RESTRICTED

WT/TPR/S/303/Rev.1

10 January 2017(17-0151) Page: 1/75

Trade Policy Review Body

TRADE POLICY REVIEW

REPORT BY THE SECRETARIAT

SIERRA LEONE

Revision

This report, prepared for the second Trade Policy Review of Sierra Leone, has been drawn up by the WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), sought clarification from Sierra Leone on its trade policies and practices.

Any technical questions arising from this report may be addressed to Jacques Degbelo (tel.: 022 739 5583) and Nelnan Koumtingué (tel.: 022 739 6252).

Document WT/TPR/G/303/Rev.1 contains the policy statement (revision) submitted by Sierra Leone.

Note: This report is subject to restricted circulation and press embargo until the end of the first session of the meeting of the Trade Policy Review Body on Sierra Leone. This report was drafted in English.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 2 -

CONTENTSSUMMARY 61   ECONOMIC ENVIRONMENT 91.1   Main Features of the Economy 91.2   Recent Economic Developments121.3   Trade Performance 131.4   Foreign Direct Investment162   TRADE AND INVESTMENT REGIMES 172.1   General Framework 172.2   Trade Policy Objectives 192.3   Trade Agreements and Arrangements 192.3.1   World Trade Organization 192.3.2   Regional agreements 202.3.2.1   African Union 202.3.2.2   Economic Community of West African States 212.3.2.3   Other arrangements 212.3.3   Preferential trade arrangements 222.4   Investment Regime 222.4.1   Legal framework for business 232.4.2   Local content prescriptions 242.4.3   International investment agreements 253   TRADE POLICIES AND PRACTICES BY MEASURE 263.1   Measures Directly Affecting Imports 263.1.1   Customs procedures and requirements 263.1.2   Customs valuation 273.1.3   Rules of origin 283.1.4   Tariffs 283.1.4.1   Applied MFN tariff 283.1.4.2   Other duties and charges 323.1.4.3   Internal taxes 333.1.4.4   Tariff preferences 343.1.5   Duty and tax concessions and exemptions 343.1.6   Import prohibitions, restrictions, and licensing 343.1.7   Contingency measures 353.2   Measures Directly Affecting Exports 353.2.1   Export procedures and requirements353.2.2   Export taxes, charges, and levies 353.2.3   Export prohibitions, restrictions, and licensing 353.2.4   Export support, promotion, guarantee, and insurance 363.2.5   Export processing zones373.3   Measures Affecting Production and Trade 37

WT/TPR/S/303/Rev.1 • Sierra Leone

- 3 -

3.3.1   Tax and incentives 373.3.1.1   Tax373.3.1.2   Incentives 383.3.2   Standards and other technical requirements 393.3.3   Marking, labelling, and packaging 413.3.4   Sanitary and phytosanitary requirements 413.3.5   State trading, state-owned enterprises, and privatization 423.3.6   Competition policy and price controls 433.3.7   Government procurement 433.3.8   Intellectual property rights 454   TRADE POLICIES BY SECTOR 484.1   Agriculture 484.1.1   Overview 484.1.2   Agricultural policies 484.1.3   Key subsectors 504.1.3.1   Crops 504.1.3.1.1   Cocoa 504.1.3.1.2   Rice 514.1.3.2   Forestry 524.1.3.3   Fisheries 534.2   Energy 544.2.1   Overview 544.2.2   Upstream petroleum and gas activities 554.2.3   Downstream activities 564.2.4   Electricity 574.3   Mining 594.3.1   Regulation 594.3.2   Main products 614.3.2.1   Diamonds 614.3.2.2   Other minerals 624.4   Manufacturing 624.5   Services 634.5.1   Overview 634.5.2   Financial services 634.5.2.1   Banking 634.5.2.2   Insurance654.5.2.3   Other financial services 664.5.3   Information and communication services 674.5.3.1   Telecommunications 674.5.3.2   Internet access 684.5.3.3   Postal services 68

WT/TPR/S/303/Rev.1 • Sierra Leone

- 4 -

4.5.4   Transport services 684.5.4.1   Air transport 684.5.4.2   Land transport 694.5.4.3   Maritime transport 704.5.5   Tourism 714.5.6   Professional and business services 725   APPENDIX TABLES 73

CHARTS

Chart 1.1 Product composition of merchandise trade, 2006-2015 15Chart 1.2 Direction of exports (f.o.b.), including re-exports, 2006-2014 16Chart 3.1 Breakdown of applied MFN tariffs, 2016 29Chart 3.2 MFN tariff escalation by manufacturing, ISIC 2-digit, 2016 31Chart 3.3 Average MFN tariff rates, by WTO product categories, 2016 32Chart 4.1 Rice production and imports, 2000-16 51Chart 4.2 Import of petroleum products, 2000-13 57Chart 4.3 Selected indicators in air transportation, 2005-13 69Chart 4.4 Visitor arrivals by air, by purpose and origin, 2012 71

TABLES

Table 1.1 Selected macroeconomic indicators, 2005, 2010-15 10Table 1.2 Balance of payments, 2005, 2010-15 14Table 1.3 FDI inflows, 2010-15 16Table 2.1 Main trade and investment-related legislation issued/amended/implemented since 2005 18Table 2.2 Key policy prescriptions in the Local Content Policy 24Table 3.1 Structure of applied MFN tariffs, 2004 and 2016 29Table 3.2 Comparative analysis of Sierra Leone's MFN tariff and the ECOWAS CET, 201630Table 3.3 Products subject to the excise tax, September 2016 33Table 3.4 Composition of Government domestic revenue, 2010-15 37Table 3.5 Main investment incentives 38Table 3.6 Sierra Leone's technical regulations in force, September 2016 40Table 3.7 State involvement in enterprises 42Table 4.1 Structure of energy consumption, 2011 54Table 4.2 Petroleum rights, related fees, and conditions 55Table 4.3 Electricity generation and consumption, 2009-14 57Table 4.4 Mineral production 2009-1459Table 4.5 Licensing requirements in the mining sector 60Table 4.6 Fees related to mineral rights and permits 61Table 4.7 Selected products in the manufacturing sector, 2009-14 62

WT/TPR/S/303/Rev.1 • Sierra Leone

- 5 -

Table 4.8 Commercial banks, September 2016 64Table 4.9 Premiums collected by insurance businesses, 2009-14 65Table 4.10 Minimum reserve requirements for insurance companies, 2016 66Table 4.11 Financial requirements for other financial institutions 67Table 4.12 Selected indicators of the telecommunications sector, 2009-13 67Table 4.13 Tourism basic indicators, 2006 and 2009-12 71Table 4.14 Other regulated professional services 72

APPENDIX TABLES

Table A1.1 Merchandise exports by product group, 2005 and 2010-15 73Table A1.2 Merchandise imports by SITC section, 2005 and 2010-15 73Table A1.3 Merchandise exports by destination, 2005 and 2010-14 74Table A3.1 MFN tariff averages by HS2-digit level, 2016 75

WT/TPR/S/303/Rev.1 • Sierra Leone

- 6 -

SUMMARY

1. Sierra Leone is a least developed country (LDC) with a relatively young population: 42.4% of its 7.1 million inhabitants are aged less than 15 years. The country is in a fragile post-conflict and post-ebola virus disease (EVD) situation. Agriculture is the backbone of the economy; its contribution to the GDP declined sharply in 2012 because of a boom in the mining sector, before bouncing back as minerals exports collapsed. Sierra Leone is rich in minerals such as gold, diamond, bauxite, rutile, and iron ore. The manufacturing sector is marginal and is limited to first-stage processing of local raw materials and to light industries. Like the other sectors of the economy, it is plagued by weak infrastructure, high production costs, unreliable supply of energy at high prices, and limited access to financing.

2. Since its last Trade Policy Review (TPR) in 2005, Sierra Leone has pursued its reconstruction efforts, supported by a substantial inflow of external aid. The business environment improved as a result of structural reforms and progress in governance and human development. Sierra Leone has expanded its mining sector through the production and export of iron ore, boosting the real GDP growth to 20.7% in 2013. However, the outbreak of EVD, and the closing of the national borders to contain its spread, jeopardized the recovery process. This was further exacerbated by the decline in world prices of iron ore, which contributed to the closure of the major mines. The economy contracted by 20.6% in 2015. A recovery started towards the end of 2015 as EVD receded. New investment in agriculture, the resumption of iron ore mining, and reforms in the energy sector are expected to support the economic recovery in the medium term.

3. During the review period, Sierra Leone's exports diversified away from diamonds, and also consist of iron-ore, rutile, bauxite, and agricultural products (cocoa and coffee). In 2012, iron ore overtook diamonds as the major export product, and accounted for 69.7% of total exports the following year. China is the main market for the country's iron ore. The share of exports to the European Union, a long-standing top market, declined from 87.4% in 2005 to 24.2% in 2013 before bouncing back to 48.4% in 2014. Exports to the other ECOWAS partners are generally low.

4. Sierra Leone is a founding member of the Economic Community of West African States (ECOWAS) and the Mano River union. It joined the Community of Sahel-Saharan States (CEN-SAD) in 2008. Sierra Leone is eligible for preferences granted by the EU under the Everything But Arms Initiative, and the United States under the African Growth and Opportunity Act. It also benefits from unilateral trade preferences granted by many other developed countries.

5. Sierra Leone established a Mission to the WTO in 2005. It continues to face difficulties in fulfilling its notification obligations. Sierra Leone benefited from two projects (on trade information and tourism) under the Enhanced Integrated Framework. Sierra Leone has not yet ratified the WTO Trade Facilitation Agreement, nor has it notified its list of category A commitments.

6. In 2010, Sierra Leone replaced its manual customs clearance system with the Automated System for Customs Data (ASYCUDA), leading to a substantial decline in average processing and clearance times. However, the day-to-day operation of the system remains frequently affected by the unreliability of Internet connectivity and electricity supply.

7. Sierra Leone gradually replaced its pre-shipment inspection with a destination inspection programme operated by two companies: Africa Link Inspection Company (for shipments arriving by sea) and Sierra Inspection Company (for shipments arriving by air or through terrestrial borders). The inspection applies to all consignments and is subject to a fee of 1% of their f.o.b. value.

8. New customs legislation was enacted in 2011, incorporating, inter alia, some provisions of the WTO Customs Valuation Agreement (CVA). However, the country is facing challenges in implementing the CVA provisions, one of the reasons for maintaining the inspection programme.

9. The 2016 applied MFN tariff has six bands with rates varying between zero and 30%. Most products fall in the 5% or 20% bands (86% of total tariff lines); the zero rate applies only to a few tariff lines (0.3%). The simple average rate is 12% (down from 13.9% in 2004). The tariff shows mixed escalation with semi-processed products subject to a lower average rate than raw materials, while fully processed products attract a higher average rate. As a member of the ECOWAS, Sierra Leone was to implement the new common external tariff (CET) as from 1 January 2015. The implementation of the CET by Sierra Leone has been delayed several times, and is now expected for 1 January 2017.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 7 -

10. At the WTO, Sierra Leone bound all its tariffs lines at ceiling rates between 30% and 80%, with an average rate of 47.5%. Many of the bound rates are considerably higher than applied duties. Other duties and charges (ODC) were bound on all tariff lines at rates varying between zero and 50%. In practice, Sierra Leone is collecting the ECOWAS Community Levy and a customs processing fee. These ODCs apply to all products, including those bound at zero.

11. In 2010, Sierra Leone reformed its internal taxation system by replacing a host of taxes with the goods and services tax (GST). The GST is levied at a standard rate of 15% and constitutes an important source of government revenue: it accounted for about a quarter of government tax revenue in 2015, the bulk of which is levied on imports. Other import charges include the excise tax and the stamp duty.

12. Various duty and tax concession programmes, including duty drawbacks, are in place. However, some of the incentives are subject to local-content requirements. Sierra Leone has no legislative or institutional framework for anti-dumping, countervailing or safeguards measures, and has not taken any such actions.

13. Sierra Leone collects a tax on its major exports. According to the authorities, the purpose of the export tax is to encourage value addition and support the development of local communities. The tax is applied at 2.5% on agricultural products (cocoa, coffee, and palm oil), 3% on diamond, and 5% on gold (except gold produced by artisanal miners which attracts 3%). In addition, some mineral exports are subject to the GST and a valuation fee.

14. Export licensing applies mainly to diamonds and gold. A permit is required for the export of traditional commodities such as cocoa, coffee, and rubber. Due to environmental regulations, a permit is required for the exportation of plants and charcoal. A ban on the exportation of raw logs has been in place since 2008.

15. Sierra Leone has not notified any technical regulations, or its national enquiry point under the WTO Agreement on Technical Barriers to Trade (TBT). The Sierra Leone Bureau of Standards (SLBS) is the national statutory body in charge of technical regulations, standards, certification, and accreditation. It generally follows ISO and IEC directives in the development of national standards. There are currently 33 technical regulations in force, and 100 standards. At the borders, the SLBS inspects products for conformity and labelling requirements. It may perform field tests if needed. Substandard goods are, in principle, confiscated and destroyed.

16. Sierra Leone has not notified the WTO of its sanitary and phytosanitary legislation. In general, a phytosanitary certificate is required for the international movement of any plant material or product. The authorities indicated that no SPS-related restrictions or prohibitions are currently in place.

17. There is no domestic legislation on competition or anti-competitive practices. There are policies on competition and consumer protection, but related laws are yet to be enacted.

18. Sierra Leone has not notified to the WTO any state-trading enterprise. In 2013, the Produce Marketing Board was replaced by the Sierra Leone Produce Marketing Company, established as the primary exporter of agricultural produce. However, it does not have a monopoly over the export of agricultural produce.

19. New public procurement legislation was enacted in 2016. It requires the use of open bid proceedings for all public purchases, but provides for a price preference for domestic contractors, suppliers, and domestically produced goods. National competitive bidding procedures are allowed under specified circumstances.

20. Sierra Leone is a member of the African Regional Intellectual Property Organization, and has ratified the Harare Protocol on Patents and Industrial Designs. Since its last TPR, Sierra Leone has adopted new legislation on patents, industrial design, trademarks, and copyrights. Copyrights and trademarks are more frequently subject to infringement. The authorities view their limited capacity as the main challenge in this regard.

21. The agriculture sector employs about 75% of the labour force. Over recent years, the production of major crops such as rice paddy, cassava, and cocoa has increased substantially, owing to the implementation of policies geared toward increasing productivity and extending

WT/TPR/S/303/Rev.1 • Sierra Leone

- 8 -

cultivated areas. Cocoa and coffee, the two major cash crops, are a non-negligible source of foreign exchange earnings. Tariff protection in the sector is relatively high, irrespective of the stage of processing. At 15.6% in 2016, the average applied MFN tariff for agricultural products (WTO categories) is more than 3 percentage points above the overall average.

22. The mining and quarrying sector accounts for about 90% of Sierra Leone's annual export revenues. During the review period, the legal framework was amended to review royalty rates and various licensing fees. Sierra Leone endorsed the Extractive Industries Transparency Initiative (EITI) in 2006 and was granted EITI compliant status in April 2014. With an average applied MFN rate of 5.4%, mineral products benefit from relatively lower tariff protection.

23. Sierra Leone undertook few GATS commitments, and its actual regime on trade in services is relatively open. During the period under review, Sierra Leone strengthened its legal framework on the banking and insurance industries through higher capital and reserves requirements. In the telecommunication subsector, the state-owned operator still has a de jure monopoly over fixed-line communications. However, the international gateway was liberalized in 2015.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 9 -

1  ECONOMIC ENVIRONMENT

1.1  Main Features of the Economy

1.1.  Sierra Leone is a least developed country (LDC) with a territory of 71,740 km2 and a population estimated at 7.1 million in 2015 according to preliminary results from the 2015 Population and Housing Census, up from 5 million in 2004.1 The population is relatively young, with 42.4% aged less than 15 years in 2015, and about 55% aged between 15 and 64 years.2

1.2.  Agriculture remains the largest contributor to GDP, although its share has been declining over the years to reach 40.8% in 2014, due to a boom in the mining sector (Table 1.1). It bounced back to 53.7% in 2015. Crop products, mainly rice and cassava accounted for the bulk of agricultural production. The contribution of the forestry and fishery subsectors followed the same overall trend.

1.3.  Sierra Leone is rich in minerals such as diamond, bauxite, rutile, and iron ore. In 2012, the country entered into its first full year of production of iron ore, boosting the contribution of the mining sector to GDP to 12.7% (from only 3.7% the previous year), and then to 27.3% in 2014; this has brought the contribution of the agricultural sector to a historically low level. The manufacturing sector is marginal, in terms of contribution to both output and employment. It consists mainly of light manufacturing. The performance of the services sector was similar to that of agriculture: the contribution of services to GDP declined to 29.3% in 2014 before bouncing back to 37.9% in 2015.

1.4.  Sierra Leone is in a fragile post-conflict and post-ebola virus disease situation. The last decade has been characterized by reconstruction efforts, supported by a substantial inflow of external aid. The authorities introduced several reforms that have helped to improve the business environment (section 2.4). On the governance front, Sierra Leone has recorded an overall improvement on the Ibrahim Index of African Governance since 2011, and ranked 25th (out of 54 countries) in 2015.3 It achieved some improvements on the components of the Index relating to sustainable economic opportunity and human development, but weak performance in the areas of safety and rule of law, and "participation and human rights". Indeed, progress in human development has been substantial4, even though the country ranked 181st out of 187 on the 2015 Human Development Index. Thanks to the implementation of various poverty-reduction strategies (section 1.2), the proportion of the population below the national poverty line declined from 66.4% in 2003 to  52.9% in 2011 (the latest year for which the data are available).5 However, the outbreak of the ebola virus disease in 2013 jeopardized the recovery process and exacerbated the numerous challenges to Sierra Leone's economic development. Youth unemployment remains a serious risk for social stability; about 70% of the youth population (aged 15-35) is unemployed or underemployed.6 The development of the private sector is hindered by major impediments such as a deficit in infrastructure, limited availability of skilled labour, unreliability of energy supply, and high transportation costs.

1.5.  Monetary policy is under the purview of the Bank of Sierra Leone (BSL) whose mission includes the management of the national currency, the Leone (Le); the formulation and implementation of the monetary policy; and the regulation of the financial services sector. The primary objective of the monetary policy is to achieve and maintain price stability. 7 The de jure exchange rate regime is classified as "floating" by the IMF.8 The central bank's interventions in the market are limited to weekly foreign exchange auctions aiming at allocating currency to importers, and smoothing excessive short-term exchange rate fluctuations. The exchange rate used for customs valuation purposes and other official transactions is calculated weekly as the weighted

1 Statistics Sierra Leone (2016), Sierra Leone 2015 Population and Housing Census – Provisional results. Freetown, March 2016. Viewed at: https://www.statistics.sl/wp-content/uploads/2016/06/2015-Census-Provisional-Result.pdf.

2 World Bank, World Development Indicators. Viewed at: http://data.worldbank.org/.3 Mo Ibrahim Foundation (2016), 2015 Ibrahim Index of African Governance. Country insights – Sierra

Leone. Viewed at: http://static.moibrahimfoundation.org/u/2015/10/02201446/43_Sierra_Leone.pdf?_ga=1.257322764.66447628.1474528382 [22.09.2016].

4 Since 2000, Sierra Leone's improvement in the human development score has been among the fastest, with improvement by 3.4% every year (UNDP, 2013).

5 World Bank, World Development Indicators. Viewed at: http://data.worldbank.org/.6 UNDP online information. Viewed at:

http://www.sl.undp.org/content/sierraleone/en/home/countryinfo.html. 7 Bank of Sierra Leone Act, 2011.8 IMF (2016), 2016 Article IV Consultation and Fifth Review under the Extended Credit Facility and

Financing Assurance Review, and Request for an Extension of the Extended Credit Facility. IMF Country Report No. 16/236. Viewed at: https://www.imf.org/external/pubs/ft/scr/2016/cr16236.pdf.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 10 -

average of the auction rate, and the mid-rates of commercial banks and foreign exchange bureaus. The official buying and selling rates are then set within a band of plus/minus 1% of the official mid-rate. Sierra Leone accepted IMF Article VIII obligations with effect from 1995 and, according to the IMF, maintains an exchange system free of restrictions on the payments and transfers for current international transactions.

1.6.  Sierra Leone is party to the agreement establishing the West African Monetary Zone (WAMZ), a monetary union with 5 of the 16 ECOWAS members (the Gambia, Ghana, Guinea, Liberia, and Nigeria). The launch of a single currency has been delayed many times. As part of the process for establishing the monetary union, members of the WAMZ have agreed convergence criteria comprising four primary targets: keeping the inflation rate at a single-digit level; maintaining the fiscal deficit below 4% of GDP; keeping the central bank's financing of fiscal deficit below 10% of government tax revenue; and maintaining gross external reserves at a level equivalent to at least three months of imports. As of mid-2015, Sierra Leone satisfied three of the four primary criteria.9

Gross reserves were equivalent to 2.2 months of import cover.

Table 1.1 Selected macroeconomic indicators, 2005, 2010-15  2005 2010 2011 2012 2013 2014 2015GDP at current prices (leones billion)

4,769.2 10,255.6 12,797.6 16,515.4 21,317.4 22,689.4 21,414.2

GDP at current prices (US$ million)

1,650.5 2,578.0 2,942.5 3,801.9 4,920.3 5,015.2 4,214.8

Population (in million) 5.1 5.8 5.9 6.0 6.2 6.3 6.5GDP per capita (US$) 325.5 446.3 498.0 629.1 796.3 794.1 653.1Inflation (CPI, % change) 12.1 16.6 16.2 12.9 10.3 7.3 8.0GDP by type of expenditure (%age change at constant 2006 prices)  GDP 4.5 5.3 6.3 15.2 20.7 4.6 -20.6Final consumption 1.2 -12.9 31.7 7.9 27.0 -15.4 -0.8

Private final consumption 1.7 -15.0 36.2 7.3 30.1 -15.5 -2.8NPISHa -21.8 2.6 4.4 5.6 5.3 5.9 4.9

Government final consumption

3.9 4.4 1.3 14.9 0.3 -19.3 24.2

Capital formation 22.8 229.3 41.7 -20.7 -20.7 -5.1 -15.0 Gross fixed capital formation 24.0 239.8 42.2 -26.0 -15.8 -5.3 -15.4Exports of goods and services 7.4 18.9 -1.3 157.3 37.3 60.5 -51.2 Goods 4.5 22.2 -1.6 185.8 39.0 62.8 -55.5 Services 15.7 3.9 0.4 7.5 13.2 20.0 48.6Imports of goods and services 0.4 22.6 101.1 9.9 19.9 -1.3 -17.9 Goods 3.3 23.5 87.1 9.5 6.5 -8.6 2.4 Services -10.0 18.1 172.0 11.4 65.8 15.1 -53.7   Memo: GDP excluding iron ore 4.5 5.3 6.1 5.4 5.6 0.9 1.9Percentages of contributions to GDP by sector (at constant 2006 prices)  Agriculture, forestry and fishing 52.1 55.6 54.9 49.3 42.4 40.8 53.7 Crops 33.2 38.8 38.6 34.8 30.1 29.0 38.2 Livestock 2.6 2.3 2.3 2.1 1.8 1.7 2.2 Forestry 6.9 6.4 6.2 5.5 4.7 4.5 5.9 Fishery 9.4 8.2 7.9 6.9 5.9 5.7 7.4Industry 10.7 8.6 8.9 17.6 28.5 30.9 9.8 Mining and quarrying 5.7 3.9 3.7 12.7 24.5 27.3 5.1 Diamond 5.1 2.6 2.1 2.4 2.4 2.3 2.4 Iron ore 0.0 0.0 0.2 9.1 21.0 23.9 1.2 Manufacturing and

handicrafts2.5 2.3 2.5 2.3 1.9 1.7 2.2

Electricity and water supply 0.5 0.6 0.6 0.6 0.4 0.4 0.5Services 38.6 37.2 37.6 34.4 30.1 29.3 37.9

Trade and tourism 9.5 8.8 9.3 8.4 7.6 6.9 8.6 Wholesale and retail 9.0 8.4 8.8 8.0 7.2 6.6 8.2 Hotels and restaurants 0.5 0.4 0.4 0.4 0.4 0.3 0.3

Transport, storage and 7.0 8.3 8.3 7.6 6.5 6.1 7.7

9 West African Monetary Institute (2016), Report of the 38th Meeting of the Technical Committee of the West African Monetary Zone held in Accra, Ghana. January 2016. Viewed at: http://www.wami-imao.org/?q=convergence-en.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 11 -

  2005 2010 2011 2012 2013 2014 2015communication

Transport 4.3 4.7 4.7 4.3 3.7 3.3 3.9 Communication 2.7 3.7 3.6 3.2 2.8 2.8 3.7

Finance, insurance and real estate

6.0 4.7 4.6 4.1 3.5 3.4 4.4

Administration of Public Services

4.4 3.9 4.3 4.3 3.8 4.2 5.7

Other Services 4.4 3.8 3.6 3.2 2.8 2.8 3.7 Education 2.5 3.2 3.2 2.9 2.6 2.5 3.3

Health 3.3 3.0 2.9 2.6 2.2 2.2 3.0 NPISHa 1.5 1.4 1.4 1.3 1.1 1.1 1.5

minus FISIMb 1.4 1.4 1.4 1.3 1.1 1.1 1.4Public finance (% of GDP)  Total revenue and grants 16.1 14.5 17.0 15.2 13.3 14.0 16.3 Domestic revenue 8.7 9.6 11.4 11.3 10.7 9.8 10.9 Income taxes 2.4 2.3 3.7 4.7 4.4 3.9 4.2 Goods and services tax 0.0 2.4 2.7 2.5 2.1 2.0 2.8

Customs and excise department

4.9 3.4 2.7 2.1 2.3 2.2 2.5

of which: import duties 3.6 2.0 2.2 1.4 1.3 1.3 1.5 Mines department 0.2 0.3 1.6 1.3 1.1 0.8 0.4 Other department 0.7 0.6 0.5 0.5 0.5 0.4 0.5

Road user charges and vehicle licences

0.5 0.6 0.2 0.2 0.4 0.4 0.4

Grants 7.4 4.9 5.5 3.8 2.6 4.2 5.4Total expenditure & net lending 17.4 18.1 21.5 20.3 14.8 17.3 20.6 Recurrent expenditure 13.0 11.9 12.5 12.7 10.3 12.0 13.1 Wages & salaries 4.8 5.0 5.3 5.7 5.0 6.4 7.4 Non-salary, non-interest

recurrent expenditure5.6 5.4 5.2 5.3 3.9 4.6 4.9

Total interest payments 2.6 1.5 2.0 1.8 1.4 1.0 0.8Development expenditure & net lending

4.4 6.3 9.0 7.6 4.6 5.4 7.5

Development expenditure 4.3 6.3 9.0 7.6 5.4 5.3 7.5 Net lending 0.1 0.0 0.0 0.0 -0.8 0.1 0.0Overall balance   Balance on commitment basis

including grants-1.3 -3.7 -4.5 -5.2 -1.6 -3.3 -4.3

Balance on commitment basis excluding grants

-8.6 -8.5 -10.1 -9.0 -4.1 -7.5 -9.8

Contingency expenditure 0.0 0.0 0.0 0.0 0.0 -0.4 -0.3 Change in arrears -0.1 -0.9 -0.5 -0.5 -0.1 -0.2 -0.2

Balance on cash basis including grants

-1.4 -4.6 -5.1 -5.7 -1.7 -3.9 -4.8

Annual growth of domestic revenue (%)

16.5 31.7 48.0 28.1 21.7 -2.4 4.7

Government debt (% of GDP) [..] 46.8 44.9 36.9 30.8 35.9 46.1External sector  Leones/US$ (annual average) 2,889.6 3,978.1 4,349.2 4,344.0 4,332.5 4,524.2 5,080.7Nominal exchange rate (2010=100)c

144.4 100.0 87.8 92.4 93.2 90.3 91.4

Real effective exchange rate (2010=100)c

91.7 100.0 100.6 117.3 126.9 130.7 142.4

Current account balance (US$ million)

-42.8 -316.6 -1,353.5 -944.5 -886.2 -650.9 -742.6

% of GDP -2.6 -12.3 -46.0 -24.8 -18.0 -13.0 -17.6Trade balance (% of GDP) -7.8 -18.4 -47.1 -27.6 -14.9 -21.9 -26.3 Goods -7.0 -12.6 -38.0 -18.4 -0.5 -1.5 -18.2 Exports (f.o.b.) 11.2 14.0 13.2 27.9 31.5 26.1 13.8 Imports (f.o.b.) -18.2 -26.6 -51.2 -46.2 -31.9 -27.6 -32.0 Services -0.8 -5.8 -9.1 -9.2 -14.4 -20.4 -8.1 Exports 4.7 2.3 5.4 4.8 4.7 4.2 4.2 Imports -5.5 -8.1 -14.5 -14.0 -19.0 -24.5 -12.3   Gross international reserves (US$ million)

169.6 343.3 380.6 420.6 474.8 554.4 580.7

In months of imports 5.2 4.6 2.4 2.2 2.3 2.5 3.7External debt stocks (% of GDP) 107.6 36.1 35.7 29.6 28.4 24.7 ..External debt stocks (% of 664.9 218.3 191.8 83.4 63.1 .. ..

WT/TPR/S/303/Rev.1 • Sierra Leone

- 12 -

  2005 2010 2011 2012 2013 2014 2015exports of goods, services and primary income)

.. Not availablea NPISH stands for Non-Profit Institutions Serving Household.b FISIM stands for Financial Intermediation Services Indirectly.c An increase indicates appreciation.Source: Sierra Leone Statistics online information. Viewed at: https://www.statistics.sl/gdp/; Statistical

information provided by the authorities of Sierra Leone; IMF, Regional Economic Outlook, Sub-Saharan Africa, April 2016; World Bank's World Development Indicator database. Viewed at http://data.worldbank.org/data-catalog/world-development-indicators (September 2016).

