SIERRA LEONE

COUNTRY OVERVIEW

LOCATION AND SIZE.

Sierra Leone is located in West Africa, bordering the North Atlantic Ocean, with an area of 71,740 square kilometers (27,925 square miles) and a total coastline of 402 kilometers (250 miles). The country shares a border with Guinea in the north and east and with Liberia in the southeast. In comparative terms, Sierra Leone is in area about half the size of the U.S. state of Illinois. Freetown, the capital city, is located in the western part of the country.

POPULATION.

The population of Sierra Leone was estimated in 2000 to be roughly 5.2 million. Exact figures for the country are impossible to find because a civil war has ravaged the country since 1991. Since the beginning of the war, it is estimated that some 2.5 million people have been displaced as refugees, mostly to Guinea and Liberia. Sierra Leone has an annual population growth rate of 3.6 percent, a birth rate of 45.6 per 1,000, and a death rate of 19.58 per 1,000, according to 2000 estimates.

Most of the population (99 percent) is of indigenous African descent. There are roughly 18 different native African ethnic groups. The largest, the Mendes and the Temnes, each make up roughly 30 percent of the entire population. The other groups account for about 39 percent, with the Krio (or Creole), Lebanese, and Indians making up about 1 percent. The Krio are descendants of freed slaves from Britain, North America, the Caribbean and re-captives from slave ships, who were settled in Freetown when it became a British colony in 1808.

Although English is the official language, it is only spoken by government officials and a limited number of educated Sierra Leoneans. Mende and Temne are spoken in the south and north, respectively. Krio, a mix of English and African languages, is spoken by the Krio, who make up an estimated 10 percent of the population. Although a small percentage of the population speaks Krio, the language is understood by an estimated 95 percent of the population, according to the World Factbook.

The population of Freetown was estimated at over 1.2 million in 1994. Many rural people fled to the city to escape the rebel Revolutionary United Front (RUF) that is responsible for a campaign of terror involving hundreds of random amputations (cutting off of hands, legs, ears, etc.), rapes, murders, and lootings.

OVERVIEW OF ECONOMY

Sierra Leone is an extremely impoverished country with an economy primarily based on agriculture and mining. Although the country is richly endowed with natural resources and minerals—especially diamonds—a decade-long civil conflict has brought most production to a near standstill. Sierra Leone has large areas of fertile land, but the vast majority of farmers engage only in subsistence farming. Of the cash crop agricultural production that continues during the internal conflict, the most significant products are palm kernels, palm oil, cocoa and coffee, and food crops including rice (the main food crop), cassava, corn, millet, and peanuts.

Sierra Leone has vast deposits of diamonds, gold, ru-tile, and bauxite. Diamonds make up the country's principal export. However, diamonds have become more of a curse than a blessing for Sierra Leone. The civil war that has been raging for the past 10 years has mainly been a struggle for control of the diamond fields. Illicit diamond mining has provided money for the rebels to continue the war, and has made it difficult to realize peace in the country.

The country's economy has been steadily declining since the 1960s, with severe stagnation and recession since the early 1980s. Between 1980 and 1990, the World Bank put the country's average GDP growth rate at 0.6 percent, decreasing to-3.3 percent between 1990 and 1996, and falling to-3.6 percent in 1996. The civil war is the main reason for the steady decline. Although a brief ceasefire in the late 1990s brought hope to the economy, the resumption of fighting by 1999 caused more damage to the country. The World Factbook estimated that gross domestic product (GDP) at purchasing power parity was US$2.7 billion in 2000. The disruption of the war has reduced Sierra Leone to one of the poorest countries in the world.

POLITICS, GOVERNMENT, AND TAXATION

Sierra Leone gained its independence on 27 April 1961 as a constitutional monarchy within the British Commonwealth. When its first leader, Sir Milton Margai, passed away in 1964, the competitive political struggles between the Sierra Leone People's Party (SLPP) led by Albert Margai, and the All People's Congress (APC) led by Siaka Stevens, heightened the ethnic cleavages (divisions) within the country. Since independence, the recurrent political divide has been expressed regionally in the Krio descendants of the original Freetown settlers and the indigenous people of the hinterland (interior of the country); the Temne-dominated northern province and the Mende-dominated region of the southeast; an economically powerful immigrant Lebanese and Afro-Lebanese group and the indigenes; and a traditional group of native rulers and a modern, mostly urban, Western-educated elite.

