: Mining in Sierra Leone has known deposits of rutile (a major source of titanium), bauxite (used as an abrasive and catalyst), titanic iron ore, diamonds, gold, chromite (a major source of chromium), platinum, lignite (brown coal), clays, and base metals such as copper, nickel, molybdenum (used to strengthen and harden steel), lead and zinc.

In November 2011, African Minerals loaded its first iron ore shipment (40,000 tons) at its Tonkolili mine, moved the shipment to Pepel port, and transported the shipment to an offshore ship for further export. The iron ore shipment was the first of its size from Sierra Leone in over thirty years. The current operations are expected to produce 20 million tons of iron ore per annum at full capacity, expected to be achieved in second quarter of 2013.

London Mining shipped its first iron ore cargo in April, around 4,000-4,500 tons of ore per day is being processed, and the target is to reach 1.5 million tons in 2012.

Octéa Diamond Group, opened a new 180 tons-per-hour processing plant as part of a $200 million expansion project. It has a target to boost diamond output from 10,000 to 45,000 carats per month later this year by mining kimberlite seams.

Petroleum: In 2009, a consortium led by U.S. oil company Anadarko found a significant potential for oil off the coast of Sierra Leone. Further exploration by Anadarko, African Petroleum, and Talisman are ongoing to assess the full commercial potential of oil deposits off the coast. The highest estimates of Sierra Leone's offshore petroleum deposits are 500-700 million barrels.

The Government awarded offshore licensing blocks in July 2012. In several cases it granted licenses to several bidders, forging partnerships. In one case a licensing block was awarded to African Petroleum and U.S. company Kosmos Energy. Two blocks were awarded to Chevron Sahara and Noble Energy with an added partner ODYE Limited. Kosmos pulled out of its awarded block. Chevron, Noble, and Odye signed deals in late 2012.

Sierra Leone participates in the Extractive Industries Transparency Initiative (EITI) process.

Private Equity: In Sierra Leone private equity firms face challenges such as gaining information to conduct due diligence on management teams and finding opportunities that meet their needed rate of return. The U.S. private equity firm Joule Investments finalized an agreement on a $650 million project to build phase two of the Bumbuna hydroelectric power project. The U.S. private equity fund ManoCap received a grant from the U.S. Overseas Private Investment Corporation for $34 million to invest in small to medium-sized agriculture, fisheries and light manufacturing enterprises.

Road Infrastructure: Currently, the country is in the midst of the biggest road construction program in its history-a $900 million program managed primarily by the Chinese company, the State-owned China Railway Seventh Group Co. Ltd.

Seaports: Sierra Leone's Freetown area harbor is strategically located making it a strong potential candidate as a trans-shipment trade hub. Foreign businesses routinely cite the port as the most significant factor that discourages private sector investment. However, mismanagement, inefficient operations, high financial loses, and lack of investment at the port prompted the Government to engage a foreign firm to take over these responsibilities. The Sierra Leone Ports Authority signed a concession agreement and transferred its container terminal management and stevedoring activities to the private sector company, Bollore Africa Logistics, for a 20 year concession period. Bollore, a French registered company, operates eight container terminal concessions in Africa, offers stevedoring in ten African ports, and also operates in North and South America, Europe, the Middle East, Asia and Oceania. The infrastructure at the ports is outdated and cannot handle modern vessels resulting in a recent reduction in traffic volumes. Bollore's efforts to date are resulting in some positive changes.

Telecommunications: The Government recently issued a 3G license to one of the existing GSM operators. The Government is participating in the Africa Coast to Europe submarine fiber optic cable project. Through a 100 percent government owned special purpose vehicle (SPV), analogous to a limited company/partnership. The fiber optic cable reached Sierra Leone shores in September 2011. As of December 2012 the cable connection is not operational. The Government plans to cease managing the project and divest the majority share of government interest in the SPV to the private sector.
Development Strategy, Legislation, and Law Relating to the Investment Climate
In 2009, the Government launched a national Private Sector Development Strategy. A number of legislative acts relate to the strategy:

The Finance Act, 2010. This act provides for the imposition and alteration of taxation for the year 2010.

The Payment Systems Act, 2009. This act provides for the establishment, operation, designation and supervision of electronic payments, clearing and settlement systems, and the rights and obligations of transacting and intermediating parties.

