Policies toward Foreign Direct Investment

The Government of Sierra Leone has a favorable attitude toward foreign direct investment (FDI), which it sees as critical to revitalizing the country’s economic growth.

The Ministry of Trade and Industry oversees trade policies and programs, and supervises the Sierra Leone Investment and Export Promotion Agency (SLIEPA), the government’s lead agency in implementing initiatives to stimulate exports and investments, improve the investment climate, and promote the development of small and medium-sized enterprises (SMEs).  The government has a variety of initiatives to remove constraints on trade and improve the investment climate.  In recent years, Sierra Leone has constructed major roads leading to district headquarter towns and rehabilitated a network of trunk and feeder roads, linking agricultural suppliers with urban markets in mainly district headquarter towns.  The government has also prioritized improvements to the country’s trade facilitation infrastructure, including simplifying the customs clearance procedures at ports and land borders, and extending the major seaport to accommodate more vessels.

While the government’s message is that the country is open to foreign investment, investors perceive corruption as a primary obstacle. The Bio administration has taken efforts to address corrupt practices affecting procurements, land rights, customs, law enforcement, judicial proceedings, and other governance and economic sectors. The legal system generally treats foreign investors in a non-discriminatory fashion, although investors have noted that the judicial application of the laws is often subject to financial and political influences.  The legal framework is largely in place, but consistent enforcement is a challenge. Moreover, the government has failed to abide by international arbitral rulings related to a U.S.-owned mining company.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities have the right to establish and own business enterprises and engage in all forms of remunerative activities. Foreigners are free to establish, acquire, and dispose of interests in business enterprises. However, foreign investors cannot invest in arms and ammunition, cement block manufacturing, granite and sandstone excavation, manufacturing of certain consumer durable goods, and military, police, and prison guards’ apparel and accoutrements. Furthermore, there are limits to land ownership by foreign entities and individuals; the limitations vary depending on the location of the land being used and are discussed below in the “Real Property” section.

Business Facilitation

Sierra Leone has made progress in recent years in simplifying its business registration process.  The Corporate Affairs Commission (CAC) now manages the registration of limited liability companies and provides a “one stop shop” including an online business registration system.  The entire process involves five steps and takes on average ten days. Additional information is available from the CAC’s website at http://www.cac.gov.sl/ . SLIEPA also provides useful guidance on starting a business, sector-specific business licenses, mining licensing and certification fees, and marine resources and fisheries at http://sliepa.org/starting-a-business/ .

Outward Investment

Sierra Leone has no program to promote or incentivize outward investment, but also places no restrictions on such activity.

Sierra Leone has bilateral investment treaties with Germany, in force since 1966, the United Kingdom, revised in 2001, and with China, signed in 2001, though the agreement has not yet entered into force. As a member of the Economic Community of West African States (ECOWAS), Sierra Leone also benefits from the Trade and Investment Framework Agreement signed in 2014 with the United States. Sierra Leone does not have a bilateral taxation treaty with the United States.

Transparency of the Regulatory System

Sierra Leone’s regulatory system is not fully consistent with international norms. The Government of Sierra Leone develops laws and regulations at the national level, but the public and business community have few opportunities to provide input into proposed laws and regulations. The Constitution requires publication of proposed laws and regulations in a government journal, the Gazette, for a period of 21 days. However, stakeholders report that they often do not receive notice of relevant regulatory changes, and proposed regulations may automatically take effect unless overturned by Parliament. The Sierra Leone Chamber of Commerce, Industry and Agriculture represents the business community, but the private sector and civil society have limited roles in pushing for regulatory changes.

In recent years, Sierra Leone has taken various steps to promote and improve regulatory transparency. The Right to Access Information Act 2013 makes government records and information available to the public.  However, since its establishment in 2014, the Right to Access Information Commission has been largely ineffective due to funding constraints. In 2018, the Bio administration appointed a new head of Commission in an effort to improve its services, while the World Bank launched the Proactive Disclosure Scheme for information to be released before it is requested.