The SLPP held power until the general elections of 1967, which were won by the APC. The 1967 coup d'état (take-over of the government), however, prevented the APC from governing until April 1968 when a counter-coup restored civilian rule. In 1971, Sierra Leone was proclaimed a republic and a new republican constitution was adopted in which the head of state, Siaka Stevens, became executive president. In a new constitution adopted in 1978, Sierra Leone became a 1-party state, although it had been in practice a 1-party state as far back as 1973. In 1985, Siaka Stevens handed over power to the commander of the armed forces, Major-General Joseph Momoh.

As president, Joseph Momoh initially announced sweeping reforms. He also implemented IMF donor prescriptions (policies and regulations) aimed at privatization, attracting foreign investments, and urging more efficient domestic revenue collection. He worked with the IMF to resume stabilization (efforts to strengthen the economy) programs that had been interrupted during the Siaka Stevens regime. Other changes targeted the export of gold, diamonds, and fish products, which severely undermined the privileged position of Lebanese and Afro-Lebanese merchants who had long monopolized these economic activities. For example, foreign firms like LIAT Construction and Finance Corporation were given the authority to redirect production and profits through the formal (legal) economy to the benefit of the entire nation. The Lebanese population and politicians engaged in private mining of diamonds were discouraged from doing so through tougher restrictions and laws. Tougher laws such as longer prison sentences and stiff fines were also passed to curb smuggling of minerals, as well as more vigorous searches by customs officers at airports and at border crossings. The aim was to increase revenue collection by the government, and end the dominance of the informal (illegal) economy of smuggling, corruption, and private mining of minerals by influential groups in the country.

During the early years of President Momoh's tenure, he seemed to have ensured government control of the economy, especially in the area of diamonds. For example, in 1986-87, official diamond exports were 280 percent higher than 1985-86 figures. Similarly, foreign reserve holdings of the Bank of Sierra Leone rose to $7.6 million by the end of 1986, from a mere $196,000 in November 1985 when Momoh assumed the presidency.

The sweeping economic reforms angered the influential business community and resulted in an attempted coup in March 1987. Perhaps due to the fear of another coup attempt, the enforcement of drastic economic reforms slowed down after March 1987. A financial crisis in the 1980s, coupled with misrule and government corruption, as well as the difficulties caused by the effects of a civil war in neighboring Liberia, led to a coup d'état in April 1992. The coup was led by a group of young army officers, who selected 27-year old Captain Valentine Strasser to be the head of state. Captain Strasser led the country's Military Supreme Council of State until he was deposed in January 1996 because of his opposition to national elections that would hand over power to a civilian government.

Ahmed Tejan Kabbah of the SLPP won the elections held in February 1996 and set about forming a government of national unity. Another coup in 1997 overthrew the elected government, which went into exile in Guinea. The rebels then controlled the country until 1998, when the elected government was returned to power with the help of armed forces from Nigeria. Although a peace agreement was signed between the warring parties in 1999, fighting continues between the government and the rebels.

Corruption at all levels has destroyed the effectiveness of taxation in Sierra Leone. Individuals with strong ties to politicians often evade taxation—they end up not paying taxes either because they bribe the tax officials or threaten them with loss of their jobs. The strong political, economic, and ethnic ties based on favoritism, bribery, and corruption, among top members of the ruling political party use up state resources and thereby deprive the bureaucracies of funds for national development. According to William Reno in his book Corruption and State Politics in Sierra Leone, President Stevens is said to have used up to 70 percent of state revenues for "preferred (untaxed) concessions in diamond mining areas to political allies who were essential to his effort to resist local demands for greater revenue allocations."

INFRASTRUCTURE, POWER, AND COMMUNICATIONS

The civil war has disrupted any improvements to the country's infrastructure for nearly a decade. The road system is in serious need of repair, as the lack of resources has led to neglect. The small railway system is used very infrequently because the mines it leads to have been closed. Air transport in Sierra Leone is focused on the International Airport at Lungi, which, prior to the war, served many airlines, such as KLM, British Airways, and the regional airlines.

