Savings & Investment

Sierra Leone’s President, Ernest Bai Koroma, was quoted saying, “A massive investment in agriculture is needed across Africa if the continent is to respond to the global food crisis sparked by soaring prices of basic crops. It is vital that Africa increases food productivity and achieves food self-sufficiency. African farmers need to adopt higher-yielding land practices, with increased use of improved seeds, fertilizers and irrigation” (UN News Centre).

Given the abundance of Sierra Leones fertile land, which 8% is still uncultivated, shows that the reason their productivity is the lowest in the world is because of the lack of incentives farmers have because of the high cost of input and incomparable prices that are in the world market for goods (UN News Centre).

Sierra Leone needs to increase their investment in building and tools to help production in the agricultural industry and industrial industry as well. A change must be made if they want to see any economic improvement to their failing infrastructure and social order in government. To increase the capitol, a factor of production, Sierra Leone simply needs to change the amount of capital it has.

Trade-offs, when involving investment and savings, play a major role. It is vital that Sierra Leone realizes their need for capital. They would need to consume less and save more, a trade-off, to be able to afford their new expansion in the sectors of their economy that need it most and where they can see the highest potential of growth. Sierra Leone currently seems to be saving their money for the things they know they can benefit the most from, such as diamonds and agriculture, but isn’t investing to their full potential to help maximize their capital.

Also, if they invested more money in education that would significantly help the country as a whole thanks to the increase in educated workers to help produce ideas to become more efficient. The DFID, Department of International Development, strongly encouraged Sierra Leone to invest in education so between 2002 and 2005 Sierra Leone doubled their enrollment in schools thanks to their free primary education policy that ahs been enacted. Sierra Leone and others created a 10-year education plan that is intended to increase the literacy rate of the people living in Sierra Leone.

In regards to incentives, the corrupt government, during the time of the civil war, would restrict the participation in political life, access to justice, minimum wage, and adequate public service (DFID). This decreases the incentive to work if the working person isn’t able to earn a reasonable income to support their growing families and isn’t allowed to be apart of the actions being taken against the government for the injustices.

Thanks to the DFID and European Commission, they have developed a ‘poverty reduction strategy’ aimed to, “continue to build on the gains in the security and governance sectors and will also do more to stimulate and sustain economic growth, develop infrastructure and improve basic service delivery to the poor” (DFID). Sierra Leone needs to start saving their money while reducing consumption only to later take out and increase investment by purchasing tools, factories, and equipment to help grow their economy.

Given the room for growth Sierra Leone should increase investment in other industries and even the ones at hand if they want to see any growth as a country and of their GDP and economic 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. .