2023 Investment Climate Statements: Sierra Leone

Policies Supporting Foreign Direct Investment

The Government of Sierra Leone has a positive attitude towards FDI. There is a general call on investors to invest in all economic sectors, especially in infrastructure and energy, as the government looks for private sector-led economic growth and development for the country. The Government of Sierra Leone’s medium-term National Development Plan (2019-2023) established a growth agenda to support economic diversification and competitiveness, and to develop a viable private sector to increase participation in global trade while addressing the legislative, institutional, and regulatory impediments to inward investment to create a more investor-friendly environment.

The government’s diversification initiative is primarily directed toward agriculture, fisheries, tourism, and infrastructure. The government promotes sustainable investment in mechanized commercial agriculture, value addition, and agricultural research. The fishery sector is pushing for investment in lawful cultivation, commercial farming, and preservation of fish products. In the tourism sector, priority areas are investment in the hospitality industry, rehabilitation of historical and cultural sites, and promotion of tourism-based activities that link with the rural economy. The government focuses on public-private partnerships for major infrastructural energy, water, roads, ports, and telecommunications projects. It encourages investments in local industries like agro-processing, other value-addition industries, and small enterprise development.

Sierra Leone allows foreign investors to compete on the same terms as domestic firms. The Investment Promotion Act of 2004 protects foreign entities from discriminatory treatment. The Act creates incentives and customs exemptions, provides for investors to freely repatriate proceeds and remittances, and protects against expropriation without adequate compensation. The Act further provides for arbitration under the UNCITRAL rules in the event of a commercial dispute. In August 2022, the government ratified the Arbitration Act of 2022 to replace existing legislation based on the English Arbitration Act of 1950. This new Act established the Sierra Leone Arbitration Center, regulates third-party funding, and formally acceded Sierra Leone to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York convention).

Additionally, the Government of Sierra Leone established the National Investment Board (NIB) in 2022 to serve as a one-stop shop to facilitate the setting up of businesses and provide support and information to start and operate a business. This institution aims to streamline and standardize processes which at present are marred by bureaucratic inefficiency, fraud, and corruption, and create a conducive and safer investment environment. The NIB’s mandate is to promote investment opportunities, assist investors in obtaining facilities relating to their business, and improve the investment climate in the country.

However, poor quality and limited infrastructure pose significant challenges to investment and practical commercial activity. The shortage of skilled labor, the slow legal system, and the high level of corruption, which is pervasive at all levels of government, are significant obstacles to FDI.

Further, the country’s economic challenges have intensified in the last year. Inflation has continued to rise on the back of increasing commodity prices, loose macroeconomic policies, and sharp currency depreciation. These challenges have been compounded by external shocks such as Russia’s further invasion of Ukraine in February 2022, which continues to impact global supply chains. The soaring cost of living has also contributed to rising levels of food insecurity. Sierra Leone remains at high risk of debt distress, and risks have risen in the context of recent large fiscal deficits and the currency depreciation.

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, or military, police, and correctional officers’ apparel and accouterments. 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.

Sierra Leone has few specific restrictions, controls, fees, or taxes on foreign ownership of companies in Sierra Leone, other than certain registration formalities. In 2022, Parliament established the Mines and Mineral Development Act in an attempt to regulate mining activities and protect the environment and the interests of local communities. Small mining investments require a minority partnership with a Sierra Leonean company. Export licenses are required only for certain goods and materials. 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. The Sierra Leone National Carrier Ratification Agreement Act of 2012 mandates the use of the Sierra Leone National Shipping Company for 40 percent of all goods imported or exported from Sierra Leone. The Petroleum Act 2001 restricts petroleum exploration and production licenses 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 the business services, financial services, and maritime and airport sectors.

The Local Content Policy adopted in 2012 requires investors to utilize local goods and services in place of imported ones, promote the employment of citizens, and develop the human capacity of these citizens through training. According to the Local Content Agency Act of 2016, failure to follow the policy will result in the denial of investment incentives. More information is available below in the “Performance Requirements” section.

The 2016 local content policy requires investors to utilize local goods in place of imported goods, promote the employment of citizens, and develop the human capacity of these citizens through training.

The legal system generally treats foreign investors in a non-discriminatory fashion, though investors comment that judicial application of the laws is often subject to financial and political influence.