Electricity supply is very unreliable in Freetown. There are constant outages as the old generators break down. However, it is estimated that the nearly-completed Bumbuna hydroelectric power project will be capable of providing electricity to most of the country. Its completion is dependent on the end of the war.

Sierra Leone's ports have provided important access to trade. The Port of Freetown has been an important center of trade for many countries. The natural harbor at the mouth of the Sierra Leone River is one of the world's finest; it affords 21 square kilometers (8 square miles) of anchorage for large ships. Bonthe and Pepel are 2 additional ports used in the export of goods.

The telephone system in Sierra Leone is not an advanced or extensive system. In 1997, Sierra Leone had roughly 17,000 main telephone lines in use, and in 1999 there were 650 mobile telephones. The telephone system was enhanced by a satellite earth station which offered up to 70 channels. Despite the limited resources available, Sierra Leone has made considerable progress in expanding its links with neighboring countries through the Pan-African Telecommunications Network (PANAFTEL) since independence. External services are handled by Sierra Leone External Telecommunications Services (SLET).

ECONOMIC SECTORS

Sierra Leone, since the mid-1980s, has been considered by the United Nations as the country most seriously affected by adverse economic conditions. Sierra Leone is virtually a failed state characterized by a severe decline in educational, health, transportation, and other services.

The private sector dominates the country's free market economy, with subsistence agriculture contributing the most. Agriculture made up the greatest portion of GDP in 1999: 43 percent, according to the World Fact-book. The country could be self-sufficient in foodstuffs, but the destabilizing effects of the civil war has driven most farmers of cash crops from the land.

Diamond mining is the nation's most important source of foreign currency, but its percentage contribution to total foreign earnings has declined from 65 percent in the mid-1970s to less than 20 percent in the 1990s. The decline is the result of a combination of smuggling, unfavorable prices for developing country commodities, depletion of resources, and the effects of the war. The World Factbook reported that industry contributed 26 percent of GDP in 1999 and services contributed 31 percent.

AGRICULTURE

Since over 60 percent of the population of Sierra Leone is usually engaged in agriculture, during the 1970s efforts were made by the government to increase productivity in food crops and achieve self-sufficiency, especially in rice production. However, the government's emphasis on cash crops, and overall poor agricultural planning tends to relegate agriculture to a secondary role. Rice accounts for approximately 40 percent of the value of the output of food crops. Other food crops include cassava, millet, sorghum, peanuts, beans, and corn, among others. Livestock (cattle, goats, and sheep) and fishing are also of importance to the economy.

According to Background to Sierra Leone, a 1980 publication of the Sierra Leone government, agricultural development was a priority in the 1970s. Accordingly, the government launched a series of Integrated Agricultural Development Projects (IADPs) aimed at maximizing agricultural production in individual regions of the country. The projects included a detailed study of a region's agricultural need and potential, as well as assistance to small farmers. Farmers were encouraged to use fertilizers and equipment together with advice on improved methods of cultivation. However, the economic dislocation of the 1980s, coupled with the war of the 1990s, have effectively undermined progress in agricultural development. Little has been done to improve the sector at the beginning of 2000.

INDUSTRY

MINING. Sierra Leone is endowed with many mineral resources. Prospects for minerals began in 1926 and reserves of iron, gold, diamonds, platinum, chromite, bauxite, and rutile (a titanium ore) were quickly found. The first diamond was discovered in 1930 and mining began 2 years later. Bauxite mining began in 1963 and reserves are estimated at nearly 50 million tons with a high alumina content of 55 to 56 percent. Exploitation of the estimated 170 million tons of rutile started in 1967. The country has one of the world's largest deposits of rutile. At the height of production in the 1970s, Sierra Leone was ranked as the fourth largest producer of gem diamonds in the world.

The country's civil unrest has caused serious problems in the mining sector. All mining permissions have been suspended since January 2000. Although diamonds and rutile have historically played major roles in Sierra Leone's economy, the war has caused legitimate mining production to virtually cease and has increased smuggling of diamonds from the country. In addition, the exploration of potentially valuable amounts of gold and bauxite in the country has been interrupted.

MANUFACTURING.

