Download Sierra Leone Investment Outreach Investment Outreach Campaign

Sierra Leone
Investment Outreach
Campaign
Summary Presentation of
Rice and Cocoa Investment
Outreach Strategy
November, 2012
Provided with the Support of the EU
The Rationale
The President’s ‘Agenda for change’ (2008-2012)
identifies Agriculture as a key driver of economic growth
and poverty reduction for Sierra Leone. This will be
achieved by;
Increasing productivity
Promotion of diversified commercial agriculture through the
private sector
Improve agricultural research and service delivery
Improve agricultural output through value addition, post harvest
loss reduction, agro processing, packaging and building rural
market infrastructures
August 2012
2
Foreign Direct Investment is widely seen as a very effective tool for accelerating
development and poverty-reduction in emerging markets
Reduce Poverty
Raise Incomes
Increase Productivity
Improve Technology
INVESTMENT
Increase Export Prices
Improve Know-How
Improve Market Access
KNOWLEDGE
Knowledge and investment can come from domestic and foreign sources.
But in most developing countries, domestic resources for investment and
knowledge of global markets are very limited. Most rapidly developing countries
have exploited foreign capital and know-how to accelerate their growth
Approach
1.
Document SL’s competitiveness for rice and cocoa
2.
Prepare investor presentations
3.
Recommend actions to enhance sector competitiveness
4.
Identify sites that meet investor requirements
5.
Document and analyse land allocation procedures
Regional demand for rice is growing rapidly
Current/Projected Regional Rice Imports 1961 –
2020 (metric tons)
Consumption of rice in two important sub
8,000,000
regions of Africa is forecast to grow by
over 30% over the next 10 years
7,000,000
6,000,000
Two factors are driving demand for
Metric Tons
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
1961-1970 1971-1980 1981-1990 1991-2000 2001-2005
2010
2020
West Africa (Current Tech)
West Africa (No area expansion)
Southern Africa (Current Tech)
Expon. (Southern Africa (Current Tech))
imported rice :
Rising incomes and changing diets
leading to increased consumption of
rice – growth in per capita rice
consumption has increased from
around 4% per year in the 1980s to
over 6% in the current decade
Expansion of domestic production is
limited because of limited scope for
continued expansion of rice acreage
using current technologies; significant
investment is needed to move to more
modern irrigated rice production
technology
Source: Africa Rice Centre (WARDA). 2008. Africa Rice Trends 2007., Lancon et al, 2002
5
But Supplies from top exporters are not expected to increase
Current and Projected Exports, Major Net Rice Exporters
2008-10 vs 2020 (thousand tonnes)
-0.52
China
India
1.54
Indonesia
Brazil
Japan
-0.87
United…
Pakistan
Argentina
Uruguay
0
20,000
40,000
60,000
80,000
2020
Avg 2008-10est
100,000
120,000
140,000
Source: OECD-FAO Agricultural Outlook 2011© OECD 2010
August 2012
6
Prices rose sharply during the last decade and are expected to remain high
Current and Projected World Rice Prices, US$/ton
700
600
500
400
300
200
100
0
Note: Milled, 100%, grade b, FOB Bangkok (Jan/Dec)
Source: OECD-FAO Agricultural Outlook 2011-2021
August 2012
7
The booming economy is driving domestic demand and prosperity
GDP growing by 6+% per year in real terms,
projected at over 30% in 2012
Domestic Exports from Sierra Leone
US$ Thousands
Annual FDI inflows have increased ten-fold since
2003
Domestic exports have grown five-fold since
350,000
300,000
2002
250,000
On top of traditional diamond, gold, bauxite and
rutile exports, exploitation of one of the world’s
largest iron ore deposits started in 2011 and a
large offshore oil-field was confirmed in 2009
Tourism arrivals growing by more than 10% per
200,000
150,000
100,000
year
50,000
Major indicators of domestic consumption
(vehicle registrations, mobile phone subscribers)
growing at double digit rates
Source: SLIEPA, UNCTAD, ITC Trade Map, Bank of Sierra Leone, Ministries of Transport, ICT, Tourism and Energy
