2017 Investment Climate Statements: Sierra Leone

Policies Towards 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. President Koroma’s Agenda for Prosperity, a five-year roadmap to place Sierra Leone on the path to achieving middle-income status by 2035, recognizes that increasing investment will require a more supportive business environment. The Ebola outbreak placed enormous strains on the government’s resources and capacities, essentially depriving the country of funds needed for infrastructure investment, but Sierra Leone sees FDI as a catalyst for the country’s recovery from the outbreak.

The Ministry of Trade and Industry oversees trade policies and programs, while the Sierra Leone Investment and Export Promotion Agency (SLIEPA) is 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.

The government has a variety of initiatives to remove constraints on trade and improve the investment climate. In recent years Sierra Leone has constructed or rehabilitated a network of trunk and feeder roads, linking agricultural suppliers with markets and district headquarter towns. The government has also prioritized improvements to the country’s trade facilitation infrastructure, including simplifying procedures at land borders and the process to clear goods at the ports.

While the government’s message is that the country is open to foreign investment, investors see many obstacles. Corruption is widely seen as endemic, affecting procurements, land rights, customs, law enforcement, judicial proceedings, and virtually all other governance and economic sectors. The legal system generally treats foreign investors in a non-discriminatory fashion, although investors comment that judicial application of the laws is often subject to financial and political influences.

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. There are limits to land ownership by foreign entities and individuals. These restrictions vary depending on location of the land being used, and are discussed below in the “Real Property” section.

Other Investment Policy Reviews

The WTO conducted its second trade policy review for Sierra Leone in 2017. The final report is available at https://www.wto.org/english/tratop_e/tpr_e/s303_e.pdf . The UN Conference on Trade and Development (UNCTAD) last conducted an investment policy review for Sierra Leone in 2009.

Business Facilitation

Sierra Leone has made significant progress in recent years in simplifying its business registration process. Registration is now managed by the Corporate Affairs Commission, which provides a “one stop shop,” including an online application. The process involves six steps and takes on average ten days. Additional information is available from the CAC’s website, http://www.cac.gov.sl . SLIEPA also provides helpful step-by-step guidance at http://www.investsierraleone.biz .

Outward Investment

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

Sierra Leone has bilateral investment treaties with Germany (in force since 1966) and the United Kingdom (adopted in 1985 and revised in 2001). It signed a treaty with China in 2001, but 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 by ECOWAS and 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 undeveloped, as legal, regulatory, and accounting systems lack transparency and are not fully consistent with international norms.

Laws and regulations are developed at the national level, but the public has few opportunities to provide input into proposed laws and regulations. The Constitution requires proposed laws and regulations to be published in a government publication, the Gazette, for a period of 21 days. However, stakeholders assert that they often do not receive notice of relevant regulatory changes, and a proposed regulation may automatically take effect unless overturned by Parliament. The business community is represented by the Sierra Leone Chamber of Commerce, Industry and Agriculture, but the private sector and civil society have a limited role in pushing for regulatory change.

In recent years, Sierra Leone has taken various steps to promote regulatory transparency. The Right to Access Information Act 2013 makes government records and information available to the public, though its implementation has been incomplete. Sierra Leone joined the Open Government Partnership (OGP) in 2014. The Office of the Auditor General produces comprehensive and credible annual audits, and recent supplemental reports have focused on the expenditure of Ebola response funds. While the audits have identified numerous serious deficiencies and challenges, most of the Auditor General’s recommendations are not implemented by the responsible ministries, departments, and agencies. Sierra Leone joined the Extractive Industries Transparency Initiative (EITI) in 2008, and after a brief suspension for insufficient disclosures the country has been EITI compliant since 2014. As discussed above, the government has attempted to simplify and streamline various business processes, including the procedures for business registration. The enactment of the Public Financial Management Act in 2016 reformed the budget process and improved transparency in the expenditure of public funds.

International Regulatory Considerations

Sierra Leone has been a member of the WTO since July 23, 1995, and a member of GATT since May 19, 1961. 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.

Legal System and Judicial Independence

The legal system is derived from the English common law system, and outside of Freetown courts also 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.

