Report No. 11371-SL

Sierra LeonePolicies for Sustained Economic Growthand Poverty AlleviationMay 14, 1M3

Western Africa DepartmentAfrica Region

FOR OFFICIAL USE ONLY

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-1 Report No.:11371-SL Type: (ECO),Title: POLICIES FOR SUSTAINED ECONOMI.

Ext.:34876 Room:J 6165 Dept.:AF4CO-

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CERRECY EQUIVALENTS(as on Februry 12, 1993)

Cumrcy Unit - Leone (Le)USS1 = Le 557 I/

e 1- US$0.0018

ABBREVLIAIONS

ADB Afican Development BankAGD - Auditor Generas DepartmetAGO - Accountant Gonal's OfficeBSL - Dank of Sierra LeoneCeB - Centa Tender BoardEEC - Euoe Eonommic CommunityEMC - Fia Moitoring CommiteeGDP - Gross Donm¢e ProdctGVWC Guma Valley Water CompanyIBmD - Iternational Dank for Rec.AtrUCtion and DevelopmentICB - Iternaional Compeve Bidding1DA - hteatiod Development AgencyIFAD - nternational Fund for Agricultural DevelopmentIFC I- nrational Funane Corration3IF - Intrnationl Monetary FundMOF Ministry of Fiane, Developmen and Economic PlanningNDMC - Naon Dimond Mining CompanyNtOs - Non-Govenmental OrganionNIC - Natonal Irance CompanyNP - Nat Peolem CompanyNPA - National Power AuthorityODA - Overseas Development AdmiationPER PublbEc Eeditu Reviewpp! - Poicy Framwork PperPIP - Public Invstment ProgramPSM Publc Seor Managemen Support PrectRAP - Rihs Acumuatio ProgmRC - Recontio n Import CreditSAPS - StructuralAdustmn Program Steeing CommiteSEiROMCO - Sierra Leone Ore and Met Company LimitedSLPA - Sierra Leone Ports AuthoritySLPM - Siera Lone Produce Maketig BoardSLPRC - Sierra Leo Perleum Refining CompanySPA - Speoial Program of AssistnceSSI - Specialbt Sevices IrnonalUN - United NaionsUNCTC - United Naions Cente for Tannatonl CoporationsUNDP - United Natios Development ProgrammeUNICEF - Uited Naims Cdres Fund

FISCAL YEAR

July 1 - June 30

With ef8ct fiom April 25, 1990, the whne rate is dtemined freey betwen the comm_I banks andtheir cutomers for each tmanaion. For customs duty asmeand debt se epaymet, theangerate is deterined veely based on a wo4gted avee of all transactis by the commercial banks duringthat wadc

FOR OMCIL USE ONLY

FOREWORD

The last World Bank cuntry economic me m on Sierra Leone was prepared in1981. Since then, failing real incomes and dwinding social and economic infrastructure haveresulted in a drastic reduction in living stndards. The majority of the population live In absolutepoverty. Per capita income was orly US$210 in 1991, making Sierra Leone one of the poorestcountries in the world.

To break the trens toward dedining per capita inoome and increasing poverty, theGovermet began in 1989 to address the structural problems in the economy. Significantreforms have been implemented in the past three years. This report presents the countrsprogress toward structnua adjustment, resumption of economic growth, and better managementof public resources. The report has a strong policy orientation with focus on receM actions andfther measures required over the medium term to ensure susinable economic growth;accodinly, the main themes are issues of structura adjustment, fiscal managemet, socialaspects of adjustment and poverty reduction.

The author of the report i Nils Borje Tallroth. 0. Donovan, R. Polson andK.G.B. Singh prepared the section on agricuture. D. Berk, T. Stephens and J. LowenS(consultat) coniuted material for the poverty assment. Leo Maraboli contributed thetedhical part of the mining section. Boubker Abisourour contributed to hapter V and preparedthe statistical tables. Ron Fennell and Piroz Rad, and other colleagues withn theWorld Bank provided valuable comments on different parts of the report Sedor reports preparedin comection with World Bank public eupenditure reviews in 1991 and i992 provided the basisfor some of the sector section. The report was discussed with the Governmt in Februay 1993.

Thb document has a resticted distribution and may be used by recipients only in the perfofnanceof their ofcial duties. Its contents nmay not otherwise be disclosed without World Bank authorzation.

SERtA LEONE

POUCIES FOR SUrAIND ECONOMIC GROW7HAND POVERTY AILZVION

TABLE OFNTNNI3

Par Nb.

EXEC'J'FI'IR SI.TNIIRY . .................................. v i -

L RBECEN ECONOMUC DEVIELOPIENI4S .......... ............. 1

A. le Economic edine of the 198 ...... ............. ......... 2

B. Beginning of Strucur Adjustment ......................... . Si. IhieFirsPhase S ........................... 52. Progmson lmpl e entatiana-dEarlylmpa.t....... 7

C. Gipact on the Pove Siuation 8. ....... .. . 8

IL ADJU&rMENT POUCIPS AND SSS-THZ SECOND MU .. 10

A. Mm Asgiccuural Sector .. ...... ........ .. . 111. PolcyandPerfbo man eP rl to S tw ucturalAdjubne.. ...... 122. AgriculturdlPolicyindieContextofftructurald A........ 123. Agricturda Strategy-Oudine .................... ...... 134. Main Actions and the Bans Role ...... . ..... . 14

B. TheIGingSector .... ............. 161. Present Status .... .... 162. Medium Terom Strateg ................... 18

C. PublicSectoReform............... 201. Fisa .2. 9StaeEteqniseReom................. 223. Cii Service Rfom .. . . ... .. ...... .... 24

D. DomeadcesR urce Mobllzalon ..... Z ....... .. ...... 30

E. PrivateSector ncntives ....................... . 321. OvervIew. ............. 322. Prc and Intereslat....................... 333. Exchange Rate and Trade Policiesdo ...... ....... 344. Txuaion and Regulatory Framework .............. 38S. 'Ihe nbrnaSector .................... ......... . . . . 39

ImL RUORING THE GOVERNMENrS CAPACIT YTO PROVIDEBASIC SERVICES ..................... .. 40

A. Ovfeniew .................. ....... *....... 401. Recet Public Expendtu Deveopment ....... .... 402. MainsIues and CouaintsB. ..... ................ 413. The 1992193 Budget.................... 424. iDevd0pmne Expenditurs. ...... .. .......... . .. 43

coNTEMs (contd.) Page NO.