0
2002
2004
2006
2008
2010
August 2012
8
Sierra Leone lies at the heart of an important rice growing belt
Sierra Leone
Rice growing areas of the world (Source IRRI)
August 2012
9
Irrigated rice yield potential is over 7 tons per ha
Yields of most promising rice varieties
9.0
8.0
7.0
Yield (t/ha)
6.0
Located in the Forest Zone of
Africa, Sierra Leone has rice yield
potential higher than most other
Forest Zone countries, and as high
as The Sahel with its advantage of
higher solar radiation
5.0
4.0
3.0
2.0
1.0
0.0
Forest
Sahel
Source: WARDA, 2002. Promising Technologies for Rice Production in West and Central Africa. WARDA, Bouak.e, Cote
d‘Ivoire, and FAO, Rome, Italy
August 2012
10
Sierra Leone has comparative advantage in producing rice
West African Domestic Resource Cost (DRC) Comparisons for
Rice production to Supply Local (LM) and Regional market (RM)
Country
1978
1993
1995
Cote D’Ivoire-LM 1.68
1.02
0.73
1996 2003 2006
Mali-LM
0.69
0.40
0.95
Senegal-LM
1.66
1.12
0.33
Sierra Leone-LM
0.89
Sierra Leone-RM
0.55
NC
0.20
0.72
Note: A country has comparative advantage when DRC < 1.0
Sources: CERDI Université d’Auvergne; Stanford University; WARDA. Annual Report, 2001-2002;
MAFFS, Sierra Leone Agricultural Sector Review, 2004; Papa Seck et al (2010)
August 2012
11
Two initial sites have been identified for new irrigated rice plantations
Proposed
“Sembehun” Site
Proposed
“Torma Bum” Site
August 2012
12
Initial findings at Torma Bum Site are very promising
Located in Bonthe and Pujehun
Districts around Jong and Sewa rivers
Flat lands with irrigation from both
rivers ; some of the area will require
major drainage and flood control
works
Gross area of 90,000+ hectares –
largest expanse of irrigable land in
the country.
Small holder cultivation under local
company providing mechanical
cultivation services for up to 5,000
ha annually provides source of out
grower paddy for milling
Scattered small villages, with deep
flood and slash-and-burn cultivation
ridges
Mainly alluvial plains 4 – 6 Km wide.
Soils predominantly are deep loams
and clays
Located close to three minor ports
and within 60 Km of main east-west
highway connecting to the Freetown
Harbour
August 2012
13
Sembehun Site smaller and also promising
Located in the Coastal Plains
around the Gbangbaia river in
Moyamba District
The predominant Newton land
system is gently undulating, with illdefined nearly level crests and very
gently sloping side slopes.
Area very suitable for irrigation
from the river; drainage and flood
control works would be minor
Soils are deep, well drained, gravel
free over the upland parts, Along
the swampy valley floors they are
deep, variable alluvial and colluvial
soils, locally silty or with peaty
surface layers.
Gross area of 20,000+ hectares
possible
August 2012
14
Sierra Leone also in the world heart of the World cocoa producing belt
ICCO World Cocoa Economy
15
Global Demand for Cocoa is High
International
Cocoa
Organization
statistics show that globally, during the
In that period demand for cocoa
beans represented by grindings
showed a consistent trend than
production, rising from over 3.1
million tonnes in 2000/01 to over 3.7
million tonnes in 2007/08.
World Cocoa Supply and Demand
4000
3500
3000
Qty '000 tons
period 2000/01 to 2009/10, global
cocoa demand and supply were
almost balanced, with production
surpluses occurring in four and
production deficits in six out of the
ten years.
2500
2000
Supply '000 tons
1500
Demand '000 tons
1000
500
0
Supply, represented by production
rose from almost 2.9 million tonnes
in the 2000/01 season to 3.7 million
tonnes in 2007/08,
Trading years
16
World Chocolate Consumption Drives Demand for Cocoa
Consumption of chocolate confectionery products drives the
demand for cocoa. Consumption increased by 11% from 2000 to
2008 in the rich industrialized countries, especially of Europe
resulting in a buoyant demand for cocoa in the world market.
Due to its proven health benefits, consumers have embraced
dark chocolate, which is deemed healthier on account of its higher
cocoa content than its milk chocolate counterpart.
