1. Openness To, and Restrictions Upon, Foreign Investment
2. Bilateral Investment Agreements and Taxation Treaties
Sierra Leone has bilateral investment treaties with Germany, in force since 1966, the United Kingdom in 1981 and revised in 2001, China signed in 2001 but not yet entered into force, and United Arab Emirates, signed in 2019 but not yet in force. These treaties protect investors with fair and equitable treatment and defense against unlawful expropriation. Though not yet in force since signing in 2001, China and Sierra Leone reaffirmed their commitment to deepening the relationship by a memorandum of understanding signed when President Bio visited China in 2018.
Sierra Leone also benefits from its membership of the Economic Community of West African States (ECOWAS) and the Trade and Investment Framework Agreement with the United States, signed in 2014 with no bilateral taxation treaty. Double bilateral taxation treaties exist with Norway, South Africa, and the UK, extended to Canada, Denmark, Ghana, New Zealand, Nigeria, and The Gambia. However, the Ministry of Finance plans to review all existing treaties and work on the requested treaties from Kenya and Qatar.
3. Legal Regime
4. Industrial Policies
5. Protection of Property Rights
6. Financial Sector
7. State-Owned Enterprises
Sierra Leone has more than 20 state-owned enterprises (SOEs) mainly active in the utilities, transport, and financial sectors. There is no official or comprehensive government-maintained list of SOEs. There is no official or comprehensive government-maintained list of SOEs. However, notable examples include the Guma Valley Water Company, the Sierra Leone Telecommunication Company, the Electricity Distribution, and Supply Authority, the Electricity Generation and Transmission Company, the Sierra Leone Broadcasting Corporation, the Rokel Commercial Bank, the Sierra Leone Commercial Bank, the Sierra Leone Produce Marketing Company, to name but a few. Some of these SOEs are governed by an independent board of directors, while the relevant government ministries supervise others.
Sierra Leone is not a party to the Government Procurement Agreement within the WTO Framework. SOEs may engage in commerce with the private sector, but they do not compete on the same terms as private enterprises, and they often have access to government subsidies and other benefits. SOEs in Sierra Leone do not play a significant role in funding or sponsoring research and development.
10. Political and Security Environment
Sierra Leone is a constitutional republic with a directly elected president and a unicameral legislature. In March 2018, the opposition Sierra Leone People’s Party (SLPP) presidential candidate, Julius Maada Bio, won the fourth cycle of presidential elections since the civil war ended in 2002. It was deemed “free and fair” by international observers. The Sierra Leone Police, supervised by the Ministry of Internal Affairs, is responsible for law enforcement and maintaining security within the country, but it is poorly equipped and lacks sufficient investigative and forensic capabilities. The Republic of Sierra Leone Armed Forces (RSLAF) is responsible for external security and has some domestic security responsibilities to assist police upon request in extraordinary circumstances. The RSLAF reports to the Ministry of Defense and the Office of National Security. Civilian authorities maintained effective control over the security forces.
Sierra Leone, in 2020, made a historical “Freedom of Speech” move by repealing Part 5 of the Public Order Act of 1965 that criminalized libel. President Bio has also signed into law the abolition of the death penalty.
There is tension between social, political, and cultural institutions over power and resources. Policies and positions are sometimes sought for control over public finances. The government launched three Commissions of Inquiry (COI) to probe into the governance activities of the immediate past administration, which created further tensions. The COI was concluded in March 2020, and a government White Paper issued in September 2020 assuring citizens of the full implementation of the recommendations, which included recovery of all monies and confiscation of all assets as detailed in the COI reports. At the outbreak of COVID-19, the government implemented nationwide restrictions and curtailed movement to reduce the risk of the infection. Enforcement provoked sporadic violent clashes around the country, leaving some people dead, many hospitalized, and property destroyed. The President blamed it on the opposition as trying to make the country ungovernable and raised concerns about peace and national cohesion. He cautioned that reverting to the dark days of the war will only make things very difficult for Sierra Leoneans.
Sierra Leone’s relations with the neighboring countries of Guinea and Liberia are peaceful. However, Guinea laid claim over the border village of Yenga, in the Kailahun District of Sierra Leone, despite the several meetings between the Presidents of the two countries. There have been isolated incidents of politically motivated violence during and after the 2018 national and local elections.
Sierra Leone has declared June 24, 2023, as the official date for the next presidential, parliamentary, and local council elections and will register voters for that election from September 3 to October 4, 2023. Thirteen opposition political parties have established a coalition, the Coalition Progressive Political Party (COPPP), to challenge the current administration in the next presidential election.
