While Sierra Leone offers U.S. firms opportunities in many sectors, the market presents some daunting challenges including difficult macroeconomic conditions, a lack of skilled labor, poor quality and limited infrastructure, and pervasive corruption at all levels of government. Clearance of goods at ports can be slow and highly bureaucratic, and there are other limitations including a lack of intellectual property protections, restrictions on land access, and local content requirements.

U.S. firms must contend with the difficult macroeconomic landscape in Sierra Leone.  Inflation has continued to rise due to increasing commodity prices, debt-fueled government spending, loose macroeconomic policies, and sharp currency depreciation. These challenges have been compounded by external shocks like the COVID-19 pandemic and the Russian invasion of Ukraine, which continue to impact the global supply chain. The soaring cost of living, food insecurity, the high risk of debt distress, and the currency depreciation continue to undermine the economy’s stability. Even following a redenomination of the Leone in 2022 intended to strengthen the currency, the Leone depreciated 34.2 percent against the dollar from September 2022 to September 2023. Limited capital market and portfolio investment opportunities exist, and though the Sierra Leone Stock Exchange is over a decade old, it remains relatively inactive.

Sierra Leone’s labor force is informal, unregulated, and needs more specialized skills, with about 90 percent of laborers working in the informal sector, predominantly in subsistence or other small-scale agriculture. Businesses identify significant shortfalls in skilled professionals due to limited vocational training, and foreign investors find recruiting and training enough workers challenging.

Poor quality and limited infrastructure also pose significant challenges to investment, domestic travel, inland transport, and routine operations. Efforts to construct major roads leading to district headquarter towns and rehabilitate feeder roads linking agricultural suppliers with urban markets are ongoing.  Access to electricity and energy is limited and unreliable.  The government continues to look for funding and private public partnership opportunities for the construction of major infrastructure projects, including public utilities and telecommunications. 

Corruption is widespread in Sierra Leone and is particularly endemic in government procurement, the award of licenses and concessions, regulatory enforcement, customs clearance, and dispute resolution, though the Anti-Corruption Act of 2008 makes it criminal to offer, solicit, or receive a bribe.  In 2022, Sierra Leone ranked 110 out of 180 countries in the Transparency International Corruption Index, having improved somewhat since 2019 when the Government of Sierra Leone passed an Anti-Corruption Amendment Act, which increased the powers of the Anti-Corruption Commission (ACC), which is mandated to investigate and prosecute acts of corruption by individuals and companies. It also provides an incentive scheme for informants and whistleblowers, protects witnesses, and empowers the ACC commissioner to prevent contracts that are not in the national interest.  Sierra Leone signed the UN Convention against Corruption in 2003 and ratified it in 2004. The country is not a party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

Though the customs department has automated its clearance procedure to simplify and reduce clearance time, and the major seaport was extended to accommodate more vessels, clearing goods through the Freetown port remains a lengthy and bureaucratic process.  Some firms find engaging a clearing agent to be beneficial to expediting the process.

Challenges persist in accessing land. Investments outside the capital city require special attention to local community requirements, particularly land tenure, which is subject to traditional leaders’ influence and authority. There are two systems of land tenure in Sierra Leone. The Western Area, which includes Freetown, operates under a freehold system. The provincial areas outside the Western Area use a leasehold system where local communities retain ultimate control. Foreigners cannot own land under either system but can lease land to a maximum size of 15,000 hectares for agriculture and 10,000 hectares for mining for up to 50 years. In the provinces, land committees have oversight responsibility over land, and investors wishing to invest in any land must comply with the processes and procedures set out in the Customary Land Rights Act of 2022.

Sierra Leone is a member of the World Intellectual Property Organization and the African Regional Intellectual Property Organization, the common intellectual property body for English-speaking African countries. Sierra Leone is bound by the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) but has yet to ratify the WIPO Copyright Treaty or the Berne Convention to Protect Literary and Artistic Rights.  Intellectual property laws date to the colonial era, are incomplete, and protection is limited. Efforts to update the country’s legal framework have included the Copyright Act of 2011, the Patent and Industrial Design Act of 2012, and the Trademark Act of 2014. Even with these updated acts, legal protection and enforcement is minimal.

While these issues do not necessarily reflect the discriminatory treatment of U.S. interests, they underscore the challenges facing all foreign firms operating in Sierra Leone. The legal system provides a venue to enforce property and contract rights, and foreign investors have equal access to the judicial system, but it is considered slow and often subject to financial and political influence.   The Constitution protects property rights, but the rule of law is fragile and uneven across the country. Property management procedures are lengthy, unreliable, expensive, and do not guarantee the protection of the property user and or owner’s rights. Further, the local content act of 2016 requires investors to utilize local goods and services in place of imported goods, promote the employment of citizens, and develop the human capacity of these citizens through training.

Sierra Leone has few specific restrictions, controls, fees, or taxes on foreign ownership of companies. The Mines and Mineral Development Act regulates mining activities and protects the environment and the interests of local communities. Export licenses are required for certain goods and materials. The export of gold and diamonds must comply with internationally accepted standards such as Kimberley Process certification. The Petroleum Act of 2011 restricts petroleum exploration and production licenses to companies registered or incorporated in Sierra Leone.