Real Gross Domestic Product (GDP) growth increased to 15.2% in 2012 after expanding by 6% in 2011, due to the commencement of iron ore production, non-iron ore GDP growth was 5.3%. The latter was led by an expansion in agricultural production, services and construction, as spending, particularly on roads and the two large iron ore projects, continued at increased levels. The overall result in 2012 was significantly lower than expected mainly due to operational problems at the large Tonkolili iron ore mine. The International Monetary Fund (IMF) reports that Sierra Leone fell two percentage points from the 15% economic growth achieved in 2012 to 13% in 2013 -14. Real GDP growth for 2014 is forecast at 14%. The current account deficit of the balance of payments is projected to narrow to 10.5% of non-iron ore GDP (19.1% in 2013), while reserve coverage would improve to 3.4 months of imports.
Inflationary pressures declined in 2012 and prospects for 2013 are encouraging: Inflation eased steadily throughout the first half of 2012 reaching 12.5 per cent in June 2012. Factors that contributed to the decline included a tightening of government expenditure in the first half of 2012, moderation in the growth of the money supply particularly credit to the private sector which decelerated significantly, a stable exchange rate and removal of customs duties on petroleum products and resultant stability in retail fuel prices. Inflation moderated slightly over the second half of 2012 to 11.4 per cent (December 2012 on December 2011). The declining trend in inflation has continued in 2013 as the authorities are restraining fiscal policy, and monetary policy conditions have remained tight. The inflation rate (year-on-year) stood at 9.5% in July, which augurs well for the end-year target.
The 2012 fiscal position was worse than anticipated. The domestic primary deficit reached 3.8% of non-iron ore GDP, compared with 1.8% budgeted, because of expenditure overruns. While revenue collection was slightly higher than expected, expenditure was well above appropriation levels, mostly on account of spending related to the November elections, and the authorities’ continued efforts to scale-up infrastructure investment. The higher-than-budgeted deficit was partially financed with over-borrowing from the government securities market and an accumulation of unpaid bills at the end of the year.
The external position improved in 2012 and is expected to strengthen further in 2013. The current account deficit dropped from 45% of non-iron oreGDP in 2011 to 39.4% in 2012. The improvement reflects the sharp decline in investment-ledimports related to iron ore projects, the commencement of iron ore export, and favorable terms oftrade. Although the latter are expected to deteriorate in 2013, the current account deficit wouldnarrow further on account of the expected strong export performance. Sierra Leone’s reservecoverage rose from 2.8 months of imports (excluding iron ore-related imports) in 2011 to 3.1 months in 2012. It is expected to stabilize around this level in 2013.
Monetary and banking sector developments were broadly satisfactory in 2012, as risks to financial sector stability appeared contained. Broad money (M2) grew by 23.1%, slightly faster than nominal non-iron ore GDP; and credit to the private sector expanded by 6.3%, down from 21.8% in 2011, partly reflecting the impact of enhanced banking supervision, and some crowding out from a sharp rise in government borrowing from the securities market in 2012. Financial soundness indicators show that banks are generally well capitalized, profitable, and in compliance with prudential regulations. They also point to an increase in nonperforming loans, partly due to the high level of government unpaid bills to the private sector at the end of 2012.
Furthermore, strong reforms aimed at reducing corruption, providing free health care and improving the decrepit transport, power and public health infrastructures top the list of the government’s priorities. As a result, the country is ranked as one of the world’s top reformers by the 2012 World Bank’s Doing Business index.
Youth unemployment is a challenging social problem in Sierra Leone. The country’s youth unemployment rate of 60% is amongst the highest in the West African sub-region. In the context of the second Poverty Reduction Strategy Paper(PRSP II) or Agenda for Change for 2008-2012, the government has implemented new legislation for youth-friendly initiatives that aim to provide an environment conducive to youth development, employment and empowerment. Youth employment remains a top priority in the third Poverty Reduction Strategy Paper (PRSP III) or Agenda for Prosperity.
Sierra Leone gained independence from Britain in 1961, under the premiership of Sir Milton Margai of the Sierra Leone People’s Party (SLPP). Sir Milton ruled the country until his death in 1964 and was succeeded by his younger brother, Sir Albert Margai.
Following multi-party elections in 1967, the SLPP narrowly lost power to the All Peoples Congress (APC) led by Siaka Stevens, but was prevented from becoming Prime Minister by a coup, on the day he was to be inaugurated. In 1978 a group of non-commissioned officers, staged a counter coup and invited Stevens to form a new government.
In 1971, the country became a republic with Siaka Stevens as president, and a year later popularly elected local councils were abolished. Steven’s APC regime introduced one-party rule in 1978, and he ruled the country until 1985 when he retired.
