This Investment Climate Policy Note (ICPN) for Sierra Leone evaluates the country‘s business
environment by: (i) analyzing barriers to private sector investment and growth and how they vary
among different types of firms, (ii) benchmarking Sierra Leone‘s investment climate and firm
performance to that of other countries and (iii) providing recommendations to promote and
strengthen the private sector.
The ICPN is supported by the statistical analysis of a 2009 enterprise survey of 150 formal,
manufacturing and service firms with five or more employees based in Western Area/Freetown
and Kenema, two of Sierra Leone‘s major urban centers. It does not cover rural firms, informal
firms or firms with less than five employees, which make up the majority of the country‘s
enterprises. Data from other enterprise surveys facilitate international comparisons with Mano
River Union members Guinea, Liberia and Cote d‘Ivoire, and two larger post-conflict
economies: the Republic of Congo (DRC) and Rwanda. Key findings are summarized below
with priority recommendations based on these findings following the summary.
The ICPN is organized as follows. Chapter 1 provides context for Sierra Leone‘s business
environment. Chapter 2 discusses the performance of Sierra Leone firms, with a focus on labor
productivity. Chapter 3 examines how investment climate constraints cost businesses money and
time, discusses main bottlenecks to conducting business as identified by managers of Sierra
Leone firms, and reviews obstacles related to electricity supply, tax rates, informality, corruption
and access to land. Chapter 4 analyzes data on how firms access and use finance, and chapter 5
discusses exports and internationalization in Sierra Leone. Chapter 6 concludes and provides
policy options to improve the investment climate.