The Companies Act, 2009. This act provides for the registration of companies. Provisions of this law include mandating disclosure of personal conflicts of interest by company directors and officers, requiring shareholder approval of large related-party transactions to reduce possible misuse of company assets, and providing shareholders with rights to hold the directors liable for damages in a related-party transaction. The act offers the possibility of rescission of the transaction. In the case of a related-party transaction that is harmful to the company. The act also grants shareholders access to all relevant documents.

The Goods and Services Tax Act, 2009. The act provides for the imposition of a broad-based tax on the consumption of goods and services in Sierra Leone and to provide for other related matters.

The Bankruptcy Act, 2009. The act provides for declaring as bankrupt any persons who cannot pay debts of a specified amount and to disqualify them from holding certain elective and public offices or from practicing any regulated profession.

The Mines and Minerals Act, 2009. The act consolidates and amends the law on mines and minerals; promotes local and foreign investment in the mining sector by introducing new and improved provisions for exploration, mine development, and marketing of minerals; ensures transparent and accountable management of the mineral sector in accordance with international best practice; promotes improved employment practices in the mining sector; improves the welfare of communities adversely affected by mining; and introduces measures to reduce the harmful effects of mining activities on the environment.

The Payment Systems Act, 2009. This act provides for the establishment, operation, designation and supervision of electronic and other payments, clearing and settlement systems, and the rights and obligations of transacting and intermediating parties.

Investment and Export Promotion Agency Act, 2007. Establishes the Sierra Leone Investment and Promotion Agency. It became operational in May 2008. It is the country's lead agency focusing on developing policies and programs to stimulate local and export trade, improve the investment climate, encourage expansion and diversification of exports, and promote the development of small to medium enterprises.

Business Registration Act, 2007. This act reduced company registration procedures to four steps. There are no restrictions on the amount of equity a foreign firm may own in a local business. In addition, there are no requirements that nationals own shares, that the share of foreign equity fall over time, or that technology be transferred under certain terms. There are also no offset requirements.

Investment Code, 2005. The code was designed to provide more protection for companies investing in Sierra Leone and to promote production and value-added activities. The code directs government to encourage joint ventures and allow full foreign ownership. The code ensures there is no discriminatory economic or industrial strategy against foreign investors and no limit is imposed on foreign ownership or control.

Contracts: The judicial system is slow and often inefficient and remains widely regarded as corrupt. When a judgment is rendered, enforcement may not follow. The European Union, UNDP, Ireland, Japan, and the U.K. all have judicial reform projects in Sierra Leone, which include aspects to improve contract law.

Discrimination, Limits, or Denial of Treatment for Foreign Investors: The Investment Code of 2005 effectively addresses the treatment of foreign investors. There are no known economic or industrial policies or practices that have discriminatory effects on foreign investors. There are also no formal obstacles on foreign ownership or control, but there are restrictions in one business sector. The historical exploitation of the country's vast mineral wealth has led to legislated restrictions to protect small scale local artisan miners. Investments in mining of less than $500,000 require a Sierra Leonean holding of 25 percent.

Government Review of FDI: Sierra Leonean authorities do not screen investments. Companies have to register, but private investors generally do not consider the business registration process as a major impediment to investing.

Privatization: The Government's privatization program includes 24 publicly owned enterprises. It is looking for investors, especially foreign and expatriate investors, who will bring significant capital and expertise on how to improve the financial performance of those institutions.

Trade: Sierra Leone's trade policies are relatively open and non-tariff barriers have been eliminated. Tariff rates are consistent with those of its neighboring ECOWAS states and West African Economic and Monetary Union (WAEMU) countries. Import and export licenses have been abolished for all but a small number of products. Importing and exporting problems exits. Customs clearance is slow, cumbersome, costly, lengthy, opaque, and complicated. Tariff schedules are not always transparent which allows arbitrary assessments that can be challenged only with difficulty as appeals processes are ill defined and lengthy. Sierra Leone continues to use the Brussels Declaration of Value, as it has not yet adopted the World Trade Organization (WTO) Agreement on Customs Valuation.

Commercial Banks: Sierra Leone has a growing banking sector which is home to more than a dozen commercial banks that provide common services.