Sierra Leone's manufacturing sector is one of the smallest in all of Africa. Manufacturing industries are very few and still in a stage of infancy in Sierra Leone due to the lack of financial support available during the civil strife. The manufacturing businesses are mainly raw materials processors and light manufacturers for the domestic market. Items processed are mostly palm kernels and rice. Other manufacturing industries produce a variety of goods including salt, knitwear and other clothing, paint, oxygen, plastic footwear, nails, soap and cosmetics, and a wide range of furniture. Sierra Leone also has a refinery for imported petroleum. The continuing trouble in this sector is indicated in the small number of new manufacturing businesses that opened recently. In 1998, only 0.5 percent of the country's new businesses were involved in manufacturing or construction, according to the Sierra Leone News Agency.

SERVICES

TOURISM.

Prior to the outbreak of the war in 1991, serious tourist development took place. The center of attraction was the Cape Sierra district bordered by Lumley Beach. Many modern hotels catered to the tourist population. In 1978, the Bintumani Hotel was built, equipped with 300 beds and a conference center. The Cape Sierra Hotel and the Mammy Yoko Hotel are also located in the Lumley Beach area. Within the city, the main hotels are Brookfields and the Paramount. However, many of these hotels have been damaged by the war or have been transformed as lodgings for soldiers.

Sierra Leone is also home to historic Bunce Island, once a slave trading post. Freetown itself is part of the Freetown Peninsula endowed with unspoiled beaches, nature trails, and historic buildings. The number of tourists has been dramatically reduced because of the war.

FINANCIAL SERVICES.

Sierra Leone was chosen as the site for the West African Clearing House, which was established in Freetown in 1975. Banking was first introduced to the country in 1898 by the then Bank of West Africa, which later became the Standard Bank of Sierra Leone. It was followed in 1917 by Barclays. The nation's first indigenous commercial bank, the Sierra Leone Commercial Bank, Ltd., was opened in 1973 and is entirely government-owned. Sierra Leone's banking system is supervised by the Bank of Sierra Leone, which serves as the central bank and therefore controls, maintains, and regulates the nation's money supply and foreign reserves.

Of major importance to the nation's economic growth is the National Development Bank, founded in 1968. Its function is to provide finance in the form of loans or equity capital to many development projects in agriculture, agro-based industry, and industry. However, the ongoing civil strife, especially the 1997 coup d'état that toppled the civilian government of President Tejan Kabbah, seriously dislocated these financial services. Barclays Bank, for example, ceased operations in the country, and the Treasury Building was severely damaged by fire.

RETAIL.

Sierra Leone is a land of petty traders and street hawkers. Many indigenous people engage in retail with items as varied as food commodities, clothing, and building materials, among others. According to Background to Sierra Leone, over 8 percent of the country's working population is engaged in retail and wholesale distribution.

INTERNATIONAL TRADE

Over the years, the value of Sierra Leone's exports has steadily declined as the value of imports has risen, forcing the country to bear the burden of an increasing trade deficit. In 1998 exports were valued at $17 million, and imports totaled $92 million. The World Fact-book estimated that exports had increased to US$65

million and imports to US$145 million by 2000. Chief trading partners for exports are the United States, Britain, Belgium, Italy, the Netherlands, and Germany. Leading sources for imports are the United States, Britain, Italy, Nigeria, the Netherlands, Indonesia, and Germany. Despite some successful efforts to increase the output of agricultural productivity and diversify exports, Sierra Leone's balance of visible trade has still been unfavorable. The balance of trade has also suffered from an increase in short-term debts, and the deterioration of terms of trade related to the sharp increases in the price of petroleum products and manufactured goods from the industrial world. These increases exceeded those of agricultural produce, diamonds, and bauxite.

Prior to the war, the domestic market was favored by the growing tourist trade, while the policy of non-discriminatory tariffs served the interests of consumers by keeping prices relatively low. The National Trading Company set up in 1971 with government financial assistance, also ensured the maintenance of competitive prices on the home market, and the promotion of indigenous enterprise in commerce.

MONEY

The value of the leone has been declining since the early 1980s. The leone was formerly linked to the pound sterling. Its value is now determined largely by the export earnings of the country. Since the country does not earn a great deal from its external trade, the IMF and the World Bank constantly encourage the country to reduce government spending in order to maintain a balanced budget. The Sierra Leone economy has undergone several IMF economic and financial policies aimed at improving the value of the leone in relation to other currencies of the world. A stronger leone is supposed to translate into a stronger economy. However, the outcome has often been high inflation (a weak currency in terms of exchange rates) and a great deal of leone fluctuations, mostly downwards.

