Description
Rebuilding Business And Investment In Post-Conflict Sierra Leone
Sierra Leone’s current business context
The Government of Sierra Leone is committed to improving the country’s investment climate, convinced that private
sector development is the engine for economic growth. Although obstacles remain to doing business in Sierra Leone,
the country has recorded major improvements in recent years, thanks to the collaboration and support from many
stakeholders, including the World Bank Group’s Removing Administrative Barriers to Investment (RABI) program.
Results have been significant. Sierra Leone has been steadily making progress and has been the second country
(behind Burkina Faso) in the Economic Community Of West African States (ECOWAS) with the highest number of
improvements on the World Bank Group’s Doing Business report– a remarkable turnaround only seven years after a
civil war had all but destroyed the economy.
History of the Sierra Leone Investment Climate Program: Removing Administrative Barriers to
Investment (RABI)
In 2004, two years after the end of Sierra Leone’s devastating civil war, the World Bank Group Investment Climate
Advisory Services team responded to a request from the Government of Sierra Leone to help create a better business
and investment climate that would lay a foundation for the country’s economic growth. The team partnered with the
UK’s Department for International Development (DFID) and other development partners to design a program to help
Sierra Leone improve its business climate, encourage job creation, and spur investment. The result of this partnership
was the RABI program, which ran from 2004 to 2010. RABI pioneered a collaborative approach by working closely with
the government, local institutions and the private sector to implement a comprehensive, integrated agenda that
focused on reforms in the key areas. A follow-on program, the Sierra Leone Investment Climate Program, was
requested by the government and initiated in January 2011.
The success of RABI has also led to other IFC Advisory Services programs in Sierra Leone, including the Conflict
Affected States in Africa Initiative, which aims to strengthen the competitiveness of small and medium enterprises,
rebuild financial markets while building the appropriate financial infrastructure to support private investment and
increase private participation in the provision and rehabilitation of infrastructure.
Components of the Program
The Sierra Leone Investment Climate Program concentrates on three key areas: Reducing barriers to formalization
(reducing barriers to new business registration and streamlining the administration of taxes); enhancing public and
private dialogue to identify barriers to existing businesses (supporting and strengthening the Sierra Leone Business
Forum; and generating investment in key sectors (supporting the Sierra Leone Investment and Export Promotion
Agency).
Rebuilding Business and Investment in
Post-Conflict Sierra Leone
The Sierra Leone Investment Climate Program
In only three years, Sierra Leone’s investment leads have
increased by 71 percent.
In partnership with:
KEY
CHALLENGES
RABI PROGRAM RESPONSES
Business
Registration
New legislation to further reduce the time and cost to register a new business and further
increase access by decentralization and computerization.
Paying Taxes
Focus on the policy and administrative aspects of tax administration with a view to
reducing the burden on small businesses.
Attracting
Investment
Gather information on investment and trade opportunities and facilitate investment into
the country, support the development of export industries and promote Sierra Leone as a
vibrant and improving location for business in West Africa in the key economic strategic
sectors of tourism and agribusiness.
| 2
KENYA INVESTMENT CLIMATE PROGRAM
The very successful, high-profile event, which had the active participation of Former Prime Minister Tony Blair,
investor George Soros, and Prince Charles, Prince of Wales, attracted over 600 registrants and demonstrated
that Sierra Leone is a peaceful, stable democracy that is open for business, showcasing the government’s
commitment to reform, and highlighting investment opportunities in the country’s strategic target sectors of
tourism and agribusiness.
In the month following the Trade and Investment Forum, the Sierra Leone Investment and Export Promotion
Agency received an increase in total investor enquiries of 71 percent.
Dr. Ernest Bai Koroma, President of Sierra Leone
Building investor confidence
“These reforms are helping to build investor confidence. But they are just the
beginning, not the end, of our efforts – a down-payment if you will, on the pro-
business, pro-reform agenda we are committed to pursuing in the years to
come”, President Ernest Bai Koroma told hundreds of investors gathered in
London for the Sierra Leone Trade and Investment Forum in November 2009.