Source: Bank of Sierra Leone

Major Indices Relating to FDI

Significant Foreign Investors in Sierra Leone
Conversion and Transfer Policies
The Investment Code guarantees foreign investors the right to repatriate earnings and the proceeds of sales of assets and allows expatriate employees to repatriate earnings. There are no restrictions on converting or transferring funds associated with investments, including remittances of investment capital, earnings, loan repayments, and lease payments. Investors can withdraw and remit any amount from a commercial bank and, subject to availability of the currency, have it transferred into any freely convertible currency and at legal market clearing rates. U.S. businesses in rural areas have occasionally reported challenges repatriating earnings with local banks, but it appears the challenges are logistical and the central bank policies adhere to the new Investment Code. Outflows of wealth are most often in the form of diamonds and other minerals rather than financial flows. Cash outflows are mostly for physical capital expenditures.

Foreign Exchange, Transfers, Credit Cards: Sierra Leone has a floating exchange rate. The Leone fluctuates, but overall has depreciated slowly over recent years, mainly due to increasing demand for financing current consumption and a decrease of inflows of foreign currency resulting from decreased mineral exports and decreased foreign remittances. Nevertheless, the Leone has been relatively stable in 2012 fluctuating from 4311 Leones/$ to 4405 Leones/$.

There are no legal restrictions on obtaining foreign exchange. The Central Bank conducts frequent foreign exchange auctions, typically on a weekly basis, but limits a single bidder to $100,000. Additional foreign exchange is available through the banking system, but banks will provide cash only to customers who have deposited cash and customers who have deposited transfers can obtain only transfers. The law requires that money transfers over $10,000 be sent through the banking system to ensure transparency and provide paper trails for all transactions. The first international ATMs and point of sale terminals opened and began operating in Sierra Leone in 2011. Similarly, credit cards are not used in Sierra Leone largely due to poor internet connectivity and rampant fraud.
Expropriation and Compensation
There is no history of expropriations in Sierra Leone. World Bank indices indicate that Sierra Leone's laws on investment protection are strong. Investors' rights are covered across a range of areas such as:

Open access to all sectors of the economy to foreign investment

Rights to 100 percent foreign ownership of companies

Freedom to use foreign managerial, technical and unskilled workers

No exchange restrictions

Guarantees on capital repatriation, loan remittance, and against expropriation

Dispute Settlement
The legal system inherited from the U.K. protects property and contract rights. There have been few notable disputes with property or contract rights affecting U.S. or other foreign investors. Investors have access to the judicial system, but the system is slow and is often subject to financial and political influence. Arbitration clauses in contracts and foreign judgments are respected. The Law Reform Commission is considering a new Commercial Law, but progress has been slow. One specific U.S. investor has claimed that his competitors are allowed to undervalue imports, thus paying less in duties and underselling him. Other investors complain that undervaluing goods bound for retail is necessary to reduce what many believe are exorbitant customs duties. The Government has expressed the desire to find a solution to this problem, but they have yet to resolve the issue. Sierra Leone is also a party to the Convention on Settlement of Investment Disputes between States and Nationals of Other States (The Washington Convention), which it ratified and put into force in October 1966.
Performance Requirements and Incentives
Performance Requirements: The Government has established no performance requirements prescribing mandatory percentages of exports, domestic content, required domestic inputs, or limiting access to foreign exchange. There is no requirement that investors purchase from local sources or export a certain percentage of output, and there are no legal limits on access to foreign exchange. There is no requirement that nationals own shares or that the share of foreign equity is reduced over time. There is also no requirement that technology is transferred on certain terms. There are no offset requirements or conditions on permission to invest.

Investment Incentives: Among the incentives available to investors are:
General:

Three year exemption on import duty for plant, machinery and equipment

Reduced duty rate of three percent on the import of raw materials

Corporate tax rate of 30 percent

Goods and services tax rate of 15 percent

Income tax of 15 - 30 percent depending on incomes

Social security contribution of 15 percent of gross salary

100 percent tax loss carry forward can be utilized in any year

125 percent tax deduction on R&D and training spending

125 percent tax deduction on expenses for export promotion activities

Three year income tax exemption for skilled expatriate staff, where bilateral treaties permit

Agribusiness:

Exemption on import duty for farm machinery and equipment, and agrochemicals.

Income tax exemption to 2020 for companies, individuals and partnerships.

50 percent of dividends paid from companies engaged in agricultural activity are exempt from withholding taxes

Infrastructure:

Projects in excess of $1,000,000 will be exempt from income taxes for the earlier of ten years from start-up or the year 2020

Additional incentives are also available for investments in what government considers pioneer industries, such as pharmaceuticals and solar energy.