POVERTY AND WEALTH

Sierra Leone, like many developing states, is a land of gaping inequalities where national income is concerned. According to The World Development Report, 1999-2000, in 1989 the richest 10 percent of the population had 43.6 percent of the national income, whilst the poorest 20 percent of the population had 1.1 percent of the national income. The access to national income and resources tends to be heavily weighted in favor of ruling party leaders, cabinet ministers, and those with political ties to the president.

According to Earl Conteh-Morgan and Mac Dixon-Fyle, authors of Sierra Leone at the End of the Twentieth Century, by the mid-1980s, the level of poverty in the country was such that "state hospitals and clinics suffered heavily through a lack of supplies, modern equipment, and motivated employees. This sector also suffered nonpayment of inadequate government salaries. The consequence was that many officials were forced to corruption diverting drugs and medical equipment or putting them into private use." In other words, Sierra Leone, by the mid-1980s was already a failed state. Central government ministers and bureaucracies simply centralized and monopolized important functions, and thereby public revenues. In the process, they deprived the local authorities of adequate revenues and responsibilities necessary

to nurture grassroots local development and a democratic culture. The lack of funds and the continued centralization of authority by the central government meant that such basic but necessary functions as garbage collection, maintenance of public toilets, and supervision and maintenance of public markets, were eventually abandoned. Even Freetown, the capital, suffered a decrease in the scope of service deliveries. In the 1980s, it was described by many observers as increasingly developing into overgrown and overcrowded shantytowns with crumbling buildings, open drains, and deteriorating, chaotic roads.

By the late 1980s and long before the eruption of civil strife, political and economic deterioration in Sierra Leone had become extreme. Between 1980 and 1985 incomes per capita declined by an average of roughly 6 percent per annum. The inflation rate reached 80 percent by the end of the 1980s. Loss of morale and significant economic deprivation was the consequence for government workers, teachers, and others dependent on government salaries. Often deprived of salaries for months on end, many resorted to informal economic activities as a way to supplement their meager or nonexistent incomes. The most popular form of economic activity became petty trading for the mass of people, and the more influential obtained import licenses and involved their relatives in trading activities. Private vehicles were often used for commercial purposes, either as taxis or to transport goods.

Deterioration and dilapidation was not just confined to the roads and streets, but were found in the classrooms as well. Teachers lacked even chalk for writing on the board. Windows, roofs, and furniture not only deteriorated, but were, in many schools, absent. As a result, the quality of education decreased substantially from the primary level to college. The consequence for higher education has been a massive brain drain of lecturers and school teachers to neighboring African states, to international organizations, and to the West.

WORKING CONDITIONS

Since the early 1980s, the Sierra Leone labor force has been shrinking due to a combination of factors such as worsening economic conditions that affected most developing countries in the 1980s, the decline in the price of raw materials in the world market, misrule in the form of embezzlement of funds by government officials, and the effects of IMF conditions such as the freeze on hiring and the laying off of thousands of civil servants, in order to reduce the size of government.

In 1981, before the downward slide into massive unemployment, the country had an estimated 1.369 million workers with most found in agriculture (65 percent), followed by industry (19 percent), and services (16 percent). However, in 1985 there were only 65,000 wage earners. The struggle for good working conditions by trade union activists has been an integral part of relations between government and labor. Trade unionism began in Sierra Leone as early as 1914 with the formation of a union among temporary customs workers. In 1971 an act of Parliament guaranteed the right of workers to industrial action upon due notification. According to law, minimum pay rates and maximum hours should be regulated every 2 years and the government is committed to upholding the right of workers to form unions and bargain for better pay and good working conditions. Politicians have often undermined the effectiveness of labor unions through co-optation of the leaders—bribing the leaders, or enticing them with better job offers, so that they drop their demands for pay raises and better working conditions. In the early 1980s, for example, both the leaders of the Sierra Leone Labor Congress (SLLC), and the president of the Sierra Leone Teachers' Union (SLTU) were appointed members of parliament in order to separate them from the unions, which would, in turn, end their activism. Working conditions are still far from ideal. Government employees get meager salaries, and often go unpaid for several months. The uncertainty of government jobs means that many workers engage in petty trading in order to survive.