Sierra Leone joined the Open Government Partnership (OGP) in 2014. Over the last decade, the Office of the Auditor General produced comprehensive and credible annual audits. Although the audits identified numerous serious deficiencies and challenges, most of the Auditor General’s recommendations have remained unimplemented by the responsible MDAs. Parliament has not penalized MDAs for failure to implement the audit recommendations. Sierra Leone joined the Extractive Industries Transparency Initiative (EITI) in 2008, became EITI compliant in 2014, and having made meaningful progress in implementing the 2016 EITI Standards, is to review the legal framework and prepare recommendations for Beneficial Ownership Disclosure reform.  The enactment of the Public Financial Management Act in 2016 reformed the budget process and improved transparency in the expenditure of public funds, and the Fiscal Management and Control Act of 2017 directed government MDAs to transfer revenues and all other monies they receive into the Consolidated Revenue Fund. One of the first executive orders of President Bio in April 2018 was to order all MDAs to transfer their residual funds into the Treasury Single Account (TSA), a key IMF condition to improve governmental budgetary oversight and controls.

International Regulatory Considerations

Sierra Leone joined the General Agreement of Tariff and Trade (GATT) in May 1961 and the World Trade Organization (WTO) in July 1995. Sierra Leone has never been a party to a dispute case before the WTO, and it has not notified the WTO of any measures that are inconsistent with the WTO’s Trade Related Investment Measures (TRIMs) obligations. As a member of the World

Customs Organization (WCO) since November 1975, Sierra Leone acceded to the International Convention on the Simplification and Harmonization of Customs Procedures in June 2015. Otherwise referred to the Revised Kyoto Convention, Sierra Leone successfully completed the WCO Time Release Study in support of the country’s commitments to the WTO Agreement on Trade Facilitation in 2016, and finally notified the WTO of acceptance of the WTO amendment of the Agreement on Trade facilitation in May 2017.

Legal System and Judicial Independence

The legal system is derived from the English common law system, but outside of the capital, Freetown, local courts apply customary law to many disputes. The courts provide a venue to enforce property and contract rights. The country does not have a consolidated written commercial or contractual law, and numerous, disparate pieces of legislation sometimes lead to uneven treatment of commercial disputes.

The Superior Court of Judicature consists of the Supreme Court, the Court of Appeal, and the High Court. Commercial disputes brought before the High Court are generally heard by the Commercial and Admiralty Division. In 2010, Sierra Leone created a Fast Track Commercial Court with the aim of reducing the duration of commercial cases from two-three years to about six months. To date, the court has had minimal effectiveness due to resource limitations. In 2017, Sierra Leone hosted a commercial law summit to address gaps in the justice system, resulting in concrete recommendations in key areas, including arbitration, anti-corruption and bribery, public-private partnerships, and reform of the court process. There is now a draft Arbitration Bill which when passed into law will bring arbitration proceedings in Sierra Leone up to international standards. Though it is generally purported to be independent, there are indications the executive wields influence over the judiciary. Although foreign investors have equal access to the judicial system, in practice the system is slow and often subject to financial and political influences.

Laws and Regulations on Foreign Direct Investment

Sierra Leonean law generally ensures that foreign investors may compete on the same terms as domestic firms. The Investment Promotion Act 2004 protects foreign entities from discriminatory treatment. The law creates incentives, customs exemptions, provides for investors to freely repatriate proceeds and remittances, and protects against expropriation without prompt and adequate compensation. The law establishes a dispute settlement framework that allows investors to submit disputes to arbitration in accordance with the rules of procedure of the UN Commission on International Trade Laws (UNCITRAL). Export licenses are required only for certain goods and materials. While the export of gold and diamonds must comply with internationally accepted standards such as Kimberley Process certification, the permits required to export goods such as cocoa and coffee are issued automatically, and legally, at no cost.

