Neil on Africa: Sierra Leone needs stability, it's blessed with resources
Named the “Lion Mountains” by Portuguese explorers, Sierra Leone has an estimated population of 7.6 million and an estimated GDP of $4billion (R59bn) -World Bank 2018.
The largest economic hub of the country is its capital city Freetown. The country has gone through several coups and has had its fair share of unrest, civil wars and ebola outbreaks, but it remains one of the most religiously tolerant countries, with the 77percent Muslim majority co-existing with the 23percent Christian minority, with almost no religion- driven conflict.
Sierra Leone, like many of its African compatriots, is richly blessed with many natural resources like diamonds, iron, and gold. On February 14, 1972, the country made headlines when the world’s third-largest gem-quality diamond - called the “Star of Sierra Leone” - was discovered in Koidu.
Historicallydiamonds became the source of unrest, as the rebel groups had control of the major diamond deposits, and they became known as Blood Diamonds, as they fuelled the procurement of arms and gave rise to an uprising in the country for more than four decades.
Today the country remains one of the top 10 largest producers of diamonds in the world, and artisanal mining is still the second-largest employer after agriculture, which in 2017 contributed 60percent to the GDP from such major cash crops as coffee, rice and cocoa. The stagnation of the economy in 2018 could be explained by the reduction in mining sector output due to disruption in productivity on the Tonkolili and Marampa mines, which are major iron-ore mines. This could persist in 2019, as the government has cancelled major mining licenses, including Tonkolili and Marampa.
Sierra Leone’s President Julius Maada Bio, since his election last year, has been reviewing mining contracts and considering changes to the law that would ensure the West African nation benefits from its natural resources.
Electricity supply is still a major constraint in the country, and the lack of infrastructure, and an unfavourable business environment will also continue to harm growth.
Tourism prospects were particularly affected by this situation, and by China’s cancelling of funding $400m for a new airport near the capital in 2018.
The IMF has advised the country to avoid huge capital projects, which could put the country in a debt trap, as the level of public debt (62.99percent of GDP in 2018) is too high.
On the Neil Economic Scale, the price of a can of coke in Sierra Leone is SL£11407.50 (R17.14) and the price of a litre of petrol is SL£8500 (R12.77). The average Inflation rate is 15.2percent.
Sierra Leone remains a great country, with so much potential for transforming the prospects of its people. The new government, through Maada Bio, has put in place new measures to fight corruption and improve the quality of life of the population by channelling revenue generated from its natural resources to the development of the country.
The estimated $250m foreign currency generated from diamond exports could do so much good for the people of Sierra Leone and the government has been trying to improve governance of strategic resources to ensure the beneficiation of the people.
Neil De Beer is the current president of the IFA and advises numerous African states on economic development. www.ifa.africa or [email protected]