Sierra Leone - Current economic position and prospects (Vol. 1 of 5) : Main report

Report No. 494a-SL Sierra Leone Current Economic Position and Prospects (In Five Volumes) Volume 1: Main Report November 27, 1974 Western Africa Region Not for Public Use D)c urnent of tht International Bank for Reconstruction and Development International Developrmetnt Association This rpot u as prepared tor offitlal LIW only hy the, BRnk ,roL]u[. It may n(lt he pAulflshed, quotetd or t I'd witho t Banhk Croup authorization TheRa Bank Uoup doe,s not ai:r ept rosposmhility tor the .e( Liri(y vor oIrnIplct(ei ls o ti thre report.  CURRENCY EQUIVALENTS Currency Unit : Leone (Le) a fixed parity exists between the Leone and the pouna sterling: L = Le 2 The Leone floats against the dollar. Between Februaary 1913 ana April 1974 the rate at the end of each month has fluctuated as follows: US$ 1 = Leo .877 - 0.775 Throughout this report the following rates have been used for the conversion of Leone into US dollars and vice versa: 1968 and earlier: US$ 1 = Le 0.714 1961 : US$ 1 = Le 0.7j5 1968 - 1971 : US$ 1 = Le o.83 1972 : US$ 1 = Le o.816 19(i : US$ 1 = Le 0.8i3  PREFACE This report is based on the findings of an Economic Mission which visited Sierra Leone in November/December 1973. The following participated in the Mission and in the writing of the Report: Emmerich M. Schebeck - Chief of Mission Hendrik T. Koppen - General Economist Roger S. Suith - Fiscal Economist (IMF) Cornelius P. Cacho - Planning/Administration Specialist Gerald L. Karr - Agricultural Economist (Consultant) Gerhard Gerhardsen - Fishery Specialist (Consultant) Judith A. Edstrom - Education Economist Claude Delapierre - Transport Specialist Rolf Gusten - Transport Economist Ibrahim Kande - General Economist (ADB) Luz R. Pangilinan - Mission Secretary Ms. Edstrom and Messrs. Delapierre and Giisten visited Sierra Leone in the spring of 1974.   VOLUME I: THE MAIN REPORT Table of Contents Page No. COUNTRY DATA MAPS SUMMARY AND CONCLUSIONS ...... .......................... i- xi PART I: THE ECONOMIC STRUCTURE AND RECENT DEVELOPMENTS I. ECONOMIC TRENDS AND STRUCTURAL FEATURES OF THE ECONOMY ............................. 1 Overall Growth .............. ! . . . * . . . . . . * * * * 1 Structural Change and Sectoral Development ... 2 Investment . .....................o..o .... 4 Investment-and Savings .. ...................... 5 Fiscal Development ..0 .......... . .... * . . . . . . . . . . 8 Prices and Wages ......... . * . . . ...... . . . . . . . 11 Monetary Developments ... ................. ... 12 Balance of Payments .... .. . ... ....... ....... . 15 II. POPULATION, EMPLOYMENT, INCOME DISTRIBUTION .. 21 Population and Employment ....-...... -..... 21 Migration . ..... . . .. ......... . ......... . .* 25 Poverty and Income Distribution .............. 27 PART II: THE SECTORS - SETTING AND STRATEGY III. ECONOMIC SECTORS - OBJECTIVES AND PROSPECTS .. 32 Agriculture ...... ........................... 33 Fishery ............ ........... .............. 38 Mining .. .............. oo-............................. 40 Transport ........ 48 Energy ... ............................... 55 IV. SOCIO ECONOMIC NEEDS ............. 59 Education and Training ..... .. -.-........... 59 Health ..... ...........oo-o-o ......... ......o 63 V. ADMINISTRATION, ABSORPTIVE CAPACITY, PLANNING 65 General Administration .............- ..... 65 Projects and Planning ................. 66  Table of Contents (Continued) PART III: RESOURCES FOR DEVELOPMENT VI. DOMESTIC RESOURCES - ISSUES AND PROSPECTS ........... 68 Domestic Resources - The Public Sector ........ 