Foreign companies may own or invest in Sierra Leonean entities, with limited exceptions. Small mining investments require a minority partnership with a Sierra Leonean company. The Sierra Leone National Carrier Ratification Agreement of 2012, and amended in 2014, provides preferential treatment in shipping to the Sierra Leone National Shipping Company. The Petroleum Exploration and Production Act 2001 restricts licenses for petroleum exploration and production to companies registered or incorporated in Sierra Leone. The Government of Sierra Leone has also identified certain restrictions on foreign investment in its Schedule of Specific Commitments to the General Agreement on Trade in Services, from August 1995, which established limited restrictions on business services, financial services, and the maritime and airport sectors. Businesses providing such services must establish local partnerships or joint ventures. The Local Content Policy, adopted in 2012, promotes the utilization of locally produced goods and locally provided services, and the employment of Sierra Leonean nationals. While failure to follow the policy previously resulted only in a denial of investment incentives, the Sierra Leone Local Content Agency Act 2016 requires compliance. More information is available below in the “Performance and Data Localization Requirements” section.

Sierra Leonean authorities do not screen, review, or approve foreign direct investments. Companies must register to do business in Sierra Leone, and there are no reports that the registration process has block investments or discriminate against investors. In the case of investment guarantees, the government established certain procedures with the U.S. government in agreements signed on December 28, 1962 and November 13, 1963, whereby Sierra Leone authorities grant approval for external investment guarantees in Sierra Leone. Additional information about the laws and regulations applicable to foreign investments is available on the website of SLIEPA at http://sliepa.org/ .

Competition and Anti-Trust Laws

Sierra Leone does not have a competition law. The European Union (EU) and the United Nations Conference on Trade and Development (UNCTAD) have supported the Ministry of Trade and Industry’s attempt to develop a competition policy, but the parliament has not yet adopted the relevant legislation.

Expropriation and Compensation

There is currently no history of expropriation in Sierra Leone, though the government has threatened such action against a foreign investor following a dispute under arbitration in an international tribunal. The Constitution authorizes the government to expropriate property only when it is necessary in the interests of national defense, public safety, order, morality, town and country planning, or the public benefit or welfare. In such cases, the Constitution guarantees the prompt payment of adequate compensation, with a right of access to a court or another independent authority to consider legality, determine the amount of compensation, and ensure prompt payment.

Dispute Settlement

ICSID and New York Convention

Sierra Leone has been a party to the International Convention on the Settlement of Investment Dispute (ICSID) since 1966, but not a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). Sierra Leone was not an independent state but a colony of the Britain when the convention was negotiated and adopted in June 1958. Though Parliament in November 2018 approved a motion authorizing Sierra Leone as a state to accede to the convention, Sierra Leone is yet to domesticate the provisions of the New York Convention in its legal system. Section 13 of the Arbitration Act 1960 allows foreign arbitral awards to be registered in Sierra Leonean courts and enforced in the same manner as a domestic judgment or court order. However, registration of foreign arbitral awards is not automatic but instead left to the discretion of the presiding judge.

Investor-State Dispute Settlement

Investment disputes in Sierra Leone can take a long time to resolve, given heavily centralized decision-making, the slow pace of bureaucracy, and substantial court backlogs. In 2016, the Embassy received multiple reports of cases where U.S. companies experienced challenges in asserting their investment interests. One company reported that the previous government denied regulatory approval for the firm’s acquisition of a Sierra Leonean entity in part because preference should be given to Sierra Leonean buyers. However, in 2018, the new administration overturned the decision and granted regulatory approval for the U.S. company to take over.  The recent cancellation of two iron ore mining company licenses over disputed royalty payments and non-compliance with mining laws has resulted in referral of the government to international arbitration.

