AfDB-Sierra Leone Partnership
Through 2017, AfDB will help diversify and strengthen Sierra Leone’s economy, including by promoting inclusive growth led by the private sector. The bank will also help the country manage revenues from natural and mineral resources more efficiently.
By Aimee Rae Ocampo // 27 March 2014Two women pan for gold in a river. Artisanal gold mining is a significant source of income for many Sierra Leoneans living near areas with rich gold deposits. Through 2017, AfDB will be helping Sierra Leone manage revenues from mineral resources more efficiently. Photo by: Felicity Thompson / AfDB Sierra Leone has come a long way since its 11-year civil war ended in 2002. The country has held three successful democratic elections since, and the peace and security situation has improved significantly. Freetown has likewise been instrumental to U.N. peacekeeping efforts, providing police and military personnel in conflict-affected countries. Notable progress has also been made in economic development — the World Bank estimates gross domestic product in 2013 grew 17percent year-on-year. Despite recent strides, Sierra Leone still faces several challenges to achieving sustainable and inclusive development. Its economy relies heavily on agriculture and extractive industries, with the former contributing more than a third to Sierra Leone’s GDP and employing roughly 70 percent of the working population. The mining sector, meanwhile, requires high-skilled labor and is only able to employ less than 3 percent of the workforce. These factors make the economy highly susceptible to climate change and environmental shocks. Further, insufficient energy and transport infrastructure hampers growth in the private sector, which has failed to capitalize on the threefold increase in foreign direct investments. In addition, the government struggles to fight corruption and lacks a solid public financial management system, crippling its ability to deliver basic services. Social development remains problematic, gender inequality is widely prevalent, youth unemployment is high and low-skilled workers comprise the majority of the labor force. As one of the country’s top development partners, the African Development Bank is committed to helping Sierra Leone achieve its development goals. AfDB has aligned its assistance with the country’s Agenda for Prosperity strategy for 2013-2018, supporting Freetown’s goal of moving up to middle-income status by 2035. Funding levels Under the bank’s country strategy paper for Sierra Leone, AfDB will be providing $243 million to $378 million in indicative funding between 2014 and 2017. Below is a breakdown of possible allocation levels. The bulk of AfDB assistance to Sierra Leone — $150 million — will come from its private sector operations investment window. Contributions from the bank’s regional funding mechanisms are expected to be anywhere between $39 million and $129 million, while disbursements from the Asian Development Fund will range from $54 million to $99 million. The indicative allocation varies widely because funding levels for ADF-13 and the first year of ADF-14 — which cover the current partnership period — have yet to be determined. The allocation in the low scenario is based on the assumption that Sierra Leone will not receive an allocation from the bank’s Fragile State Facility for ADF-13. The medium scenario assumes the country will receive $22.5 million from the FSF envelope, while the highest numbers are calculated based on a $45 million FSF allocation — which is the same amount Sierra Leone received in ADF-12. Given uncertain funding levels, AfDB will be working closely with the government of Sierra Leone in identifying and prioritizing projects to be financed during the period. Funding priorities AfDB’s strategy for Sierra Leone hinges on two key priorities: - Enhancing Economic Governance and Transparent Management of Natural Resources Revenue. - Supporting Transformational and Sustainable Infrastructure Development. Focus will be on the areas of private sector development; capacity building for the public sector; gender equity and women’s empowerment; fostering inclusive development for the benefit of vulnerable members of the population, particularly the youth; climate resilience and sustainable growth; and regional integration and trade in the context of the Mano River Union. Below is a breakdown of programs to be supported within the funding period, alongside their corresponding indicative budget allocations. The four highest-funded AfDB projects currently being implemented in Sierra Leone are: - Three Towns Water Supply Project in Sierra Leone ($60.03 million) – Designed to increase access to water services in the cities of Bo, Makeni and Kenema, and strengthen the capacity of the Sierra Leone Water Company. - Matotoka Sefadu Road Rehabilitation Project in Sierra Leone ($44.67 million) – Aimed at improving transport conditions along the Matotoka-Yiye road and its surrounding areas. - Rural Water Supply and Sanitation Project in Sierra Leone ($43.27 million) – Intended to develop a framework for rural water supply and sanitation at the national level, as well as broaden access to water and sanitation services. - Lungi-Port Loko Road Upgrading Project in Sierra Leone ($40.29 million) – Targets to rehabilitate war-damaged road infrastructure, stimulate economic growth and reduce poverty. Devex analysis AfDB has identified the public sector’s limited capacity to coordinate and implement development projects as the highest risk to aid delivery, citing weaknesses in both national and local levels. In this light, the bank foresees capacity building activities playing a central role in its projects in Sierra Leone. Public finance management is also an area of concern. AfDB intends to engage civil society in monitoring the substantial revenue coming from extractive industries, while coordinating with other development partners to increase transparency on this front. Fluctuating demand for and prices of mineral resources in the global economy, coupled with environmental threats from climate change are also seen as significant threats to the country’s development objectives, as they could greatly affect Sierra Leone’s economy. Addressing these issues will entail incorporation of climate-resilience measures in projects, as well as closer monitoring of macroeconomic drivers to ensure that corresponding measures are taken. Close cooperation and consultation with the government is also expected to mitigate risks in areas such as corruption, youth unemployment and gender inequality. AfDB is among the country’s top four development partners, along with the United Kingdom, European Union and World Bank, and will continue to provide support to Sierra Leone through 2017 and beyond. Contact AfDB field office in Sierra Leone Tel: (232) 7654-1328 Email:
Two women pan for gold in a river. Artisanal gold mining is a significant source of income for many Sierra Leoneans living near areas with rich gold deposits. Through 2017, AfDB will be helping Sierra Leone manage revenues from mineral resources more efficiently. Photo by: Felicity Thompson / AfDB
Sierra Leone has come a long way since its 11-year civil war ended in 2002. The country has held three successful democratic elections since, and the peace and security situation has improved significantly. Freetown has likewise been instrumental to U.N. peacekeeping efforts, providing police and military personnel in conflict-affected countries.
Notable progress has also been made in economic development — the World Bank estimates gross domestic product in 2013 grew 17percent year-on-year.
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As former Devex editor for business insight, Aimee created and managed multimedia content and cutting-edge analysis for executives in international development.