The world just wants more chocolate
August 2012
17
But Global Supply is constrained
African regional production grew at
3% per annum above the world
average of 2.5 per annum in the
same
period
(2000-2010).
Production in the Americas grew at
2.1 % and Asia and Oceania grew at
1.8%.
Africa’s share of net world cocoa
exports has risen to about 75% of
the world total exports, compared
to 13% from the Americas and 12%
from Asia and Oceania.
Over 90% of Africa’s net cocoa
export is from West African
countries, including Sierra Leone.
Share of world market %
12%
13%
Africa
Americas
Asia and Oceania
75%
18
World Market Prices have been Buoyant
Daily international prices for
4000
3500
3000
2500
US$ per m t.
cocoa beans have risen, from their
lowest level of $774 per mt in
2000/2001, to a peak of $3,637
per mt in 2009. World market
prices in real terms were 86%
higher in 2009/10 compared to
2000/01.
Producers are benefiting from the
buoyancy of the market because
of increased rising producer
prices paid farmers. ICCO
reported producer price index in
SDRs/mt rising steadily up to 186
in 2008/09 (2000/01=100).
Price of beans
2000
1500
Price of beans
1000
500
0
Trading year
19
Sierra Leone is one of earliest producers in West Africa
In nearly all producing countries in Africa, cocoa (Theobroma cacao) is grown
by smallholders on farms ranging from one to five hectares (ICCO, 2007).
In West Africa, the crop was first established in Ghana, in the mid 1920s.
Production spread rapidly in West Africa including Sierra Leone, which was
one of the earlier countries to start growing the crop.
There are now a large numbers of cocoa farms and cocoa farmers in Sierra
Leone, mainly in the Eastern and Southern provinces, where conditions are
ideal for growing the crop.
20
Sierra Leone is a Cocoa Producing Country
Sierra Leone has a
cocoa belt located along
the Moa basin, mainly
in the Kailahun and
Kenema Districts as well
as parts of the Kono and
Pujehun Districts. This is
an area in excess of
2,250 sq kilometer.
Most existing cocoa
plantations are located
in this region
21
Sierra Leone has great potential for increased cocoa production
Agro climatic conditions
Sierra Leone lies within the humid tropics between the 7th and 10th parallels with
suitable temperature, rainfall and relative humidity regimes for cocoa.
Rainfall 2,000-3,000mm per year with only 3 months with less than 100mm rainfall
Sunshine hours >1,500 hours with reduced sunshine during months with high rainfall.
Soils suitability
The soils of the Moa River basin, area 75 miles long and 30 miles wide, are the most
suitable for cocoa. The soils are rich to moderately rich, 4 - 5ft deep and well drained.
The topography is characterized by sloping and undulating land. The vegetation is
secondary bush with partly old forest, ideal for shade loving cocoa plant.
22
Target Sites have been identified for new cocoa plantations
Target Cocoa Areas
•areas identified for expansion of
cocoa production by new
investors
One identified site is in
the Luawa Chiefdom
Kailahun District. The
area has some existing
cocoa farms that are
producing well. The
gross area available is
estimated at 12,000 ha
The second site is in
two locations in Small
Bo Chiefdom, Kenema
District. The combined
gross area is estimated
at 8,000 ha.
23
Great Opportunities also exist for investment along the value chain
The traditional export market has been for cocoa beans. It offers little
opportunity for the development of the sector in producing countries
Fig 1. Current Basic Cocoa Supply Chain
Confectionary
Industry
Supermarkets
Developing
Country
Farmers
Exporters
Multinational
Converters
Large
Chocolate
Manufacturer
Specialist
Retailers
Small
Chocolate
Manufacturer
24
New Opportunities now Exist for Investment up the Value Chain
Moving the Domestic Cocoa Sector up the Industry Value Chain
Farm Inputs
Suppliers
Technical
Services
Agronomic
Smallholder
Cocoa Farms
Technical
Services
Engineering
Domestic
Processors
Domestic
Converters
Confectionary
Industry
Large
Chocolate
Manufacturers
Small
Chocolate
Manufacturers
Financial Services
Providers
Supermarkets
Specialist
Retailers
Certification and
Quality Assurance
Domestic
Chocolate and
Confectionary
Industry
Domestic and
Regional
Outlets
25
Becoming a New Investor in the S L Cocoa Industry
Transnational corporations (TNCs) are integrating backwards into the upstream
activities in the cocoa sectors of producing countries - Archer-Daniel-Midland
(ADM), Cargill, Barry Callebout and many others now collaborate in processing
beans in producing countries and exporting cocoa butter, powder and, in some
cases industrial chocolate to consuming countries.