International Commercial Arbitration and Foreign Courts

The Arbitration Act 1960 allows investors to arbitrate disputes, but the procedures set forth in the law are outdated and not in compliance with international standards. The country does not have a central arbitral institution, and instead arbitration is conducted on an ad hoc basis, including through pre-trial settlement conferences and alternative dispute resolution mechanisms before the Commercial and Admiralty Division of the High Court. The Investment Promotion Act 2004 allows investment disputes to be referred to arbitration in accordance with UNCITRAL procedures or the framework of any applicable bilateral or multilateral investment agreement. Judgments of foreign courts can be enforced under the Foreign Judgments (Reciprocal Enforcement) Act 1960, provided the country has a bilateral or reciprocal enforcement treaty with Sierra Leone. The Public Private Partnership Act, 2014 also provides for international arbitration in Sierra Leone.

Bankruptcy Regulations 

The Bankruptcy Act 2009 establishes a process of bankruptcy for individuals and companies. Bankruptcy is a civil matter, but it may disqualify an individual from holding certain elected and public offices and from practicing certain professions. The Bankruptcy Act 2009 also encourages and facilitates reorganization as an alternative to liquidation. The World Bank ranked Sierra Leone 162, with a score of 24.7, in the ease of resolving insolvency in 2020. While the country’s regulatory framework for bankruptcy is relatively strong, on average secured creditors receive only 11 cents on the dollar (compared to 20 cents average throughout sub-Saharan Africa) and the proceedings cost approximately 42 percent of the estate’s value.

Following the passing of a Credit Reference Act in 2011, Sierra Leone established a Credit Reference Bureau within the Bank of Sierra Leone, mandating all financial institutions to pass all information regarding loan applications for credit history checks. The credit history checks will detail all outstanding loans, when and where a loan was taken, and the repayment history guiding financial institutions in their loan decision. The Bureau now operates a digital identification system to control credit information and ensure citizens have secure and complete ownership of their personal data and information thereby transforming the financial inclusion landscape.

Investment Incentives

The Investment Promotion Act 2004 creates various incentives for foreign and domestic investors, and SLIEPA compiles information about the benefits and incentives available in various sectors. In particular, these are investment and employment, research and development, value-added manufacturing and training expenses incentives; incentives provided for businesses engaged in agriculture, airlines, fish farming, infrastructure, liquefied petroleum gas and cookers, mineral and petroleum, petroleum refinery, pharmaceuticals, photovoltaic systems, poultry, tourism; and income tax deductions for disabled persons, women and youth employments and skills development, and social services like schools and hospitals etc. SLIEPA provides details of these investment incentives at http://sliepa.org/investment/why-sierra-leone/investment-incentives/. However, in April 2018, the government suspended all duty and tax waivers to organizations, agencies, companies and contractors except for organizations that fall under the relevant Vienna Convention on Diplomatic Relations, as President Bio called for a complete review of all investment incentives, yet to be published. In May 2019, the National Revenue Authority provided details on tax incentives at  https://www.nra.gov.sl/sites/default/files/Final%20Magazine%20MRP%2029-5-19.pdf.

Foreign Trade Zones/Free Ports/Trade Facilitation

In conjunction with First Step, a subsidiary of U.S.-based development organization World Hope International, the government established a Special Economic Zone (SEZ) in 2011 on 50 acres near Freetown.  According to the Sierra Leone SEZ policy of 2013, businesses operating in this zone  enjoy tax holidays for ten years in the first instance, renewable for another five years at the discretion of the Sierra Leone SEZ Authority. The government further provides these businesses with import duty exemptions and expedited government services including customs, immigration, and registration.

Performance and Data Localization Requirements

The Sierra Leone Local Content Agency Act 2016 promotes foreign investors’ utilization of the domestic private sector. The act applies in the mining, petroleum, manufacturing, agriculture, transportation, maritime, aviation, tourism, public works, fisheries, health and energy sectors.

The local content policy targets several issues:

• Employment of nationals: Sierra Leoneans should be given “first consideration” for employment and training. The policy establishes a minimum of 50 percent staffing for Sierra Leonean nationals among an enterprise’s managerial and intermediate employees and limits the employment of expatriates as junior employees.