Mining:

Tax rate reduced from 35 to 30 percent for all companies with audited accounts

Losses can carried forward for ten years following the date of initial production

Capital allowance of 100 percent in the first year for prospecting and exploration expenses. For production rights and other expenditures, investors will be allowed an initial allowance of 40 percent in the year of expenditure followed by an annual allowance of 20 percent a year for the next three years following the date of initial production

Reclamation, rehabilitation, and mine closure costs can be deducted in the year incurred

Tourism: Investments in hotels meeting certain eligibility criteria will attract the following benefits:

Income tax exemption that expires in five years, 2015, or when the amount qualifying under the tax holiday exceeds 150 percent of original invested capital

Three year exemption from import duties for key building materials and other inputs

Technology Transfer: There are no requirements for technology transfer. There are no requirements that major procurements are approved only if the foreign supplier invests in manufacturing, R&D, or service facilities in Sierra Leone (no technology "offset" requirements).

Visa Incentives: The Government provides preference regarding visa, residence, and work permit requirements to nationals of other countries in ECOWAS. U.S. citizens must have a visa to enter Sierra Leone, obtainable from the Sierra Leonean embassy in Washington or at other Sierra Leonean embassies. Airport visas are available, but cost $100 and the process to issue is very slow. Foreign investors must have a self-employment/work permit from the Ministry of Labor, which takes six weeks to four months or longer to obtain and costs $85. A foreigner also must have a residence permit. There is an application fee of $100 and the permit costs $1,000 for entrepreneurs and $1,660 for employees.
The Right to Private Ownership and Establishment
Foreign and domestic private entities have the right to establish and own business enterprises and engage in all forms of remunerative activities. Foreigners are free to establish, acquire and dispose of interests in business enterprises.
Protection of Property Rights
Land Tenure: There are two legal types of land tenure in Sierra Leone. Freetown and the Western Area, the former British colony of Sierra Leone, operate under a freehold system. Outside the Western Area, land is governed under a leasehold system. Foreigners cannot own land under either system, but can lease land for terms of up to 99 years. Officially there is complete and open access to the court system if an individual or enterprise thinks its interests to be compromised, but judicial practice is open to political or financial influence.

Sierra Leonean citizens can acquire private land in Freetown and the Western Area only. State lands are obtained from the State Lands Committee and the Ministry of Lands via a bureaucratic process that typically takes 65-70 business days. In the past, State Land has been appropriated by government officials for personal use without proper sale or procedures. Under the Customary Land system, an investor can lease land by entering into a joint venture for economic purposes with the local paramount chief who controls the land in his district. This system is designed to protect the livelihood of indigenous and local communities or the traditional users of the land: householders, subsistence farmers, herders, and small producers.

The Ministry of Lands placed a moratorium on selling land in November 2008 because of a variety of abuses. While the government has lifted the ban on the sale of private land, the sale of public lands remains prohibited. The government is receiving support from external donors to redesign the land tenure system.

Mortgages and Property Loans: Mortgages exist in Sierra Leone, but the real estate market is minimal and mortgages are not common. When they are given, mortgages can carry long terms, but are more commonly of short duration and high interest. Short-term bank loans for new construction are more common. Many Sierra Leoneans and businesses will enter into construction projects with whatever funds they have amassed, and halt construction when the money runs out. The project starts again when the owners gets more money. In this way, a single-family home can take a lifetime to build, but remains in families for generations.

Intellectual Property: Sierra Leone has been a member of the World Intellectual Property Organization (WIPO) since its inception. As a result, Sierra Leone also is bound to implement the international standard for intellectual property, the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Sierra Leone is also a member of the common Intellectual Property (IP) organization for English-speaking Africa, the African Regional Intellectual Property Organization (ARIPO) and parties to its main instruments: the Harare (patents) and the Banjul (marks) protocols which establish a common system for obtaining and maintaining protection for patents, trademarks and industrial designs.

In Sierra Leone, only the most basic elements of an IP regime are in place and functioning. Generally, IP rights are poorly understood as a tool for protecting innovation, brands, and creative works to create wealth. IP law in Sierra Leone is outdated and incomplete. Since 2005, the Government has been making efforts to modernize the IP system, but protection is not a high Government priority and progress has been limited due to limited financial, personnel, and institutional capacities. Customs screening for counterfeit or pirated goods coming from China, Nigeria, Dubai, and other centers of illegal production is weak. When goods are confiscated, they often re-appear in the market. Popular music and films are illegally copied and sold in Sierra Leone. This practice mostly affects local and regional music as well as popular Nigerian films. Some American music and videos are affected.