Siaka Stevens was succeeded by Joseph Momoh in 1985, and remained President until 1992, when he was overthrown one year into the country’s civil conflict. The National Provisional Ruling Council which had overthrown Momoh handed over power to Ahmed Tejan Kabbah in 1996, after multi-party elections. At the end of the war in 2002, Kabbah won a second and final five-year term. In 2004, popularly elected local councils were reinstated after an interregnum of 32 years.
On September 17, 2007, Ernest Bai Koroma of the APC was sworn in as President of Sierra Leone. The second set of local council elections took place in July 2008. The 2012 presidential and parliamentary elections were fiercely contested. The SLPP’s candidate retired Brigadier Julius Maada Bio, who as the incumbent’s main challenger pulled 37.4% of the votes. Koroma won 58.7% of the votes in the first ballot, thus preventing a run-off.
In the 50 years since Sierra Leone’s independence, the SLPP has ruled for a total of 16 years, from 1961 to 1967 and again from 1996 to 2007; while the APC has ruled for 31 years, from 1967 to 1992 and again from 2007 to 2013. Although various military regimes and interregnums ruled Sierra Leone for a total of five years, civilian rule, under either the APC or SLPP, accounts for about 90% of the country’s post-independence time span as of 2010.
Sierra Leone was one of the world’s poorest countries when the civil war began in 1991. In spite of its remarkable strides and reforms since the war ended in 2002, problems of poor infrastructure -- including roads and energy -- low capacity, youth unemployment, high maternal and infant mortality, widespread rural impoverishment, impact of the global economic downturns, and lapses in public financial management and governance still persist. There is also the daunting challenge of enhancing transparency in managing the country’s vast natural resources.
Through its Country Partnership Strategy (CPS), the Bank in Sierra Leone supported the country’s Agenda for Change which has phased into the Agenda for Prosperity. The current Agenda for Prosperity prioritizes economic diversification, managing natural resources , accelerating human development and other growth drivers; international competitiveness, labor and employment, social protection, governance and public sector reform and gender and women’s empowerment. The Bank supports policy reforms and macroeconomic management through budget support (provided in harmonization with other budget support donors), and in the areas of human development, infrastructure & productive sectors, and governance. The Bank is also focused on strengthening country systems, including support to decentralized services and public finance management and helping to build the demand for good governance.
Country Performance and Institutional Assessment rating hasbeen 3.3 for the past three years, compared to 3.2 in 2009
Transparency International ranking, which measures perceived levels of public sector corruption, ranked Sierra Leone 134 out of 183 countries and territories in 2011, and 123 out of 178 in 2012. In 2013, Sierra Leone had the highest number of respondents admitting to having paid a bribe at 84%.
Doing Business data provides objective measures of business regulations and their enforcement. In 2013, Sierra Leone ranks 137 out of 183 countries on the "ease of doing business," up from 148 in 2012. The 2014 ranking is 142.
The United Nations' Human Development Index, which focuses on the challenge of sustainable and equitable progress, ranked Sierra Leone 180 out of 187 countries and territories based on 2011 data. In 2012, Sierra Leone moved up to 177 out 187 countries.
Health and nutrition outcomes were among the worst in the world: infant mortality rates were recorded at 160 per 1,000 live births in 2006, maternal mortality was at 1,077 per 100,000 live births in 2005, and the mortality rate for children under five was 271 per 1,000 in 2005. The incidence of tuberculosis is high, with about 628 cases per 100,000 people versus 495 cases for the region.
The reported incidence of malaria is high but declining, from a morbidity rate of 37.5 (2003) to 35.2 (2005). Sierra Leone has made rapid progress in measles immunization, with better than average results relative to the rest of Sub-Saharan Africa.
The HIV/AIDS prevalence continues to be low at 4.9% (2009) nationally. Ninety-one percent of children born to HIV-positive mothers are now negative (2009). The reported incidence of malaria is high but declining, from a morbidity rate of 37.5 in 2003 and 2004, to 35.2 in 2005, 35.0 in 2006, 35.1 in 2007, and 35.0 2008 and 2009.
Poverty is heavily concentrated in the rural and other urban areas outside Freetown. Revised estimates suggest that 66% of the population lived below the poverty line in 2004. But between 2011 and 2013, poverty decreased to 52.9%. The proportion below the poverty line in Freetown in 2003 and 2004 was estimated at 22%, compared to about 79% in the rural areas. In 2011, while rural poverty decreased to 66.1%, it increased to 28% in the Western Area
Underemployment still continues to be a problem. In 2006, three of every 10 men aged 20 to 24, were neither formally employed nor in school. The problem is especially acute in urban areas.
