Sierra Leone – its economic future – 2020
A Sustainable Future for ALL
The World Bank – Snap Shot -2015
Macroeconomic Context
Real gross domestic product (GDP) in 2014 was 7.1%, and 1.0% excluding iron ore production, compared to the pre-Ebola forecast of 11.3% and 6%. The Ebola Virus Disease (EVD) adversely affected several sectors of the economy, coupled with the closure of the mining sector due to decline in international market prices.
Prospects for 2015 are uncertain being dependent on EVD containment and resumption of iron ore production, real GDP expected to contract by between 13% and 24%, depending on iron ore production, with the non-iron ore economy shrinking by 1 percent.
Moreover, the recent suspension of production by Addax Bioenergy has also added to the contraction in the economy over the second half. The economy is now projected to contract by a very substantial 24% in 2015. The effects of iron ore related closures and that of Addax could have devastating consequences on jobs and by extension families.
Over the first half of 2015 fiscal flows have been kept relatively stable and maintained below IMF programme parameters.
Expenditures have been contained over the first half of 2015, but this has been achieved in part through the banking of commitments leading up to the end of the first half.
The deterioration in mineral exports and higher imports in 2015 is likely to impact adversely on the trade balance for 2015 with a sharp reduction in the March quarter already evident.
The basic structure of life in Sierra Leone
Sierra Leone's economy is predominantly agricultural, with about half of its workers engaged in subsistence farming. The principal food crops are rice, cassava, corn, millet, and peanuts. The leading cash crops, most of which are exported, are coffee, cocoa, palm kernels, and palm oil. Poultry, cattle, sheep, pigs, and goats are raised. The fishing industry is also important.
Agriculture in Sierra Leone is a significant part of the economy of Sierra Leone with it accounting for over 50 percent national Gross Domestic Product (GDP).. Two-thirds of the population of Sierra Leone are involved in subsistence agriculture.
Sierra Leone is not self-sufficient in food. Food is one of Sierra Leone's biggest imports
Sierra Leone’s exports have been increasing after the UN sanctions were lifted in late 2010. Sierra Leone main exports are diamonds (63 percent of total exports), cocoa (22 percent) and coffee. Sierra Leone main export partners are: Belgium, Netherlands, China and United States.
Sierra Leone Trade Balance
As of 2014 Sierra Leone had a negative trade balance of $218M in net imports. As compared to their trade balance in 1995 when they still had a negative trade balance of $113M in net imports.
In 2014 Sierra Leone imported $2.36B, making it the 156th largest importer in the world. During the last five years the imports of Sierra Leone have increased at an annualised rate of 31.2%, from $606M in 2009 to $2.36B in 2014. The most recent imports are led by Refined Petroleum which represent 32.4% of the total imports of Sierra Leone, followed by Rice, which account for 4.77%.
Imports
Foodstuffs, machinery and equipment, fuels and lubricants, chemicals
Imports - partners:
China 13.2%, US 7.1%, India 6.8%, UK 6.6%, Belgium 6.1%, Netherlands 4.7%, South Africa 4.6% (2014)
Exports:
$533.3 million (2015 est.)
$2.086 billion (2014 est.)
Exports - commodities:
Diamonds, rutile, cocoa, coffee, fish
Exports - partners:
China 80%, Belgium 8.8% (2014)
GDP is: US$ 6billion (2015estimate)
GDP - composition, by sector of origin:
Agriculture: 66.8%
Industry: 3.4%
Services:29.8% (2015 est.)
- Agriculture - products:
Rice, coffee, cocoa, palm kernels, palm oil, peanuts; poultry, cattle, sheep, pigs; fish
Industries:
Diamond mining; iron ore, rutile and bauxite mining; small-scale manufacturing (beverages, textiles, cigarettes, footwear); petroleum refining, small commercial ship repair
Sierra Leone, on the west coast of Africa, covers an area of about 74,000 km2 andborders on Guinea and Liberia. The country is well endowed with natural resources. About 45 per cent of the people are under 15 years of age and 60 per cent are less than 50. According to the World Bank’s 2007 estimate, the country has a total population of about 5.8 million and the population is growing at an annual rate of 1.8 per cent.
The country has nine major river basins and three minor ones. Surface water is abundant. During the year a six-month rainy season with overabundant precipitation follows a six-month dry season. The country is rich in diamonds, and mining is highly developed.
Agriculture
Agriculture is a key economic activity. According to World Bank estimates accounts for more than 44 per cent of gross domestic product (GDP). About 74 per cent of the land is cultivable and there is considerable potential for agricultural development. The sector currently employs 75 per cent of the country’s labour force.