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, in the hope of reducing the duration of a typical commercial case from 2-3 years to 6 months. To date, the court has had minimal effectiveness due to resource limitations.

Foreign investors have equal access to the judicial system, but 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 and customs exemptions, provides that investors may 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 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 provides preferential treatment in shipping to the Sierra Leone National Shipping Company, and the Petroleum (Exploration and Production) Act 2001 restricts licenses for petroleum exploration and production to companies registered or incorporated in Sierra Leone. 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, but the Embassy is not aware of any complaints that the registration process has been used to block particular investments or discriminate against particular investors.

The Sierra Leone Investment and Export Promotion Agency (SLIEPA), http://investsierraleone.biz , can provide additional information about the laws and regulations applicable to foreign investments.

Competition and Anti-Trust Laws

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

Expropriation and Compensation

There is no history of expropriation in Sierra Leone. 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 Convention and New York Convention

Sierra Leone has been a party to the ICSID Convention since 1966. Sierra Leone is not a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). 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 government actions, 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 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. Another company reported challenges in collecting payments owed by the government in a services contract. As of March 2017, both matters are unresolved.

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 pretrial 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.

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 148th in the ease of resolving insolvency in 2017. While the country’s regulatory framework for bankruptcy is relatively strong, secured creditors receive only 11 cents on the dollar (compared to 20 cents throughout sub-Saharan Africa) and the proceedings cost approximately 42 percent of the estate’s value.

Investment Incentives

The Investment Promotion Act 2004 creates various incentives for foreign and domestic investors, and the Sierra Leone Investment and Export Promotion Agency (SLIEPA) compiles information about the benefits and incentives available in various sectors. These incentives include:

• Ability to carry forward 100 percent of losses indefinitely.
• Reduced customs duty rates of 3 percent on the import of raw materials and 5 percent for plants and machinery, with a zero-rated goods and services tax.
• Income tax exemptions for the employment of local staff.
• Exemption from export/excise taxes for 75 percent exported output.
• Three-year income tax exemption for skilled expatriate staff, where bilateral treaties permit.
• Tax deductions for expenditures on R&D and training.
• Agribusiness: Income tax exemptions for 10 years for investments in cocoa, coffee, palm oil, and other rice and tree crop farming; an exemption from import duties for farm machinery, equipment and agrochemicals; and an exemption from withholding taxes for 50 percent of dividends.
• Infrastructure: Income tax exemptions for 15 years for public private partnerships with capital investments in excess of $20 million.
• Mining: Partial income tax exemptions for up to 10 years, and a capital allowance of 100 percent in the first year for prospecting and exploration expenses, followed by an allowance of 40 percent for production rights and other expenditures in the year of expenditure.
• Tourism: Reduced income taxes for five years, a two-year payroll tax exemption for a limited number of skilled expatriate workers, a full exemption from import duties for new construction, and a tax deduction of 125 percent of international expenditures to promote tourism.

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 of Sierra Leone established a Special Economic Zone (SEZ) in 2011 on 50 acres near Freetown. The SEZ includes import and export duty exemptions, three-year corporate tax holidays, 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 minimum percentages for Sierra Leonean nationals among an enterprise’s managerial and intermediate (50 percent) 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 will be enforced by the Local Content Agency. Companies will be required to submit local content plans to demonstrate compliance, and violations are subject to fines, the loss of investment incentives and civil forfeiture.

The Embassy is unaware of any Government of Sierra Leone requirement for companies to turn over 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. Freetown and the Western Area, the former British colony of Sierra Leone, operate under a freehold system. Outside the Western Area, land is governed under a leasehold system, where local communities retain ultimate control. Foreigners cannot own land under either system, but they can lease land for terms of up to 99 years. In leasehold areas, local Paramount Chiefs control the land, and may enter into 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 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. The World Bank ranks Sierra Leone 163rd in the world for the ease of registering property, as the process takes approximately 56 days and costs more than 10 percent of the property’s value.

The Government of Sierra Leone’s Agenda for Prosperity recognizes that reforming the manner in which land ownership rights and obligations are determined is necessary in order to attract foreign investment. The World Bank has provided assistance 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. The cabinet approved a new National Land Policy in November 2015, but the policy awaits Parliament’s action.