The Government has been working with the International Centre for Trade and Sustainable Development (ICTSD), ARIPO, and London-based Saana Consulting in developing projects to meet Sierra Leone's needs in developing a TRIPS compliant IP regime.
Transparency of Regulatory System
Excessive delays and inefficient enforcement are common in Sierra Leone regulatory systems. SLIEPA views regulatory systems as inherently important to business growth and is in the process of trying to streamline procedures. Regulatory processes are vulnerable to for corruption. Licenses, contract enforcement, and high tax rates remain problems. One notable effort to improve clarity is the Government's establishment of a "one stop center" where investors can obtain all required permits and licenses.

The Government does not specifically use tax, labor, environment, health and safety or other laws and policies to distort or impede investment, but corruption exists relative to all these issues. There is no codified discrimination against foreign investors within any regulatory processes. There are no private sector or government efforts to restrict foreign participation in industry standards-setting consortia or organizations.
Efficient Capital Markets and Portfolio Investment
Policies generally facilitate the free flow of financial resources, and are improving. Citizens and foreigners have access to credit under the same market terms. Foreign investors typically bring in capital from outside the country and have well-established banking relationships that enable them to obtain working and trading capital. Credit is much more difficult to obtain in the indigenous private sector because the land tenure system makes collateral very difficult to establish. The lack of a titling system makes it difficult for a lender to identify the true owner of land. Foreigners may lease, but not own land.

Most private businesses in Sierra Leone use overdraft on bank accounts as their only form of revolving credit. Portfolio investing has not taken hold in Sierra Leone, as it is just now advancing from being a cash-only economy to one with electronic transactions. Sierra Leone created a stock exchange in 2007, but it remains small with only one traded stock.

There is no evidence of cross-shareholding and stable shareholder arrangements in Sierra Leone. There is no history of hostile takeovers in Sierra Leone.

A current challenge for the Central Bank is the borrowing-lending gap for commercial banks. Interest rates have risen to as high as 30 percent in 2011 while banks borrow at single digit rates. The Central Bank is addressing this problem by promoting the interbank market and strengthening supervision of the banking system. Interest rates are decreasing with the addition of new banks and other financial institutions. They now range between 17-25 percent. The Government's bonds earn about 20 percent interest. Interest rates can be as low as 14% based on an individual's relationship with the bank in terms of the volume of business transacted.

Assets of the Federal Central Bank: Bank of Sierra Leone Assets, Dec. 31, 2011. Source: Bank of Sierra Leone

Assets of Commercial Banks: The total assets of all commercial banks in Sierra Leone as of December 31, 2011 were $642,376,000.
Competition from State-Owned Enterprises (SOEs)
When private enterprise competes with public enterprise, Sierra Leone law dictates that the same terms and conditions apply with respect to access to markets, credit, and other business operations. State-Owned Enterprises can be found in the power, water, transport, and construction sectors. These SOEs are sometimes the result of the unique limitations of physical infrastructure which does not allow competition. The significant challenge of providing power to the growing population of Freetown has led the Government to consider other power options. This is an area of significant opportunity for foreign investment and the U.S. private equity firm, Joule Africa, has already entered the sector. The advent of wireless phones has made landline phones less pervasive and more privatization has occurred in that sector as well.

Each SOE is managed uniquely, though most report through an office to a cabinet minister. Through the national privatization process, SOE boards of directors are beginning to be established. Sierra Leone does not have a Sovereign Wealth Fund. State-Owned Enterprises are not required by law to publish an annual report or to submit their books to independent audit.
State Owned Enterprises in Sierra Leone Transportation Sector

Mechanical Services Unit.

