Trade & Poverty in Sierra Leone

43133 Public Disclosure Authorized SIERRA LEONE Adding Value through Trade for Poverty Reduction Public Disclosure Authorized Diagnostic Trade Integration Study Public Disclosure Authorized Public Disclosure Authorized November, 2006 i SIERRA LEONE DIAGNOSTIC TRADE INTEGRATION STUDY TABLE OF CONTENTS PREFACE ....................................................................................................................................III EXECUTIVE SUMMARY AND ACTION MATRIX .............................................................IV 1. INTRODUCTION AND SOCIO-ECONOMIC BACKGROUND .............................. 1 Introduction ................................................................................................................................. 1 Socio-Economic Background...................................................................................................... 2 Recent Efforts at Macroeconomic Reform.................................................................................. 3 Results to Date............................................................................................................................. 3 Macroeconomic Constraints on Investment, Trade, and Growth.............................................. 11 2. TRADE & POVERTY IN SIERRA LEONE............................................................... 15 Introduction ............................................................................................................................... 15 Poverty in Sierra Leone............................................................................................................. 15 Impact of Trade on the Poor...................................................................................................... 17 Direct Effects and Multipliers ................................................................................................... 19 Indirect Effects .......................................................................................................................... 25 Impact of Trade on Risk and Uncertainty Faced by the Poor ................................................... 26 Conclusion................................................................................................................................. 27 3. AGRICULTURE, AGRO-INDUSTRY AND FORESTRY........................................ 29 Introduction ............................................................................................................................... 29 agricultural production, Processing, and marketing .................................................................. 29 Potential for expanded production and exports ......................................................................... 37 Choices to Promote Trade, Growth, and Poverty Reduction .................................................... 45 Constraints inhibiting achievement of potential........................................................................ 46 Priority actions .......................................................................................................................... 49 4. FISHERIES..................................................................................................................... 55 Current Situation ....................................................................................................................... 55 Potential for Improvement and Its Constraints.......................................................................... 57 Short-term Actions .................................................................................................................... 61 5. MINING .......................................................................................................................... 63 ii Introduction ............................................................................................................................... 63 Industrial large-scale mining ..................................................................................................... 64 Artisanal mining........................................................................................................................ 65 Competition for resources ......................................................................................................... 66 A Case for transparency ............................................................................................................ 68 Potential for value-added........................................................................................................... 69 6. TOURISM ....................................................................................................................... 70 Tourism and Development ........................................................................................................ 70 The Potential in Sierra Leone.................................................................................................... 71 Options ...................................................................................................................................... 73 Challenges ................................................................................................................................. 74 Priorities for Moving Forward................................................................................................... 74 Implementation.......................................................................................................................... 77 7. CUSTOMS AND TRADE FACILITATION ............................................................... 78 Current Situation ....................................................................................................................... 78 Priorities .................................................................................................................................... 79 Other key issues......................................................................................................................... 80 8. INFRASTRUCTURE AND PUBLIC SERVICES ...................................................... 87 Transport ................................................................................................................................... 87 Electrical Power ........................................................................................................................ 93 Telecommunications ................................................................................................................. 95 9. FINANCIAL SERVICES............................................................................................... 97 Brief Review of Existing Situation............................................................................................ 97 Financial Constraints to Expanded Trade and Growth............................................................ 100 Options for Overcoming Financial Constraints....................................................................... 101 Vision for the Future ............................................................................................................... 105 10. TRADE POLICY AND INSTITUTIONS .................................................................. 106 Introduction ............................................................................................................................. 106 Capacity to Define, Negotiate and Implement Trade Policy Objectives................................. 106 Sierra Leone and Multilateral Trade Negotiations .................................................................. 108 Market Access Issues: Exports to the EU and the US............................................................. 110 Regional Integration through ECOWAS................................................................................. 112 Export Promotion and Development in Sierra Leone. ............................................................ 113 Developing Standards Management Capacity to Support Export Diversification .................. 115 iii List of Tables Table 1-1: Sierra Leone – Selected Social Indicators...................................................................... 2 Table 1-2: Key Economic Indicators for Selected Years (1994, 2000-04)...................................... 4 Table 1-3: Value of Exports, 1994-2005 (thousand US dollars) ..................................................... 6 Table 1-4: Value of Imports, 1994-2005 ......................................................................................... 7 Table 1-5: Sierra Leone Fiscal Performance, 2001-04 .................................................................... 9 Table 1-6: Money Supply, Inflation, and Interest Rates, 2001-04................................................. 10 Table 1-7: Average Interest Rates: June 2004 to December 2005................................................. 10 Table 1-8: Average Monthly Exchange Rates May 2004 – December 2005 ................................ 11 Table 1-9: Balance of Payments of Sierra Leone (billion SLL) .................................................... 13 Table 2-1: Food Poverty & Total Poverty by District ................................................................... 16 Table 2-2: Direct Income and Employment Effects of Increased Agricultural Exports................ 21 Table 2-3: Growth in Tourism Employment and Income to 2015................................................

Load more