COUNTRY HISTORY AND ECONOMIC DEVELOPMENT

1495. Portuguese establish a fort on the site of modern Freetown, a base for traders in gold, ivory, pepper, and slaves.

1672. British Royal African Company establishes 2 trading depots, 1 on Bunce Island and 1 on York Island.

1787. The first settlers (freed slaves) arrive from Britain and establish a self-governing "Province of Freedom."

1808. Freetown becomes a British colony.

1896. The British impose a protectorate on the hinter-land of the country (the interior of the country was declared an overseas territory of the British Crown).

1926. Prospecting for minerals starts, and by 1930 employs over 16,000 workers.

1949. Sierra Leone Produce Marketing Board (SLPMB) set up to exert government control over agricultural marketing and production.

1960. Development of Industries Act passes as a result of the government's construction of the Wellington Industrial Estate in the suburbs of Freetown.

1961. Sierra Leone becomes an independent nation within the British Commonwealth.

1963. Central Bank of Sierra Leone set up.

1971. Sierra Leone becomes a republic, casting off the last vestige of colonialism, with Siaka Stevens as the first executive president.

1978. Sierra Leone becomes a republican 1-party state on 14 June 1978, with the All People's Congress (APC) as the sole party.

1980s. The continent-wide African economic crisis affects Sierra Leone, adversely resulting in high inflation and chronic unemployment.

1991. The internal economic dislocation (massive unemployment and high inflation), coupled with the spillover of the Liberian civil war, plunges Sierra Leone into civil strife perpetuated by the Revolutionary United Front (RUF) rebels.

1999. The RUF and the Sierra Leone government sign the Lome Peace Accord that allows the deployment of over 12,000 UN peacekeeping troops in the country.

2000. Despite the peace accord, internal fighting continues.

FUTURE TRENDS

Sierra Leone entered the last decade of the 20th century as a failed state, culminating in the outbreak of civil strife in 1991. The anarchy has resulted in massive suffering, displacement of people, and deaths in the hundreds of thousands. However, if the Lome Peace Accord is successfully implemented and future governments manage the mineral and agricultural wealth of the country wisely, Sierra Leone could become another Singapore. Britain is currently engaged in training a new army and a new police force for the country. Although the United Nations' peacekeeping operation has experienced some difficulties, including some of their troops being taken hostage by rebels, it is still hoped that the peacekeeping mission will help to bring an end to the civil strife.

DEPENDENCIES

Sierra Leone has no territories or colonies.

BIBLIOGRAPHY

Background to Sierra Leone. Freetown: State House, 1980.

Conteh-Morgan, Earl, and Mac Dixon-Fyle. Sierra Leone at the End of the Twentieth Century: History, Politics, and Society. New York: Peter Lang, 1999.

Human Rights Watch. <http://www.hrw.org>. Accessed December 2000.

Reno, William. Corruption and State Politics in Sierra Leone. New York: Cambridge University Press, 1995.

Sierra Leone News Agency (SLNA). Business Page: Trade and Industry Overview. <http://www.sierra-leone.gov.sl/business/trade_overview1.htm>. Accessed October 2001.

United Nations High Commissioner for Refugees. Background Paper on Refugees and Asylum Seekers From Sierra Leone. Geneva: UNHCR, 1998.

U.S. Central Intelligence Agency. The World Factbook 2001. <http://www.odci.gov/cia/publications/factbook/index.html>. Accessed October 2001.

—Earl Conteh-Morgan

CAPITAL:

Freetown.

MONETARY UNIT:

Leone (Le). One leone equals 100 cents. Leone notes are available in denominations of 1, 2, 5, 10, 20, 50, 100, 500, 1,000, 2,000, and 5,000. Coins are in denominations of Le50 and 100.

CHIEF EXPORTS:

Diamonds, rutile, cocoa, coffee, fish.

CHIEF IMPORTS:

Foodstuffs, machinery and equipment, fuels and lubricants, chemicals.

GROSS DOMESTIC PRODUCT:

US$2.7 billion (purchasing power parity, 2000 est.).

BALANCE OF TRADE:

Exports: US$65 million (f.o.b., 2000 est.). Imports: US$145 million (f.o.b., 2000 est.).