1.2  Recent Economic Developments

1.7.  During the period 2005 (Sierra Leone's last TPR) to 2013, Sierra Leone implemented reconstruction reforms through its Poverty Reduction Strategy10 (aimed at laying down the foundation for broad-based economic growth), and expanded its mining sector. The Strategy provided for substantial investments targeted at building infrastructure, developing the private sector, and expanding access to social services. Between 2008 and 2013, several major transport, agriculture, and energy projects were completed.

1.8.  In 2013, the authorities launched the Agenda for Prosperity, setting the pathway to middle-income status by 2035.11 The Agenda for Prosperity pursued the efforts of promoting the private sector with a view to its further contribution to inclusive growth; addressing the infrastructure deficit; and improving governance and transparency in public service delivery. The programme includes major investment projects such as the construction of a new airport on the mainland, the construction of hydroelectric dams, and the extension of agricultural irrigation projects.

1.9.  As a result of these reforms, economic growth peaked at 8.1% in 2007, and was at 5.4% in 2008, while the world economy was battling with surges in global food and fuel prices. 12 The growth moderated in 2009, as demand for Sierra Leone's exports weakened essentially because of the global downturn, but accelerated again in 2011 as the country began exporting iron ore from the newly completed Tonkolili mining project. In the first full year of production, 2012, the economy grew by 15.2%. The non-iron-ore economy, driven by the agriculture, manufacturing, construction, and services sectors, also played its part. Per capita nominal GDP increased from US$325.5 in 2005 to US$796.3 in 2013 (Table 1.1).

1.10.  The outbreak of the ebola virus disease in May 2014, the closing of the national borders to contain the spread of the disease and the resultant delays in/interruption of implementation of projects, combined with the decline in world prices of iron ore in 2014 and 2015, jeopardized the reconstruction efforts. The upward trend in economic growth recorded since 2010 halted at 20.7% in 2013. Subsequently, real GDP growth declined to 4.6% in 2014 and to an estimated rate of -20.6% in 2015. Most economic sectors, including construction, trade, tourism, transport and manufacturing, were affected. However, a recovery, mainly in the non-iron economy, started towards the end of 2015 as the ebola virus disease receded. New investment (more than US$500 million between 2016 and 2018) in agriculture, resumption of iron ore mining by Shandong Iron and Steel Group in early 2016, and ongoing energy reforms are expected to support economic recovery in the medium term.

1.11.  Between 2005 and 2009, Sierra Leone managed to maintain its fiscal deficit well below the WAMZ's target of 4% of GDP, except in 2008. However, the deficit widened to 3.7% of GDP in 2010, 4.5% in 2011 and 5.2% in 2012, reflecting expenditure overruns and the construction of public infrastructure, as well as a decline in total public revenue. In response, the Government, inter alia, scaled down public investment projects and delayed the payment of some bills; the percentage of non-performing loans increased, partly due to the high level of government unpaid bills to the

10 Government of Sierra Leone (2005), Poverty Reduction Strategy Paper – A national Programme for Food Security, Job Creation and Good Governance (2005-2007), Freetown, February. Viewed at: http://www.imf.org/external/pubs/ft/scr/2005/cr05191.pdf; and, Government of Sierra Leone (2008), An Agenda for Change, Second Poverty Reduction Strategy (PRSP II), 2008-2012. Freetown. Viewed at: http://unipsil.unmissions.org/portals/unipsil/media/publications/agenda_for_change.pdf.

11 Government of Sierra Leone (2013), Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding. Viewed at: http:// www.imf.org/External/NP/LOI/ 2013/SLE/100113.pdf.

12 Information provided by Statistics Sierra Leone.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 13 -

private sector. In 2013, the deficit narrowed to 1.6% of GDP, thanks to the peak in economic growth, stronger revenue performance, as well as further reduction in public expenditure. However, the public deficit increased again to 3.3% of GDP in 2014 and to 4.3% in 2015 due to stagnation of total public revenue and despite a slight increase in grants (Table 1.1).

1.12.  Sierra Leone is highly dependent on foreign aid; between 2005 and 2013, net official development assistance received per capita fluctuated between US$67 and US$102, and reached a peak of US$144.2 in 2014.13 The stock of external debt as a percentage of GDP was 31.6% in 2015 (compared to 36.1% in 2010), and the risk of debt distress is assessed by the IMF as moderate. 14 In 2015, multilateral debt represented 45.6% of total external debt, and the debt service amounted to US$46 million, representing 6% of total exports of goods and services.15

1.13.  Until 2011, the Bank of Sierra Leone had conducted its monetary policy mainly through open market operations that had affected money supply to the economy and interest rates. In 2011, the Monetary Policy Committee introduced the Monetary Policy Rate (MPR) as an anchor for inflation expectations and a benchmark for other market rates. The leone's real effective exchange rate depreciated by 42.4% between 2010 and 2015 (Table 1.1), as a result of its large nominal depreciation. With the collapse in iron ore exports and the decline in ebola-related aid, the exchange rate has been facing significant depreciation pressures. Between mid-2015 and end-March 2016, the Leone further depreciated, by 18% against the US dollar.16 In response, the Monetary Policy Committee decided to raise the MPR to 10.5% in September 2016 (from 9.5% in March 2016).17

1.3  Trade Performance

1.14.  Sierra Leone's exports are largely dominated by mineral products, but their composition has changed during the review period (Chart 1.1). Between 2005 and 2013, exports increased nearly tenfold to US$1.5 billion, driven mainly by iron ore (Table A1.1). Its exports have diversified away from diamonds and also consist of rutile bauxite, iron ore and agricultural products (mainly cocoa). Indeed, Sierra Leone started exporting iron ore in 2011. In 2012, iron ore overtook diamonds as the major export product, as the Tonkolili and the Marampa mines completed their first year of full-scale production. In 2013, iron ore accounted for 69.7% of total exports while the share of diamonds declined to 12.2%. With the decline in the global price for iron ore, exports declined in 2014 and dropped to US$ 536.2 million in 2015 as a further decline in prices led to the closure of the two iron ore mines. China is the main market for Sierra Leone's iron ore. The share of exports to the European Union, a long-standing top market, declined to 26.1% in 2013, at the height of the boom in the iron ore subsector. It jumped back to 50% in 2015 with the collapse of iron ore exports (Table A1.3). Exports to the other ECOWAS partners are generally low, peaking in 2010 owing to rice exports (Chart 1.2).

1.15.  Since 2011, Sierra Leone's merchandise imports have fluctuated between US$1.5 billion and US$1.8 billion, compared to US$ 770 million in 2010, and US$341 million in 2005 (Table A1.2). In 2011, imports surged by 122%, reflecting the purchase of machinery and transport equipment related to mining and oil investment projects. The share of machinery and transport equipment in total imports reached a peak of 44.1% in 2011 before declining as the development phase of the iron ore project came to an end. In 2015, the share of food products in total imports increased to 34.5% (compared to 21.5% in 2014), while that of mineral fuel and lubricants declined from 31.2% to 18.2%, as a result of lower global oil prices.

1.16.  The overall trade deficit (on goods and services) neared US$1.4 billion in 2011 (Table 1.2), due to imports for reconstruction, including under related major investment projects. Between 2005 and 2015, the overall current account deficit was driven to a large extent by a merchandise trade deficit until 2012, and the deficit in the services account. Indeed, from a modest amount of US$13 million in 2005, the deficit of trade in services increased to US$1.022 billion in 2014 before

13 IMF (2016), 2016 Article IV Consultation and Fifth Review under the Extended Credit Facility and Financing Assurance Review and Request for an Extension of the Extended Credit Facility. IMF Country Report No. 16/236. Viewed at: https://www.imf.org/external/pubs/ft/scr/2016/cr16236.pdf.

14 IMF (2016), 2016 Article IV Consultation and Fifth Review under the Extended Credit Facility and Financing Assurance Review and Request for an Extension of the Extended Credit Facility. IMF Country Report No. 16/236. Viewed at: https://www.imf.org/external/pubs/ft/scr/2016/cr16236.pdf.

15 World Bank, World Development Indicators. Viewed at: http://data.worldbank.org/.16 World Bank, World Development Indicators. Viewed at: http://data.worldbank.org/.17 Bank of Sierra Leone (2016), Monetary policy statement, September 2016. Viewed at:

https://www.bsl.gov.sl/pdf/MPC_Statement_September%202016.pdf.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 14 -

declining to US$341 million in 2015 (provisional figures). Other business services (mainly operational leasing services, miscellaneous professional and technical services) are the main contributors to this deficit. Sierra Leone is a net importer of services: it is a net exporter of communication services, and a net importer of transportation services.

Table 1.2 Balance of payments, 2005, 2010-15 (Net flows, US$ million)  2005 2010 2011 2012 2013 2014 2015a

Current account balance -43 -317 -1,353 -945 -886 -651 -743Balance on Goods and Services -129 -474 -1,385 -1,048 -732 -1,098 -1,107 Goods balance -116 -325 -1,118 -698 -24 -76 -766 Goods exports 184 361 389 1,059 1,548 1,306 582 of which:   Diamonds (official) 142 113 129 162 186 208 154 Diamonds (unrecorded) 14 14 24 12 7 6 5 Rutile 0 41 39 176 130 96 92 Iron ore 0 0 15 357 1,065 743 77 Bauxite 0 31 39 17 14 39 43 Cocoa 5 37 44 23 9 26 19 Goods imports (f.o.b.) -300 -686 -1,506 -1,758 -1,571 -1,382 -1,348 Goods imports (c.i.f.) -341 -780 -1,712 -1,997 -1,786 -1,571 -1,531 of which:   Food -53 -104 -245 -306 -358 -337 -528

Machinery & transport equipment -72 -248 -754 -486 -401 -332 -335 Petroleum products -116 -171 -275 -347 -416 -491 -278 Services balance -13 -150 -268 -349 -708 -1,022 -341 Services credit 78 60 159 182 229 209 176 of which:   Travel 64 26 44 47 63 35 27 Transportation 12 24 30 21 26 33 20 Communication services 0 1 77 102 125 127 109 Services debit -91 -210 -427 -532 -937 -1,231 -517 of which:   Transportation -43 -109 -197 -249 -191 -197 -167 Insurance services -8 -7 -17 -22 -36 -36 -32 Communication services 0 -10 -4 -14 -17 -16 -15 Travel -32 -13 -14 -15 -18 -19 -9 Other business services -2 -60 -183 -222 -663 -935 -283 Income balance -51 -48 -217 -133 -357 -382 -112 Credit 5 10 9 10 11 7 9 Debit -56 -58 -227 -144 -369 -389 -122 Current transfers balance 137 206 249 236 203 828 476 Credit 139 219 271 259 229 841 498 Official transfers 87 160 114 96 37 429 351 Other sector (private) 52 59 158 163 192 412 147 Debit -2 -13 -22 -23 -26 -12 -22 Official transfers -1 -1 -1 -2 -1 -3 -1 Other sector (private) -1 -12 -21 -20 -25 -9 -21Capital and financial account balance 122 663 1,432 619 637 709 497 Capital account balance 68 149 157 151 164 78 135 Financial account balance 54 513 1,275 468 473 631 363Errors and omissions -225 -671 -55 357 296 -23 140Overall balance -146 -325 24 31 48 36 -105

a Provisional figures.Note: IMF IFS exchange rate (annual average) is applied.Source: Information provided by the authorities of Sierra Leone.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 15 -

Chart 1.1 Product composition of merchandise trade, 2006-2015

Source: Customs and Excise Department, Government Gold and Diamond Office, oil importing companies and statistics Sierra Leone.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 16 -

Chart 1.2 Direction of exports (f.o.b.), including re-exports, 2006-2014

0%

20%

40%

60%

80%

100%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

EU-27 United States Japan Switzlerand ECOWAS Other

Chart 1.2Direction of exports (f.o.b.), including re-exports , 2005-2014

Customs and Excise Department, Government Gold and Diamond Office and Oil Importing Companies, Statistics Seirra Leone.

Source: Source: Customs and Excise Department, Government Gold and Diamond Office, oil importing companies and statistics Sierra Leone.

1.4  Foreign Direct Investment

1.17.  Sierra Leone's business environment has improved greatly thanks to various reforms undertaken as part of post-conflict reconstruction efforts. Total FDI inflows reached high levels in 2011 and 2012 (Table 1.3), reflecting investments in the energy and mining industries.

Table 1.3 FDI inflows, 2010-15(US$ million and %)

2010 2011 2012 2013 2014 2015Inward FDI 238 950 722 430 404 519Inward FDI (% of GDP) 9.2 32.3 19.0 8.7 8.1 12.3Inward FDI stock 482 .. .. .. .. 1848Cross-border mergers and acquisitions(net sales)

13 52 0 0 0 0

Greenfield FDI projects (from the rest of the world)

230 218 110 611 0 463

.. Not available.Note: Estimates.Source: UNCTAD (2016), World Investment Report 2016. Investor Nationality: Policy Challenges. Viewed at:

http://unctad.org/en/PublicationsLibrary/wir2016_en.pdf.

1.18.  China, Belgium, Germany and the United States are among Sierra Leone's main investors. The ebola virus disease outbreak has contributed to reducing FDI inflows, and a number of investment projects were suspended. To support the recovery, the authorities are giving priority to the agriculture, mining and infrastructure sectors in their investment promotion programmes.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 17 -

2  TRADE AND INVESTMENT REGIMES

2.1  General Framework

1.19.  Sierra Leone is a constitutional republic with a unicameral parliament. The Constitution of Sierra Leone, 1991 has been amended three times since 2005.1 Major changes include provisions relating to the anti-corruption legislation, and the use of the existing register of voters for by-elections (even if the register has not been revised or reviewed as prescribed). The President is the Head of State and the supreme executive authority. He is elected by direct universal suffrage for a term of five years, renewable once. The President is assisted by a Vice-President (elected jointly with the President). The President is advised by a Cabinet of Ministers. The current President was elected for a second term in November 2012. The next presidential elections (together with the parliamentary elections) are scheduled for 2017.

1.20.  Sierra Leone is divided into four administrative regions: the Eastern Province, Northern Province, Southern Province, and Western Area (where Freetown, the capital, is located). The provinces are divided into 12 districts where the central government is represented by district councils, and 149 chiefdoms. The chiefdoms are headed by traditional leaders (paramount chiefs) elected for life by tribal authorities, and are in charge of the day-to-day administration of their localities.

1.21.  Legislative power is vested in the Parliament. The Parliament consists of 124 members elected for a five-year term: 112 are elected directly through the "district block" representation system, and 12 indirectly to represent provincial districts. The last legislative elections were held on 17 November 2012. In general, a bill passed by the Parliament becomes law once signed by the President. A law cannot enter into force until it has been published in the Gazette. The body of law consists of the Constitution, laws, ordinances, orders, regulations, and customary law. Treaties and international agreements, once ratified and published in the Gazette, take precedence over domestic laws.

1.22.  Headed by the Chief Justice, the Judiciary is independent from the executive and legislative authorities, and consists of the Supreme Court, the Court of Appeal, and the High Court of Justice. The Supreme Court is the final court of appeals and has supervisory jurisdiction over all other courts in Sierra Leone. The High Court of Justice has jurisdiction over civil and criminal matters. Appeals are brought, in first instance, to the Court of Appeals, and in final instance, to the Supreme Court. Judges, including the Chief Justice, are appointed by the President, subject to parliamentary approval.

1.23.  In 2010, the Government launched a Fast Track Commercial Court and introduced an alternative dispute resolution mechanism to reduce delays and the costs of commercial disputes and litigations. These have contributed to reducing the backlog of commercial cases and the time it takes from filing to judgement to an average of 2 months (compared to 2 to 6 years previously). 2

However, the effectiveness of the court is limited by resource constraints.

1.24.  The Ministry of Trade and Industry (MTI) is responsible for trade policy. It collaborates with relevant ministries and agencies, including: the Ministry of Finance and the National Revenue Authority, on tariffs and customs issues; the Ministry of Justice and the Law Reform Commission, on legal and judicial matters and reforms; the Ministry of Foreign Affairs, on trade negotiation and representation; the Bank of Sierra Leone, on financial services issues and various technical ministries responsible for areas such as agriculture, fisheries, mining, labour, lands, and tourism.

1.25.  The MTI also collaborates with private sector institutions such as the Chamber of Commerce, Industry and Agriculture; the Chamber of Mines; and other trade, producer, and consumer associations. There is no formal consultation with the private sector on trade policy formulation and/or implementation. Established in 2007, the Sierra Leone Business Forum is the main consultative mechanism between the public and private sector. Before the outbreak of the ebola virus disease, the public-private sector dialogue was deemed "very good". 3 A public-private consultation mechanism is in place for the cocoa sector.

1 The Constitution of Sierra Leone, Act No. 6 of 1991.2 The Investment Climate Facility for Africa, online information. Viewed at:

http://www.icfafrica.org/project/fast-track-commercial-court-in-freetown [06.10.2016].3 EIF (2013), Sierra Leone Annual Progress Report 2013. Viewed at:

http://www.enhancedif.org/en/file/1074/download?token=ObUQ3oN2.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 18 -

1.26.  In 2008, the MTI established the National Coordinating Committee on Trade (NCCT), a comprising relevant ministries and agencies, as well as representatives from the private sector and the academia. The NCCT was structured in various subcommittees, each overseeing a specific trade-policy issue. According to the authorities, the Committee is being revived through assistance from the DFID's Trade Advocacy Fund. Trade policy evaluation is under the purview of the MTI. No evaluation has been undertaken so far.

1.27.  Sierra Leone considers the fight against corruption as a priority and critical to the delivery of its Agenda for Prosperity. The Anti-Corruption Commission (ACC) was established in 2007 to investigate alleged instances of corruption and prevent corruption practices. The National Anti-Corruption Strategy (NACS) is the main framework for the Government's anti-corruption policy. During the review period, the Government implemented two NACS with a focus respectively on prevention and enforcement (NACS 2005-08), and constructive engagement and institution strengthening (NACS 2008-13). The Parliament also enacted a new anti-corruption Act4 to, inter alia, broaden the range of offences (from 9 to 29 offences); provide protection for "whistle blowers"; make it mandatory for civil servants to declare their assets; and strengthen the ACC. Unlike the previous legislation, the new act gives the ACC the power to prosecute. Between 2001 and 2014, the ACC reported 95 cases of convictions.5 Sierra Leone ratified the United Nations Convention against Corruption (UNCAC) in 2004, and the African Union's Convention on Preventing and Combating Corruption, in 2008.

1.28.  As a mineral-rich country, Sierra Leone endorsed the Extractive Industries Transparency Initiative (EITI) in 2006. It has been designated EITI compliant as of April 2014. The 2013 reconciliation exercise reported payments of US$48.7 million by companies against Government receipts of US$52.4 million.6 The Government has established an online repository through which revenues generated from mining companies (and forestry licences) are publicly made available.7

1.29.  Since its last Trade Policy Review in 2005, Sierra Leone has adopted or amended laws in several areas, including: customs, mining, business environment, banking, and intellectual property (Table 2.1).

Table 2.4 Main trade and investment-related legislation issued/amended/implemented since 2005Law Latest amendmentBusiness environment and investment The Constitution of Sierra Leone, 1991 The Constitution of Sierra Leone (Amendment) Act,

2016 Anti-Corruption Act, 2008 Investment Code, 2005 General Law (Business Start-Up) (Amendment), 2007 Investment and Export Promotion Agency Act, 2007 Companies Act, 2009 Companies (Amendment) Act, 2014 Bankruptcy Act, 2009 Registration of Business Act, 2007 Sierra Leone Produce Marketing Act (Repeal) Act 2013 Public Private Partnership Act, 2014

Sierra Leone Small and Medium Enterprises Development Agency Act, 2016

Local Content Agency Act 2016Taxation Good and Services Tax Act, 2009 Finance Act Finance Act, 2016 Customs Act, 2011Mining Mines and Mineral Act, 2009 Petroleum (Exploration and Production) Act, 2011 Petroleum (Exploration and Production)

(Amendment) Act, 2014 Petroleum Regulatory Agency Act 2014 Diamond Cutting and Polishing Act, 2007 National Minerals Agency Act, 2012Utilities National Electricity Act, 2011 Electricity and Water Regulatory Commission Act, 2011

4 The Anti-Corruption Act 2008, repealing the Anti-Corruption Act 2000.5 Anti Corruption Commission online information. Viewed at: http://www.anticorruption.gov.sl/index.php?

p=102&pn=Concluded%20Criminal%20Cases [05.10.2016].6 SLEITI (2016), Sierra Leone Extractive Industries Transparency Initiative 2013 Report. Viewed at:

http://www.sleiti.gov.sl/admin/images/news/SLEITI%202013%20RECONCILIATION%20REPORT.pdf. 7 Government of Sierra Leone Online Repository. Viewed at:

http://sierraleone.revenuesystems.org/login/auth.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 19 -

Law Latest amendmentTransport Road Transport Authority Act, 1996 Road Transport Authority (Amendment) Act, 2014 Maritime Administration Act, 2001 Sierra Leone Maritime Administration

(Amendment) Act, 2007Standards and technical regulations Weights and Measures Act, 2010Communications Telecommunications Act, 2006 The Telecommunications (Amendment) Act, 2015 Postal Services Regulatory Agency Act, 2012Intellectual Property Copyright Act, 2011 Patents and Industrial Designs Act, 2012 Trade Marks Act, 2014Financial services Payment Systems Act, 2009 Home Mortgage Finance Act, 2009 Credit Reference Act 2011

Anti-Money Laundering and Combatting of Financial Terrorism Act, 2012

Bank of Sierra Leone Act, 2011 Borrowers and Lenders Act, 2014 Insurance Act, 2016Other Environment Protection Agency Act, 2008 Public Procurement Act, 2016 Legal Practitioners Act, 2015

Source: Parliament of Sierra Leone online information, "Acts". Viewed at: http://www.parliament.gov.sl/ParliamentaryBusiness/Acts.aspx; and information provided by the authorities.

2.2  Trade Policy Objectives

1.30.  The ultimate goal of Sierra Leone's trade policy is to help create wealth and employment.8

The Government seeks to achieve this goal by promoting and developing a robust and competitive private sector. It intends to, inter alia, develop a transparent trade-regime; build the required capacity and infrastructure for increased participation in global trade; promote competition; protect consumers; and encourage inflows of aid, private investment, and migrant remittances.

1.31.  Sierra Leone's trade policy is also guided by a number of trade-related policies and strategies, including the 2007 National Export Strategy, the Local Content Policy, and the Small and Medium Enterprises Policy.

1.32.  Sierra Leone views participation in global trade as a vital factor in its economic development and intends to build the required capacity to reap the related benefits. In that regard, it supports initiatives towards the elimination of trade-distorting measures within international fora such as the WTO, promotes trade with the other ECOWAS countries, and is taking steps to better utilize existing trade preferences.

2.3  Trade Agreements and Arrangements

2.3.1  World Trade Organization

1.33.  Sierra Leone is an original Member of the WTO. It extends at least MFN treatment to all its trading partners. Sierra Leone is neither a signatory nor an observer to any of the plurilateral agreements concluded under the WTO.

1.34.  The authorities view the multilateral trading system as important for their country's integration into global trade. They recognized that reaping the benefits from WTO membership will not come automatically and that Sierra Leone will continue to rely on trade-related technical assistance, including in capacity building, to address shortcomings in its institutions. They agreed the Trade Facilitation Agreement would offer benefits in terms of reduced time and trading costs, but that considerable investment in infrastructure would be needed.

8 Ministry of Trade and Industry (2010), Sierra Leone National Export Strategy 2010-2015. Viewed at: http://www.3adi.org/tl_files/music_academy/campus/Nigeria/3adi/SIL_Natl_Export_Strategy.pdf [14.09.16].

WT/TPR/S/303/Rev.1 • Sierra Leone

- 20 -

1.35.  Sierra Leone joined the Integrated Framework in 2005. Under the Enhanced Integrated Framework (EIF), Sierra Leone benefited from two projects on trade information and tourism.9 Its Diagnostic Trade Integration Study update was validated in November 2013, and is aligned with its Agenda for Prosperity. At the 10th Session of the Ministerial Conference in 2015, Sierra Leone emphasized its need for technical assistance and capacity building through EIF and the Aid for Trade initiatives, in particular as it was embarking on the phase of recovery from the ebola virus disease.10

1.36.  Sierra Leone established a Mission to the WTO in 2011. It continues to face difficulties in fulfilling its notification obligations, and has made only two notifications to the WTO since its previous TPR. In 2014, Sierra Leone notified the WTO Committee on Safeguards that it has no relevant legislation, regulations or administrative procedures on safeguard measures.11 In 2010, Sierra Leone notified the Committee on Subsidies and Countervailing Measures that it had not established an authority competent to initiate investigations, and had not taken any countervailing action.12

1.37.  Sierra Leone has not been involved in any dispute case, as a complainant, respondent, or third party. In the negotiations at the WTO, Sierra Leone is a member of the ACP group, the African Group, the G-90, the LDCs, and the "W52" sponsors.13

1.38.  Within the WTO, Sierra Leone is currently under administrative measures (category III) due to contribution arrears. As a consequence, Sierra Leone is, in principle, denied training and technical assistance other than those necessary to meet its GATT Article XIV-2 obligations.

2.3.2  Regional agreements

2.3.2.1  African Union

1.39.  Sierra Leone is a founding member of the African Union (AU), successor to the Organization of African Unity (OAU). The AU aims to become an economic and political union. The Abuja Treaty provides for the establishment of the African Economic Community (AEC) by 2028, using existing regional economic communities (RECs) as pillars.14 Sierra Leone participates in this process through the Economic Community of West African States (ECOWAS). However, the integration process has been slow in taking hold.

1.40.  Through the African Peer Review Mechanism, the AU has been providing an opportunity for countries to voluntarily submit for review, their policies and practices in the areas of democracy and political governance, economic governance and management, corporate governance, and socio-economic development. Sierra Leone acceded to the Mechanism in 2004, and in 2010, became the 15th country to complete its peer review.15 In the report, the panel of experts identified several economic constraints16, and noted that poverty, poor energy supply, and inadequate and poorly maintained infrastructure are the key challenges to the country's political and socio-economic development. They suggested that priority be given to, inter alia, corruption, and mineral resources management.

9 Enhanced Integrated Framework online information. Viewed at: http://www.enhancedif.org/en/country-profile/sierra-leone.

10 WTO document WT/MIN(15)/ST/64, 21 December 2015.11 WTO document G/SG/N/1/SLE/1, 20 March 2014.12 WTO document G/SCM/N/202/SLE, 15 January 2010.13 The "W52" sponsors support a proposal for modalities in the negotiations on geographical indications

(establishing a multilateral register for wines and spirits, and extending the higher level of protection beyond wines and spirits), and for patents applicants to disclose the origin of genetic resources and traditional knowledge used in their inventions (http://www.wto.org/english/tratop_e/dda_e/negotiating_groups_e.htm).

14 The pillars of the AEC are: the Community of Sahel-Saharan States (CEN-SAD), the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC), the Economic Community of Central African States (ECCAS), the Economic Community of West African States (ECOWAS), the Intergovernmental Authority on Development (IGAD), the Southern African Development Community (SADC), and the Arab Maghreb Union (UMA).

15 APRM (2012), Republic of Sierra Leone: APRM Country Review Report No. 12, January. Viewed at: http://aprm-au.org/admin/pdfFiles/Country-Review-Report.pdf [20.09.2016].

16 The constraints include poor resource mobilization, a lack of access to credit, and a lack of institutions to support agricultural credit.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 21 -

2.3.2.2  Economic Community of West African States

1.41.  Sierra Leone has been a member of the Economic Community of West African States (ECOWAS) since its establishment in May 1975.17 The ECOWAS was notified to the WTO in 2005 under the Enabling Clause.18 ECOWAS members adopted a common external tariff (CET) in October 2013; some member States have been implementing the CET since January 2015. The authorities indicated that Sierra Leone plans to implement the CET as from 1 January 2017.

1.42.  Sierra Leone has ratified ECOWAS's Trade Liberalization Scheme (ETLS), which provides for products deemed of Community origin to be traded across borders duty free and without quantitative restriction. To benefit from the ETLS, the companies and each of their products must be registered as meeting the rules of origin specified under the scheme. Registration of products involves a two-stage approval process: a national committee examines the application and makes recommendations to a regional committee for decision. Sierra Leone set up its National Approval Committee in 2014. To date, the Committee has approved nine enterprises and their products under the ETLS.

1.43.  The ECOWAS protocols establish the free movement of persons: ECOWAS citizens with a valid travel document and health certificate may stay for up to 90 days in another ECOWAS member state before being required to apply for residency. In principle, residency is automatically granted upon application. The authorities indicated that ECOWAS citizens are treated identically to national citizens in establishing and running a business.

1.44.  The ECOWAS' Monetary Cooperation Programme (EMCP), adopted in 1987, called for the creation of a single monetary zone in the sub-region. As part of their efforts to implement the EMCP, the Heads of State of six ECOWAS members who are not members of the West African Economic and Monetary Union (WAEMU) have been working since 2000 to establish a second monetary zone in the sub-region, the West African Monetary Zone (WAMZ).19 The WAMZ comprises Sierra Leone, the Gambia, Ghana, Guinea, Liberia, and Nigeria. The launch of its single currency has been delayed many times.