Other Investment Policy Reviews

The World Trade Organization (WTO) conducted a trade policy review for Sierra Leone in 2017: The UN Conference on Trade and Development (UNCTAD) last conducted an investment policy review for Sierra Leone in 2010:   Investment Policy Review: Sierra Leone | UNCTAD. 

Business Facilitation

The government established the National Investment Board (NIB) in 2022 to coordinate, facilitate and promote business investment in Sierra Leone. The Board aims to simplify the bureaucracy and regulations for businesses, build trust and credibility in the registration process, and enhance a predictable and transparent investment climate that drives responsible investment. The government, with the support of development partners, provided for increased spending in critical infrastructure in its budget for 2023, in areas such as energy, transport, and ICT, which are essential to business facilitation and physical and digital connectivity.

The Corporate Affairs Unit of the NIB 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:   http://cac.gov.sl . The Sierra Leone Investment and Export Promotion Unit of the NIB also provides guidance on investing, exporting, starting a business, logistics and distribution, and sector-specific information: https://www.sliepa.gov.sl/ .

Outward Investment

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

Transparency of the Regulatory System

The Sierra Leone Parliament is the country’s supreme legislative authority. Generally, Parliament enacts bills that the President signs into law. The judiciary interprets and applies the laws to ensure impartial justice and provides a mechanism for dispute resolution. However, the regulatory system is not entirely consistent with international norms. Laws and regulations are developed at the national level, and the Constitution requires publication of proposed laws and regulations in a government journal, the Gazette, for 21 days.

A series of legislative reforms have been carried out since the second trade policy review in 2017 to create a conducive business environment and attract FDI. These include the Arbitration Act, Environmental Protection Agency Act, Anti-Money Laundering Act, the Banking Act, the Bank of Sierra Leone Act, the Extractive Industries Revenue Act, and several Finance Acts, to name a few. To strengthen the legal, regulatory, and institutional frameworks, Sierra Leone established the National Investment Board, the Credit Reference Bureau, the Corporate Affairs Commission, revised the legislation of company activities, and developed the Local Content Policy.

Also, Sierra Leone has taken steps to promote and improve regulatory transparency. The Right to Access Information Commission was established in 2014 to make government records available to the public and imposes a penalty for failure to make information available. Sierra Leone joined the Open Government Partnership (OGP) in 2014, an initiative that empowers citizens to fight corruption and promotes transparent and accountable governance. The OGP, now led by the National Council for Civic Education and Development (NaCCED), made significant progress in access to justice, gender, education, and open Parliament, thereby assuring citizens of government’s commitment to provide for the public and to consolidate democracy. In 2020, Parliament passed the Independent Commission for Peace and National Cohesion law and repealed Part 5 of the Public Order Act of 1965 that criminalized libel. In 2021, the government enacted the Cyber Security and Crime Act, signed the abolition of the death penalty, created a fast-track court to try sexual offenders, and in 2022 signed into law the Gender Equality and Women’s Empowerment Act.

The Audit Service Act of 1998 established the Audit Service Sierra Leone (ASSL) and further strengthened to carry out audits of all government entities, including statutory corporations and organizations by the Audit Service Act of 2014.

Sierra Leone became a member of the Extractive Industries Transparency Initiative (EITI) in 2008, established the Sierra Leone Extractive Industries Transparency Initiative (SLEITI), and became compliant with EITI rules in 2014. In 2019, the EITI Board agreed that Sierra Leone had made meaningful progress in implementing the EITI Standard but should undertake corrective actions before the second validation in December 2020. However, in 2020, recognizing the challenges associated with the COVID-19 pandemic, the EITI Board introduced flexible measures in EITI implementation and tasked the multi-stakeholder group (MSG) to focus on ensuring EITII’s commitment to transparency and accountability. In 2022, SLEITI achieved an overall score of 87.5 percent in implementing the 2019 EITI standard comprising stakeholder engagement, transparency, and outcomes and impacts.

The Public Financial Management Act of 2016 reformed the budget process and improved transparency in the expenditure of public funds. The Fiscal Management and Control Act of 2017 directed government ministries, departments, and agencies (MDAs) to transfer all revenues into the Treasury Single Account, domestically referred to as the Consolidated Revenue Fund (CRF).

