There is a critical need for IFC to become more involved in conflict affected countries.
Sierra Leone, a small, West African country recovering from a shattering 11-year civil war, is one such country where IFC has positioned itself to make a difference through the private sector.
More than 70 percent of Sierra Leone’s six million people live below the poverty line and the country has the world’s highest infant mortality rate. The civil war, which ended in 2002, left the country’s infrastructure devastated and all but destroyed its economy.
Sierra Leone’s future growth will depend heavily on the success of private-sector reforms, which are being supported by IFC. The country ranked 160 out of 178 in the 2008 Doing Business report, an annual survey released by IFC and the World Bank that ranks countries on the ease of doing business.
"The government has recently implemented a number of crucial reforms, paving the way for IFC to become more involved in fostering a vibrant private sector," says IFC Country Manager Imoni Akpofure. "IFC is committed to working with the government of Sierra Leone to promote economic recovery."
EXPANDING ACTIVITIES
IFC has opened a representative and program office in the country, paving the way for IFC to expand its activities to support the growth of Sierra Leone’s private sector.
In June 2007, IFC invested $25 million in Celtel Sierra Leone and mobilized a further $25 million from other investors to help the company expand and upgrade its fast-growing mobile networks.
In March, 2007 IFC’s Global Trade Finance Program signed agreements to issue guarantees against the underlying trade transactions of three of the country’s leading banks. The guarantees will cover the banks’ payment risks and help increase Sierra Leone’s share of global trade.
As of June, 2007, IFC committed a total of $54.2 million to projects in Sierra Leone from its own account. That figure is expected to rise sharply as IFC increases investments and launches various advisory services programs to assist the country’s post-conflict recovery.
IFC's activities in Sierra Leone are conducted through its conflict affected countries initiative for Africa, which also covers Central African Republic, the Democratic Republic of the Congo and Liberia. Under the initiative, IFC’s strategy in Sierra Leone is to work closely with the government to improve the investment climate, strengthen the domestic financial sector, finance select private sector companies, and support private participation in rebuilding infrastructure.
IFC strategy is consistent with Sierra Leone's stated commitment to private sector development as an engine for economic growth and recovery.
President Ernest Bai Koroma told Reuters in a recent interview: "We are trying to restore confidence in our system. We are trying to improve on our investment opportunities, improve the economic environment, cut down on the barriers to business."
IFC ADVISORY SERVICES IN SIERRA LEONE
Working with Britain’s Department for International Development, the investment climate team for Africa is advising Sierra Leone’s government on implementing reforms to improve the country’s investment environment and remove obstacles blocking private sector development.
The investment climate team for Africa provides advisory services on behalf of the World Bank Group. The team is managed by IFC and draws staff and resources from across the Bank Group and development partners to help governments in Africa achieve successful reform.
The program will work with Sierra Leone’s government to simplify customs procedures and ease tax hurdles and other regulatory requirements that make it difficult or unappealing for smaller businesses to enter the formal sector of the economy.
A key aspect of the program is fostering dialogue between the government and the private sector. The Sierra Leone Business Forum fills that need. The forum aims to support the government’s reform efforts by providing a platform for the private sector to promote investment-friendly policies and to sensitize the government and the general public on important business issues.
IFC is examining ways to help establish a microfinance institution in Sierra Leone and is in initial discussions to advise the country’s central bank on supervising the financial markets. The aim is to pave the way for further investments in the near future.
The investment climate team for Africa is also undertaking an advisory project to identify public policies and instruments that would attract responsible international private investment into the diamond, tourism and other sectors. The goal is to increase corporate social responsibility and stimulate improved business standards.
For more information contact:
Daniel Musiitwa
Communications Officer
Johannesburg, South Africa
Tel: +27 11 731 3175
Email: dmusiitwa@ifc.org
