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Investor Interest in Sierra Leone Grows

Michael Durr's picture

I'm in a unique position in MIGA, responsible for fielding initial investor inquiries about MIGA’s political risk guarantees. Over the last few years I have noticed a jump among investors considering MIGA cover in several countries. One of those countries is Sierra Leone. 

MIGA works hard at promoting investment both into Africa and countries that have experienced conflict, so Sierra Leone is a natural target market for MIGA. However, the recent rise in investor interest goes far beyond what our marketing could accomplish. My view of the change in investor interest is based on MIGA application data and what I'm hearing by phone and email from potential investors. 

MIGA requires a Preliminary Application (PA) for all projects. The PA only takes a few minutes to complete and allows MIGA to quickly assess a project's eligibility for a MIGA guarantee. PAs do not necessarily result in MIGA guarantees, but they offer some insight into investment trends and investor interest. In 1995 Sierra Leone joined MIGA and we received our first PA. From 1995 through 2007 MIGA received 44 PAs for Sierra Leone. But in the last 18 months alone MIGA has received another 23 PAs for Sierra Leone. In addition to PAs, I have received calls and emails from potential investors interested in Sierra Leone at an increasing rate. From where I sit, it looks like foreign investor interest in Sierra Leone is growing. 

The PAs and supporting anecdotal evidence from email inquiries and phone calls also reveal a shift in the types of investments businesses are considering. Before 2008, 70 percent of MIGA's PAs came from the infrastructure and mining sectors. Since 2008 only about 15 percent are from those sectors while the dominate sectors have become agriculture, manufacturing, and services.   

Infrastructure and mining projects can offer substantial returns for investors and bring many benefits to the host country, but they tend to be large and take a long time for investors to finance and implement, often years after MIGA receives a PA. The smaller nimble agriculture, manufacturing, and services projects often happen very quickly. Many of these projects are done under MIGA’s Small Investment Program which offers reduced premiums and streamlined processing. To see the kinds of projects MIGA has done recently in the country check out MIGA's page dedicated to Sierra Leone. So far MIGA has signed four guarantees, but our business pipeline is healthy and growing. 

Although the civil war was declared over in early 2002 investment did not rush into Sierra Leone immediately. It took a while to get rolling. Today, we see small and medium-size businesses investing and succeeding in Sierra Leone and it’s worth noting all of this investor interest occurred while most of the rest of the world was in the middle of a financial crisis. 



Submitted by Sharon N on
Thank you for this posting. It is great to hear that a country with a long history of civil war now has a high degree of investor interest. It is especially compelling that the majority of funds have been used to improve the infrastructure of the nation, since this is bound to yield sustainable results. I am just curious as to what the incentive(s) are of investors. Are they more motivated by potential financial prosperity, or are they more interested in assisting in nation-building? If the main reason is due to nation-building efforts, is there a specific reason why investors have chosen to invest in Sierra Leone, as opposed to other "failing states"? The fact that infrastructure is being developed is certainly positive news, yet I am curious as to why the specific nation of Sierra Leone has such investment.

My data shows a big jump in interest from certain types of investors into Sierra Leone. Typically small to medium sized projects such as the guarantees MIGA issued for Ice Ice Baby (ice producer) and Sierra Fishing Company Ltd. More on those two projects is available from MIGA's page on Sierra Leone. Although my data set is not large, it is corroborated by the investors I'm speaking with by phone and email. My sense is most of the investors are not weighing investments into Sierra Leone vs. investments into other countries. They have found specific business opportunities and want to make them happen. In my mind the rise in investor interest comes from the improved security and investment climate - and the fact that there are many needs to be met after the conflict.
Also worth noting the interest in infrastructure projects has remained steady. It has only fallen relative to interest in other sectors.

Submitted by VEDiCarlo on
In reading this post I am struck by the obvious question, "why Sierra Leon?" Following a supply/demand market principle, it would seem that the increase in applications could be attributed to a belief that either opportunities are all of a sudden abundant in the region, or there will soon be fierce economic competition for projects/space in Sierra Leon. Not knowing anything about the current political or economic status of the region, I would postulate that the later possibility is more accurate. Has the region seen an influx of international supporters lately? Say, perhaps from governments seeking agricultural resources such as China or India?

Submitted by VSL on
Thanks for this, it's always so refreshing to get good publicity because Sierra Leone deserves it quite frankly. The Official gateway to investment is at

These specific projects that applied for MIGA guarantees were all initiated from Sierra Leone residents. Any other interests in Sierra Leone for investment have been mainly in sectors where Sierra Leone offers unique products or opportunities, particularly mining. This sector is receiving the largest interest. There has been recent investment in some agricultural based projects, like in the biofuel sector, such as those by Addax. Since land-access is inexpensive and vast amounts of land remain underutilized (estimated 25% of arable lands), many foreign investors are looking to grab available lands to produce products for export and although the investments have small impacts on domestic development, the goals are to export products. The cost of land and labour are usually the main hindrances for these types of projects elsewhere in the world, therefore making Sierra Leone and other African nations particularly interesting for these types of investments. That is why there has been an increase in European biofuel projects in the southern hemisphere. Other typical post-war investments in road building and other infrastructure improvements have also increased, but these type of investments always emerge after wars or periods of civil unrest in developing countries because large amounts of donor funds are often given to the governments for improvements in these areas. Regardless, there is little interest in other investment sectors in Sierra Leone outside of these specific or unique opportunity areas. The country still poses a considerable level of risk due to numerous challenges, i.e. corruption, lack of concrete legislation, unclear frameworks and procedures, complex bureaucratic governance, ineffective rule of law (volatile population), just to name a few. There is no doubt, however, that the post-war administrations have made some effort on improving the investment climate in Sierra Leone, but there is still considerable work left to do. Sierra Leone is a certainly a beautiful country with many opportunities and, if it were properly managed, could be changed into a prosperous West African country. If, however, they continue business-as-usual, it is doubtful that much progress will be made in securing serious investor interest in other sectors, such as in tourism or other development areas, outside of the usual resource investments. So - Sierra Leone, make the necessary changes and improve your country, you have the opportunity and it is all up to you!

First and foremost kudo's to Michael Burr for sharing this piece, it show's that Sierra Leone is headed in the right direction. As a Sierra Leonean myself, living and working in Freetown, Sierra Leone I'll tell you guys that the investment climate in Sierra Leone is a budding one but with ample room for improvement if an investor wishes to give it a try. Yes corruption is still endemic, rule of law is not at it's best, electricity supply is improving though sometimes erratic, infrastructural devlopment is on the up and go and the health sector has received a tremendous boost i.e the free health care for under five years and lactating mothers. This is just a gist of the Sierra Leonean scene as it is now. I know all investors would be looking at what would be their returns on investment but like someone said inter-earlier; though you'll be looking at making money just feel gratifeid that if you invest now you'll e contributing to nation building. In life it's not always about money, there are other things that make mother earth such a glorious place to live in. On this note I advise anyone who wants to invest in Sierra Leone, to give serious thought to investing in the tourism sector cause that's a sector of our society that has untapped potential.

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