International Regulatory Considerations

Sierra Leone joined the General Agreement of Tariff and Trade (GATT) in 1961 and the World Trade Organization (WTO) in 1995. Sierra Leone is committed to the multilateral trading system and has not notified the WTO of any inconsistent measures with the WTO’s Trade-Related Investment Measures (TRIMs) obligations. It acceded to the Kyoto Protocol in 2006 and the International Convention on the Simplification and Harmonization of Customs Procedures, otherwise referred to as the Revised Kyoto Convention in 2015. It became a contracting party to the International Convention on the Harmonized Commodity Description and Coding System (HS Convention) in 2015. It replaced its pre-shipment inspection with a destination inspection in 2009 and notified the WTO of the Agreement on Trade facilitation in May 2017. The Customs Act of 2011 upheld the WTO Customs Valuation Agreement, which prohibits the use of arbitrary or fictitious values. However, it has not notified the WTO of its sanitary and phytosanitary legislation required for the international movement of any plant materials or products or any state-trading activity.

Sierra Leone is not a signatory to any plurilateral agreements concluded under the WTO but established a mission to the WTO in 2011. It ratified six multilateral investment agreements, including the International Center for Settlement of Investment Disputes (ICSID) and the Multilateral Investment Guarantee Agency (MIGA) Conventions, so that foreign investments in Sierra Leone are covered against non-commercial risks such as currency transfer risks, expropriation risks, risks of war and civil disturbance, and repudiation risk.

Legal System and Judicial Independence

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

The Superior Court of Judicature consists of the Supreme Court, the Court of Appeal, and the High Court, while the lower courts consist of the magistrate court and the local courts. In 2010, Sierra Leone created a Fast-Track Commercial Court to reduce the duration of commercial cases to as low as six months. In 2017, Sierra Leone hosted a commercial law summit to address gaps in the justice system, resulting in concrete recommendations in critical areas, including arbitration, anti-corruption and bribery, public-private partnerships, and reform of the court process. The Judiciary established a special court in 2019 to sit on cases of noncompliance with National Social Security and Insurance Trust (NASSIT) Act and to try corruption indictments.

Foreign investors have equal access to the judicial system, which is slow and often subject to financial and political influence. However, Sierra Leonean courts may acknowledge foreign judgment from specific jurisdictions with reciprocal enforcement arrangements with Ghana, Nigeria, Guinea, and the Gambia. Generally, Sierra Leonean courts do not apply foreign law, but foreign judgment can be enforced when registered with the high court. However, the registration may be refused when enforcement is contrary to public policy.

On depositing its instrument for accession to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), Sierra Leone became the 166th state party to the Convention, which came into force in January 2021. The Arbitration Act of 1960 was repealed and replaced the Arbitration Act of 2022, which incorporated the New York Convention regarding awards made in Sierra Leone. Recommended during the inaugural Commercial Law Summit of May 2017, the accession will promote FDI by resolving disputes by arbitration without interference from local courts and will enforce arbitral awards consistently and predictably.

Laws and Regulations on Foreign Direct Investment

The Companies Act of 2009, the Registration of Business Act of 2007, and their subsequent amendments are the primary laws governing the registration of all businesses before commencing operations. The Corporate Affairs Department of the National Investment Board deals with the incorporation of companies. In contrast, the Office of the Administrator and Registrar General (OARG) deals with sole proprietorships and partnerships, with the process streamlined into a one-stop shop.

Sierra Leonean law 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 for customs exemptions, allows investors to repatriate proceeds and remittances freely, and protects against expropriation without prompt and adequate compensation. The law establishes a dispute settlement framework that will enable investors to submit disputes to arbitration under the UN Commission on International Trade Laws (UNCITRAL). Furthermore, the Arbitration Act of 2022 provides for enforcing and recognizing arbitral awards, an important tool to protect investors and promote foreign direct investment in Sierra Leone.

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 blocked investments or discriminated against investors. In the case of investment guarantees, the government established specific procedures with the U.S. government in agreements signed on December 28, 1962, and November 13, 1963, whereby Sierra Leone authorities approved external investment guarantees in Sierra Leone. Additional information about the laws and regulations applicable to foreign investments is available on the SLIEPA website:   https://www.sliepa.gov.sl/. 