From a focused to a broader intervention
Very often, when the World Bank Group’s Investment Climate team first sets foot in a country, it initially focuses on
one or two specific reform areas. Once that first initiative has been passed and the private sector is reaping the
benefits, the team engages with the government on wider reforms. That same model was applied in Sierra Leone. The
initial focus was on rapid diagnostics, which identified key barriers to investment. This led to a focus on improving
business start-up and gradually broadened to include regulatory reform, including doing business reform, tax policy
reform, private-public dialogue and investment generation.
Reform communications
That which is not communicated cannot be implemented.
Governments often pass reforms that do not get implemented
because these reforms have not been publicized. The departments
and civil servants mandated with their implementation have little
knowledge of the reforms, and may continue using the old ways.
Similarly, when private businesses have not heard of new
modifications or regulations that simplify their transactions, they
cannot make use of these improvements and therefore continue to
suffer the delays and costs involved.
For those reasons, RABI seeks to create awareness through several avenues:
• Helping ministries and agencies to better communicate reforms, both internally to civil servants and externally to
the private sector
• Support private sector associations in communicating reforms to their members, and to get feedback toward fine-
tuning the reforms
• Keep the media informed of all reforms and their impact, so it might better reach key stakeholders. For example,
RABI provided a business reporting training program for the Sierra Leone Network of Economic and Development
Reporters.
| 3
KENYA INVESTMENT CLIMATE PROGRAM
Starting a Business
With the passage of the General Law (Business Start-Up
Amendment) Act 2007 and the Registration of Business
Act 2007, the time to register a business has been
reduced from one week to 2 days and the cost has been
cut by almost 50percent. As a result, the number of
businesses registered has more than doubled, and the
associated revenues have increased from 600 million
Leones ($150,000) in 2007 to 1 billion Leones
($250,000) in 2009. An amendment to the Companies
Act in 2009 allowed for better protection for investors.
Trading Across Borders
Importing and exporting procedures have been mapped
and used for discussions to further streamline customs
procedures.
Tax
The government eliminated the requirement that new
businesses pay a quarter of their estimated taxable
income before they register as companies, an exemption
scheme that allows compliant tax payers to avoid
advance tax at import. As a result, the number of
taxpayers increased by 40 percent, from 4,650 in 2008
to 6,593 in the first quarter of 2010.
Construction Permits
The building approval process has been moved from the
Ministry of Lands to the Ministry of Works, reducing the
time to obtain construction permits.
Registering Property
Property registration has been speeded by lifting a
moratorium on sales of privately owned properties. The
number of procedures for registering a property is now 7,
can be completed in 86 days, and costs 12.2 percent of
income per capita.
Commercial Courts
A Commercial Court opened in Freetown in December
2010 in order to speed commercial litigation and reduce
the estimated backlog of 1,500 commercial cases in
Sierra Leone. Commercial disputes in Sierra Leone
currently take between two and six years to resolve. The
new court aims to reduce these times to as little as three
months.
Promoting Investment
The Sierra Leone Investment and Export Promotion
Agency (SLIEPA) is now operating efficiently. SLIEPA
issued an investment guide and other information for
investors promoting key sectors, including agribusiness.
SLIEPA’s investment leads have grown from four in
2009 to more than 100 as of June 2010.
Creating a Platform for Public–Private Dialogue
The Sierra Leone Business Forum (SLBF) has been
established as an independent organization, active in
promoting issues related to tax modernization, financial
sector reform, land rights, and other business-oriented
changes.
SLBF advocacy efforts have lead to the enactment or
amendments of six laws: The Companies Act, Payment
Systems Act, General Services Tax, Bankruptcy Law,
Amendment to the General Law—Business Start-up,
Registration of Businesses Law.
Tracking Success
RABI has helped the government develop an action plan
to improve the business climate and a tracking
mechanism to assess progress. A reform coordinator
(DB consultant) prepares monthly reports for Cabinet.
| 4
KENYA INVESTMENT CLIMATE PROGRAM
Marie Bob-Kandeh, Managing Director of Rehoboth Services, Secretary General of the Market Women’s
Association, and SLBF board member
Eva Roberts, Entrepreneur and winner of Business Bomba, nationwide competition for entrepreneurs
Alpha Tanue Jalloh, President of the Sierra Leone Importers Association and SLBF board member
Creating a voice for the private sector
“IFC gave us the business forum, which acts for us as a bridge between the private and public sectors,” says Alpha
Tanue-Jalloh, President of the Sierra Leone Importers’ Association and an SLBF board member.
