Economic studies
Sierra Leone

Sierra Leone

Population 6.3 million
GDP per capita 696 US$ billion
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major macro economic indicators

  2014 2015  2016 (f) 2017 (f)
GDP growth (%) 4.6 -20.6 4.9 5.0
Inflation (yearly average) (%) 8.3 9.0 9.7 9.0
Budget balance (% GDP) -7.8 -9.6 -8.0 -6.0
Current account balance (% GDP) -18.2 -15.5 -16.2 -16.3
Public debt (% GDP) 35.0 43.8 48.1 47.2


(e) Estimate (f) Forecast

*grants excluded


  • Significant mineral resources (iron, diamonds, rutile, gold)
  • Production of rice, coffee, cocoa
  • Tourism potential
  • International financial support
  • Significant port activity, set to increase


  • Vulnerability to weather conditions
  • Highly dependent on commodity prices
  • Corruption, inadequate protection of property rights
  • Risk of resurgence of Ebola virus epidemic
  • Inadequate infrastructure, failing healthcare system
  • Difficult for small and medium-sized enterprises to access credit
  • Extreme poverty, high levels of unemployment


An economy picking up gradually after two year of major exogenous shocks

Having to deal with the Ebola virus epidemic (3,600 deaths and a revenue loss estimated at 29% of GDP in 2015) and the slump in iron ore prices (50% of exports) in 2014/2015, growth in Sierra Leone took off again in 2016. The economy will continue to gain pace step by step in 2017 as iron ore production and investment, especially in infrastructure, gradually recover. Stimulated in 2016 by the resumption of operations at the Tonkolili mine, the iron sector is projected to benefit in 2017 from the start of production by the Chinese company,China Kingho Energy Group,which signed a Memorandum of Understanding with the government for USD 6 billion of investment in infrastructure and mining projects. The increase in iron ore output will remain limited in 2017, however, with iron ore prices rising only slowly and the global business environment putting a brake on investment. Apart from the mining sector, infrastructure projects will drive growth in 2017. New investment in agriculture should also provide a shot in the arm for a sector badly hit during the epidemic. Tourism, which was expanding strongly until the outbreak of the Ebola virus, hampered by political risk, the stigma of the epidemic and the withdrawal of international aid organisations, is not expected to rebound to any great extent. Furthermore, the risk of a resurgence of the Ebola epidemic, the political situation as well as unemployment levels are dissuading some investors. Finally, austerity measures, poverty and high unemployment will not help stimulate internal demand.

Inflation rose slightly in 2016, fuelled by higher food prices following a depreciation in the Leone against the major currencies (-26% against the dollar between January and November 2016). The gradual recovery of the economy should, however, help ease the downward pressure on the Leone. In contrast, the removal of fuel subsidies is expected to push prices up leading ultimately to a limited fall in inflation.


A government determined to reorganise public finances

The budget deficit is expected to decline in 2017 thanks to the austerity measures. The president has announced ambitious budget cuts amounting to USD 69 million between October 2016 and April 2017. Efforts to collect taxes, especially the 15% tax on goods and services, should be reflected in a moderate rise in revenues in 2017. Efforts on spending began in November 2016 with the removal of fuel subsidies, which guaranteed the Sierra Leoneans the lowest prices in the sub-region. The government is expected to continue these efforts in the coming months by cutting the cost of government operations: a ban on purchases of office supplies and official cars, and even the abolition of paid overtime. While these measures certainly please investors and the Bretton Woods institutions like the IMF, they will place a burden on the most deprived of the population. After rising rapidly in recent years, the public debt burden is expected to decline slightly but will remain high.

The current account deficit will still be sizeable in 2017, as the recovery of exports will be hit by iron ore prices. On the other hand, the country is still reliant on imports of foodstuffs and energy. The trade balance will remain broadly in deficit and weigh on the current account deficit, which is, however, expected to stabilise.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

Fragile political and social stability in the run up to the 2018 presidential elections

In the run up to the 2018 presidential elections, President Ernest Bai Konoma, of the All People’s Congress Party (APC), could be tempted to stand for a third term despite the constitutional ban on serving more than two. The APC rhetoric and support for the president suggest that, actually, this possibility cannot be ruled out. As in other countries in Sub-Saharan Africa which have seen similar attempts, violent opposition could break out if President Konoma were to try to keep his grip on power. After the Ebola epidemic, the government is, moreover, having to contend with growing social tensions due to rising poverty levels and the lack of infrastructure which limits its ability to respond properly and to halt the spread of the virus. Recurring allegations of corruption involving the government, against a backdrop of fiscal austerity likely to affect the poorest households, could fuel tensions. The risk of social and political instability in the short term is affecting the already difficult business climate (148th out of 190 economies according to the World Bank'sEase ofDoing BusinessIndex 2017). The inflow of donations in a country largely reliant on international aid is expected to remain significant in 2017. China, in particular, will continue to increase its influence thanks to its investment in transport infrastructure, such as the Mamamah International Airport project, and in the natural resources sector.


Last update : January 2017

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