Competition and Anti-Trust Laws

Sierra Leone does not have a competition law. The European Union 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. This ministry oversees the regulation of anti-competitive practices. Whereas consumer protection has been passed, the cabinet has approved a competition policy but awaits parliamentary ratification.

Expropriation and Compensation

The Constitution authorizes the government to confiscate property only when necessary, in the interest 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 other independent authority to consider legality, determine the amount of compensation, and ensure prompt payment.

Dispute Settlement

ICSID and New York Convention

Sierra Leone became a party to the International Convention on the Settlement of Investment Disputes (ICSID) in 1966 to arbitrate investment disputes and enforce ICSID awards.

Additionally, Sierra Leone became the 166th state party of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) in January 2021. In September 2022, Parliament repealed and replaced the Arbitration Act of 1960, with the Arbitration Act of 2022 to incorporate the New York Convention.

Investor-State Dispute Settlement

Investment disputes in Sierra Leone can take a long time to resolve, given the slow pace of bureaucracy and substantial court backlogs. The Embassy is aware of several past investment disputes involving U.S. companies, but all cases that have been brought to the Embassy’s attention have been resolved.

International Commercial Arbitration and Foreign Courts

Sierra Leone acceded to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) in 2020. In 2022, the Convention was domesticated when the Arbitration Act Chapter 25 of the Laws of Sierra Leone 1960 was repealed and replaced with the Arbitration Act No.18 of 2022, which included the New York Convention.

The Investment Promotion Act 2004 allows investment disputes to be referred to arbitration following 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 of 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 public offices and practicing certain professions. The Bankruptcy Act 2009 also encourages and facilitates reorganization as an alternative to liquidation.

After passing the Credit Reference Act in 2011, Sierra Leone established a Credit Reference Bureau within the Bank of Sierra Leone, mandating all financial institutions to give 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 data and information, transforming the financial inclusion landscape.

Investment Incentives

The Investment Promotion Act 2004 creates various incentives for foreign and domestic investors, and the multiple Finance Acts enacted since 2010. The Investment and Export Promotion Directorate of the National Investment Board (NIB) 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 employment and skills development, and social services like schools and hospitals, etc. The Investment and Export promotion Directorate of the NIB provides details of these investment incentives on its website at:   https://www.sliepa.gov.sl/invest-in-sierra-leone/all-incentives  .

The Public-Private Partnership Directorate of the NIB promotes private sector involvement in the country’s development plan, especially in public utility services. The PPP Directorate will continue to engage the private sector to secure energy, fisheries, health, housing projects, etc.

Foreign Trade Zones/Free Ports/Trade Facilitation

In conjunction with First Step, a subsidiary of a U.S.-based development organization, World Hope International, the government established a Special Economic Zone (SEZ) in 2011 on 54 acres outside Freetown’s capital. The SEZ policy accords businesses operating in the zone with a three-year tax holiday, duty and tax exemptions on imported goods, expedited government services including customs, immigration, registration, and guaranteed electricity and water supplies. Additionally, in April 2023, Parliament ratified the establishment of the Koya Industrial Zone, a public-private partnership with Arise Integrated Industrial Platforms (Arise IIP), a developer and operator of industrial parks with projects throughout West Africa.

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 to mining, industrial, petroleum, manufacturing, agriculture, transportation, maritime, aviation, tourism, public works, fisheries, health, and energy sectors.

The local content policy is meant to boost the economy by leveraging the power of local industries and citizens through their participation in the economy. It targets several issues, including:

• Employment of nationals: All foreign businesses must employ Sierra Leoneans, at least 20 percent of the managerial and 50 percent of intermediate positions. After five years, this ratio must increase to 60 percent for managerial and 80 percent for intermediate positions.
• Preferential Treatment: Preference will be granted to a foreign business that partners with Sierra Leonean businesses over foreign companies with no equity share owned by Sierra Leonean entities.
• First Consideration: Foreign businesses must give Sierra Leoneans first consideration for employment and training.
• 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 specific amounts of local materials in critical sectors, but if there is inadequate local capacity to meet the law’s target, the Ministry of Trade and Industry may issue a waiver.
• National preference in contracts: The policy first considers Sierra Leonean companies for mining and petroleum awards and licenses and public works contracts. The policy also offers domestic firms a preferential margin in government and private procurements.

