Sierra Leone - Foreign investment



The government encourages the development of plantations and the investment of foreign private capital in agriculture and worthwhile new enterprises. Safeguards are provided against nationalization, and repatriation of capital, profits, and interest is permitted. Legislation in 1983 offered tax relief for up to five years, preferential access to import licenses, exemption from customs and duties on capital equipment and new materials, and special bonuses for companies setting up outside Freetown.

Sierra Leone attracted few foreign investors in the early 1990s. Progress in reforming the economy was expected to reverse that trend, but renewed civil disturbances in 1997 threatened those prospects. Rex Mining, the first company to invest in Sierra Leone after the civil war, suspended work at its diamond mine after the military coup in May of 1997. Production in the rutile and bauxite plants resumed in 2000, but continuance was unsure because of political unrest.

Foreign direct investment inflow (FDI) was $9.6 million in 1997, but this was more than reversed by a net divestment outflow in 1998 of -$9.8 million. Net FDI inflow was $6 million in 1999 and averaged $4.45 million a year in 2000 and 2001. In UNCTAD's ranking of 140 countries in terms of their potential for attracting foreign investment in the period 1998 to 2000, Sierra Leone was ranked number 140.

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