Mining and General Services Limited

Sierra Leone Airports Authority

Sierra Leone National Shipping Company

Sierra Leone Ports Authority

Sierra Leone Roads Authority

Sierra Leone Road Transport Corporation

Sierra National Airlines

Telecommunications/Communication Sector

Government Printing Department

Sierra Leone Broadcasting Corporation

Sierra Leone Daily Mail

Sierratel

Financial Services

Forest Industry Corporation

Guma Valley Water Company

National Development Bank

National Insurance Company

National Workshop

Rokel Commercial Bank

Sierra Leone Commercial Bank

Sierra Leone Housing Company

Sierra Leone State Lottery Company Limited

Corporate Social Responsibility
Businesses that come to Sierra Leone are often quickly put under enormous pressure from the government, civil society, and NGOs to undertake Corporate Social Responsibility (CSR) projects. This pressure occasionally distracts businesses from their core commercial activities and delays the business from becoming viable enterprises. Large firms, including SOEs, are more often including CSR programs that address the Government's Agenda for Change goals or Millennium Development Goals in areas such as education, health, environmental management, sports, and Small and Medium Enterprise (SME) development. Firms operating in the mining sector have CSR programs that focus on education, community resource management and environmental sustainability, SME development, and health. Telecom companies in particular have demonstrated a willingness to fund community projects in exchange for sponsorship credit. Sierra Leone consumers seldom make distinct choices to trade with or purchase from businesses based on their CSR programs.
Political Violence
Political violence remains minimal in Sierra Leone. The run-up to national elections in November 2012 was free and fair with 97% participation. There have been no significant incidents in recent years of politically motivated damage to projects or private installations. The United Nations Peace Consolidation Mission in Sierra Leone (UNIPSIL) is ending its operations this year as the country moves out of its conflict phase. Although Sierra Leone is a "fragile state," the country is calm so insurance costs and risk premiums should not reflect the earlier realities of the 1990s.

There are no nascent rebel threats or neighbors aiming to destabilize Sierra Leone. Understandably, Sierra Leoneans and the Government are very sensitive to the political and security conditions in bordering Guinea and Liberia as well as within the region. Neighbors have successfully resolved recent electoral problems and are all now at peace. Disruption of cross border trade with Guinea would have a direct effect on availability and cost of foodstuffs and other goods. U.K., U.S., and U.N. training and new equipment have helped the Sierra Leone Police increase capacity to handle such events. The police performed well during the 2012 national elections.
Corruption
Sierra Leone signed the U.N. Convention Against Corruption in December 2003 and ratified it in September 2004. Sierra Leone established its independent Anti-Corruption Commission (ACC) in 2000 and significantly strengthened it in the Anti-Corruption Act of 2008. The Anti-Corruption Act is not used disproportionately against foreigners. The ACC is charged with investigating cases and educating the public to reduce corruption in its many forms. The ACC has many pending investigations, and several indictments. Joseph Kamara, the current ACC Commissioner, has widened the scope of the office and in 2012 pursued 21 cases, the highest number of cases in the ACC's history. Kamara's actions indicate both that the ACC seems determined to continue to pursue corruption, but also confirms that there are corrupt officials at many levels of the Government. Bribes, kickbacks, extortion, and skimming remain a problem specifically in government procurement, transfers, dispute settlement, and taxation. Giving or accepting a bribe is a criminal act, both within Sierra Leone and from a local company or individual to a foreign official, and is to be prosecuted by the ACC. Penalties vary based on the magnitude of the bribe.

Sierra Leone is a candidate country of the Extractive Industries Transparency Initiative (EITI). Sierra Leone may be delisted after failing to meet compliance deadlines.

Sierra Leone's score on Transparency International's 2012 "Corruption Perception Index" has improved for the fourth year to a score of 31, ranking Sierra Leone 123 rd globally. This year, Sierra Leone passed five of the six Ruling Justly indicator criteria for Millennium Challenge Corporation Compact eligibility and 12 of 20 overall indicators. Along with TI, the Campaign for Good Governance and Transparency Alert are other corruption watchdog organizations in Sierra Leone.
Bilateral Investment Agreements
The U.S. Embassy in Freetown, the U.S. Department of Commerce, and the Office of the U.S. Trade Representative are exploring a potential framework trade agreement with the regional organization, the Mano River Union (comprising Guinea, Ivory Coast, Liberia, and Sierra Leone. Sierra Leone does not have a bilateral investment treaty (BIT) or taxation treaty with the U.S., but has BITs with the U.K. and Germany.
OPIC and Other Investment Insurance Programs
ManoCap, a private equity firm focused on development, was granted $34 million by the Overseas Private Investment Corporation (OPIC) to finance a fund with a target capitalization of $100 million. ManoCap will invest in SMEs in a broad range of sectors including agriculture, agro-processing, sustainable fisheries, services, healthcare, sanitation, construction and building materials, tourism, light manufacturing, and financial services.
Labor
The Right of Association: The law allows workers to join unions of their choice without prior authorization or excessive requirements. However, it prohibits civil service employees, police, and members of the armed services from joining unions. The law allows unions to conduct their activities without interference, and the government generally protects this right; however, in some private industries employers were known to intimidate workers to prevent them from joining a union. According to the Ministry of Labor, approximately 35 to 40 percent of workers in the formal economy were unionized, including mainly agricultural workers, mineworkers, and health workers. Unions have the right to strike, although the government requires 21 days notice.

