WTO finalizes the third trade policy review of Sierra Leone

The World Trade Organization (WTO) Secretariat completed the third Trade Policy Review of Sierra Leone, the third since the country acceded to the Organization. Trade Policy Reviews are an exercise, mandated in the WTO agreements, in which member countries' trade and related policies are examined and evaluated at regular intervals to verify their compliance with WTO rules. Significant developments that may have an impact on the global trading system are also monitored. The trade policy review of Sierra Leone depicts a situation of a country that is making strong efforts in implementation of reforms aimed at improving the business environment and facilitating trade. Customs transitioned from the IT system ASYCUDA++ to ASYCUDA World in January 2019, and a risk management system is in place to focus customs controls on high-risk consignments. However, a large proportion of shipments still undergo physical inspections, which undermines the intended efficiency of the risk management approach. In 2020, an Electronic Single Window was introduced to streamline procedures in import processes.

Sierra Leone is a natural resources-rich country, with significant deposits of various minerals, including diamonds, iron, gold, rutile, and bauxite, and has an untapped potential in agriculture, being endowed with wide fertile agricultural land. Nevertheless, the country is included in the UN list of least developed countries (LDCs) due to its low per capita income (around USD 800), high levels of poverty, weak human capital, and a narrow-based economy.

Sierra Leone's economic structure still has a colonial character, with exports mainly represented by low-value-added raw materials predominantly supplied to China, the European Union and India, while consumer goods (including food, electronics and transport equipment), dominate imports. Minimal is also the participation of Sierra Leone businesses in global value chains, while Intra-regional exports dropped from 5% in 2017 to under 1% in 2023, showing a particularly weak regional integration.

The National Trade Strategy, adopted in 2020, aims to drive economic growth and diversification through infrastructure development, support for women entrepreneurs, and enhanced competitiveness. It also seeks to reduce the current account deficit by promoting exports, with particular emphasis on leveraging preferential market access schemes with the European Union, China and (at least until they will exist...) the United States. Additionally, the strategy underscores the need for full implementation of the African Continental Free Trade Area (AfCFTA), which Sierra Leone ratified on 30 April 2019. The trade policy review also reveals that the country plans to participate soon to the AfCFTA Guided Trade Initiative (GTI), launched in June 2022.

In terms of participation to Regional Economic Communities (RECs), Sierra Leone is a member of ECOWASand CEN-SAD. ECOWAS is a customs union with a Common External Tariff (CET) consisting of five bands (all ad valorem): 0%, 5%, 10%, 20%, and 35%. Plans are ongoing for the creation of a common market byharmonizing policies among member States, in view of achieving a monetary union in future. To this end, ECOWAS has established several protocols to facilitate the free movement of goods, services, capital, and persons and the right of establishment which are fully implemented. Nevertheless, Sierra Leone's official tradewithin the bloc remains surprisingly  low, below 0.5% of the total. Also, no progress has been achieved with respect to the agreement establishing the ECO, a single currency that Sierra Leone plans to adopt togetherwith 5 of the 16 ECOWAS members (the Gambia, Ghana, Guinea, Liberia, and Nigeria), and whose launch has been delayed many times.

Sierra Leone also accessed to the Community of Sahel-Saharan States (CEN-SAD) in 2008, that comprises 25 member States aiming to achieve an economic union through policy harmonization, the removal of tariff barriers, and the development of infrastructure. Lastly, it is a member of the Mano River Union (MRU) an intergovernmental organization established in 1973 that aims at fostering peace, unity, and prosperity among its member states. The MRU consists of Côte d'Ivoire, Guinea, Liberia, and Sierra Leone, all of which are also members of ECOWAS.