2.3.2.3  Other arrangements

1.45.  Sierra Leone is a founding member of the Mano River Union (MRU), established in 1973 with Liberia. Guinea joined the MRU in 1980, and Côte d'Ivoire, in 2008. All MRU members are also members of the ECOWAS. The objective of the MRU is to eliminate barriers to bilateral trade, and to promote cooperation in the expansion of international trade and the expansion of productive capacity, with a view of forming an economic union among members. Member countries adopted a common external tariff in 1977, and launched a customs union in 1981. However, the integration process was disrupted by episodes of political instability and violent armed conflicts within the region. The MRU resumed its activities in 2008.

1.46.  Sierra Leone joined the Community of Sahel-Saharan States (CEN-SAD) in 2008.20 The main objective of the CEN-SAD is to establish a comprehensive economic union based on a development plan consistent with the national plans. Specifically, CEN-SAD aims to carry out common infrastructure projects in transport and communications, development of trade between the member States, and the removal of barriers to the free movement of goods, commodities and services. Like ECOWAS, CEN-SAD is one of the eight pillars of the African Economic Community. However, its progress in trade and economic integration has been relatively slow.

2.3.3  Preferential trade arrangements

1.47.  As an LDC, Sierra Leone is eligible for non-reciprocal GSP treatment from a number of countries, including Australia, Belarus, Canada, EU, Japan, New Zealand, Russian Federation, Switzerland, Turkey, and the United States.21

17 The other members of ECOWAS are Benin, Burkina Faso, Cape Verde, Côte d'Ivoire, the Gambia, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo.

18 WTO document WT/COMTD/N/21, 26 September 2005.19 All WAEMU countries are members of ECOWAS.20 CEN-SAD is a regional organization created in 1998 at the initiative of six countries from the Sahel-

Saharan region: Burkina Faso, Libya, Mali, Niger, Sudan, and Chad.21 UNCTAD (2011), Generalized System of Preferences: List of Beneficiaries,

UNCTAD/ITCD/TSB/Misc.62/Rev.5. Viewed at: http://unctad.org/en/docs/itcdtsbmisc62rev5_en.pdf.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 22 -

1.48.  In addition to the GSP, Sierra Leone is eligible for the EU's "Everything But Arms Initiative", which provides LDCs with non-reciprocal, duty-free and quota-free access to the EU market. Sierra Leone is participating in the negotiations for an Economic Partnership Agreement (EPA) with the EU, through the ECOWAS group. The EU is among Sierra Leone's major trading partners (Section 1.3). In 2009, 2.3% of Sierra Leone's exports to the EU were under the GSP.22

1.49.  Sierra Leone is eligible for preferences under the U.S. African Growth and Opportunity Act (AGOA), including its apparel provisions. In 2005, it was established that Sierra Leone met the requirements for exports of handicrafts to the United States. Cane products (sugar, molasses, ethanol, etc.) and oil-palm products (palm oil, palm kernel oil, oilcake from palm, palmitic acid, etc.) are eligible for duty-free export to the United States.23 In 2013, four additional products (lemon grass, ginger, tobacco, and bitter root) were added to the list of eligible products.24

1.50.  Sierra Leone receives trade preferences from other developed countries under their national preference schemes. Although it has not signed the Agreement on the Global System of Trade Preferences among Developing Countries (GSTP), Sierra Leone, as an LDC, is granted non-reciprocal preferences by certain signatories.25

1.51.  Sierra Leone has signed some bilateral agreements, for example with: Angola, China, Ghana, Guinea, Cote d'Ivoire, Liberia, Morocco, Nigeria, and South Africa. These agreements are mostly on trade cooperation matters.

2.4  Investment Regime

1.52.  Since its last Trade Policy Review, the Government has undertaken measures to improve its investment framework and attract FDI. These include a zero-tolerance policy against corruption; the adoption of new laws, especially in the mining and minerals sector; and the simplification of business registration procedures. In 2009, the Government introduced a goods and services tax, repealing several taxes imposed under different pieces of legislation.26 In 2016, the Small and Medium Enterprises Development Agency was established, with a view to fostering a conducive business environment for small and medium enterprises.27

1.53.  Several reforms were also implemented in areas relating to, inter alia, business taxation, investment policy and promotion, business registration, and in the tourism sector.28 These reforms have contributed to improving the country's Doing Business ranking from 168th place in 2006 to 140th in 2013.29 Sierra Leone ranked 147th on the 2016 Doing Business Index. Sierra Leone ranks relatively better in terms of the subcategories of protecting minority investors (88 th), starting a business (99th) and enforcing contracts (105th). Lower rankings were recorded in the areas of getting electricity (178th), trading across borders (164th), and registering properties (159th).

2.4.1  Legal framework for business

1.54.  The Companies Act of 2009, the Registration of Business Act of 2007, and their subsequent amendments are the main laws governing the registration and operation of businesses in Sierra Leone. In accordance with these laws, all businesses must register with the relevant agency before starting its activities. The Corporate Affairs Commission (CAC) deals with companies' incorporation, while sole proprietorships and partnerships are registered with the Office of the Administrator and Registrar General (OARG).

22 European Commission document SEC(2011) 536 final, 10 May 2011. Viewed at: http://ec.europa.eu/governance/impact/ia_carried_out/docs/ia_2011/sec_2011_0536_en.pdf [06.10.16].

23 U.S. Department of Commerce online information. Viewed at: http://agoa.info/news/article/4519-sierra-leone-preferential-market-access-to-key-markets-for-sugar-palm-oil.html [20.09.16].

24 U.S. Department of Commerce online information. Viewed at: http://agoa.info/news/article/5057-sierra-leone-four-products-certified-for-us-export.html [20.09.16].

25 UNCTAD online information. Viewed at: http://unctad.org/en/pages/PressRelease.aspx?OriginalVersionID=65.

26 Goods and Services Tax Act, 2009. The Act repeals taxes imposed under: the Entertainment Tax Act, 1971; the Restaurant Food Act, 1989; the Development of Tourism Act, 1990; the External Telecommunications Tax Act, 1995; and the Sales Tax Act, 1995.

27 Small and Medium Enterprises Development Agency Act, 2016.28 Economisti Associati (2015), Evaluation of the World Bank Group's investment climate programs:

Sierra Leone Case Study – Good Results in Attracting Foreign Investment but Challenges for Sustainability. Washington, D.C.

29 The World Bank's Doing Business website. Viewed at: (http://www.doingbusiness.org).

WT/TPR/S/303/Rev.1 • Sierra Leone

- 23 -

1.55.  Since its previous TPR, Sierra Leone has taken steps to streamline the process for business registration. Companies are no longer required to, inter alia, obtain a foreign exchange control permit from the Bank of Sierra Leone; pay an advance tax before registration; have their Memorandum and Articles of Association established by a lawyer; or renew their business registration annually. In addition, the Bankruptcy Act 2009 made it easier to handle cases of business closure.

1.56.  For companies, the incorporation process involves: a company name search, free of charge, conducted manually or electronically at the Corporate Affairs Commission; the business name registration and incorporation by the CAC; and the issuance of a tax clearance certificate. The numerous fees have been replaced by a flat fee of Le 250,000. The registration fee for sole proprietorships and partnerships is between Le 20,000 and Le 60,000 depending on the class of business. One-stop shops have been set up at the OARG and the CAC in order to expedite the registration process. Starting in 2014, investors may submit registration applications and pay applicable fees online through the CAC website.30

1.57.  In addition to these procedures, foreign companies wishing to establish a subsidiary may be required to authenticate the documents of the parent company abroad. A trade licence from the MTI is no longer required for companies wishing to engage in international trade.

1.58.  The Investment Promotion Act, 2004 provides for equal treatment of foreign and domestic investors. With a few exceptions, foreigners may invest in any legitimate form of business. The restrictions include prohibition of foreign participation in airport and port operation services31, and the requirement to have nationals holding at least 25% of shares for investments of less than US$500,000 in the mining sector.

1.59.  The Act guarantees remittance of profits and repatriation of capital without restrictions, except any applicable obligation under the Income Tax Act. Foreign investors are guaranteed against expropriation, and have access to the judicial system on the same basis as nationals.

1.60.  All investors may open and maintain bank accounts in foreign currency. They may, in principle, withdraw and remit any amount from a commercial bank, and have it transferred into any freely convertible currency at any legal market clearing rate. Investors may also acquire foreign currencies through foreign exchange auctions conducted regularly by the Bank of Sierra Leone. There is no minimum capital requirement except for investments in banking and telecommunications.

1.61.  The Sierra Leone Investment and Export Promotion Agency (SLIEPA) is responsible for the administration of the Investment Promotion Act.32 Its responsibilities include promoting investment opportunities and providing a one-stop service to investors. The SLIEPA is under the supervision of the MTI. With the country emerging from the Ebola crisis, SLIEPA has been working on rebranding it as a destination for investment. A number of guides were published in 2015 (including an Investor Guide), and a "Sierra Leone Back to Growth" documentary was disseminated.33

1.62.  Some restrictions are in place for land access. Indeed, non-citizens and foreign companies are not allowed to own land in Sierra Leone; they may lease land for a term of 21 years, renewable. A longer term (50-year term renewable for 21 years) is available for foreign companies involved in agricultural activities. The leasing of public land is subject to approval by the Ministry of Lands. Decisions are generally issued within 14 days of the request. Land outside Freetown and the Western Area are governed by the customary land tenure system (see section 4.1).

1.63.  In 2014, the minimum wage for all workers was raised to Le 500,000 (US$115) per month (compared to Le 21,000 previously).34

30 The Corporate Affairs Commission, online information. Viewed at: www.cac.gov.sl. 31 World Bank online information. Viewed at: http://iab.worldbank. org/data/exploreeconomies/sierra-

leone.32 Sierra Leone Investment and Export Promotion Act, 2007.33 SLIEPA (2015), Sierra Leone: An Investor's Guide. A Private Sector Perspective on the Investment

Landscape. Freetown, July 2015. Viewed at: https://drive.google.com/file/d/0B5QXLAFG5MhiRmRsRlRoNWRyUmM/view.

34 The previous rate of Le 21,000 (US$5.75) was set in 1997 (The Minimum Wage Act, 1997).

WT/TPR/S/303/Rev.1 • Sierra Leone

- 24 -

2.4.2  Local content prescriptions

1.64.  Sierra Leone adopted a local-content policy in May 2012.35 The stated goal of the policy was "to promote growth and development of the domestic private sector by creating linkages with the large domestic and foreign firms through the utilization of local resources and products, and to promote the integration of the Sierra Leoneans in all economic activities". The policy details prescriptions for the use of locally-sourced goods and services, national preference in contracts and procurements, employment of nationals, and national ownership (Table 2.2).

Table 2.5 Key policy prescriptions in the Local Content Policy

Objective PrescriptionsUse of locally available goods and services

Investment incentives: the granting and/or continued use of incentives is conditional on compliance with the LCP. In particular, a local-content plan will be required upon application for government incentives;

Materials, products and goods: o Manufacturing industry: at least 10% of domestically produced inputs; o Beer industry: up to 20% of locally produced sorghum; o Bakery and confectionery: up to 10% of cassava flour produced locally from locally

grown cassava;o Sugar industry: for any product requiring sugar as an additive, up to 15% of locally

produced sugar in the first five years, and up to 30% in the succeeding five years;o Soap making industry: up to 50% of locally produced palm oil in the first five years,

and up to 70% in the succeeding five years;o Flour industry: up to 10% of wheat flour produced locally in the first five years, and up

to 30% in the succeeding five years;o Locally produced fabric, wood carvings and paintings: 25%.

Services sector: requirement to use services providers registered and located in Sierra Leone. Where there is no local entity, the foreign entity shall operate in partnership with a nationally owned and registered company.

o Hotel, hospitality and tourist industry National preference in contracts and procurements

Contracts and concessions: first consideration should be given to Sierra Leonean firms in sectors such as mining and the petroleum industry;

Procurements: a preferential margin of 10% for domestic firms; Bid evaluation: a 5% price preference is granted, provided that the local content of the selected

bid is at least 5% higher than that of its closest competitor. Employment of nationals

Employment targets: at least 50% of nationals at the managerial level and 40% at the intermediate level. If the required skills are not available locally, the company must demonstrate a capacity-building plan to comply with the requirement within 5 years;

Use of foreign skills: all junior-level positions shall be held by nationals. The employment of expatriates is subject to quotas.

Local ownership Local-foreign partnerships: first consideration to be given to companies with significant equity ownership by nationals, when assigning rights such as mineral concessions;

Promote access to finance by nationals.

Source: Sierra Leone Local Content Policy and information provided by the authorities.

1.65.  A Local Content Agency was established in 2016 with the task of enforcing the policy.36

Companies are required to submit local content plans to demonstrate compliance with the policy. Violations are subject to fines and the loss of investment incentives.

2.4.3  International investment agreements

1.66.  Sierra Leone has ratified six multilateral investment agreements, including the ICSID Convention37 and the Convention establishing the Multilateral Investment Guarantee Agency

35 Government of Sierra Leone (2012), Sierra Leone Local Content Policy. Viewed at: https://www.humanitarianresponse.info/sites/www.humanitarianresponse.info/files/assessments/approved_local_content_policy_document_0.pdf [06.10.2016].

36 The Sierra Leone Local Content Agency Act 2016.37 The International Convention on the Settlement of Investment Disputes (ICSID) between States and

Nationals of other States.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 25 -

(MIGA).38 Sierra Leone is not a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention).

1.67.  Sierra Leone has signed bilateral investment agreements with Germany (signed in 1965), the United Kingdom (signed in 1981 and revised in 2000), and China (signed in 2001, not in force yet).39 Agreements on double taxation avoidance are in force with the United Kingdom, Denmark, Norway, and India.

38 The other investment agreements are: the Convention setting up the Inter-Arab Investment Guarantee Corporation of May 1971 (since April 1974); the Agreement for the Promotion, Protection and Guarantee of Investment among Members States of the Organization of Islamic Conference of 1 June 1981 (since 23 September 1986); the Unified Agreement for the Investment of Arab Capital in the Arab States of 1982; and the Agreement of the Islamic Corporation for the Insurance of Investment and Export Credit of 19 February 1992 (since 1 August 1994).

39 UNCTAD online information. Viewed at: http://investmentpolicyhub.unctad.org/IIA/CountryBits/189.

Symbol

Date(00-0000) Page: 26/75

3  TRADE POLICIES AND PRACTICES BY MEASURE

3.1  Measures Directly Affecting Imports

3.1.1  Customs procedures and requirements

1.68.  Sierra Leone ranks 164th among 189 economies in terms of the ease of trading across borders, according to the World Bank's Doing Business 2016 report.1 The Customs Act 2011 is the main law governing customs procedures in Sierra Leone. It is administered by the Customs and Excise Department (CED) of the National Revenue Authority (NRA).

1.69.  The main documents required for customs clearance include commercial invoice(s), a bill of lading, a destination inspection classification and valuation certificate (from the destination inspection company), and evidence of fund transfer. Other documents such as a phytosanitary or fumigation certificate or a certificate of origin may be required depending on the nature of the goods or the country of origin.

1.70.  In 2010, Sierra Leone replaced its manual customs clearance system with the Automated System for Customs Data (ASYCUDA). The ASYCUDA++ platform is currently in place at the main customs office in Freetown, the Queen Elizabeth Port, the Lungi International Airport, and the Gbalamoya border post. The day-to-day operation of the system is frequently affected by issues related to Internet connectivity and electricity supply. The ASYCUDA has helped to increase the efficiency of the customs administration. Processing and clearance times have been reduced considerably, to as short as four hours for consignments that do not require a customs examination.

1.71.  The process for importing goods into Sierra Leone includes the following steps: submission of the destination inspection form together with other required documents to the relevant destination inspection company; submission of the delivery order (upon arrival of the consignment); completion and assessment of the Single Customs Declaration using ASYCUDA; and, payment of duties and taxes at the bank. Once the importer submits all supporting documents to customs, ASYCUDA triggers the selectivity of the customs declaration to one of the four lanes for clearance processing: green lane (immediate release of the cargo without inspection); blue lane (documentary check before release); yellow lane (detailed documentary check before release); and red lane (detailed documentary check and physical examination).

1.72.  Sierra Leone has not yet ratified the WTO Trade Facilitation Agreement, nor has it notified its list of category A commitments. A trade facilitation gap analysis was conducted in May 2016, with the support of the WCO and the World Bank. The authorities indicated that the ratification process was under way.

1.73.  During the review period, Sierra Leone gradually replaced its pre-shipment inspection with a destination inspection. The pre-shipment inspection was terminated in 2009. The destination inspection too aims to assess quality, quantity and value, and to propose customs classification of imports. The programme is carried out by two companies under contracts: Africa Link Inspection Company (ALIC), for shipments arriving by sea, and Sierra Inspection Company (SIC) for shipments arriving by air or through terrestrial borders. The inspection companies collect a service fee of 0.8% of the assessed f.o.b. value of the consignment. They also collect a fee of 0.15%, on behalf of the Sierra Leone Bureau of Standards, and 0.05%, on behalf of the Destination Inspection Secretariat within the Ministry of Trade and Industry. These bring the overall charge to 1% of the f.o.b. value of the consignment. There is no exemption. The inspection company also charges a container scanning fee of US$50 for 40 feet containers and US$30 for 20 feet containers.2 The

1 World Bank (2016), Doing Business 2016: Measuring Regulatory Quality and Efficiency. Washington, DC: World Bank Group.

2 Awareness Times, online information. Viewed at: http://news.sl/drwebsite/exec/view.cgi?archive=8&num=21115 [07.10.16].

WT/TPR/S/303/Rev.1 • Sierra Leone

- 27 -

inspection company issues a classification and valuation certificate (CVC) which is required for customs clearance operations.

1.74.  The authorities indicated that the destination inspection contracts contain provisions for the training of customs officials in classification and valuation, with a view to preparing the Customs Administration to take ownership of the functions covered by the contract. The current contracts run until 2023.

1.75.  The following products are exempted from the destination inspection: arms, ammunition, and related parts and accessories imported by the Government for military or paramilitary use; explosives and pyrotechnical products; commercial samples; live animals; fruits; vegetables; eggs; meat (fresh, chilled or frozen); newspapers and periodicals (HS heading 4902); precious metals and precious stones (HS headings 7101 to 7112); work of art, collectors' pieces, and antiques (HS chapter 97); goods by courier and parcel post; personal and household effects; and radioactive and nuclear substances. Goods belonging to non-governmental organizations, and goods imported by diplomats for their own use are also exempted.

1.76.  There is no formal mechanism for consultations between the customs authorities and the public. The Customs Act 2011 mandates the Commissioner-General to ensure that all relevant information is easily available to interested stakeholders, and to consult with them with a view to increasing cooperation and compliance. The NRA's Public Education Department is in charge of making customs-related information available to the public.

1.77.  The Customs Act 2011 allows stakeholders to apply for an advance binding ruling on, inter alia, the tariff classification, determination of origin, and the valuation method. In principle, the ruling is valid throughout the country. In practice, binding advance rulings are issued only on matters related to classification.

1.78.  The Act allows the CED to seize imported goods in cases of smuggling, or where it is determined that the goods have been intentionally mis-described or under-valued by an importer, with the intention to avoid payment of duties. Seized goods, if they are not prohibited, may be released upon payment of a penalty. In the case of smuggled goods, the penalty amounts to the value of the goods, augmented by applicable duties and taxes. In the case of mis-described or under-valued goods, the penalty is twice the amount of all duties and taxes on the first contravention, three times in case of recidivism, and four times in case of multi-recidivism. Importers and clearing agents are encouraged to voluntarily report any error, omission or infraction. No penalty will be assessed if such a report occurs prior to the initiation of an audit or an investigation. Importers have the right of appeal on goods seized or penalties assessed. Appeals are received, in first instance by the Commissioner-General. Any contravention to the customs law may be prosecuted within five years from the date of its end.

1.79.  Traders are not required to use the service of a licensed customs clearing agent, provided that they demonstrate their ability to use ASYCUDA. Licences for customs clearing businesses are granted by NRA's Commissioner-General. Applicants have to, inter alia, demonstrate that they have trained staff in ASYCUDA and other customs processes, and acquire a guaranteed bond. A list of licensed customs is published annually in the Gazette.

3.1.2  Customs valuation

1.80.  The Customs Act 2011 is broadly based on the provisions of the Agreement on Implementation of Article VII of the GATT 1994 (WTO Customs Valuation Agreement). The Act prohibits the use of minimum, arbitrary or fictitious values. However, in practice, Sierra Leone continues to use minimum values on some food items, drinks, clothing and footwear, toiletries, plastic chairs, and engine oils.

1.81.  A customs officer may examine and re-determine the classification of the goods, their value or the country of origin within five years of the date of the customs declaration. Such a decision can be appealed to the Commissioner-General within 90 days of receipt of the formal notice. The appeal does not dispense the importer from payment of the re-assessed import duties and taxes. The Act requires the Commissioner-General to decide on the appeal as soon as possible, but does not give a specific delay. The importer has the right to lodge a further appeal to the High Court within 90 days of the date of notification of the decision by the Commissioner-General.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 28 -

1.82.  Sierra Leone is a member of the World Customs Organization. Sierra Leone acceded to the Kyoto Protocol in 2006 and started implementing it from February 2007.

3.1.3  Rules of origin

1.83.  Under the Customs Act 2011, the country of origin of a product is the country where it was wholly obtained, or the country of its last substantial transformation. A product is deemed to have undergone a substantial transformation if such a transformation leads to a change in the tariff line (at the HS 6-digit subheading).

1.84.  As a member of the ECOWAS, Sierra Leone grants duty-free treatment to products originating in other ECOWAS members. Under the ECOWAS Protocol, goods are considered as originating in the member State where they were wholly produced or sufficiently transformed. Sufficient transformation in this case is a change in the tariff line (HS 6-digit subheading), local-content of at least 60%, or local value added of at least 30%.

1.85.  Sierra Leone's exports are granted preferential treatment under various agreements (Section 2.3). In order to benefit, the exporter is usually required to obtain a certificate of origin, issued in many cases by the Chamber of Commerce, Industry and Agriculture (CCIA). For exports to ECOWAS countries and to the European Union, the CCIA issues the certificate and certifies the other export documents against payment of a fee of Le 300,000.

1.86.  Companies that wish to benefit from the ECOWAS Trade Liberalization Scheme must register with the ECOWAS Commission, and register each of the products they wish to ship duty free. The registration procedure involves a two-stage approval process where a national committee forwards the decision to a regional committee. It takes between four and six months to obtain approval.3 The process is considered by many operators as cumbersome, and a barrier to exports to the other ECOWAS member States.

1.87.  Exports under the AGOA provisions follow a different process. Businesses are required to register with the AGOA Secretariat, located within the Ministry of Trade and Industry. In addition to the registration requirement, exports of textile or apparel products must be accompanied by a visa issued by the Ministry of Trade and Industry.4

3.1.4  Tariffs

1.88.  Border taxation remains an important source of government revenue in Sierra Leone. Import duties accounted for 14.1% of total domestic revenue in 2015 (Table 3.4).

3.1.4.1  Applied MFN tariff

1.89.  Sierra Leone became a contracting party to the International Convention on the Harmonized Commodity Description and Coding System (HS Convention) in 2015. It uses the Harmonized System for its customs tariff. The 2016 applied MFN tariff is based on the 2007 version of the HS (HS2007). It has 5,467 lines at the 8-digit level. All tariffs rates are ad valorem (Table 3.1). The 2016 tariff averages out to 12% (down from 13.9% in 2004), reflecting mainly lower imports duties on manufactured products (ISIC definition). The tariff has 6 bands (Chart 3.1); most products fall in the 5% band (44.9% of tariff lines) or the 20% band (41.1% of tariff lines). Only 0.3% of tariff lines are duty-free; these include some pharmaceutical products, medical equipment, children's books, and computers. The highest rate (30%) applies to 0.7% of tariff line, mainly beverages (alcoholic and non-alcoholic) and used vehicles (older than 10 years).

1.90.  Sierra Leone has neither seasonal nor variable tariffs. The customs tariff is applied to the value of imports plus the incurred cost of insurance and freight (c.i.f. value). In the absence of proper insurance documentation, insurance cost is assessed at the rate of 0.375% of the value of goods.

3 Hoppe M. and F. Aidoo (2012), Removing Barriers to Trade between Ghana and Nigeria: Strengthening Regional Integration by Implementing ECOWAS Commitments. The World Bank Group, Africa Trade Policy Notes No. 30, March.

4 Statutory Instrument – Export Control (Textiles and Apparel Articles) Regulations 2004, Supplement to the Sierra Leone Gazette, Vol. CXXXV, No. 16, 11 March 2004.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 29 -

1.91.  Sierra Leone's applied tariff is subject to frequent reviews, mainly through Finance Acts. These frequent revisions are likely to impact the predictability of the tariff regime. In 2016, the tariff was amended to, inter alia, set the duty rate at 5% on all "raw materials" or "packaging materials".5 There is however some room for discretion, as the legislation provides a non-exhaustive list of such materials, and tariff line numbers are not always available.6

Table 3.6 Structure of applied MFN tariffs, 2004 and 2016(%)

Description 2004 2016 Final bounda

1. Bound tariff lines (% of all tariff lines) 100.0 100.0 100.02. Simple average tariff rate 13.9 12.0 47.6

Agricultural products (WTO definition) 16.5 15.6 40.6Non-agricultural products (WTO definition) 13.5 11.4 48.7Agriculture, hunting, forestry, and fishing (ISIC 1) 14.6 14.4 42.1Mining and quarrying (ISIC 2) 5.3 5.4 50.0Manufacturing (ISIC 3) 14.1 12.0 47.8

3. Duty-free tariff lines (% of all tariff lines) 0.4 0.3 0.04. Simple average rate of dutiable lines only 14.0 12.0 47.65. Tariff quotas (% of all tariff lines) 0.0 0.0 0.06. Non-ad valorem tariffs (% of all tariff lines) 0.0 0.0 0.07. Domestic tariff peaks (% of all tariff lines)b 0.0 0.0 0.08. International tariff peaks (% of all tariff lines)c 47.2 41.8 100.09. Overall standard deviation of applied rates 9.5 7.2 6.5

10. Nuisance applied rates (% of all tariff lines)d 0.0 0.0 0.0

a Final bound rates are based on the 2016 tariff schedule in HS07 nomenclature. b Domestic tariff peaks are defined as those exceeding three times the overall simple average applied

rate.c International tariff peaks are defined as those exceeding 15%.d Nuisance rates are those greater than zero, but less than or equal to 2%.Note: The 2004 tariff is based on the HS02 consisting of 5,577 tariff lines (at 8-digit tariff line level). The

2016 tariff is based on the HS07 consisting of 5,467 tariff lines (at 8-digit tariff line level). No duty rates are provided for 4 tariff lines.

Source: WTO (2005); and WTO Secretariat calculations based on tariff information provided by authorities and the WTO Consolidated Tariff Schedule database.

Chart 3.3 Breakdown of applied MFN tariffs, 2016

(0.3)

(44.9)

(12.5)

(0.4)

(41.1)

(0.7)0

10

20

30

40

50

60

70

80

90

100

0

500

1,000

1,500

2,000

2,500

3,000

Duty-free 5 10 15 20 30

Number of lines Cumulated percentage (right-hand scale)

Figures in parentheses denote the share of total lines. They do not add to 100% since duty rates are not available for 4 tariff lines. The 2014 tariff schedule consists of 5,467 tariff lines.

WTO Secretariat calculations, based on data provided by the authorities of Sierra Leone.

Chart 3.1Breakdown of applied MFN tariffs, 2014

Number of tariff lines

Source:

Note:

Per cent

Note: Figures in parentheses denote the share of total lines. They do not add to 100% since duty rates are not available for 4 tariff lines. The 2016 tariff schedule consists of 5,467 tariff lines.

Source: WTO Secretariat calculations, based on data provided by the authorities of Sierra Leone.

5 Finance Act, 2016.6 Schedule to the Finance Act 2016 (List of Raw and Packing Materials).

WT/TPR/S/303/Rev.1 • Sierra Leone

- 30 -

1.92.  The coefficient of variation of the tariff is 0.6, indicating moderate dispersion of the rates. With an average of 15.6%, MFN rates on agricultural products (WTO definition) are generally higher than the overall average. The highest rate applies to dairy products, beverages, spirits and tobacco. Tariffs on non-agricultural products average 11.4%. Using the ISIC (Revision 2) definition of sectors, agriculture (including hunting and fishing) remains the most protected sector, with an average tariff of 14.4%, followed by manufacturing (12%), while imports of mining and quarrying products face the lowest tariffs (5.4%).

1.93.  Escalation in the MFN tariff is mixed, with semi-processed products being subject to a lower average applied rate than raw materials, while fully processed products attract a higher average applied rate (Table 3.2). At a disaggregated level (ISIC 2-digit), positive tariff escalation is prevalent in most industries (Chart 3.2), pointing to high rates of effective protection. This is, for example, the case of textiles and apparel, and non-metallic mineral products, where the average applied rate on fully processed items exceeds by more than 10 percentage points, the rate on products at the first stage of processing. Such high protection does not encourage these industries to improve their international competitiveness.

Table 3.7 Comparative analysis of Sierra Leone's MFN tariff and the ECOWAS CET, 2016

Sierra Leonea ECOWAS CETb

Numberof lines

Average(%)

Range(%)

Coefficientof variation

Average (%)

Total 5,467 12.0 0-30 0.6 12.3HS 01-24 846 16.3 5-30 0.4 16.1HS 25-97 4,621 11.2 0-30 0.6 11.4By WTO categoryWTO agricultural products 789 15.6 5-30 0.4 15.6Animals and products thereof 94 19.0 5-20 0.2 23.9Dairy products 29 19.0 10-20 0.2 16.0Fruit, vegetables, and plants 203 17.9 5-20 0.3 17.6Coffee and tea 31 15.5 5-20 0.4 12.0Cereals and preparations 97 14.4 5-20 0.4 13.5Oils seeds, fats, oil and their products 93 10.6 5-20 0.5 14.1Sugars and confectionary 23 14.3 5-20 0.5 13.8Beverages, spirits, and tobacco 83 20.7 5-30 0.3 17.0Cotton 6 5.0 5.0 0.0 5.0Other agricultural products, n.e.s. 130 10.4 5-20 0.7 9.5WTO non-agricultural products 4,678 11.4 0-30 0.6 11.7Fish and fishery products 127 16.7 5-20 0.3 15.4Minerals and metals 935 10.4 5-20 0.7 11.7Chemicals and photographic supplies 901 7.7 0-20 0.7 8.0Wood, pulp, paper, and furniture 275 11.4 0-20 0.6 11.4Textiles 653 14.3 5-20 0.4 16.0Clothing 219 20.0 20.0 0.0 20.8Leather, rubber, footwear, and travel goods

170 16.1 0-20 0.4 12.9

Non-electric machinery 525 6.7 0-20 0.7 7.0Electric machinery 248 13.9 5-20 0.5 11.2Transport equipment 205 9.7 5-30 0.9 10.2Non-agricultural products, n.e.s. 400 14.3 0-30 0.5 14.3Petroleum 20 10.3 5-20 0.7 7.9By ISIC sectorc

ISIC 1 - Agriculture, hunting, and fishing 312 14.4 5-20 0.5 11.5ISIC 2 - Mining and quarrying 100 5.4 5-20 0.4 5.1ISIC 3 – Manufacturing 5,054 12.0 0-30 0.6 12.5By stage of processingFirst stage of processing 658 11.7 5-20 0.6 10.2Semi-processed products 1,778 9.0 5-20 0.6 10.0Fully processed products 3,031 13.8 0-30 0.5 14.0

a The 2016 tariff is based on HS07 nomenclature consisting of 5,467 tariff lines (at 8-digit tariff line level). No duty rates are provided for 4 tariff lines.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 31 -

b The ECOWAS tariff schedule is based on HS 2012 nomenclature consisting of 5,899 tariff lines (at 10-digit tariff line level).

c International Standard Industrial Classification (Rev.2). Electricity, gas, and water are excluded (1 tariff line).

Source: WTO Secretariat calculations, based on data provided by the authorities.

Chart 3.4 MFN tariff escalation by manufacturing, ISIC 2-digit, 2016(%)

0.0

2.5

5.0

7.5

10.0

12.5

15.0

17.5

20.0

22.5

Food,beverages

and tobacco

Textiles andleather

Wood andfurniture

Paper,printing andpublishing

Chemicals Non-metallicmineralproducts

Basic metal Fabricatedmetal

products andmachinery

Other

n.a.

n.a.

Chart 3.MFN tariff escalation by manufacturing, I SIC 2-digit, 2014

Per cent

First stage of processing

Fully processed

Semi-processed

Not applicable.

WTO Secretariat calculations, based on data provided by the authorities of Sierra Leone.

n.a.

Source:

Average applied rate in manufacturing(12.0 % )

Source: WTO Secretariat calculations, based on data provided by the authorities of Sierra Leone.

1.94.  The authorities indicated that Sierra Leone would start implementing the new ECOWAS common external tariff (CET) on 1 January 2017.7 Although the CET rates are within Sierra Leone's WTO binding commitments, implementation will lead to some changes to the structure of the applied tariff. Sierra Leone will be required to eliminate its 15% and 30% bands, which currently apply to about 1.1% of tariff lines; to apply the 35% rate to the "specific goods for economic development"; and to revise its tariff structure accordingly. Sierra Leone would have to lower by more than 3 percentage points its tariff on (using the WTO classification): dairy products; beverages, spirits, and tobacco; coffee and tea; and leather, rubber footwear, and travel goods (Table 3.3). Import duties on fish and fishery products will be lowered by about 1.3 percentage points. For animals, oil seeds, fats, oil and related products, the adoption of the new ECOWAS CET would lead to higher average tariffs (up 5 percentage points on animals and related products). Sierra Leone would also have to raise duties on minerals and metals by an average of 1.3 percentage points.

1.95.  The ECOWAS authorities also adopted an Import Adjustment Tax (IAT) and a Supplementary Protection Tax (SPT), to take effect simultaneously with the CET. These measures would allow countries to deviate from the CET rates when necessary and under specified conditions. The IAT is to be used in instances when a country needs tariff protection higher than provided by the CET. Sierra Leone is yet to identify its list of products that would be subjected to the IAT. These taxes are for a transitional period of up to five years, and should not apply to more than 3% of all tariff lines.

1.96.  During the Uruguay Round, Sierra Leone bound all its tariffs lines at ceiling rates between 30% and 80%, with an average bound rate of 47.5%. Tariffs on agricultural products were bound at a ceiling rate of 40%, except for preparations of cereals, flour (HS sections 1902-1905), solid soup (HS section 2104), cotton linters (HS sections 5501-5504), which were bound at ceiling rates of 30%, and beer made from malt (HS section 2203) at 80%. Tariffs on non-agricultural items are all

7 The first ECOWAS common external tariff was established in 2006, and based on the WAEMU's four-band CET: 0% on essential social goods; 5% on goods of primary necessity, raw materials and specific inputs; 10% on intermediate goods; and 20% on final consumption goods. Sierra Leone did not implement this CET. In 2007, the Heads of States adopted a Supplementary Act creating a 5th band at 35% on "specific goods for economic development"; the resulting revised CET was adopted in October 2013 and is due for implementation from 1 January 2015 (ECOWAS Commission (2013)).

WT/TPR/S/303/Rev.1 • Sierra Leone

- 32 -

bound at a ceiling rate of 50% except for certain items.8 Sierra Leone's schedule of commitments has been transposed into HS07 and certified effective as of 25 October 2014.9

1.97.  Many of Sierra Leone's bound rates are considerably higher than applied duties, leaving scope for the authorities to raise applied rates within the ceiling bindings (Chart 3.3). This reduces the predictability of the tariff regime.

Chart 3.5 Average MFN tariff rates, by WTO product categories, 2016(%)

0

10

20

30

40

50

60

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

WTO Secretariat calculations, based on data provided by the authorities and WTO CTS database.

%

Chart 3.[avg] Average MFN tariff rates, by WTO product categories, 2014

Source:

1 WTO Agriculture2 Animals and products3 Dairy products4 Fruit, vegetables, and plants5 Coffee and tea6 Cereals and preparations7 Oils seeds, fats, oil and their products

8 Sugars and confectionary9 Beverages, spirits and tobacco10 Cotton11 Other agricultural products12 WTO Non-agriculture13 Fish and fishery products14 Minerals and metals

15 Chemicals and photographic supplies16 Wood, pulp, paper and furniture17 Textiles18 Clothing

19 Leather, rubber, footwear and travel goods20 Non-electric machinery21 Electric machinery22 Transport equipment23 Non-agricultural products24 Petroleum

Applied rates

Bound ratesAverage applied rate

(12.0% )

Average bound rate(47.6% )

Source: WTO Secretariat calculations, based on data provided by the authorities and WTO CTS database.

3.1.4.2  Other duties and charges

1.98.  Sierra Leone bound its other duties and charges (ODCs) at rates that vary between zero and 50%, depending on the product10; most tariff lines were bound at either 50% (80.1% of HS 6-digit subheadings), or 20% (15.2% of HS 6-digit subheadings). The zero bound ODC rate applies to 3.8% of HS 6-digit subheadings including rice; baby food items; children's books; machinery, mechanical appliances and parts; and medical instruments.

1.99.  In practice, Sierra Leone is levying the ECOWAS Community Levy on imports from non-ECOWAS countries, at the rate of 0.5% of the c.i.f. value. This charge is intended to finance the operating expenses of the ECOWAS Commission and regional integration projects.

1.100.  Bills of lading for duty free imports are subject to a stamp duty of Le 750,000. Port charges are assessed on the volume of imports and exports, at rates ranging from Le 500/t to Le 1,000/t. A customs processing fee of Le 30,000 is applicable to all transactions.

8 Items bound at 30%: pharmaceutical products; fertilizers; disinfectants, insecticides, fungicides, herbicides, pesticides; printed books, booklets, brochures, pamphlets and leaflets; children's picture books and printing books; maps; pumps for liquid; air pumps, vacuum pumps and air or gas compressors, fans; machinery and mechanical appliances, electrical equipment and parts; transmitters, colour televisions; tractors; buses, trucks and trailers; and medical, dental, surgical, and veterinary instruments and appliances. Items bound at 35%: hand tools and implements. Items bound at 70%: motor vehicles with capacity up to 2,000 cc. Items bound at 80%: motor vehicles with capacity exceeding 2,000 cc.

9 WTO document WLI/100, 17 November 2014.10 WTO online information. Viewed at:

http://www.wto.org/english/thewto_e/countries_e/sierra_leone_e.htm.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 33 -

1.101.  These other duties and charges apply to all products, including those bound at zero by Sierra Leone.

3.1.4.3  Internal taxes

1.102.  The Goods and Services Tax (GST) has been in place since 2010; it replaced the sales tax and some other taxes.11 It is an important source of government revenue. In 2015, it accounted for about a quarter of government domestic revenue (Table 3.4).

1.103.  The GST is levied at a standard rate of 15% on taxable goods and services (domestically produced and imported goods). On imports, the base comprises the c.i.f. value, customs duties, and any other tax or fiscal charge payable on the importation of goods. GST-exempted goods and services include12: animals; fish and birds imported for breeding and rearing purposes; agricultural inputs, seeds, bulbs, and roots imported for propagation; rice (in its raw state); machinery for use in agriculture, veterinary, fishing, and horticulture, manufacturing and mining; exports of minerals; water (excluding package and distilled water); crude oil and hydrocarbon products (excluding lubricating oils); books and newspapers; land, buildings, and public work; and some services (education, medical, and pharmaceuticals services; passenger transportation13; and financial services).

1.104.  Sierra Leone levies an excise tax on about 51 tariff lines at specific rates, and at ad valorem rates between 5% and 35% (Table 3.3). The tax base is the c.i.f. value of imports or the sale value (for domestic goods). The tax on tobacco products was removed in 2006, but reinstated in 2013. In 2015, the excise tax contributed to 9.3% of the Government's domestic revenue (Table 3.1), with a large share coming from petroleum imports.

Table 3.8 Products subject to the excise tax, September 2016Tariff item Description Tax rate and basis Amending

legislation22.02 Aerated waters and non-alcoholic beverages

Soft drinks, bottled or canned10% on sales or CIF0% on sales

Finance Act, 2013Finance Act, 2014

22.03 Alcoholic drinks (imported only):- alcoholic content of 10% or less- alcoholic content of more than 10%

US$4/litreUS$6/litre

Finance Act, 2016

2204, 2205, 2207.10.90, 2207.20, and 2208

Alcoholic beverages:- alcoholic content of 10% or less- alcoholic content of more than 10%

30%35% Finance Act, 2010

22.09 Locally manufactured:- alcoholic drinks of more than 10% alcoholic content- beer of more than 80% locally produced raw materials

30% on sales

5% on sales

Finance Act, 2016

22.10 Locally manufactured alcoholic drinks with less than 10% alcoholic content

20% on sales

22.11 Imported alcoholic drinks of less than 10% alcoholic content

30% on CIF

24.02 Tobacco productsCigarettes

20% on CIF0% on sales

Finance Act, 2013Finance Act, 2014

33.06 Cosmetic and cosmetic aids 10% on CIF Finance Act, 201339.07 Polythene and plastic materials 5% on CIF Finance Act, 201339.08 Rubber (imported) 10% on CIF2710, 2711, 2712, 2713, 2714, 2715, and 2716

Petroleum products 30% on CIF

Fireworks and pyrotechnic articles 30% on CIF9301, 9302, 9303, 9304, 9305, 9306.21, 9306.90, and 9307

Arms and ammunition 30% on CIF

97.01 Products and equipment designed for gambling 20% on CIF Finance Act, 2013

Source: Excise Duty Act, 1979 and various Finance Acts.

1.105.  In 2010, the authorities instated a stamp duty, levied at 20% on tobacco products and alcoholic beverages.14 The tax applies to imported and locally manufactured goods.

1.106.  A withholding tax (collected as a prepayment of the income tax) is charged at a rate of 3% of the CIF value of imported goods intended for resale.

11 Goods and Services Tax Act, 2009.12 Second Schedule of the Goods and Services Tax Act, 2009.13 Excluding domestic air travel, boat, and hovercraft services.14 Finance Act, 2010.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 34 -

3.1.4.4  Tariff preferences

1.107.  Under the ECOWAS Trade Liberalization Scheme (ETLS), Sierra Leone grants duty-free treatment to approved products from approved enterprises established in any ECOWAS member State (Section 2.3.2.2).

3.1.5  Duty and tax concessions and exemptions

1.108.  Sierra Leone's investment incentive schemes (Section 3.3.1.2) provide for duty-free importation of items such as agricultural inputs (fertilizers, seeds, pesticides, tractors and parts, machinery); building materials in the tourism sector; and machinery, plant, and equipment for mining prospection and exploration.

1.109.  In accordance with the Customs Act 2011, exemption from the payment of customs duties may be granted for imported goods used for inward processing (including goods directly consumed in the process), as foreign aid, or under the terms of a technical assistance programme. In particular, exemption is granted for goods imported into a special economic zone for use in the production of exports. In the case of inward processing, the processed goods must be exported within four years of the customs declaration.

1.110.  Goods re-imported into Sierra Leone in the same state and within one year of exportation, may be entitled to a re-entry free of import duties and taxes. The importer may also claim back any duty and tax paid at the time of exportation.

1.111.  The Customs Act provides for the drawback of duties on imported goods that were subsequently exported in the same condition, or used in the manufacture of exported goods. The drawback corresponds to the amount of the duty paid on the imported products. Fuel and plant equipment are excluded from duty drawback. Applications for drawback of duties are receivable within 4 years of the customs declaration. The authorities indicated that ASYCUDA in its current configuration does not support drawbacks, and importers are allowed to re-utilize paid duties on subsequent imports.

1.112.  The National Revenue Authority is responsible for the administration of duty waivers. The Finance Act 2013 introduced a cap of 3% of GDP on duty waivers granted in a given year. In assessing applications for duty exemptions, the NRA charges a non-refundable administrative fee of Le 750 000 per consignment.

3.1.6  Import prohibitions, restrictions, and licensing

1.113.  In accordance with the Customs Act 2011, the import or export of some products may be prohibited on the basis of, inter alia, protection of public morals; protection of human, animal, plant life or health; or protection of the environment. The authorities may restrict the exportation of some domestic materials if deemed necessary to ensure that essential quantities are available to domestic industries. Prohibition measures may also be imposed for the purpose of conservation of exhaustible natural resources.

1.114.  As a party to the Montreal Protocol, Sierra Leone prohibits the import and export of products containing ozone-depleting substances. These include non-CFC-free refrigerators, air conditioners, vehicles, and aerosol products (except medical aerosols).15 The importation of halon for firefighting is prohibited, except for the army, the police, and the airport and the port authorities. The Environmental Protection Agency may issue permits for the importation of some ozone-depleting substances if it is satisfied that the applicant has adequate facilities to handle them without causing damage to the environment. Imports and exports are allowed only if they originate in, or are to be exported to a country that is party to the Protocol.

1.115.  Trade in counterfeit or pirated products may be challenged by holders of intellectual property rights (Section 3.3.8). Permits, licences or other approval procedures may apply to imports of drugs, arms and ammunition, and hazardous products (e.g. caustic soda). Imports of counterfeit drugs, expired foodstuffs, and substandard goods are prohibited. Such goods, if seized, are systematically destroyed.

15 The Environment Protection Agency Act, 2008, repealing the Environment Protection Act, 2000.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 35 -

1.116.  In accordance with the 2011 Finance Act, importation of right-hand-drive vehicles is subject to an environmental impact assessment licence, and to a surcharge of 40% of the c.i.f. value. The 2011 Road Traffic Regulation prohibits their importation.

3.1.7  Contingency measures

1.117.  Sierra Leone has no legislative or institutional framework for anti-dumping, countervailing or safeguards actions, and has not taken any anti-dumping, countervailing or safeguard measures.

1.118.  As a member of the ECOWAS, Sierra Leone can avail itself of the supplementary protection tax in case of import surges from non-members once it starts implementing the CET.

3.2  Measures Directly Affecting Exports

3.2.1  Export procedures and requirements

1.119.  Exporters are required to submit, with their customs declaration, the relevant business registration or incorporation certificate, and a tax clearance certificate. Exporters of fresh produce such as cocoa, coffee, ginger, and palm kernel are required to obtain a letter from the Produce Monitoring Board16, stating that they have met the statutory requirements. Other required documents may include a bill of lading/airway bill, and a Custom Entry Form. The customs declaration and supporting documents are submitted through the ASYCUDA system.

3.2.2  Export taxes, charges, and levies

1.120.  An export tax is levied on major domestic goods such as cocoa, coffee products, palm oil and palm kernel, diamonds, and gold. The tax aims at encouraging value addition and supporting the development of local communities. The tax on cocoa, coffee, palm oil, and palm kernel is levied at the rate of 2.5% of the f.o.b. export value.

1.121.  The export tax is levied on diamonds at a rate of 3%. Small-scale mining lease-holders pay a royalty fee of 5% of the export value, and 1% as a valuation fee. Individuals exporting on an ad hoc basis, such as tourists or exporters interested in testing the market, may obtain a special dispensation from the licensing requirement. However, they are charged an extra 2% in addition to the 3% export tax. Gold exports are taxed at the rate of 5% of their value as assessed by the Precious Minerals Trading Directorate. Individually mined gold is taxed at a lower rate of 3%.

1.122.  Most exports from Sierra Leone are zero-rated for the GST. However, some mineral products are taxed at the standard rate of 15%. These include: rutile and its by-product, iron ore, bauxite, gold, and diamonds.

3.2.3  Export prohibitions, restrictions, and licensing

1.123.  The authorities may implement restrictions on exports for various reasons, including health, safety, and environment-related. In order to encourage farmers to export, the 2004 Investment Promotion Act abolished the licensing requirement for exports of locally produced goods, with the exception of gold, diamonds, and occasionally, some selected goods and materials (currently, scrap metals). Exports of traditional commodities, such as cocoa, coffee, and rubber are subject to a permit. Permits are issued automatically, at no cost to the trader.

1.124.  Gold and diamond exporters are required to obtain a licence from the Ministry of Mines and Mineral Resources. As a member of the Kimberley Process, Sierra Leone is required to certify that all shipments of rough diamonds are "conflict-free". The Kimberley Process Certificate is issued by the Directorate of Precious Minerals Trading (in the Mines and Minerals Agency). There is no separate fee for the certificate. It is covered by the annual diamond exporters' fee of US$1,500.

1.125.  In accordance with the Montreal Protocol, the exportation of ozone-depleting substances is prohibited. The National Drugs Control Act 2008 contains, in its First Schedule, a list of prohibited drugs. The transport, import or export of these drugs is considered an offence, and liable to conviction.

16 The Produce Monitoring Board, established in 2013 (Produce Monitoring Board Act 2013), replaced the Commodity Market Monitoring Unit.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 36 -

1.126.  Exports of raw logs have been banned since 2008. Due to environmental regulations, a special permit from the ministry in charge of natural resources is required for the exportation of plants and charcoal.17

3.2.4  Export support, promotion, guarantee, and insurance

1.127.  The authorities indicated that Sierra Leone does not operate any export subsidy programmes.

1.128.  Established in 2007, the Sierra Leone Investment and Export Promotion Agency (SLIEPA) has the mandate to, inter alia, encourage and promote the development of exports-oriented activities, with a special focus on agriculture and marine resources. It provides exporters with information on market access and technical assistance opportunities, and advocates their interests. SLIEPA is governed by a board composed of representatives from relevant ministries as well as the Chamber of Commerce, Industry and Agriculture, the bankers association, and the association of manufacturers. The agency is funded under the Government's regular budget. Activities undertaken include facilitation of trade fairs and exhibitions; provision of market intelligence and trade information; provision of capacity building in export value chains; and development of product profiles for some non-traditional exports. An investor's guide was published in 2016.

1.129.  In 2010, SLIEPA developed a National Export Strategy (NES) with a vision to "transform Sierra Leone into a flourishing country through a globally competitive export-driven economy".18

The NES identified agriculture, fisheries, mining, and tourism as being strategic for export performance, and defined government interventions accordingly. The NES also aims to address cross-cutting issues such as access to trade finance, transport and trade logistics, and trade information services. Over its implementation period (2010-15), the strategy is expected to put nearly US$590 million into the economy, mainly in the agriculture sector.

1.130.  An assessment of the strategy19 found that export capabilities were improving, although the awareness of local producers about export opportunities remained limited. The report also found that the physical infrastructure is largely inadequate, and compliance with quality requirements and standards is still a major challenge. Limited access to credit restricts considerably the development of export-oriented activities, especially in the absence of any export credit guarantee or credit risk insurance scheme. The report also pointed out the land-tenure system, in its current form, especially the application of the customary land system in rural areas, as an important barrier to the development of the agriculture sector (Section 4.1).

1.131.  In 2013, the authorities dissolved the Sierra Leone Produce Marketing Board20, a state-owned enterprise solely responsible for the purchase, export, and marketing of agricultural cash crop products including cocoa, coffee, cashew, palm oil, rice, and sorghum. The Board was replaced by a limited liability company, the Sierra Leone Produce Marketing Company Limited.

1.132.  Under the Finance Act 2011, expenses related to the promotion of exports (goods and services) and local brands abroad are fully deductible from taxable profits.

3.2.5  Export processing zones

1.133.   In 2011, First Step, a subsidiary of a U.S.-based non-profit agency, established a special economic zone (SEZ)21 near the main port of Freetown. The goal is to provide potential investors with facilities where they have guaranteed access to the logistic support and the utilities they need to operate their business. Enterprises that locate in the SEZ are granted several incentives, including a perpetual duty exemption on imports and exports, a three-year corporate tax holiday, and on-site government services including customs inspection, immigration, and business

17 The Agricultural Act (Public Notice No. 66 of 1974) – (Cap 185), 12 December 1974; and the Rural Area Act (Public Notice No. 16 of 1990) – (Cap 75), 31 December 1990.

18 Ministry of Trade and Industry (2010), Sierra Leone National Export Strategy 2010-2015. Viewed at: http://www.3adi.org/tl_files/music_academy/campus/Nigeria/3adi/SIL_Natl_Export_Strategy.pdf [14.09.16].

19 Belloc M. and M. Di Maio (2012), Sierra Leone's National Export Strategy: Implementation issues and recommendations. International Growth Centre, Working Paper 11/1018, January. Viewed at: http://www.theigc.org/wp-content/uploads/2014/09/Belloc-Et-Al-2012-Working-Paper.pdf [14.09.16].

20 Sierra Leone Produce Marketing Act (Repeal) Act, 2013.21 First Step Agreement was ratified in February 2010.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 37 -

registration. The Government has also committed to allow investors in the SEZ to use international arbitration forums to resolve disputes that may occur between them and the Government.

1.134.  Under the ECOWAS Protocol, exports by EPZ enterprises to other ECOWAS countries are not eligible for preferential treatment. They are subject to customs duties at applicable rates.

3.3  Measures Affecting Production and Trade

3.3.1  Tax and incentives

3.3.1.1  Tax

1.135.  Sierra Leone's tax revenue increased steadily during the review period. In 2015, income taxes, goods and services tax, and taxes collected by the Customs and Excise Department accounted for about 87.6% of total government domestic revenue (Table 3.4).

Table 3.9 Composition of Government domestic revenue, 2010-15Source/type of tax 2010 2011 2012 2013 2014 2015Total domestic revenue (Le billion) 987.8 1,462.1 1,873.5 2,280.0 2,226.2 2,330.2

(in % of total)Income taxes 23.9 32.4 41.5 40.8 40.2 38.7 Company tax 7.7 5 10.8 11.7 12.1 10.5 Personal income tax 14.9 26.9 30.5 28.8 27.8 27.9 Other taxes 1.3 0.4 0.2 0.2 0.3 0.3Goods and services tax 25.3 24 22.3 19.3 20.6 25.5Customs and Excise Department 35.4 23.5 18.1 21.5 22.8 23.4 Import duties 20.7 19.3 12.6 11.8 12.8 14.1 Excise duties 13.9 3.8 5.3 9.7 10.3 9.3 Other 0.8 0.4 0.2 0.1 0 0Mines Department 3.2 13.8 11.9 10.3 8.4 3.7 Royalty on rutile 0.1 0 0.3 0.2 0.1 0.3 Royalty on bauxite 0.4 0 0.1 0.1 0.3 0.3 Royalty on diamonds and gold 0.6 1.1 1.1 1.5 1.8 1.2 Royalty on iron ore 0 0 3.3 5.5 4.3 0.3 Licences 2 12.7 7.1 3 1.8 1.6Other departments 6.4 4.7 4.3 4.4 4 4.7Road user charges and vehicle licences 5.8 1.6 1.9 3.7 3.9 4.1

Source: Information provided by the authorities.

1.136.  The Income Tax Act of 2000 and the various amendments constitute the main framework for business taxation in Sierra Leone. The main taxes applicable to businesses include:

a. the corporate tax, levied at a rate of 30% on worldwide profits (for resident companies) or profits from activities carried out in Sierra Leone (for companies established through a branch or a subsidiary);

b. the personal income tax, applicable to worldwide income of resident individuals and partnerships, and levied at rates between 0 and 30% depending on the income level;

c. the rental income tax, levied at a rate of 10% on income generated from building rented for commercial activities (25% for non-resident individuals);

d. the capital gains tax, at a rate of 30% of the capital gain acquired from the disposal of a chargeable asset; and,

e. the goods and services tax, levied at a rate of 15% on most goods and services (Section 3.1.4.3).

1.137.  Interest income is taxed at a rate of 15%, and dividends for non-resident companies are taxed at a rate of 10%. Stamp duties are levied on administrative services at rates ranging from

WT/TPR/S/303/Rev.1 • Sierra Leone

- 38 -

1% to 12.5%. Land acquisitions are subject to a land tax (in addition to registration fees and the stamp duty).

1.138.  Sierra Leone's national pension scheme is a defined benefit scheme and is administered by the National Social Security and Insurance Trust (NASSIT). The employer and the employee contribute respectively 10% and 5% of the basic salary to the scheme. The scheme is compulsory for public and private sector employees, and voluntary for the self-employed.

3.3.1.2  Incentives

1.139.  Incentives are provided under various pieces of legislation, including the Income Tax Act, the Goods and Services Tax Act, various Finance Acts, the Business Start-Up Act, the Bankruptcy Act of 2009, and various sector-specific laws (Table 3.5). There has been no assessment of the impact of these incentive schemes on the economy.

Table 3.10 Main investment incentivesSector/incentive Selected requirements Legal basis

General incentives- Deduction for income tax purposes:

Plant, machinery and equipment (including automobiles and trucks): 40%

All other tangible depreciable assets (except buildings and intangible depreciable assets): 10%

Buildings used to house industrial, manufacturing or agricultural activities: 15%

Buildings used to house other commercial activities: 3-10%

Other buildings: 3-5% Employment of disabled persons: 200% of the cost Research and development: 100% of the expenses; Training of local staff: 100% of the expenses Social services (building schools, hospitals, etc.: 100%

of the expenses Donation into Skills Development Fund: 100% of the

donation

Income Tax Act 2000 and various amendments; Finance Act 2011; and Finance Act 2014

- 3 years' duty-free import of machinery, plant and equipment for the first 3 years

A minimum of US$10 million investment for new businesses, US$5 million for business expansion

Finance Act 2016

- Lower import duty (3%) on raw materials Finance Act 2013- 5 to 10 years' corporate tax exemption Businesses with a least 20% of Sierra

Leonean ownership, 100 employees, and US$5 million investment

Businesses with at least 150 employees and investment of US$7.5 million get 10 years tax exemption

Finance Act 2014

Refinery 5 years' corporate relief tax 5 years duty-free imports of equipment and

machinery

A minimum of US$20 million investment

Employment of at least 50 nationals

Agriculture5 years' duty-free import of agricultural inputs (fertilizers; pesticides; insecticides; seeds and seedlings; hybrid tree seeds; seed animal for feeding; day-old chicks; and animal semen)

Finance Act 2013

Poultry and livestock 3 years income tax exemption A minimum investment of US$50,000

for nationals and US$500,000 for non-nationals

5 years duty free import of feeds, vaccine and veterinary drugs

Finance Act 2013

Fish farming5 years exemption from income tax on income derived from the farming activity and 50% of dividends paid

Farms with at least 10 fish ponds and measuring at least 200 square metres

Finance Act 2014

Energy3 years' duty-free import of assembling stoves and cookers; equipment for the production of LPG; photovoltaic system equipment and energy efficient appliances that meet IEC global standards

A minimum of US$500,000 investment

Employment of at least 50 persons

Finance Act 2011; Finance Act 2016

Pharmaceuticals 10 years' income tax exemption A minimum of US$500,000

investment Employment of at least 50 persons

Finance Act 2011

10 years' duty-free imports of raw materials for drug manufacturing

Finance Act 2011

WT/TPR/S/303/Rev.1 • Sierra Leone

- 39 -

Sector/incentive Selected requirements Legal basis

Reduced duty rate of 3% for intermediate goodsTourism

5 years' income tax exemption (up to 150% of the original capital invested)

Hotels with a minimum of 10 ensuite bedrooms (50 bedrooms for hotels in the Western Area).

Finance Act 2011

Tax relief for the employment of expatriate staff for tourism development

Finance Act 2010

PPP infrastructure projects 15 years' income tax exemption A minimum of US$20 million in capital

investmentFinance Act 2011

Duty-free import of plant, machine and equipment during the period of construction

Subject to an approved bill of quantities (excluding petroleum products)

Finance Act 2011

Source: Various Finance Acts; and information provided by the authorities of Sierra Leone.

1.140.  According to the authorities, there is no discrimination against foreign investors with respect to the granting of investment incentives. Since 2013, all investment agreements containing incentives must be ratified by Parliament.22

3.3.2  Standards and other technical requirements

1.141.  Sierra Leone has not notified any technical regulations, or its national enquiry point under the WTO Agreement on Technical Barrier to Trade (TBT). The enquiry point is yet to be set up.

1.142.  The Sierra Leone Standards Bureau (SLSB)23 is the national statutory body in charge of standards, certification, and accreditation. It collects and disseminates information on standards and related matters, verifies weights and measures, and calibrates industrial and laboratory equipment. The SLSB has five technical committees: the National Codex Committee, the Industrial Standards Board, the Metrology Committee, the Food and Agriculture Committee, and the Engineering Technical Committee. The authorities indicated that the technical committees base their standards on those of international organizations, including regional institutions. In the absence of international standards on an issue (in the case of indigenous products for instance), the Bureau develops its own guidelines.

1.143.  The SLSB is funded mainly by the Government. It also receives support from international and regional organizations, mainly the EU, ISO and ARSO, through technical assistance and capacity-building activities. Its own resources include fees charged for the verification of weights and measures instruments24, and product testing.

1.144.  In general, the SLSB follows ISO/IEC directives, and the Procedural Manual of the Codex Alimentarius in the development of national standards. The process includes identifying the country's needs and priorities, based on national development strategies such as the Agenda for Prosperity, the National Export Strategy or the National Agricultural Development Plan; consultations with relevant stakeholders; development of the standard by the National Technical Committee; and publication of the standard in the Gazette.

1.145.  The standard is then implemented by the relevant industry. Once a standard is published in the Gazette, the regulator of the relevant industry may submit it to Parliament to make it mandatory. A 60-day period is allowed for public comments before a standard can become a technical regulation. There are currently 100 standards and 33 technical regulations (Table 3.6). About 67 standards (voluntary), mainly on fresh fruits and vegetables, were published in 2014.

1.146.  Sierra Leone has no mutual recognition agreements in place. The SLSB may inspect all imports at the borders, in collaboration with the regulatory authorities and Customs. The SLSB checks the certificate of conformity and labelling requirements, and may perform field tests before issuing clearance to Customs for the release of goods. In principle, substandard goods are confiscated and destroyed.

Table 3.11 Sierra Leone's technical regulations in force, September 2016Title Reference

Alcoholic beverages Specification for brandy SLS 14:2010

22 Finance Act, 2013.23 Standards Act No. 2 of 1996.24 Statutory Instrument No. 11 of 2010.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 40 -

Title ReferenceSpecification for gin SLS 15:2010Specification for whiskey SLS 16:2010Specification for wine-flavoured alcoholic drinks SLS 18:2010Specification for wines SLS 19:2010

Animal and vegetable fats and oils Specification for edible palm oil SLS 23:2010Specification for fortified palm olein oil SLS 41:2010

Building and construction materials Specification for ordinary and rapid hardening portland cement

SLS 11:2010

Specification for portland limestone cement CEM II/B – L (LL)

SLS 12:2010

Specification for portland limestone cement SLS 13:2010Steel for the reinforcement of concrete – Part 1: plain bars

SLS 27:2010

Steel for the reinforcement of concrete – Part 2: ribbed bar

SLS 27:2010

Steel for the reinforcement of concrete – Part 3: welded fabric

SLS 27:2010

Cereal, pulses and legumes Specification for rice SLS 9:2010Specification for fortified premix for wheat flour SLS 38:2010Specification for fortified soft wheat flour SLS 39:2010Specification for fortified strong wheat flour SLS 40:2010Specification for cocoa bean SLS 7:2010

Food technology General principles of food hygiene SLS 2:2010General standards for the packaging of pre-packaged foods

SLS 4:2010

Specification for edible cassava flour SLS 10:2010Managing for the sustained success of an organization

Specification for raw cashew nuts and kernels SLS 5:2010

Quality management systems Fundamentals and vocabulary SLS: ISO 9000_2005Requirements SLS: ISO 9001_2008

Roots and tubers Specification for gari SLS 8:2010Spices and condiments Specification for fresh ginger SLS 26:2010

Specification for refined common salt SLS 29:2010Water quality Specification for drinking water SLS 21:2010

Specification for natural mineral waters SLS 28:2010Others Confectionery – Specification for sugars SLS 3:2010

Environmental management systems – Requirements with guidance for use

SLS: ISO 14001_2004

Food safety management systems – Requirements for any organization in the food chain

SLS: ISO 22000_2005

Fresh fruits and vegetables – Specification for mangoes SLS 6:2010

Source: Government Notice No. 233. Published in The Sierra Leone Gazette, Vol. CXLLII, No. 52. August 2011.

1.147.  The SLSB has an agreement with the American Society for Testing and Materials (ASTM). Under the agreement, SLSB has access to ASTM's standards, may participate in its technical committee meetings, and receives technical assistance. SLSB is a member of the African Organization for Standardisation (ARSO). It became a corresponding member of the ISO in January 2009. With this status, the SLBS may participate in technical committee meetings as an observer, but does not have the right to vote. The SLBS is an affiliate member of the International Electrotechnical Commission (IEC) since 2003. It has adopted standards from the Codex, the IEC and the ISO (Table 3.5).

1.148.  During the review period, the SLSB has strengthened its laboratory facilities for food microbiology, food chemistry and petroleum products. Occasionally, SLSB uses the laboratories of the University of Sierra Leone for checking the quality of materials such as cement, paints, varnish, and fertilizers. A STDF project, related to a national assessment of the food control system, was approved in 2014. The authorities are currently working on finalizing an EIF Tier 2 project on standards.25

1.149.  In 2011, Sierra Leone switched from the English system of measurement to the international system of units, the metric system.26

25 Strengthening the Sierra Leone Quality Infrastructure to support industrial development and trade.26 The Weight and Measures Act, 2010.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 41 -

3.3.3  Marking, labelling, and packaging

1.150.  Sierra Leone has some technical regulations in place for the labelling and packaging of pre-packaged food (Table 3.5). SLSB has developed a conformity mark, which is yet to be adopted. The Price Tag Order 1956 requires traders to display prices on the shelves.

1.151.  The Weights and Measures Act, 2010 requires sellers of packaged goods to declare the gross and net weights or measures on the package. Canned goods, foodstuffs, and pharmaceuticals must also be labelled to show the net weight or quantity of contents, and their country of origin. The Act requires the liquid content of beverages to be labelled, as well as the yardage and width of textiles.

3.3.4  Sanitary and phytosanitary requirements

1.152.  Sierra Leone has not notified the WTO of its sanitary and phytosanitary legislation. The phytosanitary legislation includes the Agricultural Act 1946, the Plant Phytosanitary (Import) Rules of 1974, and was supplemented in 1976 with the Plant Phytosanitary (Import Restriction) Notice. The latter lists conditions under which about 64 categories of plants and plant products may be imported. It also lists plants that are the object of an absolute prohibition. The authorities indicated that a phytosanitary policy and a phytosanitary and a pest control bill are at the drafting stage. A draft food bill and food safety bills are under preparation.

1.153.  In general, a phytosanitary certificate is required for the international movement of any plant material or product. The certificate is issued by the Ministry of Agriculture, Forestry and Food Security (MAFFS), in the format established by the International Plant Protection Convention (IPPC). A pest-risk analysis is carried out prior to the issuance of the certificate. Plant products that are considered "pathways" for pest introduction require fumigation. These include: plant materials; foodstuffs in jute bags, cartons; timber, logs, piassava, ginger, rubber, kola nuts, furniture; other imported goods such as used mattresses, furniture, and used clothes. Since 2013, the authorities have charged a fumigation fee of Le 250,000 for a 20 ft container, and Le 450,000 for a 40 ft container; and a fee for issuing the certificate.

1.154.  The Phytosanitary Control Unit operates at seven border ports of entry: the Queen Elizabeth II Quay (Freetown); the Freetown International Airport (Lungi); the Gbalamuya Customs (Kambia District); the Jendema Customs (Pujehun district); the Koindu and the Buedu Customs (both in Kailahun district); and Dogolia Customs (in the Koinaduou district). These entry/exit points inspect and certify import and export consignments, issue phytosanitary certificates, clearance certificates, or import and export permits.

1.155.  The Crop Protection Unit is mandated to carry out phytosanitary inspections, treatment, and certification of plants and plant products for exports. It is the contact point under the SPS Agreement.

1.156.  The Animal Diseases Act (undated) is the main legislative framework for animal health. Veterinary activities are performed by the Livestock Services Division of the MAFFS. According to the authorities, livestock inspectors are currently available at only two border posts. In the fishery sector, the Fisheries Sanitary Regulations of 2006 give power to the Director of Fisheries to adopt sanitary control schemes for the supply of fishery products. These may include inspection of fish-processing establishments and management of licensing policies.

1.157.  The authorities indicated that no SPS-related restrictions or prohibitions are currently in place.

3.3.5  State trading, state-owned enterprises, and privatization

1.158.  Sierra Leone has not notified to the WTO any state-trading activity within the meaning of Article XVII:4(a) of the GATT 1994.

1.159.  In 2002, Sierra Leone established the National Commission for Privatisation (NCP) with a view to privatize and divestiture of public enterprises, and to reviewing existing legislation and proposing changes. This represented a major change as it removed the management of public enterprises from supervision by line ministries.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 42 -

1.160.  Recent privatization activities (Table 3.6) include a 20-year concession contract for the management of the container terminal at the Freetown port by a private company. In the agriculture sector, the Sierra Leone Produce Marketing Board was dissolved27, and replaced with the Sierra Leone Produce Marketing Company (SLPMC). The authorities indicated that the Government plans to disinvest 51% of its share in the SLPMC. The privatization of the Sierra Leone Telecommunications Company (Sierratel) is under way.

1.161.  The authorities indicated that they are currently in the process of divesting two commercial banks: the Rokel Commercial Bank and the Sierra Leone Commercial Bank.

Table 3.12 State involvement in enterprisesSector/Entity Activity/Monopoly rights State

ownership (%)

Privatization status

Agriculture and manufacturingSierra Leone Produce and Marketing Company

Export of agricultural produce 100 51% of shares are up for sale

Forest Industries Corporation Furniture and logging of timber 100 PrivatizedSeaboard West Africa Flour mill 0.01 ..Sierra Leone National Workshop Economic zone 18 PrivatizedUtilitiesGuma Valley Water Company Supply of potable water (de jure) 95 Not yet privatizedSierra Leone Water Company Supply of potable water (de jure) 100 Not yet privatizedNational Power Authority National state electricity provider 100 ..Sierra Leone Postal Services Ltd Postal services (de jure) 100 Up for privatizationSierra Leone Telecommunication Co. Ltd Telecommunication (de jure) 100 Under management

contract since 2012TransportSierra Leone Airport Authority Airport facilities (de jure) 100 Up for privatizationSierra Leone Port Authority Port facilities (de jure) 100 Up for privatizationSierra Leone Airlines National airline (de facto) 100 No longer in operationSierra Leone National Shipping Company Limited

Limited cargo clearing and forwarding services (de facto)

100 ..

Sierra Leone Road Transport Corporation Long-distance domestic bus services

100 ..

Sierra Leone Roads Authority Road construction and maintenance (de jure)

100 ..

Information servicesSierra Leone Broadcasting Corporation Broadcasting (de facto) 100 ..Sierra Leone Daily Mail Newspaper publication 100 ..Government Printing Department Printing and supply of stationery

to Government, and manufacturing educational material to schools.

100 Privatized in 2012

Financial servicesSierra Leone Commercial Bank Ltd Banking 100 Under restructuringNational Development Bank Ltd Banking 98.98 Under restructuringRokel Commercial Bank Banking 51 In the process National Insurance Company Insurance and life insurance 100OtherSierra Leone State Lottery Co. Ltd Lottery (de jure) 100 ..Sierra Leone Housing Corporation Construction of houses (de jure) 100 ..

.. Not available.Source: National Commission for Privatization.

3.3.6  Competition policy and price controls

1.162.  Sierra Leone does not have domestic legislation on competition or anti-competitive practices. A Competition Policy and a Consumer Protection Policy have been approved by the Cabinet. Related laws are yet to be approved by the Cabinet and submitted to Parliament for enactment. The Ministry of Trade and Industry is in charge of regulating anti-competitive practices. The authorities indicated that it is not unusual for firms to use their dominant position to manipulate prices.

1.163.  In a review of Sierra Leone's investment policy regime28, the UNCTAD identified some areas that deserved priority consideration. These include, in the mining sector, ensuring access for other operators to facilities such as roads and railways that may be privately owned, and in the operation of port services, a competitive determination of prices.

27 Sierra Leone Produce Marketing Act (Repeal) Act, 2013.28 UNCTAD (2010), Sierra Leone: Investment Policy Review. UNCTAD/DIAE/PCB/2009/14. Viewed at:

http://unctad.org/en/Docs/diaepcb200914_en.pdf.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 43 -

1.164.  Rice, fuel, and flour are subject to price controls. Prices of regulated services are subject to the approval by the relevant regulatory bodies. Similarly, the prices and charges on goods and services provided by government departments, public institutions, and companies owned in majority by the Government, are subject to approval by the National Income and Pricing Commission.

3.3.7  Government procurement

1.165.  A large share of the Government's annual budget is spent on public procurement. In 2010, procurement expenditure amounted to 46.8% of the budget, representing about 16% of GDP.29

1.166.  Sierra Leone is neither a member, nor observer to the WTO Plurilateral Agreement on Government Procurement.

1.167.  Public procurement in Sierra Leone is regulated mainly under the Public Procurement Act of 2016.30 The Act applies to procurement financed from public funds or by donors and carried out by ministries, departments and agencies; state-owned enterprises which utilise public funds; local councils; companies and institutions in which the State has at least a 25% interest; and any entity in the private sector which is given the responsibility for carrying out activities using public funds. Exceptions may be allowed for procurement related to national defence or national security.

1.168.  The National Public Procurement Authority (NPPA) is in charge of ensuring that policies and procedures are consistent with the legislation. The Act stipulates that procurements are to be undertaken by relevant ministries, departments, and agencies (procuring entities). Entities lacking the required technical expertise may request the assistance of the Ministry in charge of works. Each procuring entity should establish a Procurement Committee, in charge of verifying and overall approval of the procurement process. The Committee may include officials from other procuring entities. The procuring entity should also establish a procurement unit, in charge of planning the procurement, preparing the invitation to bid and the bidding documents, and conducting the bid-opening procedures. The Act establishes an Independent Procurement Review Panel (IPRP), tasked with, inter alia, reviewing bidders' complaints and challenges on contract award decisions. The IPRP is to be composed of three members appointed by the Ministry of Finance for a term of three years. The IPRP is not functional.

1.169.  The Act requires all public procurement to be undertaken by means of advertised open bid proceedings. If the procuring entity uses another method, it must note in the records the grounds for the choice of the method. The procurement process may include a prequalification stage, or a post qualification procedure. The Act prescribes equal access for all eligible and qualified bidders.

1.170.  A margin of preference may be granted to domestic contractors, domestic suppliers, or for the benefit of domestically produced goods, subject to NPPA approval. The criteria for eligibility for the preference may be specified in terms of ownership, location of the bidder or the production facilities, the origin of the labour, the raw materials or components used, or the extent of association with local partners.

1.171.  Under the Act, public procurement for goods and works is to be carried out through open tenders. The process may include a pre-qualification stage or a post-qualification procedure. The procuring entity may use a national competitive bidding procedure if it determines that only domestic bidders are likely to be interested. A national bidding procedure may also be used for procurements below a given threshold, currently set at Le 600 million for goods and services, and Le 900 million for works. For procurements above these thresholds, an international competitive bidding procedure should be used. Preparation and submission of bids should be allocated at least 4 weeks in the case of a national bidding procedure, and 6 weeks for an international procedure. In the latter case, the invitation to bid should be published in a newspaper with adequate circulation, and technical specifications should be based on standards widely used in international trade.

1.172.  Restricted bidding procedures may be used when the products are only available from a limited number of bidders or the time and cost of considering a large number of bids is deemed

29 World Bank (2012), Sierra Leone – Assessment of National Public Procurement System based on OECD and DAC Benchmarking Tool, Washington DC. Viewed at: http://documents.worldbank.org/curated/en/2012/05/16597175/sierra-leone-assessment-national-public-procurement-system-based-oecd-dac-benchmarking-tool.

30 The Public Procurement Act, 2016. Supplement to the Sierra Leone Gazette Vol. CXLVII, No.10 dated 25th February 2016. Viewed at: http://www.publicprocurement.gov.sl/files/Public_Procurement_Act_2016.pdf.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 44 -

disproportionate to the value of the procurement. In the first scenario, all known capable suppliers shall be invited to bid. In the second case, at least five bidders shall be solicited. Request for quotations may be used for procurement of goods and services below Le 60 million, and procurements of works below Le 150 million. The procuring entity should request quotations from as many bidders as practicable, and at least three. Sole-source procurement is permitted under very limited circumstances, e.g. where the supplier has the exclusive right, or there is a situation of extreme urgency. In any case, the approval of the NPPA is required.

1.173.  The recommended procurement method for consultant services is requests for proposal. The procuring entity is required to contact three to six firms. The solicitation of expressions of interest is mandatory when the estimated value of the consultant services exceeds Le 600 million. Shopping procedures may be used for procurements of goods and services below Le 60 million (below Le 150 million for works).

1.174.  A bid security may be required in the bidding documents. The amount of the security must be explicitly stated, and should be between 2% and 5% of the estimated value of the contract.

1.175.  The Act stipulates that the contract should be awarded to the bidder with the lowest evaluated and substantially responsive bid. Once awarded, the procuring entity may publish a notice in the Gazette, and any newspaper of wide national circulation. Publication is mandatory for goods and services contracts exceeding Le 300 million (Le 600 million for works).

1.176.  The level of the contract approving authority depends on the value and the object of the contract. Contracts under Le 6 million for consulting services, Le 15 million for goods, Le 30 million for works and technical services, may be approved directly by the head of the procurement unit. The head of the procuring entity may approve contracts valued up to Le 60 million for goods, Le 100 million for works and technical services, and Le 30 million for consulting services. Contracts above these thresholds are to be approved by the Procurement Committee.

1.177.  Procurement for drugs and medical supplies are under the responsibility of the National Pharmaceutical Procurement Unit.31 They are also subject to the provisions of the Public Procurement Act.

1.178.   Foreign bidders, if registered locally or in partnership with locally registered companies, may participate in procurements under national competitive bidding procedures.

3.3.8  Intellectual property rights

1.179.  As a least developed country, Sierra Leone benefited from the TRIPS Council's decision to extend the transition period for the full implementation of the TRIPS to 1 July 2021.32 In 2007, Sierra Leone undertook an assessment of its needs for technical and financial assistance related to the implementation of the TRIPS Agreement.33 Priorities were identified along the following clusters: updating the policy, the legal and the regulatory framework; strengthening the administration services; and increasing awareness, understanding, and use of intellectual property rights. During the review period, Sierra Leone enacted new legislation relating to copyrights, patents and trademarks.

1.180.  Sierra Leone is a contracting party to the World Intellectual Property Organization (WIPO). It participates in the Paris Convention for the protection of Industrial Property, the Patent Cooperation Treaty, the Madrid Agreement concerning the International Registration of Marks, and the Madrid Protocol.34

1.181.  Sierra Leone is among the 18 members of the African Regional Intellectual Property Organization (ARIPO), whose mission is to provide a shared pool of expertise in intellectual property matters and to foster harmonization of the relevant national frameworks.35 ARIPO operates a system for centralized filing and substantive examination of patent, industrial design, and trademark applications. However, the granting of protection is governed by each member

31 The National Pharmaceutical Procurement Unit Act, 2012.32 WTO document IP/C/64, 12 June 2013.33 WTO document IP/C/W/499, 3 October 2007.34 WIPO online information. Viewed at: http://www.wipo.int/wipolex/en/profile.jsp?code=sl [21.09.16].35 The other ARIPO members are: Botswana, the Gambia, Ghana, Kenya, Lesotho, Liberia, Malawi,

Mozambique, Namibia, Rwanda, Somalia, Sudan, Swaziland, Tanzania, Uganda, Zambia, and Zimbabwe; Angola and Madagascar have applied for membership.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 45 -

state's national legislation.36 While an ARIPO patent application may offer a convenient and cost-effective way of obtaining patent protection in a large number of countries37, the enforceability and effects of ARIPO trade mark registrations vary across member states due to different or non-existent provisions in their national laws.38 Sierra Leone has ratified the Harare Protocol on Patents and Industrial Designs, but not the Banjul Protocol (related to the protection of trademarks).

1.182.  Sierra Leone enacted a new Copyright Act in 201139, repealing the Copyright Act of 1965. Rights are protected during the lifetime of the author (or the last surviving author) plus 50 years. For works owned by public corporations or corporate bodies, protection is for 50 years from the date on which the work was made public. The Act provides for copyright protection by reference to international agreements, that is, on the basis of residence in a country that is party to a treaty or other international agreements to which Sierra Leone is party, or publication of the work in any of these countries. Expressions of folklore are protected for perpetuity.40

1.183.  The Copyright Act establishes the Collecting Society of Sierra Leone, tasked with protecting the rights of authors and owners of copyrights. The institution is to include representatives from the following professional groups: musicians, music producers, writers, book publishers, performing artists, and film producers.

1.184.  Sierra Leone adopted a Patents and Industrial Design Act in 201241, ending the preferential treatment given to marks registered in England under the previous legislation. An invention is patentable if it is new, involves an inventive step, and is industrially applicable. The Act incorporates, inter alia, provisions related to marks registered in other jurisdictions. Responsibility for administration of the register of patents, trademarks, and industrial designs lies with the Sierra Leone Intellectual Property Organisation (SLIPO). Patents are protected for 29 years from the filing date.

1.185.  The SLIPO may issue a non-voluntary licence after a period of four years from the filing date (three years from the date of the grant of the patent) if it is established that the invention is insufficiently exploited. Similarly, the Government may exploit or authorize a third person to exploit a patented invention when the public interest so requires, or when the Registrar determines that the manner of exploitation of a patent is anti-competitive. In the latter case, it should be established that such an authorization will remedy the practice. In any case, the right owner is entitled to adequate remuneration.

1.186.  Registered industrial designs are protected for five years from the filing date, renewable twice for the same duration. Infringements are subject to a fine not exceeding Le 60 million, imprisonment not exceeding 1 year, or both.

1.187.  For an invention to qualify for a utility model certificate, it must be new and industrially applicable. Utility model certificates are valid for a non-renewable period of 7 years.

1.188.  New trademark legislation was enacted in July 2014, repealing the outdated Trade Marks Act of 1923 and the Merchandise Marks Act.42 Under the Trade Marks Act 2014, applications for the registration of trademarks are to be lodged at the Office of the Administrator and Registrar General (OARG). If the OARG finds that the requirements are fulfilled, it advertises the application in the Gazette as "received". Opposition may be lodged within three months following the date of advertisement. Once an application is accepted, the trademark is registered and advertised in the

36 When filing for protection, applicants may use either the national or the ARIPO channel. In the process of substantive examination, ARIPO must ensure compliance with national legislation. No provisions on parallel imports, including through compulsory licensing or government use, exist at ARIPO level.

37 The cost of an application for patent protection in all ARIPO states does not exceed US$3,000; costs are reduced as processing, publication, granting, and renewals are all managed by the ARIPO Office.

38 At the national level, some legal frameworks have yet to provide for registration of service marks. Moreover, very few countries (Botswana, Lesotho, Liberia, and Swaziland) have adopted a multi-class system in which a single application may cover more than one class of goods and/or services, as set out in the International Classification of Goods and Services for the Registration of Marks.

39 Copyright Act, 2011. Viewed at: http://www.sierralii.org/sl/legislation/act/2011/8 [10.09.16].40 Sierra Leone has not yet acceded to ARIPO's Swakopmund Protocol on the Protection of Traditional

Knowledge and Expressions of Folklore.41 Patents and Industrial Design Act 2012, repealing the United Kingdom Designs (Protection) Act,

Cap 246, and the Patents Act, Cap 247. Viewed at: http://www.sierra-leone.org/Laws/2012-10.pdf [12.09.16].42 Trade Marks Act, 2014. Viewed at: http://www.parliament.gov.sl/Portals/0/BILLS/2014/THE%20TRADE

%20MARKS%20ACT%202014.pdf.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 46 -

Gazette as "accepted", and a certificate of registration is issued to the applicant. The process takes between six and eight months. Under the new legislation, trademarks are protected for 10 years from the date of application, renewable for a further 10 years (compared to 14 years previously). Applicants may appeal the decision of the Registrar to the Courts.

1.189.  The legislation also establishes a Trade Marks Registry. Upon the request of an interested party, a trademark may be removed from the register if not used for a continuous period of five years. Trademarks are subject to: an application fee of US$1,210 for the first trade mark and US$1,070 for each additional mark filed simultaneously; publication and registration fees of US$290 per mark; and an assignment fee of US$680 for the first trade mark and US$460 for each additional mark filed simultaneously. Renewal fees amount to US$950 for the first mark and US$840 for each additional trademark.

1.190.  Sierra Leone is neither a member nor an observer of the International Union for the Protection of New Varieties of Plants (UPOV). Sierra Leone is a party to the Convention on Biological Diversity.

1.191.  Holders of intellectual property rights may challenge intended or pending importation, transit or exportation of suspected counterfeit trademarked goods, or pirated copyright goods. Upon receipt of an application from a right holder, the CED is required to make a decision within 30 days, or within 3 days for urgent matters. The CED may suspend customs clearance procedures, detain the suspected goods, and eventually proceed to their destruction. In any case, re-exportation of the goods in an unaltered state is not allowed.

1.192.  According to the authorities, copyrights and trademarks are more frequently subject to infringement than other IP rights. Infringements of copyrights are punishable by a fine of up to Le 60 million, and/or up to three years of imprisonment. Infringement of rights protected under the Trade Marks Act is subject to a fine not exceeding Le 60 million and/or up to five years of imprisonment. Victims of trademark violations have resort to court litigation. The enforcement of IP rights is a challenge due to the limited awareness of the public and capacity constraints in the public sector.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 47 -

4  TRADE POLICIES BY SECTOR

4.1  Agriculture

4.1.1  Overview

1.193.  The agriculture sector (including livestock, forestry and fisheries) is the backbone of Sierra Leone's economy. Its contribution to GDP was 53.7% in 2015 (see Table 1.1). The sector employs about 75% of the labour force. Food crop products (mainly rice and cassava) are by far the most important output. According to information provided by the authorities, the production of rice paddy doubled to over one million tonnes between 2006 and 2012, owing to the implementation of policies geared toward increasing the productivity and extending the cultivated area. Over the same period, the production of cassava increased fourfold thanks to Government support to farmers through the provision of processing equipment and improved planting materials.

1.194.  Imported food products account for a large share of domestic consumption. Food products (SITC categories) accounted for about a third of total imports in 2015 (Table A1.2). Major imported food products include: rice, wheat, flour, and poultry.

1.195.  Sierra Leone's land tenure system is deemed to keep a sizable portion of arable land away from productive activities.1 There are two types of land tenure: the freehold system, applicable to Freetown and the Western Area, and the customary land tenure system, applicable to the rest of the country. In rural areas, individual ownership of land is not common. Under the customary law, the land is under the control of district paramount chiefs. They have the custody of lands on behalf of extended families and lineages attached to a particular chiefdom. Therefore, they have the final say in granting or obstructing land access to any individual.2 This situation is aggravated by the decade-long conflict, which has led to the displacement of an important fraction of rural population.

1.196.  The National Lands Policy puts paramount chiefs centre stage in the formal procedures for foreign investors to access land. Non-citizens and foreign companies are not allowed to own land. They may lease land by entering into a joint venture with the local paramount chief. The paramount chief consults with local customary landowners, and if the principle of the lease is accepted, the investor must request approval from the Ministry of Agriculture. A land lease agreement may not exceed 50 years, with a possibility of a renewal for 21 years. The annual rent rate amounts to US$5 per acre of land initially, and is subject to a review every five years.3

1.197.  In 2008, the Ministry of Lands placed a moratorium on the sale of land in the Western Area, in an attempt to curb land grabbing and multiple sales. While the ban has been lifted on the sale of private land, it remains in force on public land. A Commercial Use of Land Bill is awaiting Cabinet approval.

4.1.2  Agricultural policies

1.198.  Agriculture is usually given priority in the Government's various development programmes. One of the four priorities in the Agenda for Change (2008-12) was to raise agricultural production and productivity.4 In 2012, the Government embarked on an Agenda for Prosperity5, setting a pathway to middle income status by 2035. The first pillar aimed at achieving economic diversification by investing massively in agriculture, manufacturing, and tourism, which were identified as possessing strong potential for long-term inclusive and sustainable growth.6

1 See for instance, Unruh and Turray (2006).2 The Chieftaincy Act, 2009.3 The rent is distributed among the following stakeholders: landowners (50%); District Council (20%);

Chiefdom Administration (20%); and the Government (10%).4 The other priorities were energy, transportation, and human development. See Government of Sierra

Leone (2008). 5 Government of Sierra Leone (2012), The Agenda for Prosperity, Road to Middle Income Status – Sierra

Leone's Third Generation Poverty Reduction Strategy Paper (2013-2017). Freetown. Viewed at: https://unsierraleone.files.wordpress.com/2016/06/undp_sle_the-agenda-for-prosperity.pdf [14.09.16].

6 The Agenda for Prosperity relies on 8 pillars: promoting the diversification of production; managing natural resources; accelerating human development; fostering international competitiveness; promoting labour and employment; providing social protection services; ensuring good governance of the public sector; and promoting gender equality and empowering women.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 48 -

1.199.  The agriculture sector is under the oversight of the Ministry of Agriculture, Forestry and Food Security (MAFFS). In 2009, the Ministry developed the National Sustainable Agriculture Development Plan 2010-2030 (NSADP)7, a framework linking some objectives of Agenda for Change to specific actions. The NSADP comprises four major investment sub-programmes: commodity commercialization, infrastructure development, private sector promotion, and sector coordination and management. However, the focus was almost entirely on the commercialization component because it was deemed to have the strongest potential in terms of achieving food security and generating income for the poor.

1.200.  The Smallholder Commercialization Programme (SCP), launched in 2010, is a US$403 million programme to move the sector away from subsistence to commercialization through, inter alia, increased productivity, value addition, market access expansion, provision of adequate rural financial services, and the development of small-scale irrigation projects. The programme aims to attain annual growth of 7.7% in the agriculture sector, raising farmers' income by 10%, and increasing food security level by 25% by 2015. The agriculture commercialization sub-component is targeted at increasing productivity, value addition and marketing with emphasis on commodity chain development, and strengthening farmer-based organizations (FBOs). It is expected to lead to the creation or the rehabilitation of about 2,750 FBOs grouped into 650 agricultural business centres (ABCs), to be equipped with adequate infrastructure and equipment for the provision of agricultural services. According to the authorities, about 392 ABCs and 1,178 FBOs where created or rehabilitated under the SCP.

1.201.  In 2006, the authorities adopted a National Seed Policy and, for its implementation, established a National Seed Board, a Variety Release Committee, a Seed Industry Development Unit, and a Seed Quality Control Unit.

1.202.  Market access, especially to the ECOWAS and the EU markets, is also part of the Government's strategy in the sector. The National Export Strategy defined a framework for boosting agricultural exports to US$251 million by 2015 (from US$33.1 million in 2009). 8 The SCP included a US$100 million component for the rehabilitation of feeder roads. The objective is to rehabilitate 2,000 km of feeder roads, as well as provide for routine maintenance and spot improvements. About 771 km of feeder roads had been rehabilitated under the SCP, by the end of 2013.

1.203.  At 15.6% in 2016, the average applied MFN tariff for agriculture products (WTO categories) is more than 3 percentage points above the overall average (Table 3.3). The most protected products are: beverages, spirits and tobacco (with an average MFN rate of 20.7%), dairy products (19%), and animal products (19%). At the other end of the spectrum, the average MFN rate is 5% for cotton products, and 10.6% for oil seeds, fats, oil and related products. Sierra Leone bound tariffs for agricultural products at a ceiling rate of 40%, with very few exceptions.

1.204.  On the export side, there is a 2.5% tax on certain cash crop exports, including cocoa and coffee. Some agricultural products are subject to export ban (timber), licensing or permit requirements (agricultural produce, plants, and charcoal).

1.205.  In 2009, the Government adopted a set of incentives specific to investors in the agriculture sector. These include complete exemption from corporate income tax until 2020, and 50% exemption from withholding taxes on dividends. Investments in tree crops and rice are eligible for a ten-year tax holiday. Businesses in the agriculture sector, like in most of the other sectors, are eligible for full duty exemption on their imports of machinery and equipment. In addition, they are entitled to full exemption on parts and other equipment for three years, and a reduced rate of 3% on any other raw material. Seeds and fertilizers are exempted from import duties and from the goods and services tax. Businesses in the agriculture sector are allowed to fully deduct from their taxable base, expenses incurred on research and development, training, and export promotion.

1.206.  The Government subsidy programme mainly provides farming equipment and inputs at discounted prices. Fertilizers and seeds are imported and subsidized at the rate of 40% of their market prices. Through the SCP Tractor Hire Purchase scheme, the Government used a US$15 million line of credit from the Export-Import Bank of India to import about 265 tractors

7 The Plan is also the national denomination of the African Union's Comprehensive Africa Agriculture Development Programme (CAADP). Within the CAADP framework, in 2003 governments committed to allocate at least 10% of their expenditures to the agriculture sector within the following five years (Maputo declaration).

8 Ministry of Trade and Industry (2010), Sierra Leone National Export Strategy 2010-2015. Viewed at: http://www.3adi.org/tl_files/music_academy/campus/Nigeria/3adi/SIL_Natl_Export_Strategy.pdf [14.09.16].

WT/TPR/S/303/Rev.1 • Sierra Leone

- 49 -

between 2009 and 2010. The tractors were sold to farmers (through FBOs and ABCs) at a 60% discount.9 The balance was to be paid over seven years with an annual interest rate of 4%.

1.207.  Agricultural research is a key component in the Government's strategy for increasing productivity in the sector. The authorities reformed the research environment through the enactment of The 2007 Sierra Leone Agricultural Research Institute Act10 established the Sierra Leone Agricultural Research Institute (SLARI) as the national agricultural research institution, and brought under its umbrella various institutions dealing with, inter alia, fisheries, livestock, and forestry. The SLARI is funded through government budgets, and various research grants, gifts, and donations. The Rice Research Station and the Institute of Agricultural Research were reformed and renamed the Rokupr Agricultural Research Centre and the Njala Agricultural Research Centre, respectively. The Act established new research institutions for fisheries, livestock, plant genetics, land and water, forestry, and horticulture.11

1.208.  Credit to the agriculture sector is generally limited. The 2009 Financial Sector Development Plan12 identified increased access to affordable finance as one of its five priorities. It devised strategies in terms of broadening the outreach of rural finance, strengthening governance and supervision of microfinance institutions, as well as expanding the coverage by community banks.

1.209.  In line with the Plan, the SCP includes a US$28 million component to provide financial services for farmers and farmer-based organizations. The programme would support the establishment of 32 additional community banks (to reach a target of 53 nationally), and the establishment of microcredit institutions at the chiefdom level.

1.210.  The Sierra Leone Produce Marketing Company (SLPMC) was established in 2013 to operate as the primary exporter of agricultural produce while guaranteeing fair prices to farmers. However, it does not have a monopoly over the export of agricultural produce. Its activities cover cocoa, coffee, rice, cashews, sorghum, and palm oil (including industrial palm oil).

4.1.3  Key subsectors

4.1.3.1  Crops

4.1.3.1.1  Cocoa

1.211.  Cocoa, and to a lesser extent, coffee, comprise Sierra Leone's major agricultural exports. Cocoa's share in total exports peaked at 12.5% in 2011 (from 3.3% in 2005), and then dropped to 2.3% in 2012. The coca sector relies on about 60,000 farmers with small-sized farms (usually, less than two hectares). Intermediary agents typically purchase cocoa from farmers and convey it to traders' warehouses in urban areas; the traders negotiate directly with international buyers. Domestic processing is limited to the fermentation and drying of the beans. All production is exported. According to the SLIEPA, farmers receive about 55% of the f.o.b. price.

1.212.  Sierra Leone's cocoa production is relatively small compared with other regional producers, such as Ghana and Cote d'Ivoire. The authorities' strategy is to focus on the fair-trade organic segment as a niche market. The National Export Strategy (NES) is the main policy framework for the subsector. Over its 5-year framework (2010-15), it plans to invest about US$72 million in the subsector through policy actions geared towards increasing production, enhancing the application of quality standards, and developing a robust market system. Through the NES, cocoa growers were provided with fermentation boxes and drying tables. With a view to supporting organic cocoa farming in Sierra Leone, the Government provided training and fair trade certification opportunities. The NES also supported the modernization of the regulatory framework with respect to certification and conformity assessment.

1.213.  Cocoa growers received additional support through credits for the rehabilitation and the expansion of plantations.

9 The discount was initially at the rate of 40%.10 The Sierra Leone Agricultural Research Institute Act, 2007.11 These are the Freetown Fisheries Research Centre; the Teko Livestock Station; the Woama Plant

Genetic Resources Centre; the Magbosi Land and Water Research Centre; the Kenema Forestry and Tree Crops Research Centre; and the Kabal Horticultural Crops Research Centre.

12 Government of Sierra Leone (2009), The Republic of Sierra Leone Financial Sector Development Plan (FSDP). Freetown, October. Viewed at: http://www.bsl.gov.sl/pdf/FSDP.pdf [14.09.16].

WT/TPR/S/303/Rev.1 • Sierra Leone

- 50 -

1.214.  Sierra Leone is a member of the International Cocoa Organization, comprising major cocoa exporting countries, and some importing countries (mainly EU).13 Sierra Leone signed the 2010 International Cocoa Agreement in January 2012, but has not ratified it yet.

4.1.3.1.2  Rice

1.215.  Rice is Sierra Leone's main staple food. During the post-war period, rice production increased steadily, nearing 700,000 tonnes during the crop year 2006/07 before dropping below 400,000 tonnes the following year (Chart 4.1). With the implementation of the National Rice Development Strategy, production picked up, reaching its 2006/07 level again in 2011/12, before dropping sharply the following year. Rice production is essentially for the domestic market. There are some marginal cross-border exports to Guinea and Liberia. Imports are an important source of domestic consumption (20% of domestic consumption in 2015/16).

Chart 4.6 Rice production and imports, 2000-16('000 tonnes)

Source: U.S. Department of Agriculture, Foreign Agricultural Service. Online database, viewed at: http://apps.fas.usda.gov/psdonline/psdQuery.aspx.

1.216.  The 2007 National Rice Development Strategy (NRDS)14 is the main policy framework in the subsector. Its objective is to achieve rice self-sufficiency by 2015, that is, production of 1.5 million tonnes of paddy, by expanding of cultivated areas, and doubling productivity.15 Action includes rehabilitating and constructing feeder roads in key locations; providing community service infrastructures, such as farm market centres, daily retail markets, and irrigation schemes; providing inputs and agricultural services, as well as making credit accessible.

1.217.  The SCP includes a US$55 million component targeted at rehabilitating and developing small-scale irrigation systems for rice production. The programme is expected to rehabilitate about 18,000 ha of inland valley swamps (IVS). According to official statistics, 8,657 ha of IVS (47.6% of the target) have been developed or rehabilitated as of mid-2014.

13 Online information. Viewed at: http://www.icco.org/about-us/membership-of-the-icco.html [10.09.16].14 Coalition for African Rice Development (2009), National Rice Development Strategy – Sierra Leone.

Viewed at: http://www.jica.go.jp/english/our_work/thematic_issues/agricultural/pdf/sierraleone_en.pdf [16.09.16].

15 In a second stage, the cultivated area would be extended to 1.1 million hectares, and productivity would be raised to 4 tonnes per hectare, leading to overall production of 3 million tonnes by 2018.

0

200

400

600

800

1000Imports Production

WT/TPR/S/303/Rev.1 • Sierra Leone

- 51 -

1.218.  Rice imports are duty free.

4.1.3.2  Forestry

1.219.  According to FAO estimates16, forest covered 38.1% of Sierra Leone's land area in 2010, down from 40.4% in 2000, and 43.5% two decades earlier. High reliance on biomass-based energy, logging activities, and to some extent the extension of agricultural and mining activities are contributing to this declining trend. The contribution of the sector to GDP declined from 6.6% in 2005 to 4.6% in 2012.

1.220.  The overall goal of the Government in the subsector is to ensure sustainable management of forest resources, and biodiversity conservation. The MAFFS is responsible for forest issues. Its Division of Forestry is responsible for policy implementation. The Forestry Act of 1988 and the Wildlife Act of 1972 are the main pieces of legislation in the sector.

1.221.  The Director of Forestry is in charge of forest resources management. Forests are classified as: national production forests, oriented toward the production of forest produce; national protection forests, destined to the preservation of the forest and the protection of related species; and community forests. Community forests are designated on the basis of an agreement between the Director of Forestry and the Chiefdom Council. They are under the jurisdiction of relevant chiefdoms but the Director of Forestry retains the authority to issue permits for their exploitation.

1.222.  The Forestry Act sets a permit requirement for operations in classified forests. A permit is required, in principle, for: cutting, burning, uprooting, damaging or destroying trees; removing any timber or forest produce; clearing land; building roads or structures; taking any earth, clay, sand, gravel or stone; cultivating crops and grazing animals.

1.223.  There are three types of forest utilization rights:

a. forest utilization licence: grants the holder the right to perform the designated activities in the area covered by the licence. Licences are usually issued for a period not exceeding one year for a fee of Le 5 million. Longer periods may be granted for activities such as clearing land or planting trees or crops;

b. forest utilization concession: may include, in addition to the right of felling and extracting timber or other forest produce, the right to build infrastructure for carrying out these activities, including roads, bridges, and saw mill factories. Utilization concessions are granted for periods not exceeding 10 years, but may be extended to 20 years if the project includes substantial transformation of the forest product. Applicants for forest concession must submit, together with their application, a forest management plan making provisions for, inter alia, forest protection; the allowable annual cut; protected species; and the methods of felling and extracting timber, sylviculture, and reforestation measures. Concessions are negotiated with the Paramount Chief or the Government, depending on the status of the forest. There are currently five concessions licences, all issued for community forests;

c. forest plantation concession: gives the holder the right to clear an area with the aim of restocking it. It is generally valid for the estimated optimum growth cycle of the forest vegetation to be planted.

1.224.  The Forestry Act provides for a Reforestation Fund to finance reforestation and encourage reforestation initiatives. The Fund fee is assessed at the rate of 10% on the value of exports, and is collected on timber, non-timber forest products, and related transport cost. Funds are redistributed to districts for their reforestation activities. Holders of utilization concessions are required to pay an annual rent fee of US$12 per ha of forest.

1.225.  Some restrictions on the transportation and export of fuel-wood and charcoal have been in place since 1990.17 Transportation of 100 kg or more of wood, and 50 kg or more of charcoal, is subject to a permit. The purpose of these restrictions is to limit the pressure on forest resources, due to the high reliance on bio-mass energy. The permit fee is to be paid to revenue collectors at

16 FAO (2011), Global Forest Resources Assessment 2010, Main Report. FAO Forestry Paper No. 163. Rome, Italy. Viewed at: http://www.fao.org/docrep/013/i1757e/i1757e.pdf [14.09.16].

17 The Forestry Act No. 7 of 1988, Public Notice No. 17 of 1990.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 52 -

checkpoints alongside the main roads. The fee varies between Le 1,000 and 2,000 per unit of timber depending on the size, and amounts to Le 500 per bag of charcoal.

1.226.  In August 2007 the Government issued a ban on the felling, processing, and export of timber. The goal of the ban is to curb the over-utilization of forest resources and the loss of revenue caused by the expansion of illegal forest activities. The ban was lifted in 2008 and reinstated in 2011. The Government also adopted a set of guidelines in 2010 covering a wide range of forestry issues leasing of classified forest; issuance of logging permits; stumpage fees; including transportation of forest products; export permits; importation of chain saws and sawmills.

1.227.  Sierra Leone is a party to several conventions and treaties on conservation and environmental management, including: the Convention on the Conservation of Biodiversity; the UN Framework Convention on Climate Change; the Convention on International Trade in Endangered Species of Wild Fauna and Flora; the International Convention to Combat Desertification; the World Heritage Convention; and the African Convention on the Conservation of Nature and Natural Resources.

4.1.3.3  Fisheries

1.228.  Sierra Leone has a coastline of 506 km, and a continental shelf of about 30,000 km2, with a commercially viable stock of fish. The fishery sector remains a key sector of the economy, both in terms of employment and output. Between 2006 and 2013, its contribution to GDP varied between 5% and 10% (Table 1.1). The sector employs directly an estimated 100,000 persons. It is estimated that about a million of individuals are engaged in fisheries activities (including related processing). The sector comprises: the capital-intensive industrial subsector, operating mostly off-shore; low-tech artisanal fishery, operating in the in-shore marine fisheries; and aquaculture and inland fisheries. Total fish production was about 137,000 tonnes in 2010, the latest year for which the data is available.18 Artisanal catch accounted for 82% of the total production.

1.229.  Sierra Leone does not export fish products to some of its major markets either because of failure to meet required standards (EU market), or the non-use of by catch reduction devices (U.S. market).

1.230.  Challenges for the sector include illegal, unreported and unregulated fishing (IUU), which is estimated to cause annual revenue loss of US$30 million. In a move to curb this practice, the authorities closed their international shipping registry to foreign-owned vessels in 2010. As from that date, international vessels are no longer allowed to register with Sierra Leone flag.

1.231.  The Fisheries (Management and Development) Act, 199419 is the main legislation governing the fishery sector. The Ministry of Fisheries and Marine Resources is in charge of development of the sector, and the Joint Maritime committee (JMC) deals with supervision and licensing activities. The Government's strategy for the sector includes promoting freshwater fishing and aquaculture, and establishing a semi-industrial fishing subsector operating in inland waters. To that end, the authorities have engaged in major infrastructure investments, since 2005, comprising the construction of fish-processing plants, dry-dock facilities, vessel-repair operations, and a new fishing port.

1.232.  The 2010 Policy Framework for the Fisheries of Sierra Leone20, for the long term development of the sector, aims to turn fisheries into an ecologically sustainable and economically efficient sector. Through the Artisanal Fisheries Development Project, the Government, with the support of the African Development Bank, has constructed four fish landing sites at Tombo, Goderich, Shenge, and Bonthe. During the first stage of the project, the authorities are focusing on adding value to products for the local market. At a later stage, the sites will be equipped with processing and distribution facilities that meet international standards.

1.233.  Sierra Leone is also participating in the World Bank-funded West Africa Regional Fisheries Programme (WARFP). Through this programme, the Government had secured US$8 million of funding for the construction of a fisheries harbour with the infrastructure to accommodate up to

18 Bank of Sierra Leone online information. Viewed at: http://www.bsl.gov.sl/statistics.html. 19 The Act was amended in 2007 (The Fisheries (Management and Development) (Amendment) Act,

2007).20 Government of Sierra Leone (2010), Policy and operational framework for the fisheries of Sierra Leone.

Ministry of Fisheries and Marine Resources.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 53 -

20 vessels at a time. The complex would comprise a fisheries quay, a transhipment quay, a reefer quay, and a port administration building. The project also includes components aiming at: improving governance in the sector (data collection, stock assessment); curbing illegal fishing by reinforcing patrolling and inspection; and value addition.

1.234.  A draft Fisheries and Aquaculture Bill is at the final drafting stage. The authorities indicated that the bill has provisions for a quota-management system for fishing activities.

4.2  Energy

4.2.1  Overview

1.235.  Biomass is the main source of energy in Sierra Leone. It is estimated to account for over 80% of the energy used each year. Petroleum products account for 13% of energy consumption, and grid-generated electricity for the rest. Biomass energy is almost exclusively used by households (Table 4.1), while petroleum products are mainly used in transportation, and to some extent, by households and operators with private generator capacity. Less than 10% of the population has access to grid-generated electricity.

Table 4.13 Structure of energy consumption, 2011(%)Sector Fuel wood Charcoal Petroleum

productsThermal

and hydroTotal

Agriculture, forestry, and fishing

1.0 0.0 5.0 2.0 2.0

Mining 0.0 0.0 9.0 1.0 2.5Industrial/commercial 3.0 10.0 12.0 60.0 21.0Transportation 0.0 0.0 49.0 0.0 62.5Households 96.0 90.0 25.0 37.0 12.0Total 100.0 100.0 100.0 100.0 100.0

Source: Government of Sierra Leone (2012b).

1.236.  The Ministry of Energy is responsible for oversight of the sector. However, other ministries retain responsibility over some specific issues. For instance, the Ministry of Agriculture, Forestry and Food Security is in charge of issues related to bioenergy and crop-related energy, and the Ministry of Trade and Industry, through its Petroleum Regulatory Agency, deals with the marketing and sales of petroleum products.

4.2.2  Upstream petroleum and gas activities

1.237.  Between 2005 and 2013, about US$524 million were invested in oil and gas exploration activities in Sierra Leone. The country is not an oil producer, but the announcement of a discovery of natural gas and oil in 2010 has sparked the interest of several global oil producers. In October 2013, Lukoil Overseas announced another discovery of oil.

1.238.  In anticipation of a boom in the sector, the Government adopted a new Petroleum Act in 201121, reforming the framework for the management and the regulation of petroleum operations, and making provisions for the State's participation in the industry. The Act created a Petroleum Directorate, under the Office of the President, and a National Company. The Directorate is in charge of the regulation of petroleum operations. It is allowed to participate in, inter alia, the tender process and the negotiation of petroleum licences, their administration, and the assessment of royalties and bonuses. The National Company, on behalf of the State, is in charge of managing the commercial aspects of petroleum operations (including participation in petroleum licences).

1.239.  Petroleum resources are the property of the State. The Act provides for three types of access rights: a reconnaissance permit, a petroleum licence, and a permit for laying and operating pipelines (Table 4.2). The application process for any petroleum right includes a prequalification stage where applicants are required to obtain the status of qualified operator or applicant. The status is granted by the Petroleum Directorate upon application and payment of a fee. Criteria used in assessing applications include: the technical ability of the applicant to operate in deep

21 The Petroleum ( Exploration and Production) Act of 2011 repealed the legislation enacted in 2001.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 54 -

waters; its financial ability to undertake capital-intensive ventures; and its sense of environmental responsibility, and corporate social responsibility.

Table 4.14 Petroleum rights, related fees, and conditionsLicence/ mode of acquisition Conditions Rights

Reconnaissance permitApplication submitted to the Petroleum Directorate

Duration: by negotiation Non-renewableNo fee

Non-exclusive right to reconnaissance operations

Petroleum licenceCall for tenders or for direct negotiations

Maximum duration: 30 years, extendable once for 10 years;Application fee: US$25,000/block

Exclusive rights to exploration and production operations

Permit to build and operate pipelinesApplication submitted to the Petroleum Directorate

Linked to the petroleum licence Laying and operation of pipelines

Source: Petroleum (Exploration and Production) Act of 2011; and information provided by the authorities.

1.240.  Petroleum licences are acquired through a call for tender, open only to qualified operators. The Minister may issue a call for direct negotiations if the call for tender is unsuccessful. In 2012, the application fee was raised to US$25,000 per block, from US$7,500. The Petroleum Directorate assesses applications and recommends a decision to the Minister. Licences are valid only after ratification by Parliament. They are published in the Gazette.

1.241.  Petroleum licences are granted to applicants deemed as offering the most favourable terms and conditions to the country. They confer on the holder the exclusive right to undertake exploration and production activities within the licence area. Licences are issued for periods not exceeding 30 years, including the exploration phase. Operators are allowed an initial exploration period of three years, renewable twice for two years each. However, renewal is subject to approval from the Minister. The legislation provides for a set of minimum obligations to be fulfilled by licence holders before entering the production phase. In particular, they must complete all the exploration activities planned in the licence agreement.

1.242.  Licensees have the obligation to inform the Ministry of any discovery of petroleum resources within seven days of the discovery. They are required to assess whether the discovery merits appraisal, and inform the Petroleum Directorate within 60 days of the discovery. The State, represented by the NPC, may participate in a petroleum licence. It is entitled to a free initial interest of at least 10% during the exploration phase.

1.243.  Licensees and their contractors are required to provide employment and training opportunities to nationals. They must give preference to nationals with adequate qualifications, and in any case, implement training and technology transfer programmes in their favour. They are also required to give preference to local goods. The licence agreement may set out the payment of an annual fee for training. There are currently 8 licences and 16 companies involved in offshore petroleum exploration activities in Sierra Leone.

1.244.  Holders of petroleum rights are liable for the payment of applicable taxes, including corporate income tax, royalties, and a surface rent tax. Royalties are assessed on gross production at the rate of 10%. The surface rent tax is at US$40 per km2 per annum during the initial exploration period. It is raised to US$60 on the first extension, and US$85 on the second extension. Companies engaged in the development or production phase are charged US$110 per km2 per annum.

1.245.   Sierra Leone is a participant in the Extractives Industries Transparency Initiative. The Initiative also applies to petroleum resources. Holders of petroleum rights are mandated to disclose all payments made to the Government. For 2011, the Government's reported receipts from the oil and gas sector amounted to US$15.4 million, representing 54.4% of all receipts from the extractive industries.22

22 SLEITI (2013), Sierra Leone Extractive Industries Transparency Initiative: Reconciliation Report for the Year 2011. December. Viewed at: http://eiti.org/files/SLEITI%20Reconciliation%20Report%202011%20-%20Final.pdf [14.09.16].

WT/TPR/S/303/Rev.1 • Sierra Leone

- 55 -

1.246.  The current legislation covers only offshore petroleum activities. It is currently being revised, with a view to establishing a single legal framework for onshore and offshore activities.

4.2.3  Downstream activities

1.247.  Since the closing of the Sierra Leone Petroleum Refining Company, all the oil needed for consumption is imported. Between 2005 and 2009, the volume of oil imports (mainly diesel) declined by 36% to 170,000 tonnes (Chart 4.2), reflecting largely the pressure of higher international oil prices. With the burgeoning iron ore sector, imports picked up and neared 400,000 tonnes in 2013.

1.248.  In 2014, Sierra Leone enacted legislation establishing a regulatory agency for downstream activities, replacing the Petroleum Unit within the Ministry of Trade and Industry.23 The responsibilities of the Petroleum Regulatory Agency include monitoring the procurement, importation, refining, exportation and supply of petroleum; ensuring effective harmonization of local pump prices; promoting transparent open market guarantees for competitive distribution margins and pump price adjustment mechanisms; establishing and managing a strategic petroleum stock programme. The legislation also established a Petroleum Fund to finance the activities of the Agency, and instituted a levy on petrol, diesel or kerosene sold by companies.

1.249.  According to the authorities, there is no restriction on the importation of petroleum products. However, authorization is required from the Petroleum Regulatory Agency of the Ministry of Trade and Industry. The Unit determines pump prices through an automatic pricing mechanism. Starting from Platts weekly average, the landed price is estimated by adding freight costs, import duties, and other logistic related fees (storage, port charges, and demurrage fees). Distribution costs, excise duties, and the road-user charge are added to the landed price to obtain the indicative price. Therefore, fluctuations in international prices or the exchange rate are passed on to the indicative price. However, there is no price adjustment if these fluctuations do not cause the landed price to change by more than 5%. Fluctuations within the 5% range are compensated with excise tax revenues.

Chart 4.7 Import of petroleum products, 2000-13('000 tonnes)

0

50

100

150

200

250

300

350

400

450

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Petrol Diesel Kerosene/J et A-1 Fuel oil

Chart 4.[Petro] I mport of petroleum products, 2000-2013(In 1,000 MT)

Petroleum Unit, and Government of Sierra Leone (2012), National Energy Profile of Sierra Leone, J une 2012. Viewed at: http:/ /www.undp.org/content/dam/sierraleone/docs/focusareadocs/undp_sle_energyprofile.pdf.

Source:Source: Petroleum Regulatory Agency.

4.2.4  Electricity

1.250.  The installed capacity of the Electricity Generation and Transmission Company (EGTC), the public utility company, comprises a thermal oil plant of 37 MW and six hydropower plants with combined capacity of 56.75 MW. The rest of the installed capacity of the country is privately owned, mostly by mining companies, and is not connected to the grid. The mining sector relies on captive generation, while the other customers and households rely mainly on private generation. It

23 Petroleum Regulatory Agency Act, 2014.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 56 -

is estimated that 33,000 small generators are currently in use, providing about 180 MW annually. Total electricity generation is estimated at 199.4 GWh in 2014 (Table 4.3).

Table 4.15 Electricity generation and consumption, 2009-14Year 2009 2010 2011 2012 2013 2014Electricity generation (GWh) 132.0 168.0 175.6 186.9 163.1 199.4Consumption (% share) Industrial 33.1 29.2 40.3 28.4 14.5 30.7 Government 20.3 15.0 14.5 16.0 10.2 26.3 Domestic 31.2 29.9 27.9 30.8 37.4 25.7 Commercial 15.4 26.0 17.3 24.9 37.8 17.4

Source: Bank of Sierra Leone. Online information, viewed at: http://www.bsl.gov.sl/statistics.html [14.09.16].

1.251.  Sierra Leone's electricity tariffs remain among the highest in Africa. Its average of US$0.28/kWh is twice as much as the continental average.24 Although the Government subsidized oil imports, electricity tariffs escalated between 2000 and 2008, reflecting mainly the global trend in oil prices combined with the weakening of the local currency. The tariffs were raised by 82% between 2000 and 2005. In 2008, the authorities replaced the tariff bands in place in the domestic and commercial sectors with single tariffs of Le 989 and Le 1,290 per kWh, respectively.25

1.252.  Energy supply is one of the major constraints to private sector development. Anticipating increased demand from the mining sector, the Government's objective is to boost installed capacity to 1,000 MW by 2018.26 The Government is planning to involve mining companies in the sector, through public-private partnerships. One such partnership is Addax Biotechnology's Makeni Project, consisting of a sugarcane plantation, an ethanol refinery, and a biomass power plant. Upon completion, the company is expected to provide up to 15 MW annually to the national grid. In June 2013, the Parliament approved a power purchase agreement with Copperbelt Energy Corporation (CEC) Africa Sierra Leone Ltd. The agreement involves the development and operation of a 128 MW thermal power plant.

1.253.  Launched in April 2010, the National Energy Policy27 aims at providing access to electricity to 35% of the population by 2015, and universal access by 2030. Achievements include the construction of several hydropower stations (Charlotte, Banksoka, Makali and Bumbuna II) as well as the installation of thermal plants in Lungi, Bo and Kono.

1.254.  Sierra Leone is a pilot country in the UN Sustainable Energy for All (SEFA) initiative.

1.255.  The electricity sector was revamped in 2011 with the enactment of the Sierra Leone Electricity and Water Regulatory Commission Act of 2011, and the National Electricity Act of 2011. The first Act established the Electricity and Water Regulatory Commission (EWRC), responsible for issuing licences and monitoring compliances, regulating tariffs, and ensuring fair competition among providers (in the case of unregulated services). The Commission is to be funded through government subventions, and an annual levy on the gross revenue of suppliers. It is not yet fully operational.