Uplands account for 80 per cent of the total land area and are relatively low in fertility. The lowlands, which cover about 20 per cent of total land area, comprise fertile swamps and they have considerable agricultural potential if adequately managed. Traditionally up to 15 different crops are grown in mixed stands in one season. Rain-fed upland rice is the main crop.
Demographics
Population Estimates
year / population est.1950 / 1,944,001
1960 / 2,181,701
1970 / 2,514,151
1980 / 3,086,406
1990 / 3,931,208
2000 / 4,060,709
2010 / 5,775,902
2020 / 7,160,373
2025 / 7,874,195
2050 / 11,391,787
2075 / 13,834,191
2100 / 14,489,326
Source: UN - WPP 2015 Revision (medium).
For a Province by Province breakdown of population, visit:
Social Indicators
Population growth rate (average annual %) / 2010-2015 / 1.9
Urban population growth rate (average annual %) / 2010-2015 / 2.8
Rural population growth rate (average annual %) / 2010-2015 / 1.3
Urban population (%) / 2014 / 39.6
Population aged 0-14 years (%) / 2014 / 41.2
Population aged 60+ years (females and males, % of total) / 2014 / 4.5/4.2
Sex ratio (males per 100 females) / 2014 / 98.7
Life expectancy at birth (females and males, years) / 2010-2015 / 45.6/45.1
Infant mortality rate (per 1 000 live births) / 2010-2015 / 116.7
Fertility rate, total (live births per woman) / 2010-2015 / 4.8
Contraceptive prevalence (ages 15-49, %) / 2007-2013 / 16.6
International migrant stock (000 and % of total population) / mid-2013 / 96.4/1.6 / Including refugees.
Refugees and others of concern to UNHCR / mid-2014 / 2429
Education: Government expenditure (% of GDP) / 2007-2013 / 2.9
Education: Primary-secondary gross enrolment ratio (f/m per 100) / 2007-2013 / 88.8/91.6
Education: Female third-level students (% of total) / 2007-2013 / 28.8
Intentional homicide rate (per 100,000 population) / 2008-2012 / 1.9
People and the Environment
Threatened species / 2014 / 156Forested area (% of land area) / 2012 / 37.2
Proportion of terrestrial and marine areas protected (%) / 2014 / 3.8
Population using improved drinking water sources (%) / 2012 / 60.0
Population using improved sanitation facilities (%) / 2012 / 13.0
CO2 emission estimates (000 metric tons and metric tons per capita) / 2011 / 898/0.2
Energy supply per capita (Gigajoules) / 2012 / 11.0
The Health of the Nation
Statistics
Total population (2015) / 6,453,000Gross national income per capita (PPP international $, 2013) / 1
Life expectancy at birth m/f (years, 2015) / 49/51
Probability of dying under five (per 1 000 live births, 0) / not available
Probability of dying between 15 and 60 years m/f (per 1 000 population, 2013) / 444/423
Total expenditure on health per capita (Intl $, 2013) / 228
Total expenditure on health as % of GDP (2013) / 11.8
The Human Development Index
Sierra Leone’s HDI value for 2014 is 0.413— which put the country in the low human development category—positioning it at 181 out of 188 countries and territories. Between 1980 and 2014, Sierra Leone’s HDI value increased from 0.268 to 0.413, an increase of 54.0 percent or an average annual increase of about 1.28 percent.
Between 1980 and 2014, Sierra Leone’s life expectancy at birth increased by 10.3 years, mean years of schooling increased by 2.1 years and expected years of schooling increased by 3.9 years. Sierra Leone’s GNI per capita increased by about 54.4 percent between 1980 and 2014.
Sierra Leone’s 2014 HDI of 0.413 is below the average of 0.505 for countries in the low human development group and below the average of 0.518 for countries in Sub-Saharan Africa. From Sub-Saharan Africa, countries which are close to Sierra Leone in 2014 HDI rank and to some extent in population size are Guinea and Burundi, which have HDIs ranked 182 and 184 respectively
Inequality-adjusted HDI (IHDI)
The HDI is an average measure of basic human development achievements in a country. Like all averages, the HDI masks inequality in the distribution of human development across the population at the country level. The 2010 HDR introduced the IHDI, which takes into account inequality in all three dimensions of the HDI by ‘discounting’ each dimension’s average value according to its level of inequality. The IHDI is basically the HDI discounted for inequalities. The ‘loss’ in human development due to inequality is given by the difference between the HDI and the IHDI, and can be expressed as a percentage. As the inequality in a country increases, the loss in human development also increases. We also present the coefficient of human inequality as a direct measure of inequality which is an unweighted average of inequalities in three dimensions.