B. EcoomcId astruc t . .... ........... *4 444*4 441. EnrgyadPo 442. Transport .................................... 473. Wat Suppy . .................................... 49

C. lh Sodd Stors .................................... 511. He"thand opuIaton ............................... 512. Education .................................... 54

IV. ADDIPOVNGP MvERTY INTHEYEARS AHEAD . ............... 59A. Locating e Poor-Poverty Profile .......................... 59

1. Incomeand .............................. 592. Employment ...................................... 613. Buie Neeft and Lviog Stmdads ......................... 644. Priemand Wages ................................... 66S. VunerableGroup . ................................ 67

B. PoHicesto AddressPcvertyintheYerosAhead ...... ............ 691. IheStructra AdjustmetPx oessandthe Poor ................, 692. Imnpvement in Basic ..........................S . 703. speca Progrms for the Poor ............ 714. KeyElemes of thePovertyAllesv onStratWy ..... ......... 72

V. MIUM TERM PROSPECI ANM EXTERNAL AS5ISMANCEREQUIREMENTS ...................................... ...... 74

A. IeStratWy ... ..................................... 74

B. Gwth P Wspects ...................................... 76

C. Balance of Paymients Projecion ......................... ... 76

D. Exterdn alssta ..................Assistanc 77

TEXT TABLES

1.1 Summay of Centrd Governmnt Finance, 198081-91/92 ................ 31.2 Ec_nomlcndlcas,1981/82-1991/92 ........................... 41.3 Slected ikats of Strucurd Adjustment ........................ 81.4 Sodi ndicato for Siea Leone and Sldected Oher West Afric Countris,

1990 ................................................. 9

2.1 Nona and Re Bask Salies for Ci Sevce Staff,Mah1, 1975July 1, 199 .................................. 25

2.2 ClhvSevce Employment,lune 199December IM ................. 282.3 Adjusmets in Pay for Publi Sector Employees, FY91192 3 . ......... 292.4 PrlcingPolices,1986-92 . ....... . 342.5 hmportTarffRas ............. .......................... 37

3.1 Fun nClsfiio nof Govement Recuaene tE rx , 198081-1992/93 413.2 Devdopmnt Budgt, 199(191-1992193 ........................... 4S3.3 Ditfibutn of Sdhool, Teacrs, Pet by Level,

and Sected Yeas (1960-90191) .. 55

COIffBN'IS (contd.) Page No.

4.1 EshintsofPopuaLon iving I Absolute Povety, 19890 ............. 604.2 PeoCapa ExpenditurebyRegion, 1989/9 ........................ 614.3 MondflyHousholdExpenditurebyLevelofOutday,l989s0 ............. 614.4 MonthyHouseodExpnditbyiltem,1989190 . ................... 624.5 Mony Per Capia Expendihe by Amount of Outlay fo Households in

the Eastn Province, 19899 .............. .................. 634.6 Distribution of Cunwtdy Employed Pemos by Sectr and Gender, 1989I90 .... 634.7 DiAribution ofAgricudltd HouseholdsbySizeofFarm, 19890 . ......... 644.8 DevelopmentofKey HealthStatusIndicators, 190-90 . ................ 654.9 SocialSector Budgetary Allocaions,1980/81-l92/93 ............... .. 654.10 Aveage MonMy Salary by Occupaton, Gender and Area, 1989/90 ......... 67

5.1 KeyEwonomicand Fancia ndicaorwn,1990191-95196 . ................ 755.2 Balance ofPayment,1990191-95196 ............................ 775.3 Exena lFinancingReurm and Support, 1991-95................. 785.4 Ex.teralDebt byCreditor ............... ................... 79

FIGURE

3.1 Economic Classificatin of Government Ruent Expenditure .... ....... 41

BOX

4.1 Tradiional Systems for Coping with Economic and Soc iGal ..........D . 72

SrATSITCAL APPENDIX

MAP MD 24409

SIRA LEONE

POUCI13 FOR SUSArE ECONOMIC GROWTHAND POVERTY ALLEVUTION

EXECUTIVE SUMRY

1. Despite Its endowment with subsmtW mineral resources and ample ciutivable agriculturalland as well as rich fisheries, Sierra Leone is one of the poorest countries in the world with a percapita income of only US$210 In 1991. Overal production has been at a virtu standstill sincethe begining of the 1980s. Over two thirds of the population are estmae to live in absolutepoverty. In most rural areas, life Is at subsistence level. nfant mortity is one of the highestregistered in the world, while other key indicators such as life exectancy at 42 years are amongthe lowest. The current siuaton is the result of negative eal events, as wel as inappropriatedomestic policies, in particular weak fisca management. Because of its past policy record, SierraLeone's access to extera financial assistance has also been low.

2. Since 1989, the Goverment of Sierra Leone has been implementing a far-reachingreform program, aimed at stabilization and structural adjustment of the economy. Significanteforms measures have been taken, including liberalzation of the exchnge rate, deconrol ofcommerci bank lending rates and substal icses in other hIterest rates, stegteing ofrevenue collecton and expendture controls, liberalization of domestic pricing and trade andrevamping of natural resources policies. In ese acblvements have been made despite severeeconomic and social dismptions assodated with !he civil war in Libria, which caused an influxof nearly 200,000 Liberian refugees, and, more recentiy, rebel activides along the Liberianborder, which displaced an esdmated 15 to 20 percent of the indigenous population and reducedagricultural output and alluvial diamond exports by up to one third. The new Govenment, whichcame to power on Aprfl 29, 1992, continues implementation of the program. It has declared asits priorties the quik ending of the rebel activities and rehabilitafing the devastated areas, puttingthe economy on a solid foundation, tadlding the problem of corruption and m a ment, andthe transition to a civilian government. It is fully ommitted to poverty alleai and hasconfirmed it wil honor aU obligations which Sierra Leone has entered with the World Bank andother fincial institutions.

3. To realize these objectives and sustain the reform program, the Government will have toovercome great political and economic challenges. The security problems exert immensepressures on te budget, erode business confidence, and jeopardize the program. The mosturgent task for the Government is to bring the rebel activities to a quick end; without politicalstability and a resolution of the secuit problems, private sector investment response will remainan elusive goal. Past policies have caused great hesitancy among both indigenous and potentiforeign investors, delaying a private sector investment response to the improved policies, andmaking many donors reluctant to provide financial support. Short-fall in donor balance ofpayment support would agrate the already very tight foreign exchange situation. IheGovernment also remains under great pressure to grant further pay increases to public sectoremployees. These difficulties are compounded by the fact that existng physical and socialinfucre facilites have irtaly collapsed during the past decade-thus worsenng the povertysituation-and wt the ability to design, implement and sustain economic reforms is severelyconstained by the diapidated civil service and extreme shortage of skdlled manpower.