• Use of local goods and services: Firms should give preference to Sierra Leonean goods when they are of equal or comparable value. Companies must use certain amounts of local materials in key sectors (including 10 percent of domestically produced units in manufacturing, 10 percent of domestically available granite in cement, and specific percentages of locally produced fabric and furniture in tourism). In the event there is inadequate local capacity to meet the law’s target, the Ministry of Trade and Industry may issue a waiver.

• National preferences in contracts: The policy gives first consideration to Sierra Leonean companies for mining and petroleum awards and licenses, as well as public works contracts. The policy also gives domestic firms a preferential margin in government and private procurements.

The local content policy is enforced by the Local Content Agency. Companies are required to submit local content plans to demonstrate compliance, and violations are subject to fines, the loss of investment incentives, and civil forfeiture. Post is unaware of any Government of Sierra Leone requirement for companies to turnover source code, provide access to surveillance information, or maintain data storage within the country.

Real Property

There are two systems of land tenure in Sierra Leone. The Western Area, the former British colony of Sierra Leone which includes Freetown, operates under a freehold system. Outside the Western Area, in the provincial areas, land is governed under a leasehold system where local communities retain ultimate control. Foreigners cannot own land under either system, but can lease land for terms of up to 99 years. In leasehold areas, local Paramount Chiefs control the land, and may enter joint ventures with investors to develop or use the land in ways that serve the interests of the indigenous and local communities.

The Constitution protects property rights, but the rule of law is fragile and uneven across the country. In the absence of an effectively functioning legal framework, property rights and contracts are not adequately secure. Mortgages and liens are possible but rare, and generally
involve high interest rates and short loan periods. There is no land titling system, and traditional tribal justice systems still serve as a supplement to the national government’s judiciary, especially in rural areas. In 2020, the World Bank Doing Business Report ranked Sierra Leone 169 in the world for ease of registering property, as the process takes approximately 56 days with seven procedures and costs about 11 percent of the property’s value.

The Government of Sierra Leone’s 2019–23 medium term National Development Plan recognizes land ownership rights and obligations are determined is necessary to attract foreign investment. The World Bank has aided in this area, and proposed reforms include a comprehensive land use policy that modernizes the land registry, revises urban planning policies, and ensures that women have equal access.  In 2017, cabinet approved a comprehensive national land policy meant to improve upon and strengthen land laws and administration within the differentiated land tenure systems in the Western Area and the provinces. The policy, which awaits parliamentary action, is intended
to enhance the abilities of institutions to be able to acquire land for responsible investment and promote sustainable socio-economic development.

Currently, the Land Administration system inhibits effective and successful problem resolution, as the National Land Policy is not implemented, many existing laws and regulations are outdated, property unit formation and survey system is manual, land survey technologies are outdated and inaccurate, the number of specialists is insufficient and the existing specialists do not meet the required qualifications, and there is no unified or reliable system for Land data registration and storage. Property management procedures are long, unreliable (many decisions are verbal), expensive and do not guarantee the protection of the rights of the property user and/or owner. The new National Lands Policy of Sierra Leone aspires to gradually formalize land transactions while respecting the customary systems. Mandatory land transaction recording and registration could be an effective step towards the implementation of land related policy.

Intellectual Property Rights

Sierra Leone has been a member of the World Intellectual Property Organization (WIPO) since 1986 and a member of the African Regional Intellectual Property Organization (ARIPO), the common intellectual property body for English-speaking African countries, since 1980. As a member of the WTO, Sierra Leone is bound by the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS). Sierra Leone has not ratified the WIPO Copyright Treaty or the Berne Convention for the Protection of Literary and Artistic Rights. Despite its recognition of international standards, Sierra Leone’s protection of intellectual property is limited. Because of laws dating back to the colonial era, t patents and trademarks registered in the United Kingdom can be extended to Sierra Leone. Efforts to update the country’s legal framework have thus far included the Copyright Act 2011, the Patents and Industrial Design Act 2012, and the Trademark Act 2014. Nonetheless, legal protections remain outdated and incomplete, and government enforcement is minimal due to resource and capacity limitations. Customs screening for counterfeit goods is weak., The government publishes no known statistics about seizures of counterfeit goods.