There are opportunities for partnership with established chocolate
manufacturers
According to one local trader that is contemplating domestic grinding, the
estimated cost of a cocoa grinding operation is about $5 million. Feedstock
requirement will be about 4,000 mt per year.
Based on this estimate, Sierra Leone already produces enough cocoa to keep 3
or 4 grinding plants working full time (One TNC has procured machinery and is
currently erecting a purpose built cocoa processing factory in Kenema, eastern
Sierra Leone).
26
Domestic Value Addition Yields High Gross Margin
10000
9000
Price of
butter&powder,
8316.80
8000
7000
Price US$ per tonne
Graphs derived from ICCO
published report of the
annual average prices of
beans and the
corresponding derived
combined prices of cocoa
powder and cocoa butter
indicate a substantial gross
margin accruing to the
grinding operation. Potential
profitability is
indicated, which could be
determined by further
analysis of the costs of
grinding.
Comparative prices of Beans and Cocoa
products
6000
5000
4000
3000
price of
beans, 2599
2000
1000
0
year
2000
Year
2001
Year
2002
Year
2003
Year
2004
Year
2005
Year
2006
Year
2007
Year
2008
August 2012
27
Sierra Leone Cocoa Market is Open and Liberalized
There are Opportunities for Greenfield Investments
The cocoa market in Sierra Leone is completely liberalized and
producer prices reflect international market prices.
At present the total domestic production of cocoa is exported as
there is no domestic conversion of the beans into intermediate or
final cocoa products.
Domestic processing is limited to fermentation and drying of cocoa
beans prior to export to foreign traders and converters.
There are therefore opportunities for Greenfield investments in all
segments of the cocoa value chain.
28
General Advantages of Foreign
Direct Investment in
Sierra Leone
29
A fair and transparent process for leasing land has been established
The Government of Sierra Leone recognises that secure access to land is critical to attract investment in
agriculture, mining and tourism. At the same time, as in all countries, the process for assigning tracts of land for
commercial use needs to be compatible with other environmental and social needs – not only to protect the
community and environment, but also to ensure a sustainable and secure operating environment for investors
SLIEPA has developed a report on best-practices to help investors navigate through the land-leasing process
within the customary tenure environment. The best-practices report includes examples of a step-by-step
recommended approach, template leases, other legal documents and agreements with local communities. The
report and supporting documents is available on the SLIEPA website (www.sliepa.org)
Best-practices for agreements with local communities include a number of salient features:
While drawing on the expertise of the central government (particularly the Ministries of Agriculture, Land and
Trade), successful investors from the outset involve the local community and environmental NGOs in mapping
the site to ensure protection of areas needed for food production and all high conservation value areas
Successful agreements have free, prior, informed consent of all residents, not just local chiefs and land-owners
Successful land use plans meet the Equator Principles (and/or equivalent social and environmental standards)
Best-practice financial compensation to local communities includes three components:
– “Rent”: a fixed annual cash component (with payments publicized in the media and distributed amongst
members of the community as well as the central and regional governments according to an agreed formula)
– “Royalty”: a variable component based on the measurable output of the plantation and a pricing formula
linked to market prices – to ensure the community have a stake in supporting the smooth operation and
productivity of the estate
– An independent board to oversee how the rent and royalty payments are spent – to ensure that the benefits
do not accrue just to a few individuals
The Government of Sierra Leone stands ready to help investors with all aspects of the leasing
process. In addition to the best practices guide, SLIEPA is also establishing a special team to
help investors with the process of community consultation, land-use planning and mapping
August 2012
30
Key factor costs are highly competitive
Average Rural Labour Costs
US$ per hour, 2008
Agricultural labour costs range from $2 to $3
South Africa
3.54
Brazil
2.17
Malaysia
1.87
China
1.05
Thailand
Indonesia
0.79
0.63
Cote d'Ivoire
0.42
India
0.45
Ghana
0.50
Sierra Leone
per day, are lower than other African
countries, and considerably less than
alternate locations in Asia or Latin America