4. Medium Term Priorities and the Adjustment Progm. In the economic arena, themain task over the medium term will be to fher tignten fiscal and monetary policies to secure

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recent gains In macro economic stabilization, while mainaining the structural adjustment reomstha have already been implemente_. However, the adjustment program has to be deqpened Insrve arm and extended to include issues which have not been addressed thus far. Inrecognition of its limited administrve and Institutional resources, the Government will withdrawfrom Industrial and commercial activities and focus on its role as provider of basic services andan appropr incetives and reguatory framework for private sector activities. Privatization andreform of the public enterprise sector foms an integral part of this strategy. To sustin theprogram, priority has to be given t proviog fisc management through strengtheningInstitions, further rationalizing the tar ystem and enhancing collection efficiency, increasiAgefficiency on the expenditure side, and reabilitation of physical and social infrastructure. Ihepen-up need for rehabilitation investments of inrastructure facilities is huge, making the needfor strict prioritization imperative. Budgetary allocations should give prority to the health andeducation sectors. Another priority will be reform of the financial system to improve domesticresource mobilization and ensuring access to credit for an 3mxanding, private sector driveneconomy. To restore private sector and donor confidence, the Government has to consistentlycontine to implement its adjustment program without delays and occasional reversas andarbitrary interventions. Over time, this would create a business environment, which enables theprivate sector to take the lead in the revialization of the economy and gradually chamel paralelmarket acv"ies into the official economy. The objective of the trade policies will be *o broadenthe export base and to promote import ubstituion in line with comparative ad-ages bym-aintaining the market determined exchange rate, while establishing a trade regime whichprovides an adequate and relatively uniform leve of effective protection, and a transparent systemof rules and regulations conducive to private sector expansion. Sector policies will give priorityto agriculture, which provides job and income opportnies for the majority of the labor force,but sffrs from low productivity, and mining, which has the potential for becoming an evenmore important source of foreig exchange eanings over the medium term.

S. The most critical issue that has to be addressed to sustain the program is weak flscalmanagm em. Significant progress has already been made, but additional actions are necessary.Policies to improve ependire controls must be pursued vigorously. Measures are underwayto furter strengthen budgedng and expenditue control in key ministies, the AccountantGeneral's Office, the Auditor General's Department, and the operations of the Central TenderBoard. On the rewnue side, the program centers around measures to increase budgetaryrevemnes from Sierra Leone's natural resources base while at the same time broadening the taxbase to avoid distortions and tax evasion due to excessive tax rates, increasing fairness andtransparency by the removal of exemptions and deductions, and improving collections bystreamlining tax aminon and ensuring more rigorous enforcement. Measures to improvetax administation and collecdon should focus on strghening the Customs and the Income Taxdepartment. A far-reaching puc enterprise (P) reform program-aimed at improving thesector's ability to deliver services in a cost-efficient way and to raise its contribution to theeconomy and Government's budget-is being implementei.. Ihe program involves (i)privatization of PEs-or some of their fimctions--which, due to their nature could be betterprformed by the private sector; (ii) liquidaton of loss-making enterprises; and (ii)commercialization of enterprises remaining in the public sector. Entpriss, which wil remainin the public sector, will be provided with efficient and competent management and will berequired to enter into management contacts specifying peformance targets which have to be met.

6. The civ servie is in a severe crisis. There is an acute shortage of skilled staff,particularly at senior levels, concomitantly with significant overstaffing at lower skll levels. Thepay system is higbly distorted with both a very low level of pay compared to other modern sectoremployees, in particular for higherlevel civil service staff, and severe anomalies in the structure

of pay witin the public sector, resulting in low work morale, widespread absenteeism andgeal inefficiency. The Goverment has itiated a comprehenslve reform program, imed atretoring civil service efficiency and capacity for delivey of vices. As part of the program,chvil service employment was reduced by 11,400 (over 15 percent) durig 1991192. Prioritymedium tam actlons are: (i) ratonalizationof the functions, organizations and staffing stncteresin maor mnisies; (i) reform of the rem_meaton sysem aimed at bringing pay closer toreuanenrtion levels in the parastatal and private sectors; (-di) institutional and adnistrativereforms, including reform of the wage negotiations system and improved personm mana,meom

7. To create condidons for private sector lead, sustainable growth, Sierra Leone wll ndan efficient fl,1W sstsm for mobilizing savings and intmediatg them to investmopporWtunes with the highest e d returns. Three factors will detmine the success inmobilizing savings and improving finmcial sector efficiency: ff) maket determined deposit ratesto ensure that real rates are both positive and sufficiendy high to make fiancW savgs in SierraLeone an attractive option; (ii) availability of savings itumes; (iC) ease of accsing savigsfacilities, in particular in nrral areas. A main objective will be to Improve the efficiency andreduce the cost of financial intermediation by Increwig compedtion between fancialInstitutions. Bank portfolios must be strengthened.

8. The agricuture sector has performed very poorly over the past decade, and the firstrequirement for resumption of econmic growth is to get agriculture moving agai The primaryfocus of the Govrment's agricultural strategy is to promote sustained growth of agriculturaloutput, food security and the reduction of poverty. Focus should be on rice, the main staple,without neglecting other food crops, especially cassava and sweet potato, for which promisingimpoved varieties have been developed recendy. Simultaneously, the upland areas should beincreasingly planted to suitable economic tree crops. Such a development program, based onsmalholders, would also bring net enviromental benefit, by tking pressure off shifingclvation in the uplands, and acceleratiog the transition to intsive, setded agriculture. Thestrategy dsould include actions in five main areas: maintaining positive inentives for farms,developing infastructre, strengthening institutions, cayn out a progrm of agriculturaltralnfr and educaton, and ensuring tight donor coordination. The role of women in agncultureshould be given parcular attention when formulang the strategy of the sector.

9. To maximize the benefits to the economy of the minng actvities, priority needs to begiven to mepsures aimed at regulariion of alluvial diamond and gold exports, and to ensurethat revenues from these aciities pass through official dhannels in order to broaden the tax base.To achieve this, the Government needs to maintain policies whict eliminate the discrepancybetween the official and the parallel exchange rates, establish streamlined and transparentlicensing ad export procedures, ad pursue policies aimed at restoig business confidence.These policies must also recognize that alluvial production is next to impossible to control bypolice methods, that smuggling is a well established and inexpensive option for exporters.

10. Rsoring the Govenment's Capacity to Provide Basic Services. In line with its futurerole as provider of basic services only, the Goverment's publi eendi policies will focuson effective delivery of (i) infrastructure services to ensure a strong supply response by theprivate secor in response to improved incentives; (i) basic social senrices essental for the well-being of the population in general; and (iii) special programs to alleviate the plight of the mostvulnerable segments of the population. Expditures need to be reallocated in favor of the socisectors, and the use of resources within the diffeent departments and programs must becomemore efficient. Progress in improving avaiability of basic services wil, however, also bedetermined by the improvements in revenue mobilization and the scope for cost recovery.

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Another major constai is the limited implementation capacity, particularly in the social sectorministries.