Intellectual Property Rights

Sierra Leone has been a member of the World Intellectual Property Organization 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 also 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 very limited. Laws dating back to the colonial era mean that 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, and the government publishes no known statistics about seizures of counterfeit goods.

Companies may wish to seek advice from local attorneys who are experts in Sierra Leonean law. A list of local lawyers is available at https://sl.usembassy.gov/u-s-citizen-services/local-resources-of-u-s-citizens/attorneys/.

For additional information about national laws 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, but the exchange initially listed only one stock, a state-controlled bank. The exchange added two new listings in early 2017, and is pursuing additional expansion.

Sierra Leone’s regulatory system does not stop 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 14 commercial banks and 17 community banks. Nearly 100 bank branches exist throughout the country, with activity concentrated in Freetown. The commercial banks’ assets represent approximately 20 percent of GDP. The sector is plagued by poor performance and has significant vulnerability. While the country’s banks are profitable, the two largest banks were placed under administration in 2014, and non-performing loans made up 27 percent of bank holdings in June 2016.

Foreign individuals and companies may establish bank accounts. The usage of mobile money is slowly growing in popularity. Other electronic payments and ATM usage are very limited in Freetown and non-existent outside of the capital, but in 2017 the Bank of Sierra Leone plans to roll out a “national switch” to facilitate connectivity among different banks’ electronic systems.

Loose oversight of financial institutions, weak regulations, and pervasive corruption have made Sierra Leone vulnerable to money laundering. While the country’s anti-money laundering controls remain underdeveloped and underfunded, the Financial Intelligence Unit anticipates completing a national risk assessment in 2017.

There is no history of hostile takeovers in Sierra Leone.

Foreign Exchange and Remittances

Foreign Exchange

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 on converting or transferring funds associated with investments, including remittances, earnings, loan repayments, or lease payments. Investors can withdraw any amount from commercial banks and transfer it into any freely convertible currency at market rates. Availability of foreign currencies is often limited, and foreign-controlled businesses in rural areas have reported challenges in dealing with local banks. The Bank of Sierra Leone conducts weekly foreign exchange auctions of U.S. dollars. Only commercial banks registered in Sierra Leone may participate, and each bank is limited to purchasing $100,000 at each auction. The local currency, the Leone, has a fluctuating exchange rate. Sierra Leone is a party to the West African Monetary Zone (with the Gambia, Ghana, Guinea, Liberia, and Nigeria), and efforts to introduce a common currency have 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 government-maintained list of SOEs, but notable examples include the Guma Valley Water Company, the Sierra Leone Telecommunication Co. (Sierratel), the Electricity Distribution and Supply Authority (EDSA), the Electricity Generation and Transmission Company (EGTC), the Sierra Leone Airports Authority, the Sierra Leone Ports Authority, the Sierra Leone Roads Authority, the Sierra Leone Broadcasting Corporation, Rokel Commercial Bank, the Sierra Leone Commercial Bank, and the Sierra Leone Housing Corporation.

Sierra Leone is not 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 Program

The National Commission for Privatization was established in 2002 to facilitate the privatization of various state owned enterprises. 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 for port security, telecommunications, and other infrastructure projects. Privatization processes are open to foreign investors.

The government encourages companies to engage in responsible business conduct, and the Sierra Leone Investment and Export Agency (SLIEPA) seeks investors who will undertake corporate social responsibility projects. Sierra Leone does not have a set of standards or policies in this area, 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. Businesses operating in areas outside of Freetown and the Western Area, where local Paramount Chiefs control the land, are often expected by community leaders 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 corporate impacts on human rights and environmental protection. Sierra Leone is a member of the Extractive Industries Transparency Initiative, and has been certified as compliant since 2014.