70 Expenditure Control .................... 70 Revenue Measures ........... ........... . 73 Allocation of Resources ................... 76 The Fiscal Outlook ....... ........ 78 Domestic Resources - The Financial Sector .... 82 VII. BALANCE 'OF PAYMENTS AND EXTERNAL ASSISTANCE . 89 Trade ............ *.. . . .89 Other Current Account Items ................ * 98 External Capital Requirements...* ......... 100 External Debt . ........ .. ....... 103 VIII. PROSPECTS - CONCLUSION. .... . 105 The Medium-Term-Outlook (1974-80) ........... 105 The Long-Term Outlook (1980-85) ............. 110 Volume II Annex 1. FISCAL TRENDS AND-PROSPECTS. Volume III Annex 2. AGRICULTURE Annex 3. FISHERY Volume IV Annex 4. EDUCATION Annex 5. TRANSPORTATION Volume V STATISTICAL APPENDIX  Page I. of 3 pages COUNITR DATA-SIERRA LEONE AREA MPOULATION DUSITy 71,710 ~~~~~ l7Y~~~Uinn (mid-1972) ~~~~~~Per km2of arable land SOCIAL INDICATORS Reference Countries Sierra Leone ibeI l a SNP PE APITA 08$___ (ATIAS RASIS) /I 180 190 Ia 250 /a 3LOIa 380Ia DEMOGRAPHIC Crude death rate (per thousand) 45s /b SI d ad 46/A 5O /b Grade death rote (per thousand) .. ~~~~~~ ~~ ~~23 70 21 23 70 21 70 Infant mortality rate (per thousand live births) .183 - 159 7 i 110 7;c Life expectancy at birth (years) 41 I 53 42 75- 44w Oross reproduction rat . 2.9 2.6Alb 3.1/b 3.3 /b Population growiA rate S 2.2 2.2 /c 3.1 Tn 3.4 70c 2.9 Tc Population growtl rate - urban _/Ia ac 6 7f'.g 9Mi ZL Age struture (percent) 0OTh 37 /k 42 /c 42l/do 42 /ac 46/s. 15-64 58 71 55 7. 5 55 ~ S7. 51 7; 65 and "ovr Dse.edency ratio /4/c 37 ~ ~ 3S 37 m 10 1.1 7r' . ;L . 1.3 M; Urban pepil.iti.n as Percent of total 11 I... an 6___d_2_/ 3 Fosily Planning; No. of acceptors cuolative (thnus.)..., 1 eac 2/Uo 28/ 30k No. of users (% of narried wmoen) TWLOYMEN? Totaslbor force (thousands) 940A/ 1,050 Ic 580 2,300 1,600 lac Percentage employed in agriculture 75 717 73 7; 72 78 69 7-a0 Percen.tage uneMployod 3 71 2.3 7 ~ 20/n 9 io7;.t INCOM DISTRIBUTION Percent of national inceo received by highest 5% ha 1 lxf 60 30Ila Percent nf notinnal income received by highest 20% . 67 72 . 577" Percent of notional income received by lowest 20% 4. I 4 Percent of notional income receivod by lowest 40% . 10 72 13 1 MISTRIBUTION OF LAND OWENSHIP % owned by topll0t of% ownr o-era HEALTH AND NUTRCTION PoPulation Per physician 19,000 Ic 15,800 10,160 In 12,140 13,580 /n Population per nusing Person 2.0 4 ; 1,740 1,110 7m 2,h80 Is. 2,910o Population per hospital hod 1,415007r;L"- 700 5307; 68o 7Z 310 7; Per capita calorie nupply ou % of requirements 5. 90AI 95 In 101iI 92A/ Par capita protein supply, total (grams per day,J 6 19 77 41 7 59 77 69 7; Of which,oanimal and pulse ..16 77 io7 i 8 7z 25 7; Death rote 1-4s years /7 .. 21 73 EDUCATION Ajuste9d 18 prinery school enroilsent ratin 27317778 Adjasted 79 secondiary school enrollment ratio 4 11 12 U1 12 Tears of schooling provided, first and secwnd level 12 12 12 13 12 Vocational enrollment as % of sac, school enrollment 2 57 15 la. Adult literacy rate % * 15 /a 32 Le 20 4on 3 77b HOUSING Average No. of persons per rmo (urban) . 2.1 If, .. 2.11 I. Percent of occupied units without piped water 4. 9 7; oh Accens to electricity (an % of total populotion) ..