The cost to export goods is similar as Sierra Leone requires seven documents to be inspected by customs’ officials, while the total cost (excluding taxes) is $1,573 per container, with delivery taking up to 26 days from point of origin. Compared to global averages this gives Sierra Leone a ranking of 136^th out of 183 on ease of engaging in cross-border trade.

Sierra Leone’s also does very poorly when it comes to contract enforcement, where it ranks 144^th out of 183 countries ranked on this issue by the Bank. On average, reports World Bank analysts, it takes a total of 40 legal procedures to take a contract from dispute to resolution, at the cost of 515 days spent in court or otherwise attending to legal issues. The financial cost of pursing a contract claim, says the Bank, typically accounts for 150-percent of the value of the claim.

Finally, in terms of closing a business, Sierra Leone ranks 149^th out of 183 countries measured.  Typically it takes 2.6 years to close a business at a cost of 42-percent of the cost of an estate with an estimated recovery rate of 8.4 cents on the dollar.

Table 1 presents a summary of these rankings as well as Sierra Leone’s overall ease-of-doing business rating.  As one can see, Sierra Leone has two bright spots when it comes to business.  First, starting a business is not terribly hard when compared to other African countries and it has top-notch investor protections.  However, obtaining construction permits, registering property, contract enforcement, and paying tax are rather onerous—largely due to the country’s ongoing problems with corruption.

Table 1:

World Bank Ease of Doing Business

Assessment and Rankings: Sierra Leone

 

Prospects

Mineral rich Sierra Leone has unfortunately seen little in the way of benefit from its extensive deposits of diamonds, gold, and other minerals, though this may be changing.  A typical extractive-industries, least-developed economy, the country has the usual bifurcation of the economy into a small, lucrative mining and forestry sector dominated by foreigners and which employs relatively few people and a huge subsistence agriculture sector which employs the majority of the population.  The recently concluded civil war was at least in part a result of this economic division of the country and premised on realigning flows of funds from the natural-resources extraction sector away from one set of elites and into the hands of another.

Figure 3:

 Sierra Leone Economic Growth,

Percent Increase, 2003 – 2013

So, a major test for the political system in the coming years is ensuring not just growth, but more equitable growth to ensure that the yawning inequalities that helped spark and fuel Sierra Leone’s wars are at least somewhat alleviated.  As for the growth part of that equation, rebuilding after the civil war has proven to have provided grist for the economy and the resumption of commerce and relatively safe conditions for agriculture in the countryside has helped subsistence farmers return to their lands.  Peace and a modicum of stability has also proven beneficial for foreign investment and in 2013 GDP surged when an iron mine backed by foreign investors opened.

Other factors, too, have broadly been positive. The government’s debt load is relatively stable and the fiscal outlook generally positive despite having declined the last couple of years due to infrastructure-related loans taken out by the government.  Still, given this debt is going to build badly needed roads, bridges, schools, hospitals, another public goods, this might better be seen as positive debt that will likely increase the country’s growth capacity in coming years. Finally, inflation is relatively stable and the currency, too, has seen stability for the last three years.

What’s more, the end of conflict in neighboring Liberia and West Africa’s more generalized economic boom is creating a situation where, finally, both external and internal factors are all pointed towards a growth trajectory.  Still, the country remains desperately poor and, as the recent Ebola crisis has demonstrated, a place still struggling with a lack of basic public infrastructure that makes life much more dangerous and insecure than in more developed countries.

What is needed now more than ever, then, is continued peace and good government willing to tackle the significant corruption problems that are still holding the country back.  If further reforms can be made to improve the country’s business climate and all while infrastructure continues to be improved, then Sierra Leone’s future might be a very bright one.

 

Jeffrey Cavanaugh holds a Ph.D. in political science with a specialization in international relations from the University of Illinois at Urbana-Champaign. Formerly an assistant professor of political science and public administration at Mississippi State University, he writes on global affairs and international economics for AFK Insider, Mint Press News and BAM South.