Economy
GDP (2002 est.): $836 million.
GDP growth rate: 6.6%.
GDP per capita income: $171.
Avg, annual inflation rate:-3.2%.
Natural resources: Diamonds, rutile, bauxite, gold, platinum and chromite.
Agriculture: Products--coffee, cocoa, ginger, palm kernels, cassava, bananas, citrus, peanuts, plantains, rice, sweet potatoes, vegetables. Land--30% potentially arable, 8% cultivated.
Industry: Types--diamonds, bauxite, and rutile mining; forestry; beverages; cigarettes; construction goods; tourism.
Trade (2002 est.): Exports--$72.5 million: rutile, diamonds, bauxite, coffee, cocoa, fishes. Major markets--U.S., Belgium, Spain, U.K. and other west European nations. Imports--$190 million: foodstuffs, machinery and equipment, fuel and lubricants, chemicals, pharmaceuticals, building materials, light consumer goods, used clothing, textiles.

Economy of Sierra Leone
Rich in minerals, Sierra Leone has relied on the mining sector in general, and diamonds in particular, for its economic base. In the 1970s and early 1980s, economic growth rate slowed because of a decline in the mining sector and increasing corruption among government officials. By the 1990’s economic activity was declining and economic infrastructure had become seriously degraded. Over the next decade much of Sierra Leone’s formal economy was destroyed in the country’s civil war. Since the cessation of hostilities in January 2002, massive infusions of outside assistance have helped Sierra Leone begin to recover. Full recovery to pre-war economic levels will require hundreds of millions of additional dollars and many more years of serious effort by the GOSL and donor governments. Much of Sierra Leone’s recovery will depend on the success of GOSL efforts to limit official corruption, which many feel was the chief culprit for the country’s descent into civil war. A key indicator of success will be the effectiveness of government management of its diamond sector.

About two-thirds of the population engages in subsistence agriculture. Despite the fact that most Sierra Leoneans derive their livelihood from it, agriculture accounts for only 42% of national income. The government is trying to increase food and cash crop production and upgrade small farmer skills. Also, the government works with several foreign donors to operate integrated rural development and agricultural projects.

Mineral exports remain Sierra Leone's principal foreign exchange earner. Sierra Leone is a major producer of gem-quality diamonds. Though rich in this resource, the country has historically struggled to manage its exploitation and export. Annual production estimates range between $250-300 million. However, only a portion of that passes through formal export channels (1999: $1.2 million; 2000: $7 million; 2001: $26 million; 2002: $42 million; 2003: projections $60 million). The balance is smuggled out, where it is used for money laundering and the financing of other illicit activities. Recent efforts on the part of the country to improve the management of the export trade have met with some success. In October 2000, a new UN-approved export certification system for exporting diamonds from Sierra Leone was put into place that led to a dramatic increase in legal exports. In 2001, the Government of Sierra Leone created a mining community development fund, which returns a portion of diamond export taxes to diamond mining communities. The fund was created to raise local communities' stake in the legal diamond trade.

Sierra Leone has one of the world's largest deposits of rutile, a titanium ore used as paint pigment and welding rod coatings. Sierra Rutile Limited, owned by a consortium of US and European investors, began commercial mining operations near Bonthe in early 1979. Sierra Rutile was then the largest nonpetroleum U.S. investment in West Africa. The export of 88,000 tons realized $75 million for the country in 1990. The company and the Government of Sierra Leone concluded a new agreement on the terms of the company's concession in Sierra Leone in 1990. Rutile and bauxite mining operations were suspended when rebels invaded the mining sites in 1995. In 2003 OPIC agreed to a $25 million loan to Sierra Rutile to assist with the re-start of operations, now scheduled for early 2004.

Since independence, the Government of Sierra Leone has encouraged foreign investment, although the business climate has been hampered by a shortage of foreign exchange, corruption, and uncertainty resulting from civil conflicts. Investors are protected by an agreement that allows for arbitration under the 1965 World Bank Convention. Legislation provides for transfer of interest, dividends, and capital.

Sierra Leone is a member of the Economic Community of West African States (ECOWAS). With Liberia and Guinea, it formed the Mano River Union (MRU) customs union, primarily designed to implement development projects and promote regional economic integration. However, the MRU has so far been inactive because of domestic problems and internal and cross-border conflicts in all three countries. The future of the MRU depends on the ability of its members to deal with the fallout from these internal and regional problems.

Sierra Leone continues to rely on significant amounts of foreign assistance, principally from multilateral donors. The bilateral donors include the United States, Italy, and Germany, the largest being the United Kingdom and the European Union.
source: http://www.state.gov