11. Major mrovements will be required In physical Ifasnwct. The supply of poweris being improved through quick-rehailitation measures focused on the Western Area. Most ofthe roads are in very poor condition and near collape. tutonal arrangement to improveroad maintence and secure regular wpply of power and petroleum must be sustained. Thewater supply situadon is serious in most parts of the county and needs to be addressed incoordination with the Govermment's policies to alleviate poverty.

12. In the heakh sec*or, the Government should contne its present strategY of makidngrelatively low cost proventive and basic curative health care available throughout the country.To enhance the finanmial sustainbility of the primary health systam, recurrent expendtreallocations for the sector should be fiuter increased. Firm, long-tm commimen regardingfunding shoud be sought from enal donors, in pardtular for continuaion of the Iunizationprogram. Ministry of HealWth pj&nnel enditues for non-essentia staff must be drasticallyreduced to free resources for higher priority recurrent expenditures. Substantial increases in thebudgetary allocations for supplies are urgentl< !eeded to reverse last decade's drastic decline inthe avaiility of phamacicals. A reviet vould be carried out regadng the scope forincreased reliance on user chges to finance healdth zre services with particlar attenton to theirimpact on the access to basic headth care by the poor. To prevent new expenditue commitmetfrom crowding out priority programs, the Government should not proceed with the constructionof a new teaching hospital at Jui.

13. The strateg for ed on should be guided by three pivotad targets: (i) reducing theilliteracy rate to 40 percent by the year 2000 with special attention given to measures aimed atreducing female illiteracy; (fI) atning a 75 percen enrollmaet ratio in primary education by theyear 2000; and (iii) improve the quality of basic education. Severe Minity of Educationinstitutional weaknesses will, however, be a major constrait on the achievement of theseobjectives. Ihe following actions should be given priority: (a) viga.rous efforts to securesubstanially higher foreign assistance for education; (b) ensure availability of textbook and basicleaning materials through increased resource allocations, with priority to primu education; asecond priority should be rehabilitation of educational facilities; (c) the reform of the secondaryeducation curriculum should be phased in at a rate commensurate with the increase in theavailability of goveent and donor resources for financing associated co; (d) mobilizetechnical assistan for rebuiding government capacity for educational planning and managementand coordination of intenatonal assistance.

14. Addressig Poverty in the Years Ahead. Falling real iomes and deteriorating socialand physical infastructure resulted in a drastic reduction of standards of living during the 1980s.Rough estimates indicate that about 2.8 million, or 68 percent of the total population, lived inabsolute poverty in 1989/90. Most of these poor, over 2.1 million, lived in the rural areas. lhenumber of urban poor in 1989/90 is estimated at 0.7 million, over half of the urban population.About 2.2 million of the total population lived on less than US$180 per year in per capita tems.Sierra Leone's social indicators are even worse than its per capita income suggests. Ihe healthsituation is among the world's worst, with average life expectanq at 42, child mortaity at 243per 1000 live birts, and maten mortality at 630 per 100,000. A high percentage of thepopulation lacks access to basic health services, safe drinking water, and sanitary waste disafacilities. The daily per capita calorie supply is around 1,800, about 80 percent of requirements,and has actually fallen by over 10 percent since 1965. Illiteracy rates are among the highebt inSub-Sahara Africa.

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15. Since povety is so widespread, the (overnuent's stategy to eradicate poverty will haveto be cntered aund and sectoral policies which create conditons for rapid ands_stainble labor-intesive growth in employment mnd poducvity, with priority attention toagriulture. TIhS genal policies will, however, have to be complemented with specific, well-targeted and cost-effetve progm aimed at protecting vulnerable groups during the adjustmentprocess and addressig mor deeply rooted poverty problems. A comprchensive strategy tomitgate the socW cos of stuctural adjustment is being prepared. The strategy will focus ona few well-defined progam with signiflcant employment and social impact which can beimplemt quicldy wthin the existng institutional framework, while relying on non-govermment organizaon (NGOs) to assume the main responsibility for implementation. As partof this strty, the Govenment will increase significantly the allocation for the social sectors,but the magn_ ide of the problems combined with resource constraints necessitaes strong donorsupport. Key action under the stmaegy will be: (i) carefil identification of target groups amongurban and rural poor; (i) greater efforts to coornte poverty measurs by the Government,donors, and NGOs; (di) priority to development of the agricultural sector to provide jobs andincome opportmiies for the rural population; and (lv) priority to hLman resource developmentin allocation of public expditur and donor contributions, combined with measures to ensurethat resources are usfd efficiently and reaches the poor.

16. Mediam Tem Prospects and External Assistance Strategy. The Government'smedium term strategy aims at foering an economic environment conducive to a sustained supplyr'sponse. It views this as essential for achievig the dual objectives of broad-based economicgrowth conomitnty with povety reduction. To realize these objectives, its policies will begeared toward stabilizing the economy by maintaining fiscal and monetary discipline, substnilylowering the rate of inflato and achieving a susblnable GDP growth rate of 4-5 percent perannum concom y with etnal viability. The strategy focuses on developing the agriculturesector, improving the management of Sierra Leone's natural resources, in particular the miningand fisheres sectors, and reestablishing the Governmentes role as provider of basic services, withpriority to health and education The Government's success in achieving these objectives dependsmainy on the availability of external finmcing on concessional termr from both multlateralintiuin and bilateral doors, in particular over the next few critical years, to finance importsnecessary for resumption of growth and the rehabilitation of infastructure and the social sectors,while at the same time vneeting external debt obligations. Further improvements in the&ovemnment's l n cacity, and resolution of the security situation along the Liberianborder and politiW stability are also crucial for the success of the program. Insufficient fundingin the initI years of the program has made it susceptible to exteral shocks, and could weakenthe Govemment's resolve in contidnuing with the program.

SIW& LEONW

POZCMS FOR SUWAW3D ECONOMIC GROWTHAND POVERTY AUZITION

L RECENT EONOMIC DEVELOPMENT

1.1 Sierra, Lemn Is endowed withmineral welth, am101 cvable 0 A I w

agclta land, and ich fiseie. Th - -' bi *t solauyeconomy Is small and open Agriculture eBmply most of the popuation in lowproductiy, labor-Innsive fming. Ihe | .Din8 sector compre a capital-Inensie enclave and substantia alluvial operains. Wi Cimied as a tleastdeveloped" conty by the UN, it bas a populadon of 4.2 million (1991), growing at 2.6 percent a year, a lower growth ratMe thn most S9ba E .

cowutries. Per cipita income was only " US$210 in 1991, maIgSierr Leone one of l~vw I@I

the poore cuntie in the world. The disriutonof income Is narkedly uneven,

and over two thirs of the population are._estimated to live In absolute poverty. Urban ving conditions are exremy difikut * i E "

Rua life, with the eceptio of the diamond t *_and gold mning areas, is at a slf-sufficiet ssubsisencelevel. Vey few of the benefts ofSiera Leone's natural riches percolate down \

to the gerl publc. nfant motaity l oneof the highe reco In the world, whileoher key indicatos such as life expectacy of42 years and ,ximary sdw eollt weamong the loweasL Rura fder roads are in n.a sate of collape, and some of the trunroads a also In very poor condition. T .prevents farmbes from bringueir productsto matket, and conftrbutes to the high foWprices. Human rsource devlopment hasbee neglected for many yer, with schoolsand hostl ldacng e the, most basic supplies.