The Right to Organize and Bargain Collectively: The law provides for collective bargaining if it takes place in trade group negotiating councils, each of which must have an equal number of employer and worker representatives. Collective bargaining is widespread in the formal sector and most enterprises are covered by collective bargaining agreements on wages and working conditions. The law does not prohibit anti-union discrimination against union members nor employer interference in the establishment of unions.

Prohibition of Forced or Compulsory Labor: The law prohibits forced and compulsory labor, including by children. However, the Government does not effectively enforce the law and the practice of forced labor still occurs particularly in agriculture and diamond mining. Under the law, individual tribal chiefs may impose forced labor as punishment and often require villagers to contribute to the improvement of common areas as punishment.

Prohibition of Child Labor and Minimum Age for Employment: Child labor is widespread. Almost half of children aged 14-15 years were engaged in some form of child labor. The rate varied from 27 percent in urban areas to 57 percent in rural areas. The law limits child labor, allowing light work at age 13, full-time work at age 15, and hazardous work at age 18. The law states that children under 13 should not be employed in any capacity. However, enforcement was not effective.

Children aged 15 may be apprenticed (provided they have finished schooling) and employed full-time in nonhazardous work. The law sets health and safety standards and requires school attendance through the age of 15.

In rural areas, children often work seasonally on family subsistence farms. Children also routinely assist in family businesses and work as petty vendors. Adults often engage street children to sell, steal, and beg. Due to the high adult unemployment rate, few children are involved in the industrial sector or elsewhere in the formal economy.

Acceptable Conditions of Work: Formal sector employment is largely governed by collective bargaining agreements between employers and unions. Such agreements are common in sectors such as tourism, commerce, petroleum, manufacturing, media, entertainment, financial services, general services, and public utilities. The national minimum wage, covering all occupations including in the informal sector, was set at ~ 40,000 Leones ($10.50) per month. This level does not provide a decent standard of living for a worker and family. The Ministry of Labor is responsible for enforcing the minimum wage, but lacks the resources to do so effectively. Compliance is difficult to monitor in the informal business sectors. Most workers support an extended family and it is common to pool incomes and to supplement wages with subsistence farming and child labor. A controversial aspect of Government policy regarding foreign investment is that foreign companies are permitted to import any labor they require. This includes unskilled workers.

Although not stipulated by law, the standard work week is 40 hours (60 hours for security personnel). Two consecutive days off per work week is mandatory. Work beyond 40 hours is paid at 50 percent overtime and required work on rest days is 100 percent overtime. Employers negotiate work hours with employees at the time of hiring. There is no prohibition on excessive compulsory overtime.

Workers can be dismissed for incompetence, inefficiency, violation of rules, or serious offenses in a reasonably straightforward manner. After two written warnings, an employee can be dismissed without compensation. There is an appeals process via employer-union consultations and possible intervention by the Commissioner of Labor.
Foreign Trade Zones/Free Trade Zones
In 2003, the Government and Chinese company Henan Guoji Group launched a joint venture to develop an industrial and trade zone. The Government was to provide the land and existing buildings while Henan Guoji Group would supply capital, expertise, and some labor. The venture was not completed reportedly because the two parties could not finalize agreement on incentives and exemptions to be provided by the Government.

Today, First Step, a subsidiary of the non-profit international development agency World Hope International (WHI), has established a Special Economic Zone (SEZ) in Sierra Leone on 50 acres near the country's principal seaport in Freetown. First Step will lease space to partner firms and assist them with networking, logistics support, and establishing their operations. Among the incentives provided to the SEZ by the Government are: import and export duty exemptions; three year corporate tax holidays; and expedited government services including customs, immigration, and registration.
Foreign Direct Investment Statistics.
The most recent United Nations Conference on Trade and Development statistics for FDI are for 2011:

2011 Inward FDI Flows: $49 million

2011 Outward FDI Flows: $0 million

2011 Inward FDI Stocks: $313 million

2011 Outward FDI Stocks: $316 million

Selected Web Resources

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Potential investors must consider the Sierra Leone's two omnipresent challenges: the devastation of the 1991-2002 civil war and constraints of extreme poverty. These challenges continue to fundamentally impact almost all aspects of Sierra Leone society.