- - Percent of faral population connected to electricity 2 Ic . CONSUMPTON %_Jo'_eoiver. per 1000 population 4 56 /n 132 17 la 18 Passnnger care per 1000 pepulation 2 9 10 11 7/a 21 Electric power conSumption (kwh P. c.) 19 78 4,29 120 932 Newsprint connsumption p.c. kg per year 0.09 0.08 0.01 Ian 0.2 0.5 Nnten, Figurs refer either to the lotest perlodn or to acnount or environmental temperatre", body ..1ghta, and the lateot yearn. latent periods refer in principle to distribution by age and sex of national populations. the yearn 1956-60 or 1966-70; the 1otest years in prin- 6 Protein standards (requiremata) for all countries as estab- ciple in 1960 and 1970. lished by LSUDA Economic Research Service provide for a minioass /jI The Per Copits GNP estimate is at market prices fcr allowance of 60 greamse of total protein par day, arnd 20 grass of yearn obe- tihn 1960, calculated by the cane onvernion anima and pulse protein, of whIch 1.0 grams enould be animal technique as the 1972 World Bank Atlas. protein. Theoe at-adards are somwhat lower than those of 75 12 Average number of daughters per woman of reproductive gramm of total protein and 23 greamse of animal protein a an age. average for the world, proposed by FAO in the Third World Food /) Population growth roten a- for the decades ending in Suarve. 1960 and 1970. l7 one studies have suggested that crude death rates of children A( Ratio of under 15 and 65 and o-er age brackets t. ~ ages 1 through 4 nay be used as a first apprminiation index of those in lahor foree bracket of agen 15 through 64. malnutrition. /5 AO reference standards represent physiological re- /8 Pereentage scrolled of correspondting population of school age quir,events for noreal activity and health, taking as defined for each country. Ia 1972; lb 1965-70 UN estimate; In 1960-72; Id 1971 Ie Definition not available; /-f 1W6; IR Fre- town; 7;h 1965-70; /i Over 1,000 population; -71 1965-69; /k Main ionsn and an many small townshIps an could be neparately identified; /1 1963; /a 1969; In Ratio of popul-ation under 15 and 65 and over to total labor force; Is Based cc the reoulto of population growth survey which covers five percent of the total population; /P localities having nore than 2,000 Inhabitants; /I FAO entimate; /r 1967-69; Is Unemployed and partially employed; It Persons seeking sorb; /u 1962; Iv Including midwives, assistant curses and midwifery, and nursing auxiliaries; lw Personnel in govermenet services nuly; Ix 1961; /5 Government hospitals only; Iz 1961-66; l/a 1965; /ab 155yeams and over; Ian Estimate; lad 6otioate based on the population growth ourvey which commencedT in ay 1969-; /ae As percent of total school age populatins; laf 1968, households; I& Income recipient; lah Percentage of urban dwellings with piped sater Inside. *Zanbia has been selected as an objective comntr-y because its per capita incene in nearly twice as high as Sierra Leone's and ito economic structure also depends heavily on the mining sector. 81 November 26, 1971  Page 2 of 3 pages ECONOMIC INDICATORS GROSS NATIONAL PRODUCT IN 197 ANNUAL RATE OF GROWI2H (%, constant prices) US$ Mln. % 1964 -68 1968 -70 1971 GNP at Market Prices 441 100.0 2.4 11.8 o.6 Gross Domestic Investment 79 17.9 9.8 20.1 17.7 Gross National Saving 59 13.4 46.o 10.3 16.7 Current Account Balance 20 4.5 Exports of Goods, NFS 113 25.6 4.0 5.6 -0.7 Imports of Goods, NFS 130 29-5 -2.9 9.0 -8.0 OUTPUT, LABOR FORCE AND PRODUCTIVITY IN 197 Value Added Labor Force-/ V. A. Per Worker U_S$ Mln. Thousand ..f ___ f national Agriculture 138 31.3 774 72.0 178 3 average Industry 25 5.7 49 4.6 556 135 Services 208 47.1 166 15.5 1253 305 Mining 70 15.9 39 3.6 1795 437 Unemployed !otal/Average 1ti 100.0 1073 w 411 100.0 GOVERNMENT FINANCE General Government Central Government Mln-) % of O P ( Le Mln.) % of GDP 197 197 196 -7 1972 73 U7i1/72 1972 73 Current Receipts 63.8 15.4 14.9 Current Expenditure - - - ....5 ...7 13.1 Current Surplus 6.3 1.7 1.5 Capital Expenditures 12.8 4.o 3.0 External Assistance (net) 1.3 04. 