1.2 This state of economic cris, from which the ownomy is dowly emerging, is the resultof negti of tae ued, war actvites, and other etra event as well as groslyInappropaedomestic polici gout the 1980s. Te lar left a legacy of weak fiscal andpubli sctor n In which cent govemat budget revnues-and essea publicgoods and services-sral downward, while expditur; was wasted. To break the associatedtrends owwad decining per capia Income and Inreasing povety, the Government, in 1989,

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began to address the structual problems in the aenomy. Significant reforms have beenimplemened since then, including liberaization of the exane rat and trade to enuraetransactions through official cnels, deconol of prc and itest rates, strengthening ofrevenue collection and expenditure controls, and a revamping of mining and fishery policies.Untl recently, these measures were n en without significant extuernal assistance. In April1992, the Governme's adjusument policies received support from the IMP and the World Bank.The program with the IMF focuses on macroeconomic stabilization measures, Icluding exchangerate, trade, fisc and monetary policies while the Bank's support concenaes on strucumeasures, including improved fiscal management, particuarly expenditure control and revenueenhancement, civil service reform, and public entetprise reform.

A. The Ecnomic Decline of the 1980s

1.3 During the first decade after independence in 1961, the economy grew at nearly 4 percenta year. The fia and foreign exchange position was healthy, and inflation was low. The firstoil shock notwiftstanding, economic growth averaged over 3 percent in the first half of the1970s. GDP growth slowed to about 1 percent a year in 1975-80, mainly because of fallingincomes from the mining sector. Expansionary budgetary policies, in part associated with hugeexpenditures for the OAU summit which Sierra Leone hosted in 1980, led to governmentexpenditures as a share of GDP exceeding 30 percent in the final years of the decade and,compounded by the effects of raising import costs in the wake of the second oil shock, resultedin worsening fisca and current account deficits and set the stage for the problems ta sutrcedin the ensuilg years.

1.4 In te first half of the 1980s, the economic situation deteriorated sharply. While adverseextrn developments were a fuctor underlying this trend, the more fundamental reason for thispoor peformance was inappropriate government macroeconomic and fisc management policiescombined with detiorating performance in the mining sector. Budgetary revemes fell sharply,from over 16 percent of GDP in 1980/81 to only 5.4 percent in 1985186, as reductions In Importsand official diamond sales reduced the tax base and increasing indiscipline in public sectormanagement eroded collecdon efficiency (rable 1.1). In resonse, major cuts were made inapital expenditures, which were reduced from 4.9 percent of GDP in 1980/81 to only 2.2

percent of GDP in 1987/88, and also-to a lesser degree-in recurent expenditures. Toaccommodate very rapid increases in subsidy and interest payments, from 3.9 percent and 6.8percent, respectively, of recurt expendiures in 1980/81 to 30.6 and 16.1 percent, respectively,of recurrent expenditures in 1985/86, and also to meet payroll costs caused by contiedexpansion of public sector employment, expenditures for goods and services was reduced from31.5 percent of total recurrent expenditu in 1980/81 to only 21.8 percent in 1985/86. As sresult of these developments, investments in new social and physical i c facilitk s tomeet the demand from a growing population fell to a trickle, while maintenmce virtuly ceased,causing rapid decay in exiosting facilities. This decline was aggrvated by rapid demoralizationof the civil service due to eroding real wages. The budgetary deficits, fianced mainy byborrowing from the domestic banking system, were the primary cause of the accelerating inflatioduring the 1980s, pealdng at close to 170 percent in 1986/87. In order to protect, in particular,urban groups from pric incses for Imports caused by a depreclaing currency, the Governmentresorted to exchange rate controls. As a result, a rapidly expanding paralel market in foreignexchange-offering rates th at times were almost fourtimes as high as the official rate-and othertrade emerged at the beginning of the decade, and soon became a major factor in the performanceof the overall economy.

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1.5 Becaus of an overvalued exchange rate-oombined with effects of declining prices-official diamond and gold eports fell sharply as these commodities were inwreasingly traded inthe parallel market. Official cocoa nd coffee exports also declined as declining real procurementprices offered by the se buying monopoly company made smugging more profitable.Recded imports, after peaking at over US$300 million in 1980, feil drastically to only US$143In 1985/86 because of cutback in government capital expenditures coupled with decling privatesector impt due to increasing shortages of foreigp exchange through official channels(rable 1.2).1/ As a result, the current acoount deficit was reduced from over US$200 million,or about 19 percent of GDP, in 1980/81 to around US$62 million, or 4.3 percent of GDP, in1985/86. With official foreign exchange reserves vitualy edxusted-averaging less than onemonth of Imports tbroughout the decade-ad the inflow of foreign capital fang to very modestlevels, the balance of payments deficit was financed mainly by accmulation of arrears.

1.6 The Govenmet made several atempts to restore macroeconomic stability with supportfrom an BE Extended Fund Facility (EFF) in 1981/82 and a stand-by arrangement in 1984/85.These programs were, however, canceled before the credits had been fully utilized because theGovernment failed to meet the agreed targets.Z/ Moreover, as the 1980s progressed, it becameincreasingly evident that stabilizaton policies alone were insufficient since the causes of theeconomic problems were of a structural and long term nature, rather than temporary.RecogniiDg this, in June 1986, a nEw government launched a comprehensive economic reformprogram-including adoption of a marketdetermined ewhange rate, a liberalized import regime,removal of contolled prices for many basic goods and services, and termination of allgovernment subsidies-aimed at strucur adjustment combined with restrictive fiscal andmonetary policies to stabilize the economy. The program, which was supported by an IMPstandby amangement in November 1986, and supplemented by a Structral Adjustment Facility,was supended in March 1987, after about SDR 20 mfllion had been disbursed, mainly due toa lack of expenditure control and monioring which resulted in expenditure and bank torrowingexceeding the target levels shortly after the program had started. Because of overdue payments,

I/ hl the econoc dcy duig the 1980s was ineted real, the accownt of dvelopmnts presontd i thisseotion, which is based on officid data, nevet oveate to some degs the extt of decae. As theparall mat thived, ptculr in fgn echanativites, there was little scacy of impoted consumegoods. The conscio dust prosed durng mwh of the decade and o rwemaied active. Thaeactivie were suppoftd maiy by unofficial gold and dimod expots. A the sme time, teb edstece of aarge pel maet ras offica nainad accou and balance of payment statisis mading.

a, ls aomen s fed sandy awmei wfith e iMPn 1977/78and 1979/SO. Over the two decades1966/67 to 19W87 Siera Lone concdxed eght progams wthb te IMP. With the excion for the one in1979/80, they wer all suspended beoe the droet had been fully utilized.