For companies who may wish to seek advice from local attorneys who are experts in Sierra Leonean law, go to http://photos.state.gov/libraries/adana/5/Consular/Lawyer_sList-2016.pdf  for
a list of local lawyers.

Sierra Leone is notlisted in the U.S. Trade Representative (USTR) Special 301 Report or the  Notorious Markets List.For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles
at http://www.wipo.int/directory/en/.

Capital Markets and Portfolio Investment

Limited capital market and portfolio investment opportunities exist in Sierra Leone. The country established a stock exchange in 2009 to provide a venue for enterprise formation and a market for the trading of stocks and bonds, but the exchange initially listed only one stock, a state-controlled bank. In early 2017, the exchange had three listings that expressed willingness to trade their shares at the exchange.

Sierra Leone acceded to the IMF Article VIII in January 1996, which removed all restrictions on payments and transfers for current international transactions. The regulatory system does not interfere with the free flow of financial resources. Nonetheless, foreign and domestic businesses alike have difficulty obtaining commercial credit. Foreign interests may access credit under the same market conditions as Sierra Leoneans, but banks loan small amounts at high interest rates. Foreign investors typically bring capital in from outside the country.

Money and Banking System

Sierra Leone’s banking sector consists of 13 commercial banks, 56 foreign exchange bureau, 17 community banks, 15 credit-only microfinance, three deposit-taking microfinance, two discount houses, a mortgage finance company, a leasing company, 59 financial service associations, an Apex bank, three mobile financial services providers, and a stock exchange. More than 100 bank branches exist throughout the country, with activity concentrated in Freetown. The banking system currently has seven correspondent banks. The commercial banking sector is characterized by poor performance and has significant financial vulnerability. While the country’s banks are profitable, the government restructured two state-owned banks impacted by non-performing loans.

Foreign individuals and companies are permitted to establish bank accounts. The usage of mobile money is taking a central place in money transfers. Other electronic payments and ATM usage are available in urban areas but limited in rural settings, while the Bank of Sierra Leone is set to roll out a “national payment switch” to facilitate connectivity among different banks’ electronic systems. Telecommunications companies are upgrading to specifically enhance mobile money services and ecommerce.

As part of structural reforms in the banking sector under the ECF, the Bank of Sierra Leone pledged to establish a special resolution framework for troubled financial institutions, establish a deposit insurance system, strengthen its capacity to supervise and oversee the non-bank financial institution sector, and facilitate the adoption of International Financial Reporting Standards (IFRS) both internally and across the financial sector.

Inadequate supervisory oversight of financial institutions, weak regulations, and corruption have made Sierra Leone vulnerable to money laundering. While the country’s anti-money laundering (AML) controls remain underdeveloped and underfunded, the Financial Intelligence Unit (FIU) completed a national risk assessment in 2017 and is currently working with the Economic Crime Team of the Office of Technical Assistance, U.S. Department of the Treasury to enhance its capacity with a series of technical visits in 2018 and 2019, and others scheduled for 2020 with the FIU. The GIABA (a French acronym for Groupe Intergouvernemental d’Action contre la Blanchiment d’Argent en Afriqe de l’Ouest, which in English is, ‘The Inter-Government Action against Money Laundering in West Africa’) and the EU also funded a workshop on designated non-financial business and professions on Anti-Money Laundering and Combating Financing Terrorism (AML/CFT) preventive measures.

There is no history of hostile takeovers in Sierra Leone.

Foreign Exchange and Remittances

Sierra Leone has a floating exchange rate regime and the currency, the Leone, has depreciated slowly over the years mainly due to the increasing demand to finance current consumption and a decreasing inflow of foreign currency resulting from decreased exports and remittances.

