Development Economics in Sierra Leone Grade 12 economics Case Study

1. Overview

Sierra Leone, officially the Republic of Sierra Leone, is a country in West Africa. It became an independent nation on April 27, 1961. It is considered to be one of the least economically developed countries, with an HDI value of 0.273. Political and medical turmoil has only exacerbated its economic situation. From 1991 to 2002, the Sierra Leone civil war was fought and devastated the country leaving more than 50,000 dead. Much of the country's infrastructure was destroyed and it left over two million people displaced as refugees in neighbouring countries. The more recent Ebola outbreak overburdened the weak healthcare infrastructure, leading to more deaths from medical neglect than Ebola itself. As for natural resources, Sierra Leone possesses substantial mineral, agricultural, and fishery resources. In recent years, growth has been driven by mining – the country's principal exports are iron ore, diamonds, and rutile. It makes for an interesting case study in economic development.

2. Comparing levels of Economic Development

Comparing Sierra Leone to a western, economically developed country provides insight into its economic state.

The graph above compares Canada and Sierra Leone using life expectancy and GDP/capita statistics. Whereas we can see a steady increase of both GDP/capita and life expectancy for Canada, Sierra Leone has quite an erratic trajectory, though still maintaining a general upwards progression in life expectancy. Note that it is still below 60 years, and that the period of the civil war impacted the more recent set of statistics. Sierra Leone has experienced little increase in GDP/capita, highlighting the nation's low wealth and low quality of life for its citizens.
The graph above compares Canada and Sierra Leone using education statistics of women aged 15-44 with GDP/capita statistics. Even to this day, parts of the world continue to struggle in empowering their women with gender equality remaining a distant reality. Even in the wake of the 21st century, women in Sierra Leone spend an average of only two years in school as compared to the 14 years of women in Canada. Education allows for better skills and qualification for jobs of higher tier, implying one of the reasons as to the drastic differences we can see between the GDP/capita of these two countries. The empowerment of women also proves massively beneficial, with Bangladesh serving as an excellent example.

3. Domestic Factors and Economic Development

  1. Education: Education has become legally required for all children for six years at primary level and three years at junior-secondary level. A shortage of schools and teachers have made this impossible to implement however – this is another effect of the civil war as it resulted in the destruction of infrastructure including many schools. Taking steps to reinvigorate education, teacher training colleges have been set up around the country. The rebuilding of infrastructure and education of teachers is a long-term process.
  2. Government and Corruption: As most institutions were destroyed by the civil war, it would have been ideal for government revenue, much made from the country's production of diamonds at the time, to fund the rebuilding of important infrastructure. Instead, diamonds financed corruption and personal aggrandisement at the expense of these necessary public services, institutions, and infrastructure.
Sierra Leone remains vulnerable and suspect to corrupt practice. A report from Transparency International awarded a low score of 30 to the country in 2016, where 100 = no corruption.

3. Human Capital: Currently, the labour force is measured to be around 2.678 million where 61.1% are working in agriculture, 33.4% in services. There is high youth and ex-combatant unemployment, highlighting a lack of demand for labour with the limited number of active industries

4. International Trade and Economic Development

As of 2014, Sierra Leone is in a state of current account deficit. The value of imports exceeded the value of exports at 2.36B to 2.14B, resulting in a negative trade balance of $218M.

Exports of Sierra Leone, amounting to a total value of $2.14B. The information above is taken from 2014, clearly displaying the continued reliance of the country on its production and export of primary commodities.
Imports of Sierra Leone amounting to a total value of $2.36B.

Sierra Leone's specialisation in subsistence agriculture deserves worry. If the prices of iron ore, diamonds, and other commodities were to suddenly fluctuate, it could have a catastrophic effect on the economy. An over specialisation and over reliance on certain goods and services can harm an economy, but the abundance of these natural resources in the country discourages the economy from diversifying.

Foreign Direct Investment

Pervasive corruption and undeveloped human capital continue to discourage foreign investors. This blocks out Foreign Direct Investment as a possible source of economic development.

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