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World Bank Boosts Sierra Leone

Thursday, 04 February 2010 10:02 AM

FREETOWN, Sierra Leone — The president of the World Bank swept through Sierra Leone pledging more than $140 million in aid and commending President Ernest Koroma on his efforts to curb corruption and enhance the business sector.

Robert Zoellick spent two days in Sierra Leone last week, assessing how the country is coping nearly eight years after its civil war and during a global recession.

“I see Sierra Leone as a country that has made substantial progress and wanted to show support for what president and parliament have achieved,” said Zoellick.

Sierra Leone, with a population of 6.4 million has a GDP per capita of $900, according to the CIA World Factbook. The country's economy is centered on agriculture, with almost half of its $2.1 billion GDP, 49 percent, coming from the agricultural sector.

Zoellick said Sierra Leone’s growth rate would fall between 5 and 6 percent in 2009, despite a slowdown in recent years.

“I think one of the positive stories for the country is that the rate of growth had gotten close to 10 percent a year — 8 percent,” he said. “One needs to recognize that countries such as Sierra Leone were suffering a food and fuel crisis before there was a financial crisis.”

In contrast, Sierra Leone's growth rate was 1.6 percent in 1990, according to the International Monetary Fund.

He heaped much praise on Koroma’s Anti-Corruption Commission, adding that these efforts are key in attracting local and foreign investment in the nation.

“The steps that have been taken with the anti-corruption [commission] and transparency in government are fundamental,” Zoellick said. “People will be fearful of investing if they feel its going to be lost in bribes.”

Zoellick met with members of the commission on the heels of a meeting where Koroma reprimanded cabinet ministers over allegations of corruption, such as taking bribes to provide passports to people from other African nations and the Middle East, according to local press reports.

While Zoellick publicly congratulated Sierra Leone on its anti-corruption efforts, the World Bank chief probably took a more aggressive approach privately, said Douglas Allen, director of the Daniels College of Business International MBA program at the University of Denver.

“Privately, you can speak with more specificity and more frankly,” he said. “I would speculate that there are several levels of communication taking place. When you’re speaking publicly you have a different agenda. There’s a symbolic value between differentiating between public and private statements.”

This was Zoellick’s first visit to Sierra Leone. His next stop was Cote d’Ivoire — another country rebuilding after its own civil war. In trying to foster private sector investment in both countries, Zoellick said a regional approach may be necessary in several areas.

“Even if you chase off the people that are stealing the fish from the waters of Sierra Leone, they’ll go to your neighbors, so you’ll need to have a [regional] law enforcement system,” he said.

Tracking foreign investment in Sierra Leone is difficult. The country’s main exports are diamonds, rutile (a major component of titanium), cocoa, coffee and fish. A new mining law signed last year will enforce collection of mining fees and taxes, with companies such as London Mining paying at least $10 million in fees last year, as it reopens an iron ore mine here over the next several years.

“In the case of West Africa you have a number of smaller markets. It would certainly help draw investors if one could create additional sub-regional integration,” said Zoellick.

Zoellick also pledged $20 million of the bank’s funds to a jobs program to aid the country’s unemployed youth population.

The funds come from an emergency credit facility set up at the World Bank. More than 60 percent of Sierra Leone's youth are unemployed, according to Sierra Leone’s 2007 estimates. Men and women between the ages of 15 and 35 are considered youths in Sierra Leone and make up about 35 percent of the population. Many of these men were directly involved in the violence and atrocities committed during the war.

More than 50,000 people were killed during Sierra Leone’s civil war which began in 1991 and lasted 11 years.

“We knew before that the issue of youth unemployment was a very critical one … but my conversations with the president certainly strengthened my knowledge of some of the things the government is doing,” Zoellick said. “We talked about the vocational training and some of the education aspects — particularly for the young men that were pulled away in conflict and must be brought back into a constructive role in society.”

A separate $120 million to $150 million in grants has also been allocated to Sierra Leone, through the World Bank’s International Development Association (IDA), which seeks to aid the world’s poorest countries.

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