0.3 MONEY, CREDIT and PRICES 1968 196 1970 1971 12 1973 %Mllion Le outstanding end period) Money and Quasi Money 38.1 44.4 42.6 47.8 56.o 71.9 Bank credit to Public Sector 8.6 4.6 2.5 8.0 9.h 15.1 Bank Credit to Private Sector 16.1 16.9 19.4 19.9 21.7 28.2 (Percentages or Index Numbers) Money and Quasi Money as % of GDP 13.4 13.7 11.5 12.7 ...1/ General Price Index (1963 l 100) 129 134 144 10 1446 154 Annual percentage changes ins General Price Index 1.3 3.4 7.6 -2.3 3.9 5.8" Bank credit to Public Sector - 23 -47 -46 320 18 61 Bank credit to Private Sector 4 5 15 3 9 30 Note: All conversions to dollars in this table are at the average exchange rate prevailing during the period covered. 1/ January - September 1973. not apailable .not applicable  Page 3 of 3 pages TRADB PAYMS AND CAPITAL FWOIB BAlANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1971 -7' 1971 1972 1973 US $ Mln X (Millions US $) Diamonds 70 61 Exports of Goods, NPS 113.3 129.4 145.2 Other minerals 1/17 15 Imports of Goods, NPS 129.8 134.5 171.4 Major sgdcuiural exports- 17 15 Resource Gap (deficit 0 -) -i6. ; M s e -5.1 Interest Payments (net) - 4.6 - 2.9 Workers' Remittances _ - - 7.7 Other Factor Payments (net) -4.5 - 3.9 Net Transfers 5.8 3.0 5.6 All other commodities 10 9 Balance on Current Account -19.8 - 9.1 - 28.3 Total 114 lOO,O Direct Foreign Investment 5.3 3.8 .. EXTERNAL DEBT. DECEMBER 31. 1973 Net MLT Borrowing Disbursements 13.3 11.8 US $ Mln Amortization 7.7 5.7 Subtotal 5.6 6.1 17.4 Public Debt, incl. guaranteed 88.7 Capital Grants - - - Non-Guaranteed Private Debt Other Capital (net) 5.7 6.5 8.9 Total outstanding & Disbursed Other items n.e.i 7.1 0.7 0.8 2 Increase in Reserves (+) 3.9 8.0 -1.2 DEBT SERVICE RATIO for 197- Gross Reserves (end year) Net Reserves (end year) 38.4 46.4 50.4 Public Debt. incl. guaranteed 8.4 Non-Guaranteed Private Debt Fuel and Related Materials Total outstanding & Disbursed Imports 8.o 8.9 of which: Petroleum (8.0) (8.7) Exports 3.2 3.2 of which: Petroleum (3.2) (3.2) *- IBRD/IDA LENDIIG. (latest month) (Million US $): IBRD IDA RATE OF EXCHANGE Outstanding & Disbursed Nov. 1967- Dec. 1971 Dec. 1971 - June 1972 Undisbursed US $ 1.00 =Le 0.6 US $ 1.00 = Le 0.77 Outstandin incl. Undisbursed Le 1.00 = US$ 1.20 Le 1.00 = US$ 1.30 Since June 1972 The Leone floats with sterling (L1.00 = Le 2.00 1/ njocoa, coffee, palm kernels. 2/ Ratio of Debt Service to Ecports of Goods and Non-Factor Services. not available not applicable August 5, 1974   b I ( I t Z _ L v X X \ v . I'~~~~~~~~~:r I I -L - -- - - TI~~ \;~~~~~~~~ 4 -- -', 5 T c Lw 0 -IT ~ ~ ~ ~ ~ z- w > + i. _. I L _f > tEN 4 t t~~~~~~~~~~~~~~~~~~~~~~~-fF- rn j~~~~~~~ S~v lw ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~   IBRD 11223 IT~~ ~ 12 r . ,,.-,P ) J 'PRVLA, VI-~~~~~~- ~~~~~~~~~~~wA/, - , / NI m <. . \E '. - / 1PR O 1,0 E D; 1,,, I I ICR b.' -- -" 2 1 _____________NgR,THERN A/- -9~~ ~ ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- f~~~~~~~ K" t (POOSD DoI D ~~~~1 ~ ~ ~ ~ ~ 1 AA G R Ir TURE wM,C T -T ,, / L EVELOplAENT >PRIOJEICTi RAL + CAIT/t KTf'Ar|:D,;_ TERLOO 9 -A, -A~~~~~~~~~~~~~~~~A a. 'r~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-~1 ~O ON`SOR-EOCE ROAD ~~~~~7AAT- ~~~~~~~~~~~~~~~~~~~~~ IAMONDS T~~~~~~~~~~~~~~~E I~~~~~~~~~~~~~~~~~~~~~A ER TI COILE 'W SO-T RICE ______INTEGRATED AGRICULTURAL CORKS -7 ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~DEVELOPMENT PROJECT G INGADA 7 L FOREST 0 10~~~0 I? II ~~~~~~~~~~~~~~~~~~~~~~~~~~~AUGUST 197   GUINEA I100 ~~~~~~~~~~~~~~~~~~~~~~~''I 3S 130iSIN 1 120 30 24 t1 impl eondosmn t~ hor acet ane thes- do 0 . 9