“We were looking for an advocacy group that would put our position forward and that was lacking. But now,
anything we say will reach the government. I can get the government to listen.”
Encouraging business registration
“The business climate has improved—I now understand the business registration
process and can afford it, too. As a result, I have formally registered my business.”
Marie Bob-Kandeh, the managing director of Rehoboth Services, said started out as a
street hawker.
“I had to leave very early in the morning, and then I would work all day,” she says. “It
was difficult for businesspeople to develop companies in this country. Laws prevented
investment, even if you worked hard. Even our own local people were distrusting each
other because of bureaucracy. Then after the 2007 Business Act so many things were
amended, like the rule abolishing the payment of advance tax.”
Better business climate attracting Diaspora
“The business environment in Sierra Leone has completely changed in the last
few years,” says Eva Roberts, a Diaspora Sierra Leonean who returned home
in 2007. “I hadn’t been home since 1990, but my husband and I felt it was safe
to come now,” says Roberts.
Roberts has invested in a tourism project, has been growing cassava and is raising tilapia in fishponds. She is
cultivating moringa, a nutrient-rich plant with numerous applications. With her plan to market tea made from the
moringa plant, Roberts won Business Bomba, a nationwide competition to find the country’s best budding
entrepreneurs. The annual competition is funded by IFC, DFID, the George Soros Development Foundation, and
the Government of Sierra Leone.
For inquiries, please contact:
Lucie Giraud: [email protected]
Investment Climate Advisory Services in Africa - World Bank Group
Caparo Building, 1st Floor, Chyulu Road, Upper Hill
Nairobi, Kenya
Tel: +254 717 717 910 Cell: + 254 717 717 910
www.wbginvestmentclimate.org
doc_153455962.pdf
Rebuilding Business And Investment In Post-Conflict Sierra Leone
Sierra Leone’s current business context
The Government of Sierra Leone is committed to improving the country’s investment climate, convinced that private
sector development is the engine for economic growth. Although obstacles remain to doing business in Sierra Leone,
the country has recorded major improvements in recent years, thanks to the collaboration and support from many
stakeholders, including the World Bank Group’s Removing Administrative Barriers to Investment (RABI) program.
Results have been significant. Sierra Leone has been steadily making progress and has been the second country
(behind Burkina Faso) in the Economic Community Of West African States (ECOWAS) with the highest number of
improvements on the World Bank Group’s Doing Business report– a remarkable turnaround only seven years after a
civil war had all but destroyed the economy.
History of the Sierra Leone Investment Climate Program: Removing Administrative Barriers to
Investment (RABI)
In 2004, two years after the end of Sierra Leone’s devastating civil war, the World Bank Group Investment Climate
Advisory Services team responded to a request from the Government of Sierra Leone to help create a better business
and investment climate that would lay a foundation for the country’s economic growth. The team partnered with the
UK’s Department for International Development (DFID) and other development partners to design a program to help
Sierra Leone improve its business climate, encourage job creation, and spur investment. The result of this partnership
was the RABI program, which ran from 2004 to 2010. RABI pioneered a collaborative approach by working closely with
the government, local institutions and the private sector to implement a comprehensive, integrated agenda that
focused on reforms in the key areas. A follow-on program, the Sierra Leone Investment Climate Program, was
requested by the government and initiated in January 2011.
The success of RABI has also led to other IFC Advisory Services programs in Sierra Leone, including the Conflict
Affected States in Africa Initiative, which aims to strengthen the competitiveness of small and medium enterprises,
rebuild financial markets while building the appropriate financial infrastructure to support private investment and
increase private participation in the provision and rehabilitation of infrastructure.
