Research and consulting in Sierra Leone

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Research and consulting in Sierra Leone

Country overview:

IOA’s economists have leveraged extensive research and consulting on Sierra Leone to shed light on the challenges faced by a nation constrained by a lack of economic freedom. These restrictions have left the industrial sector virtually nonexistent and have hampered subsistence agriculture, the primary livelihood of most Sierra Leoneans. This, in turn, undermines efforts to combat the pervasive poverty afflicting the country. Civil society, which could offer potential solutions, faces significant limitations, while government corruption remains a major barrier to economic and social progress.

However, Sierra Leone has the potential for economic recovery if good governance can be achieved. The country’s abundant natural resources offer a strong foundation, with opportunities for a fuel-export industry stemming from petroleum deposits and a wealth of minerals such as bauxite, chromium, coltan, diamonds, gold, iron ore, and platinum. Additionally, high-tech initiatives are emerging, exemplified by the establishment of the nation’s first wind farm, funded by an international consortium.

Key opportunities in Sierra Leone:

  • Untapped oil and mineral resources provide a strong foundation for developing an energy sector and expanding the mining industry
  • The country boasts some of Africa’s finest surfing spots, offering significant potential for a thriving coastal tourism industry
  • Fishing and agriculture, already well-established, have the capacity for industrialisation with the right investments, according to IOA analysts

Key concerns/risks in Sierra Leone:

  • Worsening widespread poverty remains a significant challenge
  • Government corruption and excessive regulation across sectors hinder progress and development
  • Severe deforestation is causing substantial environmental damage that is increasingly difficult to mitigate
Sierra-Leone

Tips on doing business in Sierra Leone:

Starting a business:

  • Sierra Leone generally aligns with other African nations regarding foreign ownership of local businesses and real estate. Foreign investors typically face no restrictions on owning businesses and are granted equal legal status. The primary exception applies to mining ventures with initial capital under US$500,000, which must include 25% local ownership
  • While rural land ownership by foreigners is restricted, urban real estate leases are available, providing opportunities for investment in cities
    (Read more at: https://www.investinginsierraleone.com/)

Doing business:

  • Taxes in Sierra Leone are relatively high compared to other regional markets, with a general corporate and capital gains tax rate of 30%. However, locally based companies may qualify for deductions on dividends and rental income
  • The government enforces a local content requirement policy, which poses challenges in an environment where necessary inputs and services are often unavailable. Additional obstacles reported by businesses include inadequate infrastructure, complex and inefficient bureaucratic processes, and shortages of skilled labour

Culture and society:

  • Local business culture is not dissimilar to that of more advanced markets, including South Africa and other major players in the northern hemisphere
  • English is widely spoken, facilitating integration for investors from other English-speaking regions
  • The local business culture shares similarities with that of more developed markets, such as South Africa and key northern hemisphere economies

A sample IOA research report on Sierra Leone: