Sierra Leone - case study of an LIDC - trade

Background

• located in west Africa By the western boarder

• It has many natural resources

  • Metallic ores

  • A wide range of agricultural produce

• It has limited access to global markets

• Peripheral economy with limited access to value chains

• Had trade deficit in every category in 2014

• Heavily dependant on aid from the USA, UK and china

• One of the poorest countries in the world (ranked 180th in 2015 with an HDI of 0.47

• Member of ECOWAS

• Main export partners are china, japan and Belgium

• Young population - 60% under 25

Economy

• over dependence on primary product export

• Limited access to finance to secure banking sector

• Inadequate infrastructure

• Limited broadband internet

• High costs of production

• Low level of technology

Politics

• slow recovery from civil war (1991-2002) - previous political instability has affected confidence of investors and international trade

• Inability to control crime including illegal trading

• Inefficient government bureaucracy and prevalence of corruption

Social

• high level of unemployment = 70% of under 25s

• Bad education + educated workforce = 91% of women and 80% men do not reach secondary school

• Gender inequality - serious barriers to the contribution of women

• Child labour = immoral

• Other socio-economic inequalities in health, poverty and life - expectancy

Environmental

• debilitating effects on the population/work force to prevent diseases

• Limited effects of environmental damage to water, soil and forest reserves as a result of large scale mining operations

opportunities created by international trade

• Sierra Leone has the support of bilateral trade partners to strengthen trade and socio economic development. Chinese companies first exploited in demand for iron ores but have now become greater in their corporate social responsibility. Financed medical teams, new hospital in free-town and new foreign ministry, airport and rail network

• Being a member of ECOWAS benefits Sierra Leone by abolishing tariff and non tariff barriers between members of state. This has increased trade and boosted economic activity and increased competitiveness in global markets

• Member of Mano river union has involved SL in social and economic development programs

• SL government and multi lateral donors set up the small holder commercialisation program, providing tractors, processing equipment, reclaiming swamps and improving roads to the market

• Political stability and good trade relations have improved since the civil war, with 3 successful democratic elections. The government is modernising customs to ease trade and rule of law is strengthening in dealing with corruption and new gender laws

Challenges created by international trade

• reducing barriers which inhibit participation in global value chains. SL is close to being more integrated but is restricted by poor infrastructure in marketing cash crops and tourism reduction of illegal practices is a priority in the diamond trade and fishing

• Managing conflicts between indiscriminate development and environmental degradation. Unsustainable mining practices and agri-business have caused soil erosion, silting of rivers, deforestation and displacement of communities

• Reducing severe inequalities in life expectancy, gender, education and income. GDP, government funding and employment ops are sufficient for investment in services, infrastructure and industry - mostly rural areas, 66% live in poverty. Gender inequality is an injustice which is both a cause and consequence of limited trade and development