Sierra Leone’s HDI for 2014 is 0.413. However, when the value is discounted for inequality, the HDI falls to 0.241, a loss of 41.7 percent due to inequality in the distribution of the HDI dimension indices. Guinea and Burundi show losses due to inequality of 36.5 percent and 32.6 percent respectively. The average loss dueto inequality for low HDI countries is 32.0 percent and for Sub-Saharan Africa it is 33.3 percent. The Human inequality coefficient for Sierra Leone is equal to 40.0 percent.
The Gender Inequality Index
The 2010 HDR introduced the GII, which reflects gender-based inequalities in three dimensions – reproductive health, empowerment, and economic activity. Reproductive health is measured by maternal mortality and adolescent birth rates; empowerment is measured by the share of parliamentary seats held by women and attainment in secondary and higher education by each gender; and economic activity is measured by the labour market participation rate for women and men. The GII can be interpreted as the loss in human development due to inequality between female and male achievements in the three GII dimensions.Sierra Leone has a GII value of 0.650, ranking it 145 out of 155 countries in the 2014 index. In Sierra Leone, 12.4 percent of parliamentary seats are held by women, and 10.0 percent of adult women have reached at least a secondary level of education compared to 21.7 percent of their male counterparts. For every 100,000 live births, 1100 women die from pregnancy related causes; and the adolescent birth rate is 100.7 births per 1,000 women of ages 15-19. Female participation in the labour market is 65.7 percent compared to 69.0 for men.
In comparison, Burundi is ranked at 109 on this index.
Gender Development Index (GDI)
In the 2014 HDR, HDRO introduced a new measure, the GDI, based on the sex-disaggregated Human Development Index, defined as a ratio of the female to the male HDI. The GDI measures gender inequalities in achievement in three basic dimensions of human development: health (measured by female and male life expectancy at birth), education (measured by female and male expected years of schooling for children and mean years for adults aged 25 years and older); and command over economic resources (measured by female and male estimated GNI per capita. Country groups are based on absolute deviation from gender parity in HDI. This means that the grouping takes into consideration inequality in favour of men or women equally.
The GDI is calculated for 161 countries. The 2014 female HDI value for Sierra Leone is 0.370 in contrast with 0.454 for males, resulting in a GDI value of 0.814. In comparison, GDI values for Guinea and Burundi are 0.778 and 0.911 respectively.
Multidimensional Poverty Index (MPI)
The 2010 HDR introduced the MPI, which identifies multiple deprivations in the same households in education, health and living standards. The education and health dimensions are each based on two indicators, while the standard of living dimension is based on six indicators. All of the indicators needed to construct the MPI for a household are taken from the same household survey. The indicators are weighted to create a deprivation score, and the deprivation scores are computed for each household in the survey. A deprivation score of 33.3 percent (one-third of the weighted indicators), is used to distinguish between the poor and non-poor. If the household deprivation score is 33.3 percent or greater, the household (and everyone in it) is classified as multi-dimensionally poor. Households with a deprivation score greater than or equal to 20 percent but less than 33.3 percent are near multidimensional poverty. Finally, households with a deprivation score greater than or equal to 50 percent live in severe multidimensional poverty.
The most recent survey data that were publically available for Sierra Leone’s MPI estimation refer to 2013. In Sierra Leone 77.5 percent of the population (4,724 thousand people) are multi-dimensionally poor while an additional 14.6 percent live near multidimensional poverty (0,890 thousand people). The breadth of deprivation (intensity) in Sierra Leone, which is the average of deprivation scores experienced by people in multidimensional poverty, is 53.0 percent. The MPI, which is the share of the population that is multi-dimensionally poor, adjusted by the intensity of the deprivations, is 0.411. Guinea and Burundi have MPIs of 0.425 and 0.442 respectively.
The multidimensional poverty headcount is 20.9 percentage points higher than income poverty. This implies that individuals living above the income poverty line may still suffer deprivations in education, health and other living conditions.. The contributions of deprivations in each dimension to overall poverty complete a comprehensive picture of people living in multidimensional poverty in Sierra Leone. Figures for Guinea and Burundi are also shown in the table for comparison.