The distribution of public power in 2007 was limited mainly to Freetown in the Western Area, Bo in the South and Kenema in the East, with approximately 20 megawatts of actual output in the three cities. This translates into 30 kilohertz per capita versus a regional average of 541 kilohertz per capita. With the commissioning of the first phase of Bumbuna Hydroelectric Project in December 2009, power distribution in Freetown has improved and coverage has been extended to Makeni in the North. Nevertheless, the current power generation capacity remains highly inadequate to accommodate the country’s overall power demand. State-owned installed capacity totals 90MW approximately, of which 85% serve the Freetown Capital Western area, including the 50MW Bumbuna hydro plant.
The use of the electricity distribution network in Freetown area is severely constrained by insufficient transport capacity and frequent outages. Partial power supply remains available only in 4 District Headquarter towns out of 12 District Headquarter towns in total. In rural areas, where the bulk of the population resides, electricity access is practically non-existent. The mining sector primarily relies on captive generation to meet its large power needs. Non-mining customers are forced to resort to private diesel generators.
Also, paved, all-weather roads have improved slightly to 9.8% of the total in 2009.
Last Updated: Nov 01, 2013
Through the World Bank Joint Country Assistance Strategy (JCAS) with the Africa Development Bank (AfDB) and the International Finance Corporation (IFC), the World Bank continues to work closely with other development partners to support Sierra Leone in fighting poverty, promoting economic development and improving living standards. The JCAS is fully aligned with Sierra Leone’s Poverty Reduction Strategy II (2008-2012), “Agenda for Change,” building on ongoing reforms in economic growth, the energy sector, rural and private sector development, decentralization, infrastructure, public financial management and the social sectors.
The Bank’s support has also included support for policy reforms and macroeconomic management through budget support (provided in harmonization with other budget support donors), and in the areas of human development, infrastructure & productive sectors, and governance. The Bank is also focused on strengthening country systems, including through support to decentralized services and public finance management, rural private sector development and helping to build the demand for good governance. A new CAS/CPS to support Sierra Leone's Poverty Reduction Strategy III (20013 - 2018), "Agenda for Prosperity is being prepared and it is expected to be delivered to the Board in July 2014.
Last Updated: Nov 01, 2013
In support of the economic governance and growth agenda of the government, IDA resources have been used directly in funding policy and institutional reforms. The direct budget support has contributed to sustained fast growth in the post-conflict period by providing a non-inflationary boost to public spending whilst also improving business confidence. It allowed for a higher real level of recurrent spending, a significant part of which was channeled into health, education and economic services, with a diminishing share accruing to defense. Higher spending in these areas helped to secure improvements in service delivery and in sector outcomes. Significant improvements were also made to public finance management. The Multi Donor Budget Support dialogue has also contributed to maintaining a positive trajectory of change on governance issues. For example, the preparatory processes lead to the passage of the Freedom of Information Act which has now become a law.
The Institutional Reforms and Capacity Building Project (US$25 million plus a further US$25 million from an IDA-administered Trust Fund) has supported the decentralization process in the last six years. A functioning local government system has been established, with continuing improvements in transparency and accountability. Local councils are now firmly embedded and responsible for the delivery of devolved services to their communities. There is evidence to show that the availability of basic services has improved between 2005 and 20013. The biggest improvements have been felt by communities living far from Freetown but close to district towns. The greatest improvements have been found in access to a water source within 15 minutes, access to a health clinic within 30 minutes and access to a market area within 60 minutes. There have been country-wide sensitization program on local government which has helped build an active citizenry n governance, especially in accountability and transparency issues.
Through the completed IDA-funded Health Sector Reconstruction and Development Project, Sierra Leone has benefited immensely from restoring the most essential functions of the health sector delivery system. The project helped to improve primary and first referral health facilities in four districts. A number of specific outcomes of the project include: 50 health posts in the four districts are now fully-equipped, four district hospitals have been rehabilitated and fully-equipped, the percentage of population within a one-mile radius from the nearest primary health unit in the targeted districts has increased to over 60% in 2009 from 41% in 2004, 12 primary health facilities are now fully rehabilitated and equipped, the percentage of children aged 12-23 months completely immunized was 78.9% in 2008, compared with 75% in 2006, the number of insecticide-treated bed nets purchased under the project and distributed to the population exceeds 160,000, at least 15 laboratories are capable of performing malaria microscopy, the percentage of pregnant women in the targeted districts who sleep regularly under insecticide-treated bed nets is at least 40%, the percentage of tuberculosis (TB) smear-positive cases successfully treated under the directly observed treatment strategy in the targeted districts is at least 85% and an increase in community-directed distribution of the River Blindness medicine (Ivermectin) to 70% in 2009 from none in 2005.