Foreign Exchange

In August 2019, the government mandated the exclusive use of the Leones for all contracts and payments in Sierra Leone. The directive also prohibited individuals, business entities and organizations from holding more than USD 10,000 or its equivalent in any foreign currencies. Traveling individuals or organizations must declare foreign currencies of more than USD 10,000 or its equivalent. Any contravention of these directives is punishable by law as stipulated in the Bank of Sierra Leone Act of 2019.

The Investment Promotion Act 2004 guarantees foreign investors and expatriate employees the right to repatriate earnings and the proceeds of the sale of assets. There are no restrictions placed on converting or transferring funds associated with investments, including remittances, earnings, loan repayments, or lease payments for as long as these transactions are done through the banking system.

With the approval of the Bank of Sierra Leone, investors can withdraw any amount from commercial banks and transfer the funds into any freely convertible currency at market rates. Availability of foreign currencies is often limited in practice, and foreign-controlled businesses outside of Freetown have reported challenges in dealing with local banks. The exchange rate is market determined, as the national currency fluctuates based on the forces of demand and supply in the market. Nonetheless, the Bank of Sierra Leone sometimes conducts weekly foreign exchange auctions of U.S. dollars. Only commercial banks registered in Sierra Leone may participate. Sierra Leone is a party to the ECOWAS Common Currency, the ECO, and efforts to introduce this common currency is now being given serious consideration, though it has repeatedly been delayed.

Remittance Policies

The law provides that investors may freely repatriate proceeds and remittances. The Embassy is not aware of any recent complaints from investors regarding the remittance of investment returns, or of any planned policy changes on this issue.

Sovereign Wealth Funds

Sierra Leone does not maintain a sovereign wealth fund.

Sierra Leone has more than 20 state-owned enterprises (SOEs). These entities are active in the utilities, transport and financial sectors. 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 (Sierratel), the Electricity Distribution and Supply Authority (EDSA), the Electricity Generation and Transmission Company (EGTC), the Sierra Leone Broadcasting Corporation, Rokel Commercial Bank, the Sierra Leone Commercial Bank, the Sierra Leone Housing Corporation, and the Sierra Leone Produce Marketing Company.

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.

Privatization

The National Commission for Privatization was established in 2002 to facilitate the privatization of various SOEs. With support from the World Bank, the commission has focused on privatization of the country’s port operations, and currently seeks investments in public private partnerships (PPPs) for port security, telecommunications, and other infrastructure projects. Privatization processes are open to foreign investors, and could be integrated into plans for better capitalizing the stock exchange in Freetown via new equity listings.

The government encourages companies to engage in responsible business conduct, and the SLIEPA seeks investors who will undertake corporate social responsibility (CSR) projects. Sierra Leone does not have a set of standards or policies for CSR, but the law provides various incentives. For example, the Finance Act 2011 created a tax deduction for expenditures on social services that are outside the scope of the investment, such as the construction of schools and hospitals for community use. Community leaders generally expect businesses operating in areas outside of Freetown and the Western Area, where local Paramount Chiefs control the land, to engage in projects to support the communities’ social and economic well-being, human capital development, and physical infrastructure. Throughout the country, there is limited awareness of the impacts that corporate activities might have on human rights and environmental protection.

Corruption poses a major challenge in Sierra Leone. The country ranked 119 out of 198 countries with a score of 33/100 on Transparency International’s 2019 Corruption Perceptions Index. Corruption is endemic in government procurement, the award of licenses and concessions, regulatory enforcement, customs clearance, and dispute resolution. Sierra Leone signed the UN Convention against Corruption in 2003 and ratified it in 2004. The country is not a party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The Anti-Corruption Commission (ACC), established in 2000, has the authority to investigate and prosecute acts of corruption by individuals and companies. The Anti-Corruption Act of 2008 makes it criminal to offer, solicit, or receive a bribe, and this law applies to all appointed and elected officials, close family members, and all companies whether foreign or domestic. The Commission launched a “Pay No Bribe” campaign in 2016, which encouraged citizens to report corruption in the public sector.