Labour regulation is relatively flexible with
productivity-based payments widely applied
Leases on good agricultural land range from
$5 to $40 per hectare per year (compared to
$100+ in Brazil, $450+ in Indonesia and
$3,000+ per hectare in Malaysia)
Currently, there is no charge for utilization of
water resources
Tax rates are very attractive, with 0%
corporate income tax and 0% duty on
imported inputs for qualified investors
0.25
Source: US Bureau of Labour Services Foreign Labour Statistics Office, ILO, Economist Intelligence Unit, Plantation Managers
August 2012
31
Procedures for importing seeds and other inputs are straightforward
Fertilizers and Agricultural Equipment: All imports of fertilizer
and agricultural equipment are exempt from import duty and
VAT
Seeds: At this time, unlike many countries, phytosanitary
procedures are designed to facilitate the import of improved
planting material whilst protecting growers from importation of
pests and diseases:
Import of seeds and other plant materials is governed by the
Plant Phytosanitary Rules, which are part of The Agricultural
Act. A permit must be obtained no less that 14 days prior to
the date of importation; and a phytosanitary certificate
issued by the competent authority of the exporting country
may be required. Upon arrival, materials are subject to
examination and if necessary quarantine
Existing investors report that the process works smoothly
A National Seed Policy was also adopted in December 2006,
to guide all activities related to the production and supply of
all seeds in Sierra Leone. Amongst other matters, the Policy
provides for the establishment of a National Seed Board, a
Variety Release Committee, a Seed Industry Development
Unit and a Seed Quality Control Unit
Source: Ministry of Agriculture, Forestry and Food Security
August 2012
32
Sierra Leone’s location is ideal for supplying regional rice markets
Sierra Leone
Located at the far
USA
~4880 nm
China
With the Freetown Port
Nigeria
~1100 nm
~6800 nm
~3200 nm
~9500 nm
Western end of Africa’s
equatorial belt, Sierra
Leone is closer to the
main regional rice
markets (1100 nautical
miles to Nigeria & 3200
to South Africa) c/f the
main rice exporters
(4880 – 9500 nautical
miles)
~6300 nm
now under private
management, its natural
advantages and location
are likely to make it a
major regional hub for
shipping
South
Africa
August 2012
33
Location also ideal for serving the EU and US Cocoa markets
Located at the far Western end
~3000
nautical
miles
~3800
nautical
miles
With the recent privatization
~2700
nautical
miles
Source: Portworld.com
of Africa’s equatorial belt,
Sierra Leone is closer to major
markets in Europe and the
Americas than most other
locations suitable for cocoa
cultivation
of the Freetown Port, its
natural advantages and
location are expected to make
it a major regional hub for
shipping
34
Rapidly improving road & port facilities enable easy import and export
Current and Planned Roads and Ports
Major Roads
Other Roads
The government and donors have launched a major
road-building program
Many parts of the country can now be reached
on good tarmac roads
All target cocoa-growing areas are less than
150km from Freetown port on good roads
Freetown port is second largest natural deep-water
port in the world and largest in Africa:
As the region’s main port historically, the port has
extensive bulk-storage and fuel-storage facilities
The government has recently put the port under
contract to private management, leading to
further improvements in facilities and throughput
times
Mining companies are also developing ports at
Major Ports
Pepel and Bonthe; it may be possible for
agricultural investors to use these ports for bulk
exports and imports
Minor Ports
Source: Sierra Leone Road Authority; Sierra Leone Port Authority
August 2012
35
Producers in Sierra Leone have Favoured Access to Key Markets
US Market
Under the Africa Growth and
Opportunity Act (AGOA), since Sierra
Leone is a Least Developed Country
(LDC) in Africa, producers in Sierra
Leone are permitted to export eligible
products to the US duty-free
The current act remains in force until
September 2015
Other Markets
Of the major consuming
countries only Japan and Russia
apply import tariffs (4 – 11%) on
cocoa exports from producing
countries
Source: Official US and EU documents on AGOA and EBA/EPA rules
EU Market
Sierra Leone is one of 49 LDCs covered by
the EU’s Everything But Arms (EBA)
agreement: producers in Sierra Leone are
permitted to export all products (except
arms) to the EU duty-free and quota-free
Sierra Leone agricultural products have
been exported to the UK market for over
100 years since the country was a colony of
Britain. Trade ties dating back to that era
continue to this day.
