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Resource policy and politics

Roadmap for better times: reforms for the Sierra Leone resource sector

participants of the benchmarking process in discussions

24.11.2016 |

The West African country Sierra Leone is facing a serious challenge: low raw material prices put considerable pressure on the economy and the national budget. In previous years the mining sector in Sierra Leone became the key factor of its economic growth. Between 2012 and 2014 the mining sector (especially iron ore, diamonds and heavy sands) contributed 22 percent to GDP, 72 percent to real GDP growth and accounted for 83 percent of exports. At the same time, 21 percent of government revenues came from the mining sector. These numbers dramatically fell since 2015. An important source of financing is in danger.

Raw material prices follow long cycles. Therefore the crisis will give way to the boom. Countries that position themselves well in the current situation will profit the most. In order to maximally exhaust the potential of rising commodity prices in the future, Sierra Leone started a comprehensive reform process of the national mining sector.

Within a sector benchmarking process the public and economic conditions were evaluated along international standards such as the African Mining Vision and the Natural Resource Charter. From 10 to 12 October 2016 the government of Sierra Leone, together with representatives from the private sector and civil society, developed a national reform plan for the mining sector based on this analysis. Kristian Lempa, head of the sector programme Extractives and Development at GIZ, was present during the workshop and shared his expertise on international standards of good resource governance.

The objective of the plan is to create a just balance between conducive investment conditions and appropriate contributions by the mining sector to the development of Sierra Leone. Good laws, stable institutions, and an interested and informed public – these are the success factors for the sustainable development of a resource dependent country.

The sectoral benchmarking process is supported by the regional GIZ programme Regional resource governance in fragile states of West Africa which also assists the Sierra Leone government in establishing the governmental framework locally. Currently, the approach of using sector benchmarking in the resource sector is developed as a standard tool for scaling-up in other resource dependent partner countries.

For further information please reach out to a member of the GIZ-team.

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