President Bio established a 12-member Governance Transition Team (GTT) to conduct an immediate stocktaking of government MDAs in April 2018. The report documented a high level of fiscal indiscipline and alleged extensive corruption by the former government of President Ernest Koroma. The report recommended a commission of inquiry of all MDAs to establish how the former government utilized public assets and funds, and for the supreme audit authority to carry out forensic audits of specific sectors. These sectors included agencies relating to energy, telecommunications, the National Social Security and Insurance Trust (NASSIT), and roads.

The Anti-Corruption Amendment Act of 2019 increased the powers of the ACC in the fight against graft, increased penalties for offences under the Act and strengthened the witness protection regime. Since then the ACC has steadily pursued arrests, repayments, and convictions in both the private and public sectors. As of April 2020, the ACC had recovered millions of dollars in misappropriated funds, and prosecuted corruption cases leading to convictions of present and former public officials and private citizens. The Chief Justice established a Special Court to adjudicate corruption cases while the ACC has signed several information sharing agreements with key government institutions, including the Audit Service Sierra Leone and the FIU.

MCC approved a USD 44 million four-year threshold program for Sierra Leone signed in November 2015. The country passed the “Control of Corruption” indicator on MCC’s annual scorecards in 2019 and 2018, after failing in 2017.

Resources to Report Corruption:

Francis Ben Kelfala, Commissioner
Anti-Corruption Commission
Cathedral House
3 Gloucester Street, Freetown
+232 76 394 111, +232 77 985 985
report@anticorruption.gov.sl
http://anticorruption.gov.sl/report_corruption.php 

Lavina Banduah
Executive Director
Transparency International Sierra Leone
20 Dundas Street, Freetown
+232 79 060 985, +232 76 618 348
lbanduah@tisierraleone.org & tisl@tisierraleone.org
http://www.tisierraleone.org/ 

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 presidential elections. The Sierra Leone Police (SLP), which reports to the Ministry of Internal Affairs, is responsible for law enforcement and maintaining security within the country, but it is poorly equipped and lacked sufficient investigative and forensic capabilities.  The Republic of Sierra Leone Armed Forces (RSLAF) is responsible for external security but also 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.

There is tension between social, political, and cultural institutions over power and resources. Policies and positions are sometimes sought for the purposes of control over public finances. Sierra Leone’s relations with the neighboring countries of Guinea and Liberia are peaceful. There have been isolated incidents of politically motivated violence during and after the 2018 national and local elections.

Sierra Leone’s labor force is informal, unregulated, and lacking in 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 is estimated at 48.1 percent (2015 est.), and 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 difficult to recruit and train sufficient numbers of laborers. Youth unemployment is persistently high and will continue to grow due to high birth rates and changing demography.

The national minimum wage was reviewed upward by the Minister of Finance in November 2019 from Le500,000 to Le600,000 Leones (approximately USD 60) per month, and applies to all workers, including 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 http://travel.state.gov. 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 of their choice without prior authorization, to conduct legal strikes, and to 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, in some private industries, employers have reportedly intimidated workers 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 can require 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.

Labor issues are governed by the Employers and Employees Act 1960, the Regulation of Wages and Industrial Relations Act 1971, and regulations adopted by the Ministry of Labor and the Ministry of Health and Sanitation. Legal requirements are outdated and poorly enforced. In particular, child labor remains a widespread problem. The law limits child labor, allowing light work at age 13, full-time nonhazardous work at age 15, and all work at age 18. The law against child labor is 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. In addition, the International Labor Organization has identified discrepancies between provisions in the Child Rights Act 2007 and provisions of the Employers and Employer Act 1960.

Economic and Commercial Section
U.S. Mission Sierra Leone
Southridge, Hill Station
Freetown, Sierra Leone
+232 99 105 500
freetown-econ@state.gov