The Local Content Agency enforces the local content policy.  Companies must submit local content plans to demonstrate compliance, and violations are subject to fines, the loss of investment incentives, and civil forfeiture.

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. In the provincial areas outside the Western Area, the land is governed under a leasehold system where local communities retain ultimate control. Foreigners cannot own land under either system but can lease land to a maximum size of 15,000 hectares for agriculture and 10,000 hectares for mining for up to 50 years. In leasehold areas, the chiefdom, town, or village area land committees have oversight responsibility over land in the provinces, and investors wishing to invest on any land subject to customary law shall comply with the processes and procedures set out in the Customary Land Rights Act of 2022.

The Constitution protects property rights, but the rule of law is fragile and uneven across the country. Property rights and contracts are only adequately secure with an adequate legal framework. 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 justice systems still supplement the national government’s judiciary, especially in rural areas.

The Land Administration system currently inhibits successful problem resolution. The survey system is manual, and land survey technologies are outdated and inaccurate. Property management procedures are lengthy, unreliable, expensive, and do not guarantee the protection of the property user and or owner’s rights. While the new Acts, the Customary Land Rights Act and the Land Commission Act of 2022, seek to formalize land transactions while respecting customary systems, the 2019–23 Medium-term National Development Plan recognizes land ownership rights and rights obligations are necessary to attract foreign investment.

Intellectual Property Rights

Sierra Leone has not been listed in the U.S. Trade Representative (USTR) Special 301 Report or the Notorious Markets List.

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 to protect Literary and Artistic Rights.

Despite its recognition of international standards, Sierra Leone’s intellectual property protection is limited. Laws pre-dating the colonial era allowed patents and trademarks registered in the United Kingdom to 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.

For companies who may wish to seek advice from local attorneys who are experts in Sierra Leonean law, go to  https://sl.usembassy.gov/wp-content/uploads/sites/195/Lawyers-List-Updated-December-2020.pdf for a list of local lawyers.

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. Sierra Leone’s stock market is over a decade old but remains relatively inactive. The number of listings, as well as participation in the stock market, remains low and insignificant. Inadequate support from the government, low levels of engagement among the general populace, limited participation by foreign investors, and high levels of corruption hinder the stock market’s growth.

Money and Banking System

Sierra Leone’s banking sector, supervised by the central bank of Sierra Leone, consists of 14 commercial banks, 79 foreign exchange bureaus, 17 community banks including Apex Bank, 39 credit-only microfinance, five deposit-taking microfinance, two discount houses, a home mortgage finance company, a leasing company, two mobile financial services providers, and a stock exchange. Bank branches exist throughout the country, with activity concentrated in Freetown. The commercial banking sector is characterized by poor performance with significant financial vulnerability.

Foreign individuals and companies are permitted to establish bank accounts. The use of mobile money is becoming more popular. 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 enhance mobile money services and e-commerce specifically.

In July 2022, the Bank of Sierra Leone redenominated the Leone to simplify accounting records and reduce cash volumes needed for transactions. The redenomination eliminated three zeros from the old Leone and created a new 20 Leone denomination equivalent to 20,000 old Leone. The redenomination commenced in July 2022, was extended to March 2023, and then was extended again to the end of December 2023.

Sierra Leone has a high inflation rate and a deteriorating currency exchange rate. In June 2023, the inflation rate increased to 44.81 percent, compared to 27.95 percent in June 2022. The exchange rate in June 2023 was $1:Le20.9, compared to $1:Le13.1 in June 2022, a 37% depreciation of the value of the Leone. As part of structural reforms in the banking sector under the Extended Credit Facility of the International Monetary Fund, the Bank of Sierra Leone pledged to establish a particular 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 industry.

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 Financial Intelligence Unit (FIU) controls remain underdeveloped and underfunded, the U.S. Treasury provided technical capacity-building assistance for the operational staff of the unit between 2017 and 2022. The GIABA (a French acronym for Groupe Intergouvernemental d’Action Contre la Blanchiment d’Argent en Afrique de l’Ouest, which in English is ‘The Inter-Government Action against Money Laundering in West Africa’) and the EU also funded workshops on designated non-financial business and professions on Anti-Money Laundering and Combating Financing Terrorism (AML/CFT) preventive measures.