11. Labor Policies and Practices
Sierra Leone’s labor force is informal, unregulated, and lacking specialized skills. Approximately 90 percent of laborers work in the informal sector, predominantly in subsistence or other small-scale agriculture. Sierra Leone’s labor force was devastated by the country’s civil war of 1991-2002, and the formal employment sector has yet to recover to pre-war levels. The war led to significant migration out of the country and destroyed the nation’s education system. In a country where educational institutions once earned the moniker “the Athens of Africa,” adult literacy was estimated at 43 percent in 2018 (data.worldbank.org). Businesses identify significant shortfalls in skilled professionals due to limited vocational training. While the government is developing Technical and Vocational Education and Training (TVET) programs, foreign investors find it challenging to recruit and train enough workers. Youth unemployment is persistently high and will continue to grow due to high birth rates and changing demography.
Sierra Leone in 2016 enacted “The Local Content Policy,” stipulating quotas for investment in and employment of Sierra Leonean citizens in corporations operating in the country. The Sierra Leone Local Content Agency (www.localcontent.gov.sl) monitors compliance with the policy.
The Minister of Finance reviewed the national minimum wage from Le500,000 to Le600,000 Leones (approximately U.S.$60) per month effective January 2020 and applies to all workers, including those in the informal sector. The law requires paid leave and overtime wages, but enforcement is ineffective, and there is no prohibition on excessive compulsory overtime. Employers can dismiss workers with limited notice and severance. Foreign employees must obtain work permits from the Ministry of Labor and Social Security, and most countries’ nationals must have visas. Additional information is available from the Embassy of Sierra Leone in the United States and at . Government policies regarding the hiring of Sierra Leonean nationals are described above in the “Performance and Data Localization Requirements” section.
The law allows workers to join independent unions without prior authorization, conduct legal strikes, and bargain collectively. The Ministry of Labor and Social Security estimates that approximately 35-40 percent of workers in the formal economy are unionized, including agricultural workers, mineworkers, and health workers. The law allows unions to conduct their activities without interference, and the government generally respects this right. However, employers have reportedly intimidated workers in some private industries to prevent them from joining a union, and there is no legal protection against employers’ discriminating against union members. Unions have the right to strike, although the government requires 21-day prior notice. Collective bargaining is widespread in the formal sector, and most enterprises are covered by collective bargaining agreements on wages and working conditions.
The Employers and Employees Act of 1960, the Regulation of Wages and Industrial Relations Act of 1971, and regulations adopted by the Ministry of Labor and the Ministry of Health and Sanitation govern labor issues. Legal requirements are outdated and poorly enforced, while child labor remains widespread. The law limits child labor, allowing light work at age 13, full-time nonhazardous work at age 15, and all work at age 18. Child labor is more prevalent in agriculture, artisanal gold and diamond mining, granite quarrying, sand mining and construction, domestic service, street hawking, begging, charcoal burning, and fishing. The laws against child labor are not effectively enforced. The Ministry of Labor and Social Security attributes the ineffective enforcement to a lack of funding and the inherent difficulties of monitoring child labor in the informal sector. Also, the International Labor Organization has identified discrepancies between provisions in the Child Rights Act 2007 and provisions of the Employers and Employees Act 1960.
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
|Host Country Statistical source||USG or international statistical source||USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
|Host Country Gross Domestic Product (GDP) (USD)||2020||$4.11||2020||$4.06 billion||https://www.theglobaleconomy.com/
|Foreign Direct Investment||Host Country Statistical source||USG or international statistical source||USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other
|U.S. FDI in partner country ($M USD, stock positions)||N/A||N/A||2019||$12 million||https://ustr.gov/countries-
|Host country’s FDI in the United States ($M USD, stock positions)||N/A||N/A||N/A||N/A||https://ustr.gov/countries-
|Total inbound stock of FDI as % host GDP||N/A||N/A||N/A||N/A||https://www.theglobaleconomy.com/
*Host Country Source: https://www.statistics.sl/index.php/gdp.html#
Table 3: Sources and Destination of FDI
IMF Coordinated Portfolio Investment Survey data are not available for Sierra Leone.
14. Contact for More Information
Economic and Commercial Section
U.S. Mission Sierra Leone
Southridge, Hill Station
Freetown, Sierra Leone
+232 99 105 500