Sierra Leone is attracting increasing interest from foreign investors, following a private equity investment made by CDC group, the UK development institution.
The deal marks the first private equity investment to be made by a development finance institution in Sierra Leone since the end of the country’s civil war in 2002.
CDC will commit US$5mn to the Sierra Investment Fund, managed locally by ManoCap. The investment will provide financing to entrepreneurs in the region, stimulating economic growth and strengthening the private sector.
“Sierra Leone has made significant economic and political progress since the end of the civil war and its democratic government is keen to attract foreign investment. The country has until recently largely been ignored by investors because of its history of violent conflict, its poor infrastructure and a shortage of managerial skills,” comments Rod Evison, CDC’s managing director for Africa.
“Economic growth in Sierra Leone has been strong, averaging about 7% annually over the past five years, despite a chronic lack of access to credit.
“While Sierra Leone has been reliant on donor funding, CDC’s commitment to private sector investment will encourage entrepreneurial talent to establish and grow businesses, which in turn will increase employment and reduce poverty,” he adds.
The equity investment comes as government ministers and industry representatives from Sierra Leone gathered at a conference in London to meet with multilaterals, UK government officials and international investors.
In attendance was president Ernest Bai Koroma and senior members of his cabinet. Tony Blair, and the UK international development minister Gareth Thomas also attended the event.
President Koroma spoke of the efforts to ensure strong economic growth in the country: ““The IMF has predicted that we will grow at twice the African average by the end of this year. But this is only the beginning; our country has a wealth of untapped potential.
“We are building a legislative framework that provides the right incentives for investors while ensuring that all feel the benefits of economic growth. Sierra Leone is a country of genuine opportunity for investors and for its people.”
Former UK prime minister Tony Blair, whose Africa governance initiative has been working alongside president Koroma and his government for over a year, also addressed delegates saying: “By transforming agriculture, investing in energy and infrastructure, and creating a level playing field for investors, President Koroma is laying the foundations for a strong, stable, dynamic economy with sustainable growth. I am proud that my Africa Governance Initiative is there to support the reform effort and to build the capacity and effectiveness of the president’s government.”
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