Foreign investors and the public alike see corruption as endemic throughout Sierra Leone, despite some improvements in recent years. Sierra Leone ranked 123rd out of 176 countries on Transparency International’s 2016 Corruption Perceptions Index, an improvement from its rank of 150th in 2008. Nonetheless, measures to combat corruption have been largely ineffective. For businesses, corruption exists 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 Act of 2008 makes it a criminal offense to offer, solicit, or receive a bribe. The law applies to all appointed and elected officials, close family members, and all companies whether foreign or domestic, but it does not extend to political parties. Public officials must recuse themselves from matters in which they have financial interests, and must submit annual disclosures of their assets and liabilities. The Anti-Corruption Commission, established in 2000, has the authority to investigate and prosecute acts of corruption by individuals and companies. To date, the commission has had limited impact, though there are no suggestions that it has used its authority to discriminate against foreign businesses. The “Pay No Bribe” campaign, launched in 2016, encourages citizens to report corruption in the public sector.

Sierra Leone joined the Extractive Industries Transparency Initiative (EITI) in 2008, and after a brief suspension due to incomplete disclosures the country has been EITI-compliant since 2014. Corruption has frustrated Sierra Leone’s hopes of partnering with the Millennium Challenge Corporation on a compact program, as the country failed the “Control of Corruption” indicator on MCC’s annual scorecards from 2014 to 2016. In 2016, the MCC began a four-year threshold program, but eligibility for a larger compact will depend on the country making additional progress in this area.

Resources to Report Corruption

Ady Macauley, Commissioner
Anti-Corruption Commission
Cathedral House
3 Gloucester Street, Freetown
+232 76 394 111, +232 77 985 985
report@anticorruption.gov.sl
https://www.anticorruption.gov.sl/ 

Lavina Banduah
Executive Director
Transparency International Sierra Leone
18 Dundas Street, Freetown
+232 79 060 985, +232 76 618 348
lbanduah@tisierraleone.org

Sierra Leone has experienced peace and stability since the end of the civil war in 2002. The country held multi-party elections in 2007 and 2012, and the UN Integrated Peacebuilding Office in Sierra Leone (UNIPSIL) ended its operations in 2014. Sierra Leone’s relations with the neighboring countries of Guinea and Liberia are peaceful. There have been no significant incidents in recent years of politically motivated damage to private property or installations, and no known targeting of foreign-held property. However, there have been increased reports of politically-motivated violence as Sierra Leone prepares for national and local elections in March 2018.

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 has never recovered from the country’s civil war of 1991-2002, which led to significant migration out of the country and destroyed the nation’s education system. In a country whose educational institutions once earned the moniker “the Athens of Africa,” adult literacy is estimated at 43 percent, 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 changing demographics.

The national minimum wage is 500,000 Leones (approximately $70) 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. Workers can be dismissed with limited notice and severance. Foreign employees must obtain work permits from the Ministry of Labor and Social Security, and most countries’ nationals must also have visas. Additional information is available from the Embassy of Sierra Leone to 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 mainly 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 are known to intimidate 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. In 2015, workers at the Shandong Iron & Steel Group’s iron ore mine and at the Sierra Leone Bottling Company declared strikes over salary disparities and severance packages. In both cases, the workers and management were able to resolve the disputes.

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. But the law is not effectively enforced. Nearly half of the children who reside in rural areas are engaged in child labor, compared with 36 percent in urban areas. 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, including with regard to the minimum wage.

Additional information is available in the Department of State’s Human Rights Report, http://www.state.gov/j/drl/rls/hrrpt, and the Department of Labor’s international child labor and forced labor reports, http://www.dol.gov/ilab/reports/child-labor .

The Overseas Private Investment Corporation (OPIC) operates in Sierra Leone pursuant to a bilateral agreement from 1961. OPIC provided a loan guarantee in 2011 to an investment fund with agricultural projects in Sierra Leone, and is now considering other potential projects in the country.

Table 3: Sources and Destination of FDI

IMF Coordinated Portfolio Investment Survey data are not available for Sierra Leone.

Table 4: Sources of Portfolio Investment

IMF Coordinated Portfolio Investment Survey data are not available for Sierra Leone.

Economic and Commercial Section
U.S. Mission Sierra Leone
Southridge, Hill Station
Freetown, Sierra Leone
+232 99 105 000
freetown-econ@state.gov