Components of the Program
The Sierra Leone Investment Climate Program concentrates on three key areas: Reducing barriers to formalization
(reducing barriers to new business registration and streamlining the administration of taxes); enhancing public and
private dialogue to identify barriers to existing businesses (supporting and strengthening the Sierra Leone Business
Forum; and generating investment in key sectors (supporting the Sierra Leone Investment and Export Promotion
Agency).
Rebuilding Business and Investment in
Post-Conflict Sierra Leone
The Sierra Leone Investment Climate Program
In only three years, Sierra Leone’s investment leads have
increased by 71 percent.
In partnership with:
KEY
CHALLENGES
RABI PROGRAM RESPONSES
Business
Registration
New legislation to further reduce the time and cost to register a new business and further
increase access by decentralization and computerization.
Paying Taxes
Focus on the policy and administrative aspects of tax administration with a view to
reducing the burden on small businesses.
Attracting
Investment
Gather information on investment and trade opportunities and facilitate investment into
the country, support the development of export industries and promote Sierra Leone as a
vibrant and improving location for business in West Africa in the key economic strategic
sectors of tourism and agribusiness.
| 2
KENYA INVESTMENT CLIMATE PROGRAM
The very successful, high-profile event, which had the active participation of Former Prime Minister Tony Blair,
investor George Soros, and Prince Charles, Prince of Wales, attracted over 600 registrants and demonstrated
that Sierra Leone is a peaceful, stable democracy that is open for business, showcasing the government’s
commitment to reform, and highlighting investment opportunities in the country’s strategic target sectors of
tourism and agribusiness.
In the month following the Trade and Investment Forum, the Sierra Leone Investment and Export Promotion
Agency received an increase in total investor enquiries of 71 percent.
Dr. Ernest Bai Koroma, President of Sierra Leone
Building investor confidence
“These reforms are helping to build investor confidence. But they are just the
beginning, not the end, of our efforts – a down-payment if you will, on the pro-
business, pro-reform agenda we are committed to pursuing in the years to
come”, President Ernest Bai Koroma told hundreds of investors gathered in
London for the Sierra Leone Trade and Investment Forum in November 2009.
From a focused to a broader intervention
Very often, when the World Bank Group’s Investment Climate team first sets foot in a country, it initially focuses on
one or two specific reform areas. Once that first initiative has been passed and the private sector is reaping the
benefits, the team engages with the government on wider reforms. That same model was applied in Sierra Leone. The
initial focus was on rapid diagnostics, which identified key barriers to investment. This led to a focus on improving
business start-up and gradually broadened to include regulatory reform, including doing business reform, tax policy
reform, private-public dialogue and investment generation.
Reform communications
That which is not communicated cannot be implemented.
Governments often pass reforms that do not get implemented
because these reforms have not been publicized. The departments
and civil servants mandated with their implementation have little
knowledge of the reforms, and may continue using the old ways.
Similarly, when private businesses have not heard of new
modifications or regulations that simplify their transactions, they
cannot make use of these improvements and therefore continue to
suffer the delays and costs involved.
For those reasons, RABI seeks to create awareness through several avenues:
• Helping ministries and agencies to better communicate reforms, both internally to civil servants and externally to
the private sector
• Support private sector associations in communicating reforms to their members, and to get feedback toward fine-
tuning the reforms
• Keep the media informed of all reforms and their impact, so it might better reach key stakeholders. For example,
RABI provided a business reporting training program for the Sierra Leone Network of Economic and Development
Reporters.
| 3
KENYA INVESTMENT CLIMATE PROGRAM
Starting a Business
With the passage of the General Law (Business Start-Up
Amendment) Act 2007 and the Registration of Business
Act 2007, the time to register a business has been
reduced from one week to 2 days and the cost has been
cut by almost 50percent. As a result, the number of
businesses registered has more than doubled, and the
associated revenues have increased from 600 million
Leones ($150,000) in 2007 to 1 billion Leones
($250,000) in 2009. An amendment to the Companies
Act in 2009 allowed for better protection for investors.
Trading Across Borders
Importing and exporting procedures have been mapped
and used for discussions to further streamline customs
procedures.