There are regular shipping schedules for
both bulk and containerized cargo carriage
between Sierra Leone and European ports
with short transit time within the North
Atlantic zone.
February 2010
36
Sierra Leone has a strong human capital base for agricultural ventures
Sierra Leone is recognized as the “Athens of Africa” due to the early establishment of institutions
of higher education in the country:
The first University College in Sub-Saharan Africa, Fourah Bay College, was established by the
Church Missionary Society in Freetown in 1827
Two of the earliest secondary schools in West Africa (CMS Grammar School-1845 and Annie
Walsh Memorial School-1849) were also established by CMS
Freetown was administrative headquarters for the British administration and the centre for
training administrative staff for the British West African Colonial Administration
Early agriculturists were trained mainly in the United Kingdom at institutions like Wye College
and the University of Reading
Njala University College was established in 1964 principally for training agriculturists for Sierra
Leone and neighboring countries
The majority (80%+) of agriculturists in the country are graduates of Njala University (NU)
Since its founding in 1964 to date, NU has turned out at least 1000 agriculture graduates, many
with post graduate degrees. Most of these remain in country and constitute most of the
technical staff of the Ministry of Agriculture, Forestry & Food Security and other establishments
SaloneFAB, a web forum for sharing information about agribusiness in Sierra Leone, has also been
established, drawing together experts from government, donors, NGOs, academia and business
To help develop skills and productivity, new incentives for agribusiness investors allow for
125% tax deduction for expenses on approved training programs
Source: Interviews with Sierra Leone education and research specialists; [email protected]
August 2012
37
Development Partners are eager to support outgrower and infrastructure
development
A number of international development organizations may be able to provide technical and
financial assistance to develop the productivity and capacity of outgrower associations and
communities in rice growing areas
World Bank: Runs programs to stimulate private sector development in agriculture and
increase value-chain efficiency for local and export-oriented agricultural products
IFC: ready to consider financing and technical assistance to qualified private investors in
agribusiness and other key sectors in Sierra Leone
IFAD: runs several projects to improve agricultural production capacity, strengthen farmerbased organizations, and improve small-holders access to finance and credit
FAO: supports the National Sustainable Agricultural Development Plan with focus on quick wins
EU: supports agricultural development plans, including support to SLIEPA for preparation of
commercial food and export crop investment strategies
USAID: Consortium for Rehabilitation and Development provides support to grassroots
organizations in production, processing and marketing
GTZ: funds Seed Enterprise Enhancement and Development project to stimulate private
commercial production and marketing of certified seeds
AfDB: Agriculture Sector Rehabilitation Project focuses on agricultural capacity building and
infrastructure rehabilitation
With significant funding earmarked for infrastructure development in Sierra Leone, potential also
exists to leverage these sources to offset infrastructure development costs associated with new
production facilities (e.g. road linkages, irrigation, etc.)