Foreign Exchange and Remittances

Sierra Leone has a floating exchange rate regime. 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 Leone for all contracts and payments, prohibited individuals and other entities from holding more than U.S.$10,000 or its equivalent in any foreign currency, and travelers must declare foreign currencies of more than U.S.$10,000 or its equivalent. Violation of these directives is punishable by law as stipulated in the 2019 Bank of Sierra Leone Act. In late 2020 however, an acute shortage of domestic currency hit the market, compelling the central bank to order sufficient domestic currency to meet the market demand and lifted the restriction on foreign currency holdings to mitigate the effects of the scarcity.

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, 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, and the exchange rate is market-determined. Sierra Leone is a party to the ECOWAS Common Currency, the ECO, and efforts to introduce this common currency are 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 any planned policy changes on this issue.

Sovereign Wealth Funds

Though legislated under the 2018 Extractive Industries Revenue Act and the 2016 Public Financial Management Act, Sierra Leone has not established a sovereign wealth fund.

Privatization Program

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 privatizing the country’s seaport operations and other unsuccessful public enterprises, including a BOT public-private partnership agreement with the airport. The Commission continues to seek investments in public-private partnerships for SOEs with significant infrastructure, including telecommunications, energy, housing, etc. 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.

Additional Resources

Department of State

• Country Reports on Human Rights Practices – https://www.state.gov/reports/2022-country-reports-on-human-rights-practices/sierra-leone.
• Trafficking in Persons Report – https://www.state.gov/trafficking-in-persons-report/.
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities ( https://www.state.gov/key-topics-bureau-of-democracy-human-rights-and-labor/due-diligence-guidance/).
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises ( https://www.state.gov/u-s-national-contact-point-for-the-oecd-guidelines-for-multinational-enterprises/).
• Xinjiang Supply Chain Business Advisory ( https://www.state.gov/xinjiang-supply-chain-business-advisory/).

Department of the Treasury

• OFAC Recent Actions ( https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions ).

Department of Labor

• Findings on the Worst Forms of Child Labor Report ( https://www.dol.gov/agencies/ilab/resources/reports/child-labor/findings  )
• List of Goods Produced by Child Labor or Forced Labor ( https://www.dol.gov/agencies/ilab/reports/child-labor/list-of-goods )
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World ( https://www.dol.gov/general/apps/ilab )
• Comply Chain ( https://www.dol.gov/ilab/complychain/ )

Climate Issues

The Government of Sierra Leone has taken several steps to advance its climate response strategy. The administration established a new Minister of Environment in 2019, and in 2021, with the support of the United Nations Development Programme and other development partners, released its initial National Adaptation Plan for climate change. The plan lays out priority sectors and issues, develops programs across these priorities to be implemented, and provides recommendations for future action. The plan identified that current policy does not encourage private sector engagement on climate adaptation, as there are few regulatory incentives or deterrents to achieve policy outcomes to preserve biodiversity, clean air, or other ecological and climate objectives. The national Medium-term Development Plan (2019 – 2023) also highlights the need for private sector involvement in the planning for climate resilience and adaptation, as there has yet to be concrete engagement or contribution by the private sector to address climate issues.

Also in 2021, the country updated its Nationally Determined Contribution, which guides Sierra Leone’s efforts to reduce greenhouse gas emissions, and is the cornerstone of Sierra Leone’s climate change response to the United Nations framework Convention on Climate Change (UNFCCC). Sierra Leone is also a party to the Paris Agreement for climate resilience and adaptation.

To date, there has been limited legislation implemented to achieve climate goals. The Environmental Protection Agency Act of 2008 established Sierra Leone’s Environmental Protection Agency, which is charged with advising the President on the formulation of environmental policy, and an amendment passed in 2022 requires Environmental Impact Assessments for certain activities including mining, agriculture, and construction projects. Further, it prohibits toxic and hazardous substances from being stored or disposed of in Sierra Leone, and empowers the Environmental Protection Agency to fine violators – though there is little to no enforcement. The government has also increased the coverage of terrestrial sites of biodiversity importance to protect biodiversity and endangered species, and has imposed increased taxes on the export of timber to mitigate deforestation through the Finance Act 2021.