The IDA-funded National Social Action Project has helped improve access to community roads, with 196 kilometers of access roads completed by 2009. There were 305 small works subprojects under implementation through the cash-for-work component, and the program has created temporary employment for over 12,000 people by 2009.
The Bank supported the education sector through Rehabilitation of Basic Education Project and Education for All Fast Track Initiative. The objective was to re-establish education services and prepare the grounds for strengthening the education sector. The primary gross enrollment ratio (GER) increased to nearly 155% in 2007 from 104% in 2005, and junior secondary GER increased from 41% to 55%. That means more youth are engaged in several types of formal education activities. Girls’ enrollment also improved from 45% to 47% during the same time period. Admission into primary one increased to 323,000 from an estimated 200,000 over the project period. The number of pupils passing the National Primary School Examination after primary grade six also increased to 73% in 2007 from 69% in 2005.
The actual number of pupils passing this examination increased to 69,774 in 2007 from 52,122 pupils in 2005. Access to primary and junior secondary education has been enhanced by the rehabilitation and construction of 207 schools (240 are planned). Quality has been supported by the distribution of textbooks and training of teachers. Over 490,000 sets of textbooks (out of a target of 500,000) have been distributed to primary schools, and over 45,000 sets (out of a target of 50,000) have been distributed to junior secondary schools during the project implementation period. A total of 4,010 primary teachers also have been trained.
Infrastructure and the Productive sectors
Under the IDA-funded Infrastructure Development Project, the Sierra Leone Port Authority has completed the technical and financial evaluation processes which resulted in the granting a concession for a container terminal. The project has also supported enactment of the Road Maintenance Fund Act, 2010, which provides the basis for establishing an independent fund for this purpose. Rehabilitation of all the selected priority roads under the project was completed on time and within budget. The project has supported improvements in the baggage handling function of the Sierra Leone Airport Authority through outsourcing.
The recently approved West Africa Regional Fisheries Project is helping to address the problem of illegal fishing, strengthen regulation in the sector, and increase value addition locally of fish products.
The Rural and Private Sector Development Project has established working relationships with all 13 elected district councils of the country, approved matching grants to 75 Farmer Based Organizations (FBOs) with a total membership of nearly 5,000. These grants have provided storage sheds, drying floors and processing equipment for the FBOs. The project has supported the creation of cocoa cooperatives with a total membership of nearly 13,000 people. It also supports the rehabilitation, financial and post contract management of nearly 500 kilometers of feeder roads, and provides capacity building in procurement. It has aided in the establishment in a seed and planting material distribution scheme to provide improved planting materials for rice, cassava and cocoa to farmers, which is helping improve productivity and rural incomes. It has supported the establishment of a market information system and initiated studies to support the establishment of food safety standards to boost exports.
The IDA-supported Bumbuna Hydropower Project has been instrumental in increasing power generation by 50 megawatts, while ensuring appropriate environmental and social safeguards exist, including the creation of a safe zone along the high voltage transmission line right of way and resettlement of affected people.
Last Updated: Nov 01, 2013
Sierra Leone is a signatory to the Paris Declaration and Accra High Level Forum on aid effectiveness. Its new Development Assistance Policy and Poverty Reduction Strategy (PRSP) provide the framework for aid alignment, harmonization and execution.
Under the Multi-Donor Budget Support (MDBS) Framework involving the World Bank, the African Development Bank (AfDB), International Development Association (IDA), European Union (EU), and Britain’s Department for International Development (DFID), coordination among members and with the government has improved over the past few years. The Bank also coordinates closely its activities with United Nations (UN) institutions and other development partners and often collaborates on joint project financing through Trust Funds.
The Bank will continue to utilize IDA resources and make use of IDA fiduciary and safeguard systems to leverage additional resources from Trust Fund partners to support Sierra Leone in pursuing its key priorities in the PRSP, with special focus on strengthening economic governance, improving human development, and boosting infrastructure and productive sectors. The portfolio will continue to be based around budget support and projects in key sectors.
The budget support would allow the government to continue to take forward key policy reforms, while projects would provide support for capacity development and supporting critical investments. Developing a sharper focus on M&E and results both at the country strategy and project-level will be a key priority, as will be improving the portfolio quality. New projects in the areas of decentralization, fisheries, youth, financial sector and energy would allow IDA to contribute to significant improvements in the lives of ordinary Sierra Leoneans. Policy dialog with the government and other stakeholders will focus on policy options and managing risks, including in the extractive industries. IDA will continue to leverage its national allocation through additional support from other sources.
Within the World Bank Group, the Bank will continue coordinating its activities with International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), and World Bank Institute (WBI) in providing critical cross support in a well-coordinated manner towards portfolio quality and effective country dialogue and reforms and ultimately the results spelt out in the Agenda for Change.