Tax
The government eliminated the requirement that new
businesses pay a quarter of their estimated taxable
income before they register as companies, an exemption
scheme that allows compliant tax payers to avoid
advance tax at import. As a result, the number of
taxpayers increased by 40 percent, from 4,650 in 2008
to 6,593 in the first quarter of 2010.
Construction Permits
The building approval process has been moved from the
Ministry of Lands to the Ministry of Works, reducing the
time to obtain construction permits.
Registering Property
Property registration has been speeded by lifting a
moratorium on sales of privately owned properties. The
number of procedures for registering a property is now 7,
can be completed in 86 days, and costs 12.2 percent of
income per capita.
Commercial Courts
A Commercial Court opened in Freetown in December
2010 in order to speed commercial litigation and reduce
the estimated backlog of 1,500 commercial cases in
Sierra Leone. Commercial disputes in Sierra Leone
currently take between two and six years to resolve. The
new court aims to reduce these times to as little as three
months.
Promoting Investment
The Sierra Leone Investment and Export Promotion
Agency (SLIEPA) is now operating efficiently. SLIEPA
issued an investment guide and other information for
investors promoting key sectors, including agribusiness.
SLIEPA’s investment leads have grown from four in
2009 to more than 100 as of June 2010.
Creating a Platform for Public–Private Dialogue
The Sierra Leone Business Forum (SLBF) has been
established as an independent organization, active in
promoting issues related to tax modernization, financial
sector reform, land rights, and other business-oriented
changes.
SLBF advocacy efforts have lead to the enactment or
amendments of six laws: The Companies Act, Payment
Systems Act, General Services Tax, Bankruptcy Law,
Amendment to the General Law—Business Start-up,
Registration of Businesses Law.
Tracking Success
RABI has helped the government develop an action plan
to improve the business climate and a tracking
mechanism to assess progress. A reform coordinator
(DB consultant) prepares monthly reports for Cabinet.
| 4
KENYA INVESTMENT CLIMATE PROGRAM
Marie Bob-Kandeh, Managing Director of Rehoboth Services, Secretary General of the Market Women’s
Association, and SLBF board member
Eva Roberts, Entrepreneur and winner of Business Bomba, nationwide competition for entrepreneurs
Alpha Tanue Jalloh, President of the Sierra Leone Importers Association and SLBF board member
Creating a voice for the private sector
“IFC gave us the business forum, which acts for us as a bridge between the private and public sectors,” says Alpha
Tanue-Jalloh, President of the Sierra Leone Importers’ Association and an SLBF board member.
“We were looking for an advocacy group that would put our position forward and that was lacking. But now,
anything we say will reach the government. I can get the government to listen.”
Encouraging business registration
“The business climate has improved—I now understand the business registration
process and can afford it, too. As a result, I have formally registered my business.”
Marie Bob-Kandeh, the managing director of Rehoboth Services, said started out as a
street hawker.
“I had to leave very early in the morning, and then I would work all day,” she says. “It
was difficult for businesspeople to develop companies in this country. Laws prevented
investment, even if you worked hard. Even our own local people were distrusting each
other because of bureaucracy. Then after the 2007 Business Act so many things were
amended, like the rule abolishing the payment of advance tax.”
Better business climate attracting Diaspora
“The business environment in Sierra Leone has completely changed in the last
few years,” says Eva Roberts, a Diaspora Sierra Leonean who returned home
in 2007. “I hadn’t been home since 1990, but my husband and I felt it was safe
to come now,” says Roberts.
Roberts has invested in a tourism project, has been growing cassava and is raising tilapia in fishponds. She is
cultivating moringa, a nutrient-rich plant with numerous applications. With her plan to market tea made from the
moringa plant, Roberts won Business Bomba, a nationwide competition to find the country’s best budding
entrepreneurs. The annual competition is funded by IFC, DFID, the George Soros Development Foundation, and
the Government of Sierra Leone.
For inquiries, please contact:
Lucie Giraud: [email protected]
Investment Climate Advisory Services in Africa - World Bank Group
Caparo Building, 1st Floor, Chyulu Road, Upper Hill
Nairobi, Kenya
Tel: +254 717 717 910 Cell: + 254 717 717 910
www.wbginvestmentclimate.org
doc_153455962.pdf