1.256.  The Act imposes a licensing requirement for the sale, provision, and supply of electricity and water services, and the installation or operation of any related facilities. Licences are issued by the EWRC. Eligibility is restricted to nationals, partnerships of nationals, and companies incorporated or registered in Sierra Leone. The Act allows independent power producers to construct generating stations, including hydro-electric schemes, and to own and operate transmission facilities. However, they are required to sell their production to the Electricity Distribution and Supply Authority (EDSA).

24 World Bank (2013), Sierra Leone – Energy Sector Utility Reform Project, Washington DC. Viewed at: http://documents.worldbank.org/curated/en/2013/11/18594160/sierra-leone-energy-sector-utility-reform-project.

25 Government of Sierra Leone (2012), National Energy Profile of Sierra Leone. Viewed at: http://www.undp.org/content/dam/sierraleone/docs/focusareadocs/undp_sle_energyprofile.pdf [14.09.16].

26 Government of Sierra Leone (2013), Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding. Viewed at: http://www.imf.org/External/NP/LOI/2013/SLE/100113.pdf.

27 Ministry of Energy and Water Resources (2009), Sierra Leone National Energy Policy. Viewed at: http://www.undp.org/content/dam/sierraleone/docs/focusareadocs/undp_sle_energyprofile.pdf [14.09.16].

WT/TPR/S/303/Rev.1 • Sierra Leone

- 57 -

1.257.  The National Electricity Act dismantled the National Power Authority (a vertically integrated utility company), and established two state-owned enterprises: the Electricity Generation and Transmission Company (EGTC), and the EDSA.28 The EGTC is responsible for electricity generation and transmission. The EDSA is in charge of transmission and distribution of electricity in areas where the Commission has not issued a licence to another entity. The Authority purchases electricity from the EGTC under the terms of a power purchase agreement.

1.258.  The EGTC's capacity was boosted in 2009 with the entry into operation of the Bumbuna hydropower plant (Bumbuna I). The plant generates around 50 MW during rainy seasons. Additional investments are expected to boost its capacity to 300 MW by 2015.

1.259.  In 2012, the Government signed an agreement with Joule Africa for the development of Bumbuna II, a project with a generation capacity of up to 389 MW during rainy seasons and at least 112 MW during dry seasons. The Government is also engaged in several other energy programmes covering the installation of new plants, transmission and distribution lines, and prepaid meters.

1.260.  Sierra Leone is part of the West Africa Power Pool (WAPP), launched by ECOWAS Heads of State in 1999 to integrate the operations of national power systems into a unified regional electricity market, thereby providing a stable and reliable electricity supply.29 With funding from several sources, the WAPP launched an interconnection project in 2014 that involves the construction of 1,411 km of high voltage transmission line between Côte d'Ivoire and Guinea (through Liberia and Sierra Leone).30 The project includes the electrification of communities along the transmission line. The project will allow the provision of a minimum of 83 MW by Côte d'Ivoire to the three other countries, and better use of existing hydropower resources in these countries. The Sierra Leone section comprises the construction of 530 km of transmission lines and of 5 substations. Construction work is yet to begin.

1.261.  In 2013, the World Bank approved a US$40 million project aimed at improving the operational performance of the Electricity Distribution and Supply Authority.31 The project includes the financing of a three to five-year performance-based contract for the operation and management of the Authority, and the rehabilitation and upgrading of the distribution network.

1.262.  Since September 2016, electricity supply has been subject to the goods and services tax at the standard rate of 15%.

4.3  Mining

1.263.  Sierra Leone has a variety of mineral resources (Table 4.4). The sector accounts for about 90% of export revenues annually, comprising mainly diamonds, and recently, iron ore. In 2010, the country was the 10th largest producer of diamonds (by volume), and the 3rd largest producer of rutile.

Table 4.16 Mineral production 2009-14Mineral 2009 2010 2011 2012 2013 2014Diamond ('000 carats) 400.4 437.6 376.5 532.9 612.4 593.6Bauxite ('000 tonnes) 742.8 1,089.1 1,457.5 734.5 654.1 1,178.6Rutile ('000 tonnes) 63.9 68.2 68.0 94.5 122.1 115.1Zircon ('000 tonnes) 0.0 0.0 7.1 22.5 128.3 2.4Ilmenite ('000 tonnes) 15.2 18.2 14.7 21.4 32.5 35.8Gold (ounces) 5,356 8,690 5,284 4,345 3,099 1396Iron ore ('000 tonnes ) 0.0 0.0 137.9 967.9 7,482.2 17,497.6

Source: Ministry of Mines and Mineral Resources.

28 The Authority replaced the National Power Authority (National Power Authority Act, 1982).29 The West African Power Pool is a specialized institution of ECOWAS. 30 The Côte d'Ivoire – Liberia – Sierra Leone – Guinea (CLSG) Interconnection Project.31 World Bank (2013), Sierra Leone – Energy Sector Utility Reform Project, Washington DC. Viewed at:

http://documents.worldbank.org/curated/en/2013/11/18594160/sierra-leone-energy-sector-utility-reform-project [16.09.2016].

WT/TPR/S/303/Rev.1 • Sierra Leone

- 58 -

4.3.1  Regulation

1.264.  The Ministry of Mines and Mineral Resources is responsible for mineral resources. Established in 2012, the National Minerals Agency is responsible for implementing policies and regulations.32 Its Department of Precious Metal Trading is in charge of valuation and certification of gold and diamonds, and the collection of export-related taxes.

1.265.  Development of the mining sector was identified as a fundamental pillar for the promotion of sustainable economic growth in the Agenda for Prosperity. The Government's main priorities in the sector are to ensure that mineral resources support economic and social development in a sustainable manner, and to increase transparency and accountability. In line with these priorities, it adopted a new Mines and Minerals Act in 2009.33 The Act established the Minerals Advisory Board to monitor the implementation of minerals-related polices, advise and make recommendations to the authorities, and formulate recommendations on minerals-related policies. The Board comprises representatives from the Ministry, local governments, the mining industry, and civil society.

1.266.  Under the Mines and Minerals Act, all mineral resources are the property of the State, and the right to exploit them is subject to licences. Nationals, corporate bodies, and cooperatives registered or incorporated in Sierra Leone are eligible to apply for a minerals right. Non-national residents become eligible only after ten years of residency. The Act defines five types of mineral rights: reconnaissance licence, exploration licence, artisanal mining licence, small-scale mining licence, and large-scale mining licence (Table 4.5). Artisanal mining activities are reserved for nationals.

1.267.  The Mining Cadastre Office receives and verifies mineral rights applications, and forwards them to the Minerals Advisory Board for verification of legal requirements. If all requirements are met, the Board certifies the application and advises the Minister of its approval. However, the final decision depends on the Minister who may go against the recommendation of the Board. In case of refusal, the applicant is notified of the reasons, and given 30 days to remedy the causes of refusal (if it is feasible). The applicant may appeal the Minister's decision to the High Court.

1.268.  Artisanal mining licences are granted directly by the Mining Cadastre Office. Appeals, in this case, may be brought to the Minister in charge of the sector. Once granted, mineral rights are published in the Gazette. Holders of large-scale mining licences must commence operations within 180 days after the licence is granted. The period is reduced to 90 days for all the other types of licences.

Table 4.17 Licensing requirements in the mining sectorLicence Eligibility Conditions RightsReconnaissance Registered or incorporated

companiesMaximum area: 10,000 km2

Maximum duration: 1 year, renewable once Non-transferable

Non-exclusive right to carry on reconnaissance operations

Exploration Registered or incorporated companies

Maximum area: 250 km2

Maximum duration: 4 years initially, 3 years on first renewal and 2 years on second renewal Transferable

Exclusive right to carry on approved exploration operations, and to apply for a mining licence over any part of the exploration area

Artisanal mining Nationals; joint ventures, partnerships, cooperatives made up of nationals; companies wholly owned by nationals

Maximum area: 0.5 hectareMaximum duration: 1 year, renewable 3 timesNon-transferable

Exclusive right to carry on exploration and mining operations

Small-scale mining

Cooperative societies with at least 25% of members being citizensCompanies with at least 25% of shares held by citizens

Area: 1 to 100 hectaresMaximum duration: 3 years, renewable for 3 yearsTransferable

Exclusive right to carry on exploration and mining operations

Large-scale mining

Registered or incorporated companies

Maximum area: not indicatedMaximum duration: 25 years initially, 15 years for renewalsTransferable

Exclusive right to carry on exploration and mining operations

Source: The Mines and Minerals Act of 2009; and the Mines and Minerals Regulations of 2009. 32 National Minerals Agency Act, 2012.33 The Act repealed the Mines and Minerals Act 1994, and the Commission for the Management of

Strategic Resources, National Reconstruction and Development Act 1999.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 59 -

1.269.  The legislation requires mining licence holders (small and large scale) to assist in the development of the communities where they operate. Companies with mining operations above a certain threshold may be required to conclude community development agreements with local authorities. The agreement should include provisions requiring them to invest at least 1% of their gross revenue in the development of communities. Licence holders are required to give preference to domestic products, public corporations, and domestically incorporated or registered companies.

1.270.  Holders of small- and large-scale mining licences are required to give preference to nationals when recruiting, and to carry out a scheme of training and employment of local employees. Large-scale mining licence holders are required to obtain a land lease or other rights to use the land. Rent is distributed among stakeholders: 50% to land owners, 15% to the District Council, 15% to Paramount Chiefs, 10% to the Chiefdom Administration, and 10% to the Constituency Development Fund. The Ministry may compulsorily acquire private land if it is proven that the licence holder has taken all reasonable steps to acquire the right to use it but without success. Landowners retain the right to graze, stock, and cultivate the surface of the land (to the extent that such activities do not interfere with mining operations).

1.271.  In addition to application and renewal fees, holders of mining licences and permits are subject to an annual charge of US$600 per hectare for small-scale mining operations, and US$500,000 for large-scale mining licence holders (Table 4.6).

1.272.  Royalty fees are assessed on the market value of the extracted minerals, as determined by the Department of Precious Metal Trading.

1.273.  In 2014, the Mines and Minerals Act 2009 was amended to reduce and restructure the royalty rates as follows34: 6.5% and 5% respectively for precious stones and precious metals obtained under large-scale or small-scale mining licences; 3% for precious stones and metals obtained under an artisanal mining licence; and 3% for other minerals.35 The Finance Act 2014 also amended (mostly doubled) the various fees payable for licences (Table 4.6).

1.274.  Incentives in the mining sector include full deduction of fees related to prospection and exploration activities from taxable income; a deduction of 40% of production costs from the taxable income during the first year of activity; and a 10% amortization of start-up costs. Individuals may also deduct 50% of some investment expenditures from their personal income taxes, up to a limit of US$150,000.

Table 4.18 Fees related to mineral rights and permits Type of permit Mineral right Application fee Annual chargeLicences Reconnaissance Application: US$500

Renewal: US$500US$5,000

Exploration Application: US$500 Renewal: US$500

Year 1 to 4: US$100/km2

Year 5 to 9: US400/km2 for the first 125km2 and US$800/km2 for the remainder

Artisanal mining Application: Le 50,000 Renewal: Le 10,000

Le 400,000 (includes Le 150,000 for a the Artisanal Mining Rehabilitation Fund)

Small-scale mining Application: US$1000 Renewal: US$1000

US$800/ha

Large-scale mining Application: US$2,500 Renewal: US$2,500Transfer: US$500

US$500,000

Permits Dredging Application: US$250 Renewal: US$250

US$500 (exploration and artisanal mining)US$10,000 (small-scale mining)US$20,000 (large-scale mining)

Radioactive minerals Application: US$250 Renewal: US$250

US$20,000

Source: Mines and Minerals Regulations of 2009, First Schedule; and Schedule to the Finance Act, 2014.

34 Finance Act, 2014.35 Previously, precious stones with a market value below US$500,000 were taxed at a rate of 6.5%; those

with a value above this threshold (special stones) were taxed at a rate of 15%. Precious metals were taxed at 5%, and all the other minerals at 3% (Mines and Minerals Act, 2009).

WT/TPR/S/303/Rev.1 • Sierra Leone

- 60 -

4.3.2  Main products

4.3.2.1  Diamonds

1.275.  Sierra Leone has participated in the Kimberley Process Certification Scheme (KPCS) since its inception, in 2003.36 Accordingly, Sierra Leone exports diamonds only to participating countries. The certification process was formally incorporated into Sierra Leone's legal apparatus in 2009.37

1.276.  In 2007, the Parliament enacted the Diamond Cutting and Polishing Act, subjecting diamond cutting and polishing activities to licensing requirements. A licence, issued by the Directorate of Precious Minerals Trading for a period not exceeding five years, gives the holder the right to deal in, export and import, as well as cut, polish, crush, or set diamonds. It can be renewed indefinitely for periods of five years each. Only licence holders are allowed to export cut and polished diamonds. Product is subject to valuation by the Gold and Diamond Department. The licensee must pay the National Revenue Authority a duty of 0.5% of the difference between the certified value of the unpolished and polished diamonds. Small-scale mining lease holders pay a royalty fee of 5% of the export value, and a 1% valuation fee. Individuals exporting on an ad hoc basis, such as tourists or exporters interested in testing the market, may obtain a special dispensation from the licensing requirement. However, they are charged an extra 2% in addition to the 3% export tax.

1.277.  Any equipment used in the cutting and polishing of diamonds may be imported duty free.

1.278.  Since 2011, the export tax on diamonds has been reduced to 3% (from 6.5%). It is allocated, in terms of percentage points: 0.75 to the local community, 0.75 to the Directorate of Precious Minerals Trading, 0.70 to a special treasury account, 0.25 to a monitoring fund, 0.40 to the Independent Valuator, and 0.05 to a Rehabilitation Fund, a Public Information Unit, and the Precious Minerals Monitoring Team.38

4.3.2.2  Other minerals

1.279.  Gold exports are subject to an export duty of 3% of their f.o.b. value.

4.4  Manufacturing

1.280.  Sierra Leone's manufacturing sector is relatively small, accounting for less than 3% of GDP during the review period (Table 1.1). The sector employs roughly 2% of the labour force, and consists mainly of small and medium-scale enterprises. Activities are limited to raw materials processing and light manufacturing destined for domestic consumption (Table 4.7).

Table 4.19 Selected products in the manufacturing sector, 2009-14

Product 2009 2010 2011 2012 2013 2014Beer, stout, and maltina ('000 cartons) 859.1 996.9 1,237.

21,199.

9946.5 1,001.

7Acetylene ('000 cubic feet) 168.9 166.2 199.6 191.6 235.1 296.7Oxygen ('000 cubic feet) 244.7 227.5 267.4 230.2 273.6 265.3Paint ('000 gallons) 149.9 221.2 204.0 201.1 233.1 211.0Confectionery ('000 lbs) 3,054.

92,947.

93,469.

93,164.

53,516.

33,207.

4Cement ('000 tonnes) 236.2 301.0 317.9 335.4 313.4 303.1Soft drinks ('000 crates) 1,541.

81,962.

01,881.

32,180.

02,261.

81,502.

8Soap (tonnes) 585.7 422.0 503.2 643.2 633.6 664.6Flour ('000 tonnes) 11.4 9.6 13.4 23.2 .. ..

.. Not available. Source: Statistics Sierra Leone.

36 The process imposes certain requirements for the control of rough diamond production and trade. In particular, it requires each shipment of rough diamonds to be certified as meeting a minimum set of standards and accompanied by the Kimberley Process Certificate. As of January 2014, 81 countries participate in the process. Online information, viewed at: http://www.kimberleyprocess.com/en/about.

37 Diamond Trading Act, 2009.38 The Alluvial Diamond Mining (Amendment) Rules, 2006. Viewed at:

http://www.sierralii.org/sl/legislation/statutory-instrument/2006/15.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 61 -

1.281.  The sector faces many challenges, including weak infrastructure, the high cost of production, the inadequate or unreliable supply of raw materials and energy, and limited access to financing. In the 2016-17 WEF report on global competitiveness, Sierra Leone ranked 132nd out of 138 economies.39

1.282.  The overall goal of the Government in the manufacturing sector is to build a commercially viable sector that adds value to locally produced primary products, and creates employment. The Ministry of Trade and Industry has responsibility for overseeing the sector.

1.283.  In 2004, the UNIDO launched the four-year Sierra Leone Integrated Programme (SLIP) aimed at helping recovery from the civil war, by re-establishing entrepreneurial initiatives and providing job and income opportunities to displaced people. Through the programme, three training centres (industrial growth centres) were rehabilitated and equipped with infrastructure for the production of agricultural tools and food processing. Young entrepreneurs were trained in skills such as masonry, carpentry, metal work, and tailoring. However, most of the components of the programme were not implemented due to insufficient funding.40

1.284.  Sierra Leone launched a Local Content Policy in 2012 and established a Local Content Agency in 2016 (Section 2.4.3).

1.285.  In 2016, the average applied MFN tariff rate in the manufacturing sector (ISIC definition) was 12%, similar to the overall average MFN (Table 3.2). The average bound rate in the sector is 47.8%, leaving considerable room for tariff change. Tariff escalation is strongly positive in most industries (ISIC 2-digit), leading to high levels of effective protection. In the textile and leather, wood and furniture, and non-metallic mineral products industries, the tariff rate on fully processed products may be as high as twice the rate on products at the first-stage of processing. With additional protection provided by the excise tax, since it applies only to some imported manufactured goods (Table 3.4), Sierra Leone is less likely to achieve international or even regional competitiveness for the protected sector.

4.5  Services

4.5.1  Overview

1.286.  The services sector accounted for 37.9% of Sierra Leone's GDP in 2015 (Table 1.1). Transport, storage and communication, and tourism are the main components and accounted respectively for 7.7% and 8.6% of GDP. During the review period, the contribution of financial services to GDP was on a declining trend.

1.287.  Sierra Leone's GATS schedule includes horizontal and sector-specific commitments. In all sectors, market access through commercial presence is subject to the requirement that the foreign provider incorporates or establishes its business locally. There are also some restrictions with regard to land and building acquisition. Access through the presence of natural persons (mode 4) is generally unbound, except the requirement to obtain a work permit. Sector-specific commitments include additional restrictions on commercial presence in the provision of professional, insurance, banking, health, and transport services.

1.288.  Under Article II of GATS, Sierra Leone maintains MFN exemptions for all sectors with respect to arrangements with members of the ECOWAS and the MRU.

4.5.2  Financial services

4.5.2.1  Banking

1.289.  As at end-September 2016, Sierra Leone's banking sector comprises 14 commercial banks (Table 4.8) through 104 branches. The former HFC Mortgage and Savings Limited was issued a provisional licenced in September 2016, and is now registred as a commercial bank named

39 World Economic Forum (2016), Global Competitiveness Index, 2016-2017 edition. Viewed at: http://reports.weforum.org/pdf/gci-2016-2017/WEF_GCI_2016_2017_Profile_SLE.pdf.

40 UNIDO (2008), UNIDO Integrated Programme – Post-conflict SME support programme for industrial development and poverty alleviation. UNIDO Evaluation Group, Vienna. Viewed at: http://www.unido.org/fileadmin/user_media/About_UNIDO/Evaluation/IP-CSF_reports/08-57917_ebook_IP_Sierra_Leone.pdf [16.09.2016].

WT/TPR/S/303/Rev.1 • Sierra Leone

- 62 -

Commercial and Mortgage Bank. The Government has a majority stake in two commercial banks: the Sierra Leone Commercial Bank Ltd, and the Rokel Commercial Bank (SL) Ltd. There are 17 community banks (of which 13 were established after 2008), 15 licensed microfinance institutions (of which 13 are credit only and 2 are deposit taking institutions), 59 financial services associations, 41 registered foreign exchange bureaus, and 2 discount houses.

1.290.  During the review period, the legal framework of the banking sector was strengthened with the enactment of the Banking Act of 2011, the Bank of Sierra Leone Act of 2011, the Anti-Money Laundering and Combating of Financing of Terrorism Act of 2012, and the Borrowers and Lenders Act 2014.

Table 4.20 Commercial banks, September 2016(Le billion, unless otherwise indicated)

Bank Government shareholding

(%)

Total assets

Deposits Total gross loans

Non-performing loans (% of gross loans)

Sierra Leone Commercial Bank Ltd 85 932 849.3 296.3 39.1Standard Chartered Bank (SL) Ltd 0 830.6 673.2 73.7 8.1Rokel Commercial Bank (SL) Ltd 65 752.9 702.7 207.5 61.6Union Trust Bank (SL) Ltd 0 449.4 329.5 216.2 30.6Guaranty Trust Bank (SL) 0 705.4 524.4 261.4 6.2First International Bank (SL) Ltd 0 399.3 314.3 133.3 11.9First Bank of Nigeria 0 123.1 71.9 27.6 6.6Ecobank (SL) Ltd 0 714.3 587.7 166.2 5.4Skye Bank (SL) Ltd 0 106.3 54.4 27.1 5.2United Bank for Africa (SL) 0 306.7 210.4 49.3 1.3Zenith Bank (SL) Ltd 0 388.8 319.8 23.0 63.0Access Bank (SL) Ltd 0 164.1 118.7 12.2 11.9Keystone Bank (SL) Ltd 0 82.4 46.2 19.1 10.9Commercial and Mortgage Bank (formerly HFC Mortgage and Savings Limited)

.. .. .. .. ..

Total for the banking system - 5,955.3 4,802.5 1,512.9 ..

.. Not available.Source: Bank of Sierra Leone.

1.291.  The Banking Act provides for the licensing of banking businesses, the regulation and supervision of banking activities, and the protection of depositors. All institutions wishing to engage in banking are required to apply to the Bank of Sierra Leone (BSL) for a banking licence. The application is open to registered companies, cooperative societies, and statutory bodies. Foreign banks may engage in banking business by establishing a subsidiary. Licences for foreign banks are subject to the BSL receiving confirmation from the foreign supervisory authority that the applicant satisfies its prudential and overall management criteria, and its consent to the establishment of the subsidiary. Licences are granted for a minimum of five years, and are not transferable. There is a licence fee of Le 10 million, in addition to a Le 2 million application fee.

1.292.  Banks are subject to minimum paid-up capital, capital adequacy ratios, and liquidity requirements. In general, the paid-up capital threshold is revised every year, and is currently at Le 30 billion (Le 9 billion in 2007). Banks are required to maintain a minimum capital adequacy ratio of at least 15% of their risk-weighted assets, and a cash ratio equivalent to at least 12% of their total deposits.

1.293.  The Anti-Money Laundering and Combatting of Financing of Terrorism Act of 2012 requires any person crossing the borders with more than Le 30 million (or its equivalent) in any foreign currency or negotiable instrument, to report to the customs or the police authorities.

1.294.  Non-performing loans (NPL) are a major issue in the banking system due to problems of connected and concentrated lending. It has been aggravated by factors such as the decline in iron ore prices and delays in government payments to some contractors. As at end-September 2015,

WT/TPR/S/303/Rev.1 • Sierra Leone

- 63 -

Rokel Commercial Bank (RCB) and Sierra Leone Commercial Bank, the two state-owned banks, have NPL ratios at respectively 61.55% and 39.1%, well above the regulatory limit of 10%.41

4.5.2.2  Insurance

1.295.  The Sierra Leone Insurance Commission (SLICOM) is mandated to monitor and regulate insurance sector activities. The insurance market is reserved for companies and cooperative societies registered under the Insurance Act of 2000.42

1.296.  There are currently eleven registered insurance companies, of which seven are operating in all classes of insurance businesses (motor, fire, marine, general accident and life), two in motor and marine insurance only, and one in life and medical insurance business. Reliance Insurance Trust Corporation is the major player in the general and life insurance markets (Table 4.9). There are 11 licensed and registered insurance brokers and 10 agents. The WAICA Re-Insurance Corporation (West African Insurance Companies Association), which started its operations in 2012, is the only registered re-insurance company.

Table 4.21 Premiums collected by insurance businesses, 2009-14(Le million unless otherwise indicated)Companies 2009 2010 2011 2012 2013 2014Life insurance (net premiums) 3,129 5,954 10,675 15,139 19,154 25,304 Reliance Insurance Trust Corporation 435 1,953 4,233 5,858 5,874 6,660 National Insurance Company 1,173 2,221 3,343 3,754 4,842 7,356 Capital Express Assurance Company 265 558 947 1,746 2,550 2,965 Aureol Insurance Company 1,255 917 1,406 1,448 1,104 1,142 Sierra Leone Insurance Company .. 248 567 1,073 1,184 1,336 International Insurance Company .. 57 179 1,068 3,360 5,134 STACO Insurance Company .. .. .. 191 240 711General insurance business (gross premium)

27,764 32,181 46,632 60,895 72,241 83,820

Reliance Insurance Trust Corporation 6,486 7,169 14,125 21,208 27,000 38,717 Aureol Insurance 8,304 9,121 11,061 15,927 20,561 18,634 International Insurance Company 2,902 3,325 4,159 8,837 6,579 4,174 National Insurance Company 5,007 5,981 8,335 6,783 8,976 8,917 STACO Insurance Company 705 1,833 3,252 2,905 3,838 7,400 Marine and General Insurance Company

1,053 1,047 1,845 1,979 1,535 1,635

Medical & General Insurance Company

1,257 1,332 1,828 1,490 1,820 2,284

Trans-world Insurance Company 1,451 1,466 1,420 1,306 1,292 1,638 Sierra Leone Insurance Company 600 906 607 459 640 421

.. Not available.Source: Sierra Leone Insurance Commission.

1.297.   Insurance companies are subject to paid-up capital, deposit, and reserve requirements. Under the Insurance Act 2016, the minimum capital requirement has been doubled for all classes of insurance businesses. It amounted to Le 480 million for each class of business an insurance company is engaged in. Companies engaged in re-insurance businesses are subject to a minimum capital requirement of Le 4.8 billion.

1.298.  Deposit requirements amount to Le 300 million for each class of insurance business, and Le 600 million for subsidiaries of foreign companies. Deposit requirements for companies engaged in re-insurance business are tenfold the amount required from those engaged in general insurance businesses. Deposits are to be remitted to the BSL in cash or any approved form of security. Reserve requirements depend on the class of business and the status of the risk involved (Table 4.10).

41 IMF (2016), 2016 Article IV Consultation and Fifth Review under the Extended Credit Facility and Financing Assurance Review and Request for an Extension of the Extended Credit Facility. IMF Country Report No. 16/236 . Viewed at: https://www.imf.org/external/pubs/ft/scr/2016/cr16236.pdf.

42 Insurance Act, 2016.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 64 -

Table 4.22 Minimum reserve requirements for insurance companies, 2016

Insurance business Reserve requirementUnexpired risks Outstanding claims Contingency claims

Life insurance General reserve fund equal to net liabilities .. 1% of premiums

Marine hull insurance 75% of net premiums Amount of claims plus a margin of 20%

The greater of: 3% of premiums and 20% of net profits

Other insurance businesses 45% of net premiums Amount of claims plus a margin of 20%

The greater of: 3% of premiums and 20% of net profits

.. Not available.Source: Insurance Act of 2016.

1.299.  Insurers must maintain a margin of solvency with respect to their businesses. For life insurance businesses, the amount of liabilities must not exceed the amount of the life insurance funds. For any other class of insurance, the insurer is required to maintain a level of assets above liabilities by at least 10% of the premium income. Companies cannot declare or distribute any dividend until they fulfil all their obligations related to paid-up capital, solvency, and reserves. They should invest at least 25% of their premiums in government securities (the threshold is 50% for companies engaged in life insurance businesses).

1.300.  A company may transact in several classes of business but is required to keep separate accounts for each. In particular, receipts and investments with respect to life insurance are to be kept separate from other business.

1.301.  There is no restriction on companies established in Sierra Leone insuring risks located abroad. However, foreign companies must be registered locally to insure risks located in Sierra Leone. Insurance premiums are determined by companies but are subject to SLICOM approval.

1.302.  Insurance agents, brokers, adjusters, and assessors must be registered. Licences are issued for one year. Insurance companies are required to pay an annual levy amounting to 1% of their gross premiums to the SLICOM. In principle, brokers are required to pay the levy at the rate of 0.5% of their commission, although the actual rate is 3%.

1.303.  Importers are required to insure their imports with a company registered in Sierra Leone. Civil liability insurance is required for owners of motor vehicles. Under the recently enacted Insurance Act, the following insurance is compulsory: public liability insurance for buildings above two storeys under construction; fire insurance for tenantable and public properties; employers' liability insurance (for employers with more than 5 employees); and professional indemnity insurance (for medical practitioners, engineers, accountants, brokers, etc.).

4.5.2.3  Other financial services

1.304.  Financial institutions other than commercial banks are regulated under the Other Financial Services Act of 2001.43 They must obtain a licence from the BSL. There is an application fee of Le 500,000 and a licensing fee of Le 2 million. There are currently two microfinance institutions (Ecobank Microfinance (SL) Ltd, and Bank for Innovation and Partnership Microfinance), and one institution providing mortgage finance (HFC Mortgage and Savings (SL) Ltd). They are subject to minimum paid-up capital, capital adequacy ratios, and reserve requirements (Table 4.11).

1.305.  Financial leasing businesses are required to maintain minimum paid-up capital of Le 2 billion, and a reserve fund into which they transfer a portion of their after-tax profits annually. The portion is set at 20% until the reserve fund reaches the level of the paid-up capital, and 5% afterwards.

43 The Other Financial Services Act, 2001.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 65 -

Table 4.23 Financial requirements for other financial institutions(Le and %)

Type of institution Minimum paid-up capital

Capital adequacy ratio

(%)

Cash reserve requirement

(%)

Liquidity reserve requirement

(%)Mortgage finance 25 billion 15 10 15Deposit-taking MFIs 1 billion 8 10 20Discount houses 2 billion .. .. 60Community banks 1 billion 8 10 20.. Not available.Source: Bank of Sierra Leone.

