Private sector development
Sierra Leone's economy has recovered strongly since the restoration of peace, with real annual GDP growth averaging over 5% in the last ten years. To a large extent, this impressive rate of economic growth is caused by a return to normality, i.e. rehabilitation of agricultural land and economic infrastructures. Growth has also been possible thanks to the government efforts to maintain a stable macro-economic environment over the years and to progressively invest more public resources into the productive sectors (energy, roads, agriculture).
The productive sector in Sierra Leone is mainly structured around agriculture, which accounts for nearly half of the GDP, the mining industry (bauxite, rutile, iron ore, diamond, gold) which accounts for 20 percent of GDP and 80% of exports, and services (mainly telecommunications and finance) accounting for 28 percent of GDP. Private sector exports are highly concentrated and generally limited to a few major products in capital intensive natural resource industries, mainly diamonds.
The need for a diversification of the Sierra Leonean economy is widely acknowledged to ensure lesser reliance on a few resource-based (mining, agriculture) and non-traded sectors (transport and communications) which are minor providers of employment in the country. Moreover, the country enjoys a wide number of resources that the Government expects private investors to harness including the country's tourism potential, rich mineral resources, arable land and favourable rainfalls and ideal location at the crossroads of major trade routes.
The Government's Poverty Reduction Strategy Paper for 2009-2011 promotes the development of the private sector as a prerequisite for growth. In this context, the Government of Sierra Leone has committed to remove existing barriers to investment and create an enabling environment by improving the country's physical infrastructure, strengthening the legal and regulatory framework (including its tax and trade law and policies), promoting business support services and improving access to finance especially for Small and Medium Enterprises. The Government's commitment towards a private sector-led growth is also formalised in a Private Sector Development Strategy that the European Union as well as other donors in Sierra Leone have committed to support through their development aid programmes.
The Government efforts to improve the business climate are reflected in the "Doing business" survey published yearly by the World Bank. Between 2007 and 2010, Sierra Leone jumped 20 places in the doing business chart reflecting efforts done in streamlining procedures to open and register a business or protections offered to investors. Despite the reforms undertaken, registering a property or dealing with construction permits remain major challenges in Sierra Leone as in many countries around West Africa. The Government has committed to tackle these challenges through regulatory reforms in the coming months.
In 2008, the Government has established a business facilitation agency the Sierra Leone Investment and Exports Promotion Agency to help investors find their way in the Sierra Leone administration and to develop their business activities by providing advisory services.
Under the 10th EDF, the European Union intends to support SLIEPA's expansion by providing institutional support and technical assistance (€2 million). The European Union will also continue to support the Ministry of Trade and Industry by providing technical assistance.
The European Union also offers access to a number of financial facilities and technical assistance schemes aimed at supporting the private sector as well as strengthening financial or policy-making institutions that play a role in the development of the private sector, such as Bizclim, the Center for the Development of Enterprise or the Investment facility.