Conquering Sierra Leone’s Monstrous Trio: Unemployment, Inflation And Currency Depreciation

By: Ken D. Johnson

Sierra Leone, with its breathtaking landscapes and abundant natural resources, holds  immense potential. Yet, like many developing nations, it grapples with a formidable  challenge – the triple-headed monster of high unemployment, inflation, and a falling  national currency value. However, by effectively addressing these interconnected  challenges, Sierra Leone can achieve sustainable development and unleash its potential. To  conquer this challenge, Sierra Leone needs to significantly boost productivity, establish and  develop value-added industries, promote self-sufficiency, and reduce reliance on imports,  paving the way for a prosperous future.  

Root Cause of High Unemployment: Low Productivity Levels 

The root cause of Sierra Leone’s high unemployment is its low productivity. The country  produces limited goods and services while relying heavily on imports. Correcting this  imbalance must be done by prioritizing the development of the manufacturing sector. Sierra  Leone boasts abundant natural resources and agricultural potential, making it possible to  produce many cash crops and commodities for domestic, regional, and international  markets. By creating value-added agro-based industries and agro-businesses, the country  can generate hundreds of thousands of new jobs, benefiting the youth suffering most from  unemployment. 

For instance, imagine Sierra Leone investing in modernizing its agricultural practices and  advancing its processing capabilities. Higher-value processed crops like cocoa, coffee,  cashews, and palm oil will significantly increase the country’s gross domestic product  (GDP), the monetary value of all goods and services produced within a country. Also,  imagine establishing local processing facilities nationwide, transforming raw materials into  semi-finished and finished products. Exporting these processed goods will create a demand  for skilled labor and increase employment opportunities. Sierra Leone can also realize  significant employment opportunities in the service sector, specifically tourism and  hospitality. Additionally, the increased export revenue will strengthen the country’s  economy and support further investments in education and healthcare. 

Inflation and Vulnerability to External Shocks 

Inflation is not just a number on a chart; it correlates with high unemployment due to the  country’s reliance on high-volume imports for essential products that should be  manufactured locally and generate jobs. This dependence makes Sierra Leone highly  susceptible to external shocks and imported inflation. The urgency of addressing these  challenges cannot be overstated. This situation can significantly hinder the Central Bank of  Sierra Leone from effectively controlling domestic inflation through monetary policies.  Inflation driven by external factors, such as rising prices of imported goods and  commodities, supply chain disruptions, and geopolitical conflicts affecting grain and  petroleum markets, such as the ongoing Russia-Ukraine war, makes the central bank’s tools  to combat inflation less effective. While short-term relief from these challenges may be  limited, the country’s long-term goal should be greater self-sufficiency and reduced imports. 

For example, Sierra Leone could embark on a comprehensive agricultural development  plan, promoting the growth of staple crops like rice and cassava and developing the entire  value chain in-country from farm-to-fork; this would reduce the cost of these staples for the  average Sierra Leonean family. A nation achieves a surplus in food production through  sustainable farming practices and modern technologies, reducing its dependence on costly  imports. Furthermore, investing in renewable energy sources, such as solar and  hydroelectric power, can provide stable and affordable energy for domestic consumption to  power factories and mitigate the impact of global oil price volatility. By taking such  measures, Sierra Leone becomes less vulnerable to external shocks, ultimately leading to  price stability, curbing inflation, and improving living conditions for its citizens. These  strategies offer a clear path towards a more resilient and self-sufficient Sierra Leone, putting  the country in control of its economic destiny. 

Depreciating Currency and the Path to Prosperity 

Sierra Leone’s currency depreciation is linked closely to its low productivity, specifically its  low value-added manufacturing and services base and high import reliance. As the demand  for foreign reserves to purchase imports rises without corresponding local productivity  increases, the Leone currency weakens against major currencies, perpetuating the cycle of  poverty and inflation. Breaking free from this problem requires the country to strengthen its  manufacturing sector and boost exports.

Let’s consider a scenario where Sierra Leone invests in mineral processing plants to add  value to its abundant mineral resources, such as diamonds and iron ore, as is done with  diamonds in Botswana. Botswana’s success story can serve as a model for Sierra Leone,  

demonstrating how a country can increase its foreign exchange reserves by exporting  higher-value processed minerals rather than unprocessed minerals, creating a more robust  demand for the national currency. As a result, the currency appreciates, making imports  cheaper and enhancing the purchasing power of Sierra Leone’s citizens. This positive  feedback loop enables the country to achieve economic stability and prosperity. 

Addressing External Factors and Seizing Control 

While Sierra Leone cannot entirely control external factors such as interest rate changes in  other countries, it can focus on areas within its jurisdiction to drive positive transformation.  The nation can harness its resources and potential to tame the three-headed monster of  poverty by fostering an enabling environment for productivity and GDP growth through  value-added manufacturing. 

To achieve this, the government, private sector, and civil society must implement strategic  policies that promote investment in education, infrastructure, and technology. By equipping  the workforce with the necessary skills and knowledge, attracting foreign investors, and  fostering entrepreneurship, Sierra Leone can create a conducive environment for growth.  Streamlining regulations and reducing bureaucratic hurdles can encourage businesses to  flourish, increasing job opportunities and economic development. Collective involvement in  these efforts is crucial. 

Sierra Leone’s journey towards sustainable development and prosperity requires a  multifaceted approach to tackle the conjoined triple causes of poverty: high unemployment,  inflation, and the falling value of its currency. In the months and years ahead, the nation  must focus on increasing productivity, bolstering the manufacturing and service sectors,  and reducing import dependency. Doing so will help overcome these challenges and  transform its economy. 

Through investment in value-added agriculture and mineral processing, Sierra Leone can  create many jobs, lifting many out of poverty. By striving for self-sufficiency and reducing  vulnerability to external shocks, the nation can achieve price stability and improved living  standards for its citizens. Moreover, by actively strengthening its manufacturing base and  exports, Sierra Leone can break free from the grip of a depreciating currency and pave the  way for sustainable prosperity. Given the country’s resources and potential, these strategies are ambitious and entirely feasible. 

These economic challenges are not unique to Sierra Leone; many African countries share  them to varying degrees. The practical solutions offered here provide valuable insights for  policymakers, businesses, and citizens and can be implemented continent-wide. Taming the  triple-headed monster requires a collective effort from the government, private sector, and  civil society. The government’s role in implementing strategic policies and providing the  necessary infrastructure and support is crucial. The private sector can contribute by investing in value-added industries and creating job opportunities. Civil society can support  these efforts through advocacy and community engagement. With determination, strategic  planning, and thoughtful implementation, Sierra Leone and the continent can unlock their  potential and embark on sustainable growth and development. 

About the Author 

Kenneth D. Johnson is a seasoned international economic development  

authority focusing on Value Chain Management and compliance-related  issues. With over two decades of experience, he excels in designing and implementing transformative projects across diverse countries. Ken  leverages agricultural value chains to drive food security and prosperity in  emerging nations. His expertise spans private sector development, compliance, global mineral and agricultural value-chain linkages, marketing, and branding. He spearheaded value chain initiatives at the African Development Bank. He is a principal at Devconia, LLC, and is a former executive with  Accenture and PricewaterhouseCoopers in New York City. As a thought leader, he shares  insights through speaking engagements, conferences, and forum discussions.

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