International Trade

For Sierra Leone, their mineral exports are their main foreign earner when trading amongst countries. “The fate of the economy depends upon the maintenance of domestic peace and the continued receipt of substantial aid from abroad, which is essential to offset the severe trade imbalance and supplement government revenues” (CIA The World Factbook).

Sierra Leone exports $216 million dollars in diamonds, rutile, cocoa, coffee and fish. They rank 176 out of 223 in the world for the exported income. Their largest export partners include Belgium at 35.6%, U.S. at 20.1%, India at 15.2% and France at 4.9% (CIA The World Factbook). Sierra Leone also imports $560 million dollars worth of foodstuffs, machinery and equipment, fuels and lubricants, and chemicals from China (manufactured goods) at 10.3%, Cote d’Ivoire (fuel) at 8.8%, U.S. at 7.8%, Belgium at 6.6%, and the UK at 6.6%(CIA The World Factbook). These statistics show that larger countries are benefiting from Sierra Leone and how much they export/import with them. If Sierra Leone were able to produce more and diversify production of their goods and services, and then they could achieve great economic growth.

Since their independence in 2002 the government has encouraged foreign investment despite the fact that businesses have been hindered by the lack of foreign exchange, corruption, and uncertainty resulting from civil conflicts. Investors in new business although are protected by an agreement that allows for arbitration under the 1965 World Bank Convention which provides the transfer of interest, dividends, and capital (US Department of State).

Short after, the government also passed the Investment Promotion Act in August 2004 to attract foreign investors and began to work with international financial institutions to help “lower its administrative barriers to trade” which helped create, in 2007, the Sierra Leone Investment and Export Promotion Agency, which was created to assist investors by creating a "one stop shop" for starting a business (US Department of State).

“In 2008, the International Finance Corporation's ‘Doing Business’ guide ranked Sierra Leone 7th out of 15 West African countries in terms of ease of doing business. Sierra Leone is top-ranked in West Africa in terms of starting a business, but issues with licenses, contract enforcement, and high tax rates are still impediments to investment” (UN News Centre).

Thanks to these recent trade policies Sierra Leone has made it easy for business to operate within the country and has proved to be a vital part in the re-stabilizing of this country. Their open market has made of easy for them to trade even though it might look like they rely on their diamond market a little too much.
Sierra practices a free trade that means that traders are allowed to export/import without any government interference as long as it represents growth for the country that corresponds to its needs.
Before the civil war was initiated, the government heavily favored tourism as a growing attraction thanks to Sierra Leone’s non-discriminatory tariff that served the interests of the consumers because it kept prices relatively low (U.S. Department of State).

Its key that Sierra Leone expands their market of goods so they are not so dependent on an export. If diamonds were to drop in price or if the people of Sierra Leone were unable to continue mining for some reason, the outcome would be devastating for the economic well being of the up and coming country.

Due to the increase in short-term debts, the balance of trade has suffered. There has been a decline of conditions in trade thanks to the increase of prices. These prices mainly are dealing with petroleum products and manufactured goods from the industrial world and exceed those of agricultural produce, diamonds, and bauxite in Sierra Leone making it hard for them to do trade.

If Sierra Leone can expands their industrial infrastructure and increase their farming productivity, they will be able to achieve high GDP and economic growth and overall, achieve greater well being.


Works Cited
U.S. Department of State- Sierra Leone. Background Note, 18 Feb. 2009. Web. 22
Nov. 2009. .
CIA-The World Factbook. Africa: Sierra Leone. Central Intelligence Agency, 17
Feb. 2009. Web. 30 Nov. 2009. the-world-factbook/geos/sl.html>.
UN News Centre. “At UN, Sierra Leone calls for investment in agriculture to combat food crisis”. UN News Service, 25 Sept. 2008. Web. 30 Nov. 2009. .
"Key Facts: Sierra Leone." DFID: Department of International Development. Crown,
12 June 2008. Web. 8 Dec. 2009. .