With Ebola waning, Sierra Leone seeks to rebuild its economy

As the World Health Organisation prepares to declare the country disease-free today, businesses are keen to revive international trade

Alex Lawson
Saturday 07 November 2015 02:27
More than 12,000 people have been infected with Ebola in Sierra Leone since the outbreak in May 2014, and 4,000 have died
More than 12,000 people have been infected with Ebola in Sierra Leone since the outbreak in May 2014, and 4,000 have died

The people of Sierra Leone will breathe an uneasy sign of relief today. The west African nation is expected to be officially be declared free from Ebola – which has killed 11,313 people in the region – by the World Health Organisation.

The declaration, applicable after 42 days without a new infection, is a significant moment for the country, but many will take heed of neighbouring Liberia which was dubbed similarly clean in May before the killer re-emerged. So far, 12,000 people have been infected in Sierra Leone, and 4,000 have died since the outbreak in May 2014.

For the country’s economy, the Ebola outbreak has punctured the momentum that had been gathering. Since the end of the civil war in 2002, key industries including cocoa exports and mining have driven growth to as high as 16.7 per cent in 2012.

But the World Bank estimates the cost of Ebola to the country has been around $150m (£99.5m), while the economy is expected to contract by 2 per cent this year compared to 2014’s 4 per cent growth.

“It tore the people apart and they were just starting to build post-war, the economy was growing fast and then, wham, Ebola hit,” Albert Tucker, who chairs the foundation of ethical drinks brand Karma Cola, tells The Independent. “Psychologically it was a big thing. The local belief was in herbal medicine and traditional, spiritual burials – suddenly foreign doctors were telling them to stay away from the bodies and abandon beliefs.

“It’s a celebration that this has finished but the toll on our people has been great. It has changed the entire mentality of the country.”

Mr Tucker’s business, like larger manufacturing firms in brewing, bottling and cement, had enjoyed strong growth pre-Ebola but sales and employment levels have declined since its onset. With trade links already unreliable – “unless you pay a bribe, your trailer won’t get through to the docks at Freetown,” says one manufacturer – exporters have suffered from an unease in doing business with Sierra Leone. “We felt we were once again a ‘pariah nation’. Even other African countries would not allow us to travel there,” says Ade Daramy, the chairman of Sierra Leone UK Diaspora Ebola Response Taskforce.

As images of beleaguered families were beamed worldwide, the nascent growth in the tourism sector was hammered with direct flights from the UK cut and visitor numbers down 30 per cent in 2014 on the previous year, which had a knock-on effect on the restaurant trade. However, some food businesses, such as cassava processors, have actually enjoyed a fillip as those with best practice in food hygiene were trusted, the Afford Business Centre reports.

Domestic businesses are keen to quickly revive international trade links. Today, key figures from the country’s trade bodies will meet in London to discuss how to improve the ease of doing business there and, this week, the Sensi Tech Hub opened in Freetown to encourage digital entrepreneurship.

British links to the country, which was declared independent from the empire in 1961, remain strong. “Doing business there can be quite British at times, the laws are often similar and you drink tea at meetings,” one UK investor says. International investors in mining are among the hardest hit from Sierra Leone’s slowdown. The collapse in worldwide commodities prices – notably iron ore – has dealt a blow to the sector, and wider economy, of even greater magnitude than Ebola. The plunge has hit numerous London-listed players. Sierra Rutile was trading at a high of 81p a share in 2012, and now languishes at 22p, while diamond miner Golden Saint Resources (debuted at 12p, now 0.04p) has struggled to access funding.

Moreover, the iron ore group African Minerals, led by the controversial Frank Timis, and London Mining – whose Marampa mine featured in the 2006 film Blood Diamond starring Leonardo DiCaprio – have both collapsed amid the commodities plunge, shutting mines in the east and north.

But one investor in the country which has stuck with it during the crisis is Stellar Diamonds. Stellar, which also operates in Ebola-hit Guinea and Liberia, has so far invested $28m into Sierra Leone and plans to spend a further $25m. Its chief executive Karl Smithson, who will this weekend try to gain approval for licences to mine in the eastern Kenema district, says it has been a difficult couple of years. “People thought we were mad to invest there but we thought long term. We know the geology isn’t going to change, despite the politics and Ebola.

“We had just finished our exploratory work when Ebola struck. But as expats you can’t just walk away, so we helped educate them on how to handle it. Bureaucracy goes hand in hand with emerging democracies but it is frustrating. We are asked to help build roads, hospitals and schools – and we have done – in order to work there but the authorities need to realise the biggest change we can make is beginning to mine, to create 500 jobs.”

The government’s response to the Ebola crisis has caused bad blood. One exporter says: “Government officials initially thought Ebola was just a rural problem so, despite the aid coming in they kept the funds to use it later. They were slow off the mark.”

In his report into the economic impact of Ebola, the political economist Peter Davis claimed measures taken to contain the disease were more economically damaging than the disease itself with businesses “economically paralysed” by funds allocated badly. He added that high levels of bad debt in the country’s banks, largely from agricultural accounts, have left prospects for commercial financing meagre. His recommendations included “intelligent reconstruction” of the economy with investment in urban over rural areas to reduce international dependency in the short-term and a step up in efforts to create a “transparent legal and governance framework”.

Today may represent a significant boost for Sierra Leoneans, but it’s clear the end of this national nightmare won’t necessarily lead into a dream.

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