Sierra Leone Economic Outlook: Development Challenges

In order to contextualize the scenario in which Sierra Leone is inserted, it is essential to emphasize the conflicts that took place in the last decade and that Sierra Leone still has its consequences.


First of all, Sierra Leone went through a Civil War, which started on 23 March 1991 and this lasted 11 years, which formally ended in January 2002. During the civil war in Sierra Leone were committed numerous atrocities, which included war rape, mutilation, and mass murder. In total, 1.270 primary schools were destroyed in the War. More than a decade later, education in Sierra Leone is still recovering from the destruction caused by the conflict.


Furthermore, in 2014 there was the Ebola crisis. During the Ebola crisis, there were 8,706 people infected, and 3,956 have died. The Ebola outbreak has decimated families, the health system, the economy and social structures. It has also left an estimated 4,000 survivors who have ongoing health problems who need medical care and social support. There are various restrictions and quarantines within Sierra Leone due Ebola crisis, and a state of emergency was declared on July 31, 2014.


• In June 2014 all schools were closed because of the spread of Ebola.


• On October 13, the UN's International Fund for Agricultural Development stated up to 40% of farms had been abandoned in the worst Ebola-hit areas of Sierra Leone.


• In October 2014 Sierra Leone launched a school by radio program, that will be transmitted on 41 of the local radio stations as well as on the only local TV station.


Beyond all this, now there is the worldwide coronavirus pandemic (COVID-19), which began in early 2020. During the worldwide coronavirus pandemic in Sierra Leone, from 3 January 2020 to 13 September 2021, there have been 6,379 confirmed cases of COVID19 with 121 deaths, reported to WHO. The COVID-19 pandemic is having a significant impact on the country’s medium-term growth prospects and the economy is projected to contract by 2.3 to 4.0 percent in 2020 due to disruption in global trade, travel restrictions and domestic restrictions on mobility.


To understand the real impact by the COVID-19 in people’s lives in Sierra Leone, IPA has developed a RECOVR survey, which aims to facilitate comparisons, document realtime trends in policy concerns, and inform decision makers about the communities most affected by the economic toll of the pandemic. Therefore, the key findings are:


• Around 10% of respondents or someone in their household have developed mental health symptoms since COVID-19 reached the country.


• 45% of employed individuals have earned less pay than they did in a typical week before the government closed schools.


• 60% of respondents say they have had to deplete savings to pay for food since February 2020.


• More than 40% of respondents say they have had to limit portion sizes at meal times or reduce the number of meals they eat.


• 63% of respondents say their main concern regarding primary and secondary school-aged children in their household is their children falling behind in education.


• One in four respondents reported developing mental health symptoms, more than double the proportion since May.


• Total employment reported increased slightly compared to May 2020 but was still 15 percentage points less in October than February 2020.


• For 48 percent of respondents, it would be impossible or very difficult to come up with 200,000 Leones within the next 30 days.


• There was a 20-percentage point increase between rounds in respondents reporting needing to limit their meal portions.


• One in five respondents below the poverty line is concerned about their school age children having enough to eat versus one in ten respondents above the poverty line.


• One fifth of respondents is concerned about physical violence towards minor children or between romantic partners.


Therefore, after all this brief introduction, it's important to point out that Sierra Leone is one of the poorest countries in the world. More precisely, according to Business Insider Africa, Sierra Leone is the 9th poorest country in the world.





Although the Gini index In Sierra Leone, according to World Bank, was reported at 35.7 in 2018, the Population in multidimensional poverty, headcount (%) in this country is 59,2% according to UNDP. This represents that the majority of the population lives in poverty, confirming previous information that Sierra Leone is one of the poorest countries in the world.


Sierra Leone's birth rate (crude) has been declining for over 30 years. According to World Bank, the highest peak in the birth rate was in 1967 at 47.74%, and until mid-1983 the birth rate remained constant with slight fluctuations, ending 1983 at 47.49%. From this year of 1983, the rate starts to fall until 2019, when it reaches the rate of 32.88%. Finally, it is important to define that the crude birth rate indicates the number of live births that occurred during the year, per 1,000 inhabitants estimated in the middle of the year. Subtracting the crude death rate from the crude birth rate gives the rate of natural increase, which is equal to the rate of population change in the absence of migration.


The actual GDP in Sierra Leone is worth 3.87 billion US dollars (2020), according to World Bank. This GDP value represents less than 0.01% of the world economy. It is important to note that government revenue includes more than 50% of foreign aid. According to the same source, the population in Serra Leone in 2020 was 7,976,985, which represents 0.09% of the world’s total population. Therefore, the GDP per capita worth 484.521 US dollars (2020).


However, according to World Bank, between 2018 and 2019, the unemployment rate in Sierra Leone remained unchanged in the 4.4% range, with an increase in 2020, which rose to 4.6%. Nevertheless, if a long-term analysis is carried out, the unemployment rate is showing an upward behavior. From 1993 to 2004 the unemployment rate remained practically constant at around 3.4%, reaching its maximum unemployment peak in 2014, with a rate of 4.68%. From 2014 to 2019 there was a slight drop of 0.32%, reaching 4.6% in 2020.


As can be seen in the graph below, employment and the wage share have opposite movements in the economy of Sierra Leone, which can be explained by the dynamics of the Goodwin cycle, which is used as a basic framework to study different dimensions of capitalism structural instability (LIBANIO and FERNANDEZ, 2016).





According to Statistics Sierra Leone, the Inflation Rate in Sierra Leone is increasing since March 2021, when the Inflation Rate drops to 8.95% in February 2021 from 10.87% in March 2021. The last measure of the inflation index was in July 2021, which represented 10.5%.




Finally, according to the information described above, Sierra Leone's economy faces many challenges, which represent a very heavy burden for the population. It should be noted that in the period analyzed there was a drop in the employment rate and an increase in inflation, which made it difficult for families to acquire some goods for their own consumption. Inflation, as a result, increased the value of wages, but the distribution was still in the hands of a few. Improving Sierra Leone's economic figures requires a concerted effort by families, government and organizations outside the country. One of Sierra Leone's main problems is poor education. Therefore, investment in education and in this new generation is necessary, aiming at better results in the future.



REFERENCES

https://tradingeconomics.com/sierra-leone/indicators

http://hdr.undp.org/en/countries/profiles/SLE https://www.statistics.sl/images/StatisticsSL/Documents/SLIHS2018/SLIHS_2018_Ne w/sierra_leone_integrated_household_survey2018_report.pdf https://data.worldbank.org/country/sierra-leone https://africa.businessinsider.com/local/markets/mapped-the-25-poorest-countries-in-theworld/f2tg0wr https://www.poverty-action.org/recovr-study/recovr-sierra-leone-tracking-effects-covid19-pandemic https://covid19.who.int/region/afro/country/sl https://www.sciencedirect.com/science/article/pii/S1517758015300229









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