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B. Beginning of Structural Adjustment

1. The Frst Phase

1.8 Faced with an increasingly serious economic situation-in which the central bank lackedeven the wherewithal to purchase the paper needed for the printing of new currency-theauthorites began to implement measures to address the,structural problems of the economy inearly 1989. The first steps focused on liberalization in the foreign and domestic trade areas. InJanuary 1989, private traders were allowed to purchase coffee and cocoa at any price from theproducers and were free to retain 40 percent of the export proceeds; at the same time, privatetraders were allowed to import rice using their own sources of foreign exchange. Before, onlythe parastatal Sierra Leone Produce Marketig Board (SLPMB) was alowed to trade in thesecommodities. A policy of freely issued export lices for gold and diamond traders, combinedwith a requirement that exporters surrender 40 pecent of their export proceeds, was inudIn February 1989. In March 1989, the exchange rate was adjusted from Le 44 per US dollar oLe 65 per US dollar, which brought the officia rate close to the parallel rate of Le 70 per USdollar prevailing at that time. Following the devaluation by 55 percent (in US dollar terms) inJanuary 1990, a market-determined exchange rate was intwroduced in April 1990, which allowedcommercW banks to buy and sell foreign exchange freely at any price agreed by the partiesinvolved. The *emergency" meawures that had been introduced earlier were also lifted.

1.9 As a result of these measures, the economy began to stabilize during the first half of1990. Inflation slowed down considerably. Total budgetary revenue rose from 9.2 percent ofGDP in 1988/89 to 12.3 percent in 1990/91. Govenment borrowing from the Bank of SierraLeone was entirely used to finance payments of domestic interest on government stock, Treasurybills, and the overdraft facflity with the Bank of Sierra Leone. However, the resumption of debtservice payments to the World Bank and the ADB, as well as substantial payments to the Fund,curiled the Government's ability to reduce its indebtedness to the Bank of Sierra Leone. Thecommercial banking system, which was on the verge of collapse in mid-1989, began to stabilize.Foreign trade also improved with official exports increasing by 16 percent in real terms in1989/90 and 6 percent in 1990/91; this allowed some recovery in much needed imports.

1.10 The Government's eforts to stabilizethe economy were, however, disrupted in mid-1990by the civil war in neighboring Liberia and the crisis in the Persian Gulf. The influx of nearly200,000 Liberian refugees (equivalent to 5 percent of Sierra Leone's population) and SiraLeone's participation in the ECOMOG peacekeeping intave exerted significant pressure ongovernment finances. Despite assistmce from neighboring counties, additional miitayexpendiures of about US$6 million equivalent were incurred in the last three months of FY90/91to restore armed forces capacity to expel the rebels and to provide for food and shelter fordisplaced Sierra Leoneans. These events, compounded by rising energy prices during the Gulfcrisis and a sharp expansion in credit to the Government and the private sector, caused aresurgence of inflation with prices of food and other essential products rising particularly fast.Deep incursions into the Eastrn and Southern Provinces by Liberian rebels since March 1991-more recenty joined by insurgents of indigenous origin-have imposed considerable additionalstrain upon the economy as villages were abandoned and an estimated 15 to 20 percent of thetotal population was displaced. Ihe inions had a severely adverse impact upon the economy-reducing alluvial diamond mining, just when the new policy was becoming effective, and riceproduction by one third, and criling the evacuation of the cocoa and coffee harvest by as muchas one third. The paralel exchange rate depreciated sharply as many diamond dealers left SierraLeone after turning their working capital int dollars.

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1.11 Despite these difficulties, the Government persevered. The structurai reformsimplemented by the Government since 1989 are more far-reaching than the programsimplemented by many other countries receiving support from the inaonal finmcialcommunity. Doubts about the Govemment's ability to sustain the program because of its dismalrecord of derailed stabilization programs, however, made lnternational donors and creditorshesitant to provide extnal financial support. Occasional lapses on macroeconomic stabilizationalso contributed to this. A government request for a Rights Accumulation Program (RAP),covering the years 1992 and 1993, was approved by the IMP Board in April 1992. Followingclarmace of the arrears to the World Bank, the Bank approved in April 1992 a quick-disbursingReconstruction Import Credit (RIC) in the amount of US$43.4 million in support of theGovernment's structural adjustment program.

1.12 The objectives of the Rights Accumuaadon Program (RAP) with the IMP are to restoremacroeconomic stability, improve resource allocation, and strengthen the externa paymentsposition. A priority target in the 1992 program was to reduce the rate of inflation from 115percent during 1991 to 50 percent during 1992 and further to 25 percent during 1993. Thecurrent account deficit was projected to widen in 1992 and 1993, reflectng a sharp increase inimports to support resumed growth, before narrowing in 1994 and declining further in thefollowing years. The 1992 program aimed at restoring growth to 4-5 percent in 1993/94. Theseobjectives are to be achieved by building upon the progress made since 1989 and by stepping upefforts in those policy areas which remain to be addressed. The program focuses on<(a) strengthening financial discipline in the Government and public enterprises; (b) tighteningmonetary control through active open market operations and the maintenance of positive realinterest rates; (c) a more effective utilization of the existing potential in diamonds and fisheries;and (d) the development of a fully functioning, competitive foreign exchange market. Theprogram includes quarterly fisca and structur i performance criteria to monitor themplementation of the program. Under the RAP, the Government can accumule "rights" during

the program period equivalent to the value of arrears outstanding to the IMP (currently at SDR87.2 million, or abou US$L!9 million). Upon successfil implementation of this program andclearance of its arrears to the IMP, the Government would be able to request use of Fundresources under a subsequent program.

1.13 lhe World Bank Reconstrucdon Import Credi (RIC) provides support for continuedstructura reform with focus on Q) improving fiscal management, including improving expenditureprogramming and control in key ministries; (ii) enhancing revenue collections by strengtheningmajor revenue departments; (iii) ensuring cost-efficient delivery of services and maximizingcontribution to the budget from public enterprises through commercialization and divestiture; (iv)reforming the civil service; and (v) petroleum product supply, pricing and tax policies. Thesemeasures are designed to bring about further improvements in govenment finances; The creditcontributes to the economic growth and recovery by providing foreign exchange resources tofinance importation of petroleum products, essential raw materials, spare parts and currency noteswhich, together with rice-the financing of which would partally be met by other donors-wouldhave a significant stabilizing effect on the economy. The private sector's import requirementswill be met through improved availability of foreign exchange in the commercial bankingsystem, which is expected to be brought about by maitning liberalized exchange and tradesystems and a transparent mining policy. The project is crucial IP filling the financing gap, inparticular during the first year of the program, and in stimulating increased donor support duringthe RAP. The program will be cofinanced by the African Development Bank, the EC, and bymajor bilater donors (Japan, the UK, and the USA). A Public Sector Management Support(PSMS) project will provide technical assistance in key ministries and departments to strengthenfisc management which is vital to the successfil implementation of the program.

