Understanding Sierra Leone’s Economic and Climate Challenges: Insights from the World Bank

FREETOWN, June 16, 2025 – In a significant move towards sustainable development, the World Bank has unveiled two critical analytical reports: the Sierra Leone Country Economic Memorandum (CEM) and the Country Climate and Development Report (CCDR). These documents aim to dissect the complex economic and climate challenges that Sierra Leone faces, presenting strategic pathways for fostering growth and resilience within the nation.

The Economic Landscape: Key Insights from the CEM

The Country Economic Memorandum delves deep into Sierra Leone’s economic framework, revealing troubling trends—persistent poverty and lower GDP per capita growth when stacked against comparable low-income countries. Despite the nation’s rich natural resources, several key challenges impede economic progress:

• Macroeconomic Instability: The CEM points to lax fiscal and monetary policy as driving forces behind economic volatility. Fiscal deficits often exceed set targets due to spending overruns and inadequate oversight mechanisms.

• Weak Institutions and Governance: The report highlights how governance issues and uncompetitive private sector dynamics hinder development. High public debt further stifles private investment opportunities, limiting the nation’s economic diversification primarily to mining.

• Barriers for Domestic Enterprises: Local businesses grapple with obstacles such as limited access to credit, electric power shortages, and land acquisition challenges, compounded by a significant skills mismatch within the labor force.

To combat these pressing challenges, the CEM advocates for a multi-faceted growth strategy, emphasizing sectors such as mining, agriculture, agro-processing, and labor-intensive industries. Key recommendations include:

• Fiscal Consolidation and Debt Management: To stabilize the economy, the report calls for restoring macroeconomic stability through strategic fiscal measures.

• State Role Reevaluation: There’s a need to reassess the position of state-owned enterprises while investing in climate-resilient infrastructure.

• Empower the Private Sector: By improving access to vital infrastructure and financial resources and minimizing barriers to foreign investments, the private sector can thrive.

• Human Capital Development: Investment in education and skills development is crucial to align with market demands, fostering a more skilled workforce.

Smriti Seth, a lead author of both reports, emphasizes that the CEM serves as an essential tool to understand the economic hurdles Sierra Leone faces and the potential it holds for substantial growth.

Confronting Climate Change: Analysis from the CCDR

The Country Climate and Development Report takes a more nuanced look at Sierra Leone’s socio-economic conditions in the face of climate change. The findings are alarming, with Sierra Leone ranking among the 15 most affected economies by climate challenges. Economic implications of climate change threaten sectors vital to the country’s livelihood.

Projected increases in temperature and erratic rainfall patterns pose serious risks to agriculture and infrastructure. These environmental changes could lead to GDP losses of 9-10% by the year 2050, highlighting the urgency for immediate action. Key concerns include:

• Decreased Labor and Crop Productivity: With climate change, agricultural yields could decline, exacerbating food security issues.

• Increased Infrastructure Maintenance Costs: As rising temperatures and flooding intensify, capital stock damage could significantly raise maintenance expenses.

Through this lens, the CCDR highlights a pathway forward with three strategic recommendations for building climate resilience:

1. Green Energy Development: The report calls for investments in renewable energy and the development of sustainable cities, fostering infrastructure that can withstand climate impacts.

2. Climate-Smart Agriculture: To ensure food security and productivity, the promotion of climate-smart agricultural practices and supportive policies is vital.

3. Enhanced Social Resilience: Improving health infrastructure and expanding social protection systems can fortify the population against climate-related shocks.

Implementing these crucial climate actions requires substantial financial backing. The report argues that a combination of domestic tax revenue, green private sector investments, and international aid is essential to support these initiatives.

Sabrina Haque, another lead author of the CCDR, underscores how these reports work in tandem. By framing climate change as not just a threat, but also a lens to identify growth opportunities, the World Bank aims to guide Sierra Leone towards a sustainable and resilient future.

This comprehensive approach provides valuable insights into the intertwined dimensions of economic growth and climate action that Sierra Leone must navigate to secure its development aspirations. As the country moves forward, the strategies outlined in these reports offer a blueprint for purpose-driven progress.