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46% child deaths are from malnutrition

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Poverty Cycle, as costs money to get better but can't work and earn until better

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Médecins Sans Frontières (MSF) International

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In the country where Isatu Koroma and Angela Taylor live, there are quarantined houses surrounded by tape, and checkpoints where volunteers wield thermometers. Schools are closed and there are signs on the street asking people not to touch each other. The disease which Isatu and Angela are most anxious about causes fever and can be lethal. Which one is it?

More than 3,000 deaths and 10,000 cases suggest it is Ebola, but the right answer is malaria.

In 2013 there were more than 1.7 million cases of malaria in Sierra Leone, a small country in West Africa with a population of six million. According to the World Health Organization (WHO), 4,326 people died of the disease that year.

"This girl had malaria. And this woman. And this guy," says Ibrahim Sesay, who lives in a ramshackle building in Freetown together with other families. Isatu Koroma turns her head and gets up. "I had malaria several times, continuously," she says. "I was very affected. I used to go often to the hospital." There are 24 people crammed into this building, and here the everyday nightmare is not Ebola but malaria.

Murray Town is also home to Angela Taylor and her four children. "Malaria was and is our main health problem," she says. Previously, her family had to pay 25,000 Sierra Leonean leones (more than five euros) for each malaria treatment. "But Ebola is also a very serious problem," adds Angela. "We are praying not to catch it. People are very conscious about it."

Isatu and Angela received two of the 1.8 million antimalarial treatments delivered between 16 and 19 January by teams from Médecins Sans Frontières/Doctors Without Borders (MSF), working alongside the Ministry of Health. This was the largest ever distribution of antimalarials in an Ebola outbreak. The chosen drug is artesunate amodiaquine, which can be used both to prevent and to treat malaria. The goal is twofold: to reduce malaria cases, and to decongest the healthcare system, already overwhelmed by the Ebola epidemic. Since both diseases have similar symptoms (fever, fatigue, headaches), many patients with malaria go to Ebola treatment centres fearing that they have contracted Ebola. Many find it impossible to get treatment for malaria at local clinics because health staff are afraid that they have Ebola.

Organising a distribution on this scale takes a lot of effort, and the Ebola epidemic makes it even more complex. Over 5,000 community health workers presented themselves at 119 clinics and health centres, where the drugs were stored, in order to distribute them door-to-door, to avoid people having to crowd together or wait in long queues, common features of many distributions. The target was the Western Area, also known as Freetown Peninsula, which includes Freetown and its surrounding districts.

The antimalarials were delivered to overcrowded slums like Mabella, where it can be impossible to keep a safe distance from other people, and to fishing villages like Tombo, where the distribution was easier to coordinate with local communities because it is less densely populated. "You need to explain very well how and why to take the drugs, otherwise you could be boosting possible side-effects or people could refuse to take them," says Ramiro García, MSF information, education and communication officer. Local radio stations aired programmes to inform people about the distribution and to answer listeners' questions.

This distribution follows a first round in December, and it is part of a larger campaign supported by the Ministry of Health and UNICEF and targeting 2.5 million people.

In Isatu and Angela's neighbourhood, where malaria is the main health problem, there has only been one case of Ebola, but everyone knows about it. "It was a nurse. She lived down there, but she died," says Angela.

Suddenly, one of the neighbours listening in on the conversation cuts in. "When will this Ebola epidemic be over?" he asks MSF workers, who shrug their shoulders. No one has the precise answer, but everyone in Murray Town knows that when Ebola goes away, malaria will still be there.

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Sierra Leone: Malaria - the other epidemic

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In the country where Isatu Koroma and Angela Taylor live, there are quarantined houses surrounded by tape, and checkpoints where volunteers wield thermometers. Schools are closed and there are signs on the street asking people not to touch each other. The disease which Isatu and Angela are most anxious about causes fever and can be lethal.

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Graphs and heavy data