1.306.  Under the 2011 Credit Reference Act, credit reference bureaus are subject to a licensing requirement. Licences are granted by the BSL and renewable annually.

4.5.3  Information and communication services

4.5.3.1  Telecommunications

1.307.  Access to telecommunications services in Sierra Leone is limited, and much lower than the average for Africa (Table 4.12). In 2013, access to fixed-lines was 0.26 subscriptions per 100 inhabitants (down from 0.58 in 2009). However, access to mobile telephone services increased from 20.6 subscriptions per 100 inhabitants in 2009 to 44.1 subscriptions in 2013.44

Table 4.24 Selected indicators of the telecommunications sector, 2009-13  2009 2010 2011 2012 2013Fixed-telephone subscriptions (per 100 inhabitants) 0.58 0.24 0.27 0.30 0.26Mobile-cellular telephone subscriptions (per 100 inhabitants) 20.6 34.7 36.4 37.0 44.1Individuals using the Internet (percentage) 0.2 0.6 0.9 1.3 1.7Source: ITU's ICT Eye. Viewed at: http://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx.

1.308.  Sierra Leone Telecommunications Company Ltd (Sierratel), the state-owned operator, has a de jure monopoly over fixed-line communications. Its monopoly over the operation of the international gateway (which was managed on its behalf by a private company) was terminated in 2015.45 Sierratel is currently in the process of privatization. In 2012, its management was transferred to Management Development International Company (MDIC) under a three-year contract.

1.309.  There are currently six licensed operators in the mobile sector, of which 5 are in operation: Airtel, Africell, Comium, Sierratel, and Smart Mobile.

1.310.  The Ministry of Information and Communications is responsible for national policies on issues relating to information and communications. The National Telecommunications Commission (NATCOM) was established in 2006 as the regulator of the telecommunications sector.46 Its responsibilities include regulating activities of companies operating in the sector, managing the use of the spectrum resources, promoting universal access, and ensuring efficient, equitable, and cost-effective telecommunications services.

1.311.  The Telecommunications Act of 2006 is the main legislation in the sector.47 In accordance with the Act, licences are required for: provision of telecommunications services to the public; leasing, selling or provision of telecommunications network capacity to third parties; provision of telecommunication services through networks leased from third parties; and building any infrastructure related to the provision of these services. Licences are issued by the NATCOM. The licensing requirement does not apply to private telecommunications networks. The Commission may exempt a class of telecommunications services from the licence requirement, and require registration only.

44 These statistics are not adjusted for multiple subscriptions.45 The Telecommunications (Amendment) Act, 2015.46 http://www.natcom.gov.sl/.47 Telecommunications Act, 2006. Viewed at: http://www.sierra-leone.org/Laws/2006-9s.pdf [14.09.16].

WT/TPR/S/303/Rev.1 • Sierra Leone

- 66 -

1.312.  Licensed operators may enter freely into agreements related to interconnections and value-added services. Approval by NATCOM is not required for interconnection agreements, except those involving a foreign public telecommunications operator. All operators must submit their tariffs to the NATCOM for approval before they enter into force.

1.313.  The Act established a Universal Access Development Fund (UADF), to be used to improve access to telecommunication services by communities deemed as least advantaged. Operators are required to contribute at least 1% of their gross annual revenue to the Fund. Airtel and Africell, the two major operators in the mobile subsector, provide the bulk of the UADF resources. Each of these operators contributes a lump sum of US$150,000 annually into the Fund. The UADF is managed by a unit of the regulatory body. The unit prepares projects and invites licensed operators and service providers to bid to implement them.

1.314.  The Commission is also in charge of managing the radio frequency spectrum. It may use competitive bidding procedures in allocating radio frequency spectrum.

1.315.  The international gateway was liberalized in 2015. In March 2016, the National Telecommunications Commission launched an international competitive bidding procedure to recruit a provider for the monitoring of the international gateway system.

1.316.  The Telecommunications Act is currently under revision. The revised Act will provide for the revocation of the monopoly rights granted to Sierratel, the establishment of a new unit to manage the Universal Access Development Fund, and the opportunity for the public to submit projects for funding.

4.5.3.2  Internet access

1.317.  At the end of 2013, there were 6 licensed public Internet service providers, and 34 licensed public VSAT operators. In 2013, Sierra Leone launched its connection to the African Coast to Europe (ACE) cable, a project aiming at providing African countries with affordable access to the international broadband network, through the construction of a 17,000 km submarine fibre optic cable from France to South Africa. Sierra Leone is involved in the consortium, through the Sierra Leone Cable Company, a state-owned company. The Government intends to disinvest up to 51% of its share in the company.

4.5.3.3  Postal services

1.318.  The state-owned Sierra Leone Postal Services Limited (SALPOST) is responsible for providing universal service. It has exclusive rights to provision of domestic courier services for packages weighting up to 2 kg; printing and issuance of postage stamps; and installation of boxes and mail bags for collection and the delivery of mail. International providers include DHL, TNT, Red Coad, and UPS.

1.319.  In 2012, the authorities established the Postal Services Regulatory Agency, to license and regulate the operation of postal services.48 The Act established a board in charge of governance of the Agency; the board may appoint an executive-director for day-to-day management. The operation of any postal service is subject to a licence issued by the Executive-Director. Only nationals and registered corporate bodies are eligible to apply for a licence.

4.5.4  Transport services

4.5.4.1  Air transport

1.320.  Sierra Leone's air transportation infrastructure comprises the Lungi International Airport, and ten regional airports. A site for the construction of another international airport has been identified, and discussions are under way for a loan agreement. At the Lungi International Airport, the Sierra Leone Airport Authority is responsible for providing fire services, air navigation services, and management of the terminal. Aviation security is the responsibility of the Westminster Aviation Security Services Ltd. Ground-handling is managed by Sky Handling partners.

48 Postal Services Regulatory Agency Act, 2012. Viewed at: http://www.sierralii.org/files/2012-05.pdf [10.09.16].

WT/TPR/S/303/Rev.1 • Sierra Leone

- 67 -

1.321.  Between 2008 and 2013, the number of passengers carried increased threefold to 225,402 (Chart 4.3), reflecting the dynamism in the mining and oil sectors. Airlines currently flying to Sierra Leone include Air France, Air Ivoire, Brussels Airlines, Kenya Airlines, and Royal Air Maroc.

Chart 4.8 Selected indicators in air transportation, 2005-13

0

2

4

6

8

10

12

0

50

100

150

200

250

2005 2006 2007 2008 2009 2010 2011 2012 2013

Passengers carried Freight (right-scale)

Chart 4.4Selected indicators in air transportation, 2005-13

Secretariat calculations, based on data provided by the authorities.

'000 passengers

Source:

Million ton-km

Source: Secretariat calculations, based on data provided by the authorities.

1.322.  The authorities indicated that consultations are under way for the establishment of a sub-regional airline company among Mano River Union States.

1.323.  The Sierra Leone Civil Aviation Authority (SLCAA), established in 2008, became operational in 2010.49 It has the mandate to oversee air transport and related cargo services, and ensure compliance with related international agreements and obligations. Businesses interested in engaging in commercial air transport services (including foreign air operators) require a licence from the SLCAA. The SLCAA is funded through Government subventions.

1.324.  Sierra Leone is a signatory to the Yamoussoukro Declaration concerning the liberalization of intra-African air transport markets. The Declaration and the subsequent Yamoussoukro Decision eliminates, in principle, all non-physical barriers and restrictions related to the granting of traffic rights, especially up to fifth freedom rights. Sierra Leone is also a party to the Banjul Accord Group Agreement, together with Cape Verde, Ghana, and the Gambia.

1.325.  To date, Sierra Leone has concluded 22 air services agreements involving 42 countries.50

4.5.4.2  Land transport

1.326.  Sierra Leone's road network comprises about 11,311 km of roads, classified as primary, secondary or feeder. The paved network represents 8% of the overall network, with less than 10% built since the previous TPR. Efforts over the last decade aimed at rehabilitating the core road network.

1.327.  Under the Road Transport Authority Act of 1996, the Sierra Leone Roads Authority (SLRA) is in charge of the regulation and development of the road transport industry. The Road Maintenance Fund Administration Act of 2010 established a road maintenance fund, to be used to defray the cost of maintaining the core road network. The Fund receives mainly the road-user fee levied on fuel at the rate of US$0.16 per litre, vehicle licence and registration fees, and other licence fees

49 The Civil Aviation Act, 2008 (repealing the Civil Aviation Act of 1966).50 These are (year of signature/last review in parenthesis): Belgium (1973), Benin (1987), Brazil (2012),

Cameroon (1978), Canada (2011), Côte d'Ivoire (not available), Cuba (1976), Czech Republic (1969), France (1990), Gambia (1990), Germany (1970), Ghana (1970), Guinea (1989), Hashemite Kingdom of Jordan (1983), Hungary (1975), Iceland (2013), Italy (1970), Jamaica (2013), Kenya (not available), Kuwait (2012), Lebanon (1968), Liberia (1973), Luxembourg (not available), Mali (1974), Morocco (2008), Netherlands (1983), Nigeria (1973), Norway (2013), Pakistan (1978), Qatar (2013), Republic of the Congo (1995), Romania (1980), Russian Federation (1980), Senegal (1997), Singapore (2013), South Africa (2006), Spain (1983), Sudan (2012), Turkey (2011), United Arab Emirates (1978), United Kingdom (2012), and United States (2012).

WT/TPR/S/303/Rev.1 • Sierra Leone

- 68 -

collected under the Road Traffic Act 2007. The Fund is administered by the Sierra Leone Road Maintenance Fund Administration.

1.328.  At the regional level, Sierra Leone is involved in the ECOWAS Trans–West Africa Coastal Highway, a 4,560 km highway that is expected to link 12 member countries. According to the authorities, about 80% of the Sierra Leonean segment has been completed.

1.329.  Sierra Leone has an 84 km railway, used mainly for transporting iron ore to the port of Pepel. In 2009, the Parliament ratified a decision to lease the railway and port infrastructure to African Minerals, a mining company. The agreement grants exclusive lease rights to the company, but provides for the infrastructure to remain available to other users, at commercial rates.

1.330.  Cabotage is not permitted in Sierra Leone. However, it is commonly practiced in areas along the borders.

4.5.4.3  Maritime transport

1.331.  There are five main ports in Sierra Leone: Bonthe, Pepel, Freetown, the Kissy Oil Terminal, and the port of Sherbro Island. The port of Freetown, with six berths and four warehouses, is the primary port; Sherbro is used mainly for exports of bauxite and rutile, and Pepel is currently under a leasing contract and used primarily for exports of iron ore.51

1.332.  The Sierra Leone Maritime Administration Act of 2000 discharged the Sierra Leone Ports Authority (SLPA) from its regulatory functions, and transferred them to the newly established Sierra Leone Maritime Administration (SLMA).52 The SLMA is in charge of the registration of ships and other vessels53, the licensing and safety of maritime personnel, and the regulation of maritime, coastal, and inland waterway transportation.54 It is funded mainly by the proceeds of a charge levied on all cargo loaded or discharged in the country. The levy applies to imports and exports at the rate of US$2 and US$1.2 per tonne of shipment, respectively. Operators are subject to a registration fee and a tonnage tax, both varying between Le 2 million and Le 20 million depending on the tonnage. In 2016, there were 11 registered shipping agencies (compared to 13 in 2015).

1.333.  In 2010, the National Commission for Privatization launched a reform with the objective of increasing the efficiency and the productivity of ports. As part of this process, several companies are active at the Port of Freetown: Bolloré Freetown Terminal Limited operating the container terminal; Africa Link operating the scanners; Nectar Sierra Leone Bulk Terminal operating the break bulk section; and Holland Shipyard Sierra Leone Ltd operating the slipway.

1.334.  In 2015, Sierra Leone implemented an advance cargo declaration scheme under which all cargoes are required to obtain a Movement Reference Number (MRN) from SLPA prior to shipment. This requirement is being implemented to comply with the International Ship and Port Facility Security Code (ISPS Code). A private company (Associated Transport and Port Management System) has been designated to issue the MRN.

1.335.  The Sierra Leone National Carrier (SLNC) was established in 2012 as the sole national carrier.55 It is a joint venture between the Government (51% of the shareholding), and Four Handy Limited, a UK-based company (49%). Every shipper engaged in seaborne transportation in Sierra Leone is required to register with the SLNC. The SLNC has the right to carry out, at its discretion, the seaborne transportation of at least 40% of the total volume of cargo exported or imported into Sierra Leone, and to participate with an interest of up to 40% in the provision, operation and ownership of any floating production, storage off-loading unit (FPSO) or floating storage off-loading unit (FSO). It may enforce this provision by requesting the 40% shareholding or the payment of a commission.

51 In 2012, the authorities granted two mining companies (African Minerals and London Mining), the exclusive right to rehabilitate and increase the throughput capacity of the port of Pepel.

52 Sierra Leone Maritime Administration Act, 2000.53 In accordance with the Registration of Shipping Act of 1965.54 The SLMA is also responsible for the administration of the Carriage of Deck Passengers Act of 1961.55 Sierra Leone National Carrier Act, 2012.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 69 -

4.5.5  Tourism

1.336.  Sierra Leone's tourism assets include its beaches, tropical environment and scenery, the diversity of its wildlife, and its cultural heritage. Development of the industry has suffered from the decade-long political instability in the country. From 2006, the sector's contribution to GDP hovered around 7% until 2012, when it dropped to 5.9% because of the expansion in the mining sector. The number of arrivals by air nearly doubled between 2007 and 2012, to 59,730 visitors (Table 4.13). Nearly half of the visitors travelled for business purposes (Chart 4.4), most were from Europe and Africa. As part of its strategy to promote the concept of "root tourism", the authorities are undertaking efforts to restore some historic sites such as the Bunce Island Facilities. The outbreak of the ebola virus disease severely impacted the tourism sector, as international airlines suspended their flights and most tourism facilities were forced to close down.

Table 4.25 Tourism basic indicators, 2006 and 2009-12  2006 2009 2010 2011 2012Arrivals 33,704 36,775 38,615 52,442 59,730Number of hotels 22 27 33 37 22Number of employees 2,620 2,940 3,650 4,687 2,620Contribution to GDP (%) 7.5 6.9 7.0 7.2 5.9

Source: Information provided by the National Tourism Board.

Chart 4.9 Visitor arrivals by air, by purpose and origin, 2012(% of total arrivals)

Business49.6%

Family visit23.6%

Holidays15.8%

Other10.9%

Africa31.3%

Europe26.2%

America17.7%

Asia17.6%

Other7.2%

National Tourism Board of Sierra Leone. Online information, viewed at: http:/ /www.ntb.sl/site-page/tourism-statistics (14 April 2014).

Source:

Chart 4.5Visitor arrivals by air, by purpose and origin, 2012

By purpose of visit By origin(% of total arrivals)

Source: Information provided by the National Tourism Board of Sierra Leone.

1.337.  The Ministry of Tourism and Cultural Affairs (MoTCA) is responsible for policy formulation for tourism and culture. Its objectives are to promote sustainable tourism as a means of economic growth and socio-cultural integration, and to promote the country as a friendly tourist destination. These objectives are pursued through the development of an appropriate regulatory and policy framework, promotion of the hospitality industry, and encouragement of investments in the sector. The National Tourism Board (NTB) is in charge of the promotion and development of tourism.56 It is responsible for studying the impact of tourism policies, and for registering, licensing, and classifying tourist facilities. It is also in charge of monitoring all tourist establishments, and ensuring compliance with ECOWAS Standards of Classification of Tourist Establishments.

1.338.  In the 2009 National Investment Policy, the Government adopted a set of incentives for development of the tourism industry that includes: a reduced-rate of 15% for corporate tax during the first five years of a new investment (the standard rate is 30%); duty-free treatment for imports of materials, machinery, and equipment used in new construction, and for extension or renovation of existing tourism-related facilities (provided that such materials are not easily available locally); and a three-year exemption from the payroll tax for up to six non-national employees (provided that the skills are not available locally).

56 The Development of Tourism Act, 1990.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 70 -

4.5.6  Professional and business services

1.339.  In general, business and professional services operators may establish a commercial presence if they enter into a partnership or joint venture with Sierra Leoneans. Individuals and companies wishing to engage in a regulated profession are generally required to obtain authorization or accreditation from the relevant professional association.

1.340.  The Legal Practitioners Act of 2000 and its various amendments regulate the practice of law in Sierra Leone. Legal practitioners are required to be admitted as such by the General Legal Council. Criteria for admission include a relevant university degree, passing a professional examination, and serving a pupillage period of one year with an established legal practitioner (with at least 10 years of presence in the country). A Code of Conduct for the profession was adopted in 2011.57

1.341.  The accountancy profession is regulated under the Institute of Chartered Accountants Sierra Leone Act of 1998. The legislation establishes the Institute of Chartered Accountants Sierra Leone (ICASL) as the body in charge of educating and training professional accountants; establishing standards and disciplines for the profession; and promoting the collective interest of its members. Under the legislation, only firms and individuals licensed by the ICASL are authorized to conduct audits of private entities.58 Eligibility criteria for membership include: a professional degree, three years of experience and passing qualifying examinations. The ICASL legislation is under review.

1.342.  Other regulated professions include: engineers, notaries, pharmacists and physicians, and architects (Table 4.14).

Table 4.26 Other regulated professional servicesProfession Law and/or professional association RequirementsEngineers Sierra Leone Institution of Engineers ..Notaries Notaries Public Act, Cap 13 ..Physician anddental surgeons

Medical Practitioners and Dental Surgeons Act, 1994 (amended in 2008) Medical and Dental Council of Sierra Leone

..

Pharmacists Pharmacy and Drugs Act, 2001Pharmaceutical Society of Sierra Leone (all registered pharmacists)

Applications for review by the Pharmacy Board which maintains a register of pharmacists

Architects Architects Act, 1986Architects Registration Council

Residence in Sierra Leone, passing qualifying examinations, and practical trainingTemporary registration is available to non-residents

.. Not available.Source: WTO Secretariat based on information provided by the authorities.

57 Legal Practitioners (Code of Conduct) Rules, 2010.58 The public sector is regulated under the Audit Service of Sierra Leone Act.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 71 -

5  APPENDIX TABLES

Table A1.1 Merchandise exports by product group, 2005 and 2010-15  2005 2010 2011 2012 2013 2014 2015Total (US$ million) 159.0 341.2 349.2 1003.8 1527.4 1256.1 536.2

(% of total)Mineral exports 89.6 58.8 68.8 71.9 91.7 87.1 70.2 Diamonds 89.4 33.3 37.2 16.1 12.2 16.5 28.8 Bauxite 0.0 9.1 11.2 1.7 0.9 3.1 8.0 Rutile 0.0 11.9 9.9 17.1 8.5 7.7 17.2 Gold 0.2 2.7 2.1 0.6 0.2 0.1 0.7 Ilmenite 0.0 0.8 1.3 0.4 0.2 0.5 0.8 Iron ore 0.0 0.0 4.3 35.6 69.7 59.1 14.4 Zircon 0.0 1.0 3.0 0.5 0.0 0.1 0.2 Other mineralsa 0.0 0.0 0.0 0.0 0.0 0.0 0.0Agriculture 3.9 11.4 13.4 4.4 1.3 2.4 4.6 Coffee 0.5 0.5 0.6 0.4 0.2 0.2 0.3 Cocoa 3.3 10.9 12.6 2.2 0.6 2.0 3.6 Piassava 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Fish and Shrimps 0.0 0.0 0.2 1.7 0.5 0.1 0.8 Tobacco 0.0 0.0 0.0 0.0 0.0 0.0 0.0Other domestic exports 2.0 22.9 8.3 19.7 5.3 5.6 20.7Re-exports 4.5 6.9 9.5 4.0 1.6 4.9 4.6

a Comprises ores and concentrates of tin, zinc, molybdenum, and silver.

Source: Statistics Sierra Leone.

Table A1.2 Merchandise imports by SITC section, 2005 and 2010-15  2005 2010 2011 2012 2013 2014 2015Total (US$ million) 341 770 1,717 1,604 1,780 1,568 1,530

(% of total)Food 15.6 13.6 14.3 19.1 20.1 21.5 34.5Beverages and tobacco 2.9 2.5 1.9 1.8 1.8 2.1 2.8Crude materials 2.6 1.7 1.1 2.1 1.7 2.4 2.7Mineral fuels and lubricants 33.9 22.3 16.1 21.6 23.4 31.2 18.2Animal and vegetable oils 0.4 1.2 0.6 0.6 0.8 0.6 0.6Chemicals 6.7 5.7 3.9 6.7 7.3 5.6 3.4Machinery and transport equipment 21.1 32.3 44.1 30.3 22.5 21.1 21.9Manufactured goods classified by materials

11.9 14.4 10.2 10.6 8.2 7.4 7.9

Miscellaneous manufactured articles 5.0 2.4 1.8 1.9 1.6 2.0 2.5Miscellaneous transactions and commodities

0.0 3.9 6.0 5.4 12.6 6.1 5.6

Source: Statistics Sierra Leone.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 72 -

Table A1.3 Merchandise exports by destination, 2005 and 2010-14  2005 2010 2011 2012 2013 2014Total (US$ million) 159 341 349 1,004 1,527 1,256

(% of total)EU-27 87.4 36.3 40.7 26.1 24.2 48.4United States 2.4 28.1 26.7 19.6 0.4 5.5Japan 0.0 3.4 1.1 0.6 0.0 0.0Switzerland 0.0 11.1 9.2 8.0 6.8 9.7ECOWAS 3.8 13.5 2.9 1.6 5.1 3.1Other 6.4 7.6 19.5 44.1 63.5 33.3

Source: Statistics Sierra Leone.

WT/TPR/S/303/Rev.1 • Sierra Leone

- 73 -

Table A3.1 MFN tariff averages by HS 2-digit level, 2016

HS Description No. of lines

Average (%)

Range

(%)

Final bound

average (%)

Total 5,467 12.0 0-30 47.601 Live animals 22 15.9 5-20 40.002 Meat and edible meat offal 59 20.0 20 40.003 Fish and crustaceans, molluscs and other aquatic invertebrates 106 16.3 10-20 50.0

04 Dairy produce; birds' eggs; natural honey; edible products of animal origin, not elsewhere specified or included 38 18.8 5-20 40.0

05 Products of animal origin, not elsewhere specified or included 17 11.2 5-20 40.0

06 Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage 16 15.3 5-20 40.0

07 Edible vegetables and certain roots and tubers 59 19.6 5-20 40.008 Edible fruit and nuts; peel of citrus fruit or melons 63 19.3 5-20 40.009 Coffee, tea, maté, and spices 31 19.0 5-20 40.010 Cereals 19 8.2 5-20 40.0

11 Products of the milling industry; malt; starches; inulin; wheat gluten 30 14.8 5-20 40.0

12 Oil seeds and oleaginous fruits; misc. grains, seeds and fruit; industrial or medicinal plants; straw and fodder 49 9.3 5-20 40.0

13 Lac; gums, resins and other vegetable saps and extracts 10 6.0 5-15 40.0

14 Vegetable plaiting materials; vegetable products not elsewhere specified or included 5 11.0 5-20 38.0

15 Animal or vegetable fats, and oils and their cleavage products; prepared edible fats; animal or vegetable waxes 57 12.1 5-20 40.5

16 Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates 28 19.8 15-20 45.4

17 Sugars and sugar confectionery 23 14.3 5-20 40.018 Cocoa and cocoa preparations 18 13.9 5-20 39.4

19 Preparations of cereals, flour, starch or milk; pastry cooks' products 23 17.4 5-20 38.5

20 Preparations of vegetables, fruit, nuts, or other parts of plants 58 19.7 10-20 39.321 Miscellaneous edible preparations 26 16.7 5-20 39.022 Beverages, spirits, and vinegar 49 21.9 5-30 52.2

23 Residues and waste from the food industries; prepared animal fodder 24 5.0 5 40.4

24 Tobacco and manufactured tobacco substitutes 16 17.8 5-20 40.0

25 Salt; sulphur; earths and stone; plastering materials, lime and cement 72 6.3 5-20 50.0

26 Ores, slag, and ash 37 5.0 5 50.0

27 Mineral fuels, mineral oils, and products of their distillation; bituminous substances; mineral waxes 57 8.7 5-20 50.0

28Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes

165 5.0 5 50.0

29 Organic chemicals 338 5.0 5 49.930 Pharmaceutical products 38 5.1 0-20 31.331 Fertilizers 23 5.0 5 30.0

32Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks

59 9.2 5-20 50.0

33 Essential oils and resinoids; perfumery, cosmetic or toilet preparations 35 15.3 5-20 47.6

34

Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, dental waxes and dental preparations with a basis

28 15.9 5-20 50.0

35 Albuminoidal substances; modified starches; glues; enzymes 16 5.0 5 43.1

36 Explosives; pyrotechnic products; matches; pyrophoric alloys; certain combustible preparations 10 15.5 5-20 50.0

WT/TPR/S/303/Rev.1 • Sierra Leone

- 74 -

HS Description No. of lines

Average (%)

Range

(%)

Final bound

average (%)

37 Photographic or cinematographic goods 35 19.1 5-20 50.038 Miscellaneous chemical products 81 14.0 5-20 47.339 Plastics and articles thereof 140 8.3 5-20 50.040 Rubber and articles thereof 94 13.9 0-20 50.041 Raw hides and skins (other than furskins) and leather 37 16.4 5-20 48.642 Articles of animal gut (other than silk-worm gut) 24 17.9 10-20 50.043 Furskins and artificial fur; manufactures thereof 12 18.3 10-20 45.844 Wood and articles of wood; wood charcoal 77 15.5 5-20 50.045 Cork and articles of cork 11 5.0 5 50.0

46 Manufactures of straw, of esparto or of other plaiting materials; basket ware and wickerwork 12 20.0 20 50.0

47 Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper and paperboard 21 5.0 5 50.0

48 Paper and paperboard; articles of paper pulp, of paper or of paperboard 107 9.1 5-20 50.0

49 Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans 22 9.5 0-20 43.6

50 Silk 12 11.3 5-20 47.5

51 Wool, fine or coarse animal hair; horsehair yarn and woven fabric 48 10.3 5-20 47.7

52 Cotton 145 13.1 5-20 49.2

53 Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn 23 8.0 5-10 47.4

54 Man-made filaments 77 10.9 5-20 50.055 Man-made staple fibres 117 10.7 5-20 50.0

56 Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof 35 16.3 5-20 50.0

57 Carpets and other textile floor coverings 21 20.0 20 50.0

58 Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery 45 19.7 5-20 50.0

59 Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use 24 16.3 10-20 50.0

60 Knitted or crocheted fabrics 43 20.0 20 50.0

61 Articles of apparel and clothing accessories, knitted or crocheted 106 20.0 20 50.0

62 Articles of apparel and clothing accessories, not knitted or crocheted 113 20.0 20 50.0

63 Other made up textile articles; sets; worn clothing and worn textile articles; rags 53 18.0 5-20 50.0

64 Footwear, gaiters and the like; parts of such articles 27 18.1 15-20 50.065 Headgear and parts thereof 10 20.0 20 50.0

66 Umbrellas, sun umbrellas, walking-sticks, seat-sticks, whips, riding-crops and parts thereof 6 20.0 20 50.0

67 Prepared feathers and down and articles made of feathers or of down; artificial flowers; articles of human hair 8 20.0 20 50.0

68 Articles of stone, plaster, cement, asbestos, mica or similar materials 51 18.8 10-20 50.0

69 Ceramic products 30 18.0 5-20 50.070 Glass and glassware 70 18.6 5-20 50.0

71Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin

53 12.4 5-20 50.0

72 Iron and steel 167 5.6 5-10 50.073 Articles of iron or steel 131 16.6 5-20 49.774 Copper and articles thereof 53 7.6 5-20 50.075 Nickel and articles thereof 17 6.8 5-20 50.076 Aluminium and articles thereof 41 9.4 5-20 50.078 Lead and articles thereof 8 6.9 5-20 50.079 Zinc and articles thereof 9 6.7 5-20 50.0

WT/TPR/S/303/Rev.1 • Sierra Leone

- 75 -

HS Description No. of lines

Average (%)

Range

(%)

Final bound

average (%)

80 Tin and articles thereof 5 5.0 5 50.081 Other base metals; cermets; articles thereof 48 5.0 5 50.0

82 Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal 66 9.7 5-20 35.0

83 Miscellaneous articles of base metal 36 17.1 5-20 50.0

84 Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof 510 6.3 0-20 43.3

85Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles

265 14.4 5-20 47.9

86Railway or tramway locomotives, rolling-stock and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signalling equipment of all kinds

23 5.0 5 50.0

87 Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof 157 10.8 5-30 55.7

88 Aircraft, spacecraft, and parts thereof 15 5.0 5 47.389 Ships, boats and floating structures 21 8.1 5-20 50.0

90Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof

153 8.1 0-30 48.0

91 Clocks and watches and parts thereof 51 19.6 10-20 50.092 Musical instruments; parts and accessories of such articles 17 13.5 10-20 50.093 Arms and ammunition; parts and accessories thereof 20 19.5 10-20 50.0

94Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated name-plates

48 17.2 5-20 50.0

95 Toys, games and sports requisites; parts and accessories thereof 31 18.1 5-20 50.0

96 Miscellaneous manufactured articles 48 18.5 10-20 49.897 Works of art, collectors' pieces and antiques 13 13.1 5-20 50.0

Note: Calculations of averages are based on national tariff line level (HS 8-digit).

Source: WTO Secretariat estimates, based on data provided by the authorities, and WTO CTS database.

__________