1.14 Shortly after Sierra Leone's re-establishment of formal cooperation with the lMP and theWorld Bank, a new gove-waent came to power on April 29, 1992. The new govermnt hasstated its top priorities are the quick ending of the rebel acdvities in the Eastrn and SouthernProvinces and rehabilitating the devastated areas, putting the economy on a solid foundation, andthe transition to a civilian government. It is filly committed to poverty alleviation and hasconfirmed that it will honor all obligations which Sierra Leone has entered into with the WorldBank and other financial instittions. The new administationhas also made it a priority to tacklethe problem of corruption and mismanagement in the Government and the civil service and anumber of initiatives to this end have been taken.

2. Progress on Implementation and Early hnpact

1.15 Despite the change in govenment and the great difficuties in dealing with the securitysitation, performance under the program has been good. The implementation of macroeconomicpolicies has been particularly successful. The overall budget deficit was reduced from 12.0percent of GDP in 1989/90 to 9.3 percent in 1991/92, in line with the program target. Ihis wasachieved despite the pressures exerted on the budget by the war activities. Due to a decline inpetroleum imports and coinued problems in tax administn, particularly customs dutycoilection and failure by the fisheries sector to generate any royalties to the Govenment, totalrevenue amounWt to only 12.4 percent of GDP in 1991/92, as against a program target of 13.4percent. While strong efforts were made to focus the expenditure cuts on removing waste andslack in the recurrent budget, due to the combined effect of revenue shortfll and war-telatedexpenditures, substantive compression of essental expenditures became necessary to meet thedeficit target. The Government recognizes, however, that meeting fiscal targets through severecompression of priority programs is neither desirable nor sustinable over the medium-termBank borrowing to finance the budget deficit was well below the target; this helped meeting themonetary targets comfortably. As a result of these measures, significant progress has been madeon macroeconomic stabilization. The rate of inlaion has declined sharply, from 115 percent in1991 to 35 percent in 1992 as compared to a program target of 50 percent. Because of theimportant gains made in bringing down the rate of inflation, the Government has lowered itsinflation target for 1993 from 25 percent in the original program to 20 percent. Interest rateshave fallen sharply in line with iMation; they remain positive in real terms. The exchange ratein the commercial bank market remained stable in the second half of 1992, while the differebetween the commercial bank rate and the parAllel rate narrowed to Ifss than 5 percent. In realefftve terms, the official exchange rate, which is calculated on the basis of the rmte ruling inthe commercial bank market, depreciated by 9 percent between the second quarter of 1990 whenthe market-determined exchange rate system was adopted, and the second quarter of 1992.

1.16 Imlementation of the structural adjustnt elements of the program Crable 1.3) is alsobegining to have an impact. Availability of essential products such as gasoline, fuel oil and ricehas improved significantly; this has contributed to the sharp slow-down in the rate of inton.As a result of the new arngements for payment of petroleum product imports financed underthe RIC-requiring distributing companies to pay up-front for liftig products and surrender excisetaxes within 7 days (instead of the previous 30 days)-and by maintaining positive real interestrates, there has been a large reflow of currecy into the banking system. Delivery of a largeportion of the printed currency notes has also assisted in alleviating the severe currency shortagethe baking system was facing previously. Strengthened instittions for expendiure controlsenabled the Govermnent to meet its fiscal targets. The shortage of foreign exchange in thebanking system has eased considerably. Progress is being made in ensuring Sierra Leone getslarger gains from its mineral and fisheries resources. Recorded diamond exports have increasedsharply, from 62,000 carats in 1988/89 to an estimated 330,000 carats in 1991/92. Output in

I:~~~WI

aglr1, fthe dominant sector in the economy, has been severly affected by the icursion ofr bes from Libea in the recent paa; in addiaon, perfrman in a*iture is in e hort termdiriven more by weathier-conditions th dan hges in thie incentves stmrucre. Thus, it is no(tossble give a comprehensive aof tte stuc bS inVa of the program on

production in the sector thu far. Some very tenttve observations regarding effects of gtructuraadiusulent polies dit have been implemented in the past few years can nevtetheless be made.rebestfom Liberi aof pri and erade pas restted in adinp focant increases in cash crop ftrmers'incomes. With the SLPMB now closed down, all coffee and cocoa exports are handled by theprivate sector; producers received about 90 percent and 70 percent of f.o.b. prices, respectively,during the last crop season, as compared to less than 50 percent in the late 1980s.

C. Ipact on the Poverty Stuation

1.17 The decline in real incomes together witi deteriorating health, education, and other socialservices resulted In worsening standards of living durn the 1980s. More recenty, the rebelincursions in the Eastern and Southern Provinces have aggrvated the economic malaise. Thecategories which suffered most from these developmens were smallholders, including femalesmall-sae farmers, and other rural groups; permanent low- and mid-level civil service staff andother employees on fixed incomes; people living in slums and other disadvantaged urban groups;chidren of famflies belonging to these categories; and people affected by the rebel incursions.For these groups in particuar, subsistence is extremely precarious, but most of the popuationhas not yet begun to beneft from the vUious reforms implemented over the last three years.Today, Sierra Leone is one of the poorest coustries in the world in tem of per capita income.According to the UNDP 1990 Human Development Report, Serra Leone ranks fourth amongcountries with the least hum resource developmen Moreover, Sierra Leone's social indicators

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are worse than those of other countries at a similar level of GDP per capita (rable 1.4)-a resultof both low priority to the socW sects in the past and wasel use of budgetary resources.Daily calorie supply per capita is only about 1,800-less th 80 percent of requments, and t-hefour lowest level reported in World Development Report 1992.

1.18 The Govanmt ademsed the worsg policy situation by awarding higher salaryincraits to tie lowest paid civil ervats than to higher level staff, and making adjustments inlump-sum transport, medical and housing allowances. Discretionary increases in the taxexemption levels and tax bracket thresholds were also made. More recent measures Inclde acompensaion package to voluntarily separated and retrenched government workers. Le 2.2bilion was earmarked in the 1992193 budget for socially oriented programs and projects forimplementation by NGOs. Jn the same vein, the Government has abolished tition fees ingovernment-run or gov esppoed pry and secondary schools. It maintains a heavysubsidy on rice supplies to the army, police and prison services as part of their compensatonpackage. Overall, these policies were inadequate. Addreing poverty was not a priority andsince no program for povery alleviation existed, measures were haphazard and-with fewexceptions-did not focus on the groups most in need of assistace. The wastefil publicexpenditure policies pursued reinforced this. Ihe Government has now made poverty alleviationa top priority and is formulating a comprehensive sWegy to address the plight of the mostvunerable groups. However, the strain on resources created by the rebel activities makes itdifficult f, 1the Govemment to address to povet problems. A more detailed profile of thepovert situation in Sierra Leone and an outline of a strategy to address poverty problems ispresened in Chapter IV.