Rural population (2014) 1 2 3 4
Employment to population ratio (% ages 15 and older) / 65.2 / 63.9 / 60.7 / 65.7
Labour force participation rate (% ages 15 and older) / 67.3 / 68.1 / 64.3 / 70.9
Female / 65.7 / 57.2 / 49.5 / 65.4
Male / 69.0 / 79.1 / 78.7 / 76.6
Share of employment in agriculture (% of total employment) / 68.5 / -- / 36.9 / 59.0
Share of employment in services (% of total employment) / 25.0 / -- / 39.1 / 30.0
Labour force with tertiary education (%) / -- / -- / -- / --
Vulnerable employment (% of total employment) / 92.4 / -- / 54.0 / --
Total unemployment (% of labour force) / 3.4 / 9.7 / 5.6 / 11.9
Long term unemployment (% of labour force) / -- / -- / -- / --
Youth unemployment (% of youth labour force) / 5.2 / 9.8 / 14.6 / 13.5
Youth not in school or employment (% ages 15-24) / -- / -- / -- / --
Labour productivity: output per worker (2011 PPP $) / 3,093 / -- / -- / --
Child labour (% ages 5-14 years) / 26.0 / 23.8 / 14.5 / 24.7
Domestic workers (% of total employment)
Female / 0.5 / -- / -- / --
Male / 0.4 / -- / -- / --
Working poor, PPP $2 per day (% of total employment) / 82.8 / 67.5 / 33.8 / 70.5
Unemployment benefits recipients (% of unemployed ages 15-64) / 0.0 / 0.0 / 2.5 / 2.3
Mandatory paid maternity leave (days) / 84.0 / 85.0 / 99.0 / 90.0
Old age pension recipients (% of statutory pension age population) / 0.9 / 9.8 / 51.0 / 21.9
Internet users (% of population) / 2.1 / 16.0 / 31.9 / 19.3
Mobile phone subscribers (per 100 people) / 76.7 / 65.6 / 91.2 / 71.1
Table Key1. Sierra Leone, 2. Low HDI countries, 3. Developing countries, 4. Sub-Saharan Africa.
Number of rural poor (million, approximate) (2014) / 2,478,364.
Who are Sierra Leone’s poor rural people and where are they? - based on:
The country’s poorest people are landless people and small-scale farmers, particularly women, who head rural households.
The rural poor depend largely on agriculture, fishing, forestry, and related small-scale industries and services.
The rural poor are not a homogeneous group. One important way to classify the rural poor is according to their access to agricultural land: cultivators have access to land as small landowners and tenants, and non-cultivators are landless, unskilled workers.
Cultivators, who form the bulk of the rural poor in developing countries, are directly engaged in producing and managing crops and livestock. Since these households cannot sustain themselves on the small parcels of land they own or cultivate, they provide labour to others for both farm and non-farm activities inside and outside their villages. Some members of these households migrate to towns or cities on either a rotational or a long-term basis. In many countries, both small landowners and tenants are under increasing pressure to get out of the agriculture sector altogether.
Non-cultivators are perhaps the poorest among the rural poor. Their numbers have been rising rapidly because of the natural increase in population and resource less rural dwellers. These workers depend on seasonal demand for labour in agriculture and in rural informal, small-scale industries and services. The landless rural workers are vulnerable to fluctuations in the demand for labour, wage rates, and food prices.
Rural womentend to suffer more than rural men. Their poverty and low social status in most societies is a major contributor to chronic poverty. Substantial evidence from many countries shows that focusing on the needs and empowerment of women is one of the keys to human development.
What Do the Poor Own?
The economic conditions faced by the rural poor are affected by a variety of assets (and the returns on them) held at the household, community, and supra-community levels. The poor's physical assets include natural capital (private and common property rights in land, pastures, forest, and water), machines and tools and structures, stocks of domestic animals and food, and financial capital.
Their human assets are the labour pools—comprising workers of varying ages, genders, skills, and health—in the households and communities. Their infrastructural assets are publicly and privately provided transport and communications, access to schools and health centres, storage, potable water, and sanitation. Their institutional assets include their legally protected rights and freedoms and the extent of their participation in decision making in households and communities, as well as at the supra-community level. The first two categories of assets are largely regulated through formal and informal networks among individuals and communities. Most rural people, particularly women and those in landless households, are greatly handicapped by inadequate assets and the low and volatile returns on them.
The differences among the rural poor are more clearly reflected in their links to the economy, which determine how they use their assets and participate in production. All of the rural poor are engaged in the production of both tradable and non-tradable goods and services. Artisans and unskilled workers provide many non-tradable services and some non-tradable products (such as staple foods) that small cultivators also produce. Only cultivators, however, have access to small parcels of land through ownership or (sharecropping) tenancy. They are also the only groups of poor people who own or rent physical capital such as tools, implements, and machinery. Artisans and small-scale farmers have only limited amounts of physical capital. They have only limited access to financial capital and acquire it largely through informal agents or institutions, except for tenants, who can use their landlords as conduits to formal credit. Borrowed capital is often costly and is used to maintain consumption during hard times or to buy supplies and equipment needed for farming. Households' labour is used both within the family—for work done by unpaid family members—and to earn the wages paid to landless, unskilled workers in farm and nonfarm activities.