Sierra Leone

Investment Opportunities

Sierra Leone is a country that is certainly moving in the right direction and is now ‘open for business’. It has a wealth of natural resources which have virtually been untouched. In fact just recently, large quantities of iron ore have been discovered and in 2010 crude oil was discovered just off the coast. Early reports are showing it to be a considerable find. The country also boasts incredibly fertile land, of which around 70% is currently un . Over 360 kms of unspoilt white sandy beaches and blue seas makes this an up and coming destination that tourists will want to visit. In fact it was voted in the top ten ‘must see’ destinations by Lonely Planet magazine.

Here are some of the investment opportunities as follows:

Mining
The mining opportunities in Sierra Leone are ample and it is one of the cheapest places to mine in the world. The mining sector is split into three sub categories and they are (1) The large scale production of non precious minerals such as Rutile and Bauxite (2) Large scale production of precious minerals such as Diamonds (3) The smaller scale production of precious minerals for artesanal purposes such as diamonds and to a lesser extent gold.

Diamonds
The diamond fields in Sierra Leone reach an area of around 7,700 square miles and are concentrated around the south eastern parts of the country. Areas such as Bo, Kono and Kenema are renowned for producing high grade quality diamonds with some of larger stones of considerably high value. Although the diamond market has reached a plateau, prices per carat continues to rise. Artesanal mining is prevalent in the Kono district and around 1700 licenses have been granted.

Gold
Gold was discovered here way back in 1926 and the Sula mountains, Kangari hills, and the Bo, Tonkolili and Koinadugu districts are known to contain gold. At the moment the only gold production in Sierra Leone comes from alluvial deposits. Although gold exports have been limited, there is still plenty of gold here to be found.

Bauxite
Bauxite is a feedstock in the production of aluminium and out of the 177 million tonnes mined in 2006, Sierra Leone’s quota made up just 1% of this total. However vast reserves of bauxite exist in the country and the demand for the substance will continue to expand due to the economic growth of countries such as China and India. The bauxite deposit at Port Loko is said to contain around 23 million tonnes and is of medium grade quality (around 48% alumina and 3.5% silica) and is situated within easy access (90kms) from the capital Freetown.

Rutile and Ilmenite
Rutile is a titanium ore that is of particularly high grade. It is then processed into titanium dioxide which can then be used for making paint, welding rods and paper. It is also used in the aircraft industry and is the metal of choice. Sierra Leone has the largest natural supplies of rutile anywhere in the world and accounts for around one third of the world production. There are four rutile/ilmenite deposits around the country and these are the Gbangbama, Sembehun, Kambia and Rotifunk deposits.

Iron Ore
Sierra Leone has vast deposits of iron ore and the recent deposits found in the Tonkolili district were the largest iron ore find in twenty years. The estimated tonnage of iron ore resources is around 15 billion tonnes.
Agriculture
Sierra Leone’s tropical climate boasts some of the best farmland in West Africa with rich fertile soil and plenty of lowland and highland areas. At present there are around 4.3 million hectares of land that have yet to be farmed and the climate is good for growing a wide range of staple, cash and tree crops. Crops such as coconuts and palm oil, cassava, rice, vegetables, ginger, cashew nuts, coffee, cocoa and sugar all have room for significant expansion.

As an investment opportunity, land is very easy to obtain through secure long term leases and there are fantastic tax benefits for crop growers and exporters. The population explosion across west Africa has triggered the demand for food crops so the export potential is huge. At present food imports are high as Sierra Leone imports goods such as citrus fruits, coconuts, pineapples, mango’s, rice and spinach even though all can be grown here, so the demand far exceeds the supply.

There are also great opportunities for food producers who use traditional farming methods as consumers are becoming more tuned in to organic foods. The country’s reliance on organic methods could make Sierra Leone a major player in the export of organic foodstuffs. Investors can also take advantage of favourable trade agreements such as the African Growth and Opportunities Act (AGOA) with the USA , the Cotonou Agreement with Europe and the Community for Western African States, which is regional. Opportunities also exist for the refining of sugar into ethanol and palm oil into biodiesel. At present there is little in place to do this, so again the potential is there.