Source: Donor project descriptions and interviews:
August 2012
38
At all levels, the people of Sierra Leone are eager to attract investors
The President and Cabinet have identified rice and cocoa as a priority growth sector and are
prepared to provide support at the highest levels to accelerate investment
The Sierra Leone Investment and Export Promotion Agency (SLIEPA) with support from the 14
District Councils, as well as the Ministries of Land and Agriculture, is in the process of earmarking
and preparing a number of suitable sites for 10,000+ hectare rice plantations
SLIEPA has a team dedicated to helping agribusiness investors handle land, infrastructure and
other issues
In each of the target zones that have been visited so far, local Members of Parliament,
Paramount Chiefs and Village Elders are exceedingly eager to attract investment to their districts
According to early investors, the local population in rural areas is very eager to work; large
numbers of underemployed young people and subsistence farmers are excited at the prospect of
good employment coming to remote parts of the country
Source: Government of Sierra Leone, SLIEPA, Addax, site visits in Bombali, Kailahun, Kambia, Kenema , Pujehun and Tonkolili Districts
August 2012
39
All agribusiness investors in Sierra Leone receive a wealth of benefits
Sierra Leone Investment and Export Promotion Agency (SLIEPA), created in 2007 to facilitate
investment and improve business climate, offers investors 24-hour response to all inquiries,
relevant updated sector information, tailored visits and aftercare services
World Bank ranks Sierra Leone #2 in Africa and #27 worldwide for Investor Protection:
Investors are protected under MIGA and ATI accords; bilateral investment protection
agreements also in place with several countries
100% foreign ownership permitted in all sectors; no restrictions on foreign exchange; no limits
on expat employees; and full repatriation of profits, dividends and royalties
Government has recently approved a special set of incentives for qualified agribusiness
investors:
Complete exemption from corporate income tax up to 2020; plus, 50% exemption from
withholding taxes on dividends paid by agribusiness companies
Complete exemption from import duty on farm machinery, agro-processing equipment, agrochemicals and other key inputs; 3 year exemption from import duty on any other plant and
equipment; reduced rate of 3% import duty on any other raw materials
100% loss carry forward can be used in any year
125% tax deduction for expenses on R&D, training and export promotion
3 year income tax exemption for skilled expatriate staff, where bilateral treaties permit
Source: Sierra Leone Investment and Export Promotion Agency (SLIEPA), World Bank Doing Business Report 2010
August 2012
40
The country offers a stable and favourable business environment
Political stability: Sierra Leone is one of few countries in Africa with a fully-functioning multiparty
democracy. Since 2002, free elections have been held every 5 years; in 2007, the governing party lost
and handed over power peacefully to the current administration under President Ernest Bai Koroma. In
2012, President Koroma has been re-elected for another 5-year term. Both leading parties are fully
committed to democracy and a pro-business environment. Sierra Leone has been ranked as the most
improved country in Africa in both the Mo Ibrahim Africa Governance Index and the World Bank’s
global Governance Indicators
Peace and security: the country is free of any major ethnic, religious, ideological or other disputes.
According to Gallup, Sierra Leone is the most integrated and harmonious multi-faith country in the
world. Crime rates are extremely low – Freetown is the safest capital city in Africa, and the police force
is one of few in the world that does not carry guns
Clear direction: the current government has articulated a clear vision for the country in its “Agenda for
Change”, with 4 key priorities: providing reliable power, raising output & productivity in agriculture &
fisheries, developing a national transport network, and ensuring sustainable human development. In
2013, the government will set out a new plan in the “Agenda for Prosperity”.
Strong economic performance: since 2001, GDP has grown by more than 6% per year in real terms,
inflation has declined steadily, and exchange rates have been relatively stable, despite the volatile
global currency environment.
Pro-business government: As a former businessman, President Koroma is focused on encouraging
investment and private enterprise and continued streamlining of the “costs and time of doing business”.
The country ranks top in West Africa for ease of starting a new business; and anti-corruption laws and
institutions are among the toughest in Africa
Source: SLIEPA, President’s Office, Mo Ibrahim Africa Governance Index, World Bank Governance Indicators, Doing Business Report 2010, Gallup CoExist Index, August
IMF
2012
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Quality of life for local and expatriate management is high
500 miles of beautiful unspoilt
beaches, with numerous offshore
islands
Highest mountains in West Africa
Dozens of national parks with
mountains, forests and wildlife
Golf courses, tennis courts, deep-sea
fishing, sailing, diving and more
Very friendly and courteous people
Low cost of living
Very low crime rates
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For further information:
Please contact:
Patrick Caulker
CEO
Sierra Leone Investment and Export Promotion Agency (SLIEPA)
Email: [email protected]
Cell: +232 76 333 111
Updated versions of this presentation and additional information on the rice and
cocoa sectors can be found on the SLIEPA website: www.sliepa.org
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