On top of this most packaging materials for the production of fruit and vegetables have to be imported and therefore importers are forced to pay duty on them, thus making local production of these materials a very viable option.

The agricultural sector in Sierra Leone is a growing market and there is definitely more scope for improvement by utilising local contacts. Hoteliers and small businesses have all expressed a desire to source products locally

Fishing
The seas around Sierra Leone are teeming with fish and the country has some of the most under-fished waters in the world so the opportunities are ripe for investment. There are two key areas that potential investors might want to look at and they are industrial fishing within the economic exclusion zone and small scale fishing . Companies who are interested in developing nurseries for fish and the processing of freshwater fish can take advantage of fishing within the boundaries of this economic exclusion zone. The potential is also there for small scale fishermen to export fish regionally or to meet the demand for fish which at present far outweighs the supply.

Geographically Sierra Leone has 570 kms of coastline with a continental shelf of around 30,000 square kilometres. This means that it is home to an abundance of commercially viable species such as octopus, lobster, crab and prawns/shrimp. Other fish such as snapper, catfish, grouper, tuna, herring and sea bream can also command a good price on the open market. According to the minister of fisheries, exports valued at $433,000 way back in 2007 are well below their potential.

The Rivers and estuaries are thick with mangrove vegetation which provides the perfect climate for species such as bonga, craokers and oysters. With a little investment these can easily be turned into fish nurseries which again could offer substantial export potential. Proper data on Sierra Leone’s freshwater fish stocks are a little sketchy, however the latest survey has found 16 families of freshwater fish which is estimated to be around 100 different species. If the correct investments are in place then an annual yield of around 44 tons has been identified. Whereas the estimated tonnage for prawns/shrimp is 200,000 per year.

Fishing on a smaller scale for local demand is at present around half of its potential of 16,000-40,000 tons of freshwater fish, 85,000-1000,000 tons of salt water fish and 55,000 metric tons of Pelagic fish.

Tourism
The Country of Sierra Leone has a varied yet stunning landscape of white sandy beaches and crystal blue waters, which nestle against a backdrop of tropical forests and mountains in which exotic flora and fauna are to be found. It was voted as one of the top ten destinations by ‘Lonely Planet’ and it’s not hard to see why. There are some great government incentives for would be investors in the tourism market and large hotel chains such as Radisson have already moved in.

The main tourist areas at present stretch around the Freetown peninsular along a 40 km stretch of coast between Kent and Aberdeen. But there is room for expansion as the Tuners peninsular is a vast expanse of stunning beach that spans well over 100 kms and has hardly any tourist facilities.

A great opportunity is to invest in eco -tourism. The country is home to many animals such as pygmy hippos, 135 different species of colourful birds and rare and endangered types of monkey. In fact the country has one of the highest concentrations of unique primate species in the world (11 species). It also houses over 700 species of plants and the stunning Outamba Killimi National Park is home to rare elephants and buffalo. Sierra Leone is also a paradise for birdwatchers especially around Tiwai Island where there is already accommodation set up or this specific purpose.

In terms of history, Sierra Leone was one of the main epicentres of the trade in slaves and a visit to Bunce Island will certainly transport you back in time.

Bio-Diesel
Palm Oil is plentiful in Sierra Leone and is in fact the country’s no. 1 crop. There is the distinct possibility of converting this into bio- diesel. As green issues are coming to the fore, more and more companies are looking to sustainable alternatives to fossil fuels, and as companies become more aware of the environmental impact of their businesses then palm oil will become a very valuable commodity. At present according to the LSI group, figures show that around 90% of palm oils grown in Sierra Leone are farmed by smallholders. So the potential is there for large investment.

Crude Oil
In 2009 and 2010 tests were carried out in a 700 mile basin around the waters of Sierra Leone by American Oil company Andarko. Senior Vice President, Bob Daniels, stated that the initial tests proved to be very promising and there could be anything from 150 million to 1 billion barrels of oil. Sierra Leone offers an investment opportunity that is unparalleled for companies looking to partner with a pro business government. As the west tries to search for other avenues of oil production so as not to become dependant on the middle east, it is looking to develop oil supply capacity in the area. As a result, regional refineries are simply unable to keep up with the demand.

Source investment Sierra Leone