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I. ADJWgMENT POUCIES AND ISSUES-THE SECOND PHASE

2.1 The main task duringthe nephase of the adjustment progro will be to fther tightenfiscal and monetary policies to secure recent gains in macroec,. wuc stabilization, whilemaintaining the structural adjustment reforms that have already been implemented. However,the adjustment program has to be deepened in several areas and extended to include issues whichhave not been addressed thus far. The Government will withdraw from industrial andcommercial activities and focus on its role as provider of basic services and of an appropriateincentives and insdtutional framework for private sector activities. The improved businessenvironment would enable the private sector to take the lead in the revitalization of the economy.Priority will be given to agriculture, which provides job and income opportmities for themajority of the labor force, but suffers from low productivity, and mining, which has thepotential for becoming an even more important source of foreign exchange earnings over themedium term. The objective of Sierra Leones trade policies will be to broaden the export base,promote import substitution in line with her comparative advantages by maintainig a marketdetermined exchange rate, while establishing a liberal trade regime which provides an adequateand relatively uniform level of effective protection across the sectors, and a transparent ard fairsystem of rules and regulations conducive to private sector expansion. By maintining a stableeconomic and regulatory environment, which relies on positive incentives rather thanadministrative controls, the Government would be able to restore business confidence andgradually chanmel parallel market activities into the official economy and broaden the revenuebase. Ihis would increase resources for much needed public expenditure without raising taxrates. The financial system needs to be restructured as part of the efforts to improve domesticrevenue mobilization. Major efforts also need to be made simultaneously to increase theavailability of managerial and technical skills to ensure the efficient operation of both public andprivate enterprises and institutions. In the public sector, priority needs to be given torehabilitation of the physical and social infrastructure and improving fiscal management throughstrengthenig institutions, further rationalizing the tax system and improving collection efficiency,and increasing the efficiency of expenditure.

2.2 In implementing the adjustmt progru, the Government will face great political andeconomic challenges which threaten the program's sustainabiity. The security problems in theEastrn and Southern Provinces create immense pressures on the budget and constitute a severeconstraint on the scope for non-military expenditures. The most urgent task for the Governmentis to bring the rebel activities to a quick end: without political stability and a resolution of thesecurity problems, private sector investment response to improved economic incentives willremain an elusive goal. The Government remains uuder considerable pressure to grant furtherpay concessions to public sector employees. Good fiscal performance is contingent onsatisfactory implementation of new arrangements for surveillance of Sierra Leone's fisheriessector. Past policies have caused great hesitancy among both indigenous and potental foreigninvestors, delaying a timely and strong private sector investment response to the imrovedpolicies, and making many donors reluctant to provide financial support. To restore privatesector and donor confidence, the Government must maintain macro economic stability whileconsistently continue to pursue *s structural adjustment policies without delays and occasionalreversals. The task to create a prisectr wilingness to make long-term commitment in theform of physical investments-raL.er than trade activities with a quick pay-back period-is madeeven more difficult by the fact that major parts of the private sector is controlled by indivdualsof foreign origin with in many cases weak ties to Sierra Leone. The pent-up need forrehabilitation investme in infrastucture is huge, making the need for strict prionizationimperative. Moreover, even with strong govenmment commitment, the abilty to design,

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implemen and sustain economic reforms will be severely constrained by the dilapidated civilservice and institutiona bottlenecks.

A. The Agricultural Sector

2.3 The agricultural sector provides employment to more thn 60 percent of the work force,and accounts for about 37 percent of GDP and about 9 percent of export earnings. Theagricultural resource base is rich, large tracts of arable land remain uncultivated, and theprospects are good for raising yields on smallho'der farms and creating e anomic surpluses overand above their subsistence needs. The results would be Increased food to sustain the labor forcein other sectors, and increased earnings of foreign exchange from exports. Agricuturalproduction is overwhelmingly dominated by smallholders, typically farming 1-2 hectares perfamily, the size of holding which can be handled by the labor available for hand-hoe agriculture.There are very limited areas in larger estates, which produce less than 1 percent of coffee andcocoa, an estimated 5 percent of the palm oil, and the bulk of the domestically grown sugar(which in tun supplies about one third of total sugar conumption).

2.4 Sierra Leone has abundant rainfall, and substanti areas of soils suitable for sustainedagriculural production at high levels. From an ecological point of v.ew, Sierra Leone ispredominantly a tree crop country. Of aa estimated 5.4 million hectares which are capable ofsustained agrictural production (three quarters of the country's geographical area), some 4.2million hectares are uplands of relatively low soil fertlity-readily leached of nutrients by heavyrains if tree cover is removed-and 1.2 million hectares are fertile lowlands, in which good watermanagement is the key to high productivity. The uplands are mainy gently sloping areas drainedby a web of small valleys. In general, the uplands should be planted with the best trees for theparticular level. Ihe tops of bills are best suited to timber trees, the deeper, more friable soilsto oil palm (which grows satisfactorily in most parts of the country); in northern regions thereis considerable potentia for cashew, which tolerates some dryness and poorer soils; the East andSouth are most suitable for robusta coffee, and the lower-lying areas with good soils are the rightlocation for cocoa and kola, which must have more moisture. In general, the lowland valleys arewhere the intensive cultivation for annual crops should take place. Only 15 percent of the bestavailable lowland areas are cuerendy under cultivation. Additional areas of coastal mangroveshave good potential for rice cultivation.

2.5 The agricultural sector has performed at well below its potential. Although the data aresketchy and unreliable, it seems likely that during the 1980s agricultura production declined inreal terms. Because of border disturbances in the coffee and cocoa producing areas, there wasa sharp drop in production and marketng in the 1991192 season. Average real farm incomes arecurrently esdmated to be 20 percet lower than in 1963/64. The impact on the balance ofpayments has also been adverse: imports of rice have risen and foreign exchange earnings fromcoffee and cocoa, the main agricultural exports, have declined sharply. The sector's performancehas been weakened by, among other things, serious policy distortions on the domestic front andsubstantially reduced prices in intenmational markets. (Real prces for coffee have falen by 60percent and for cocoa by 36 percent since 1988.) The rural economy is now at a near stadstillwith severely weakened sector instiions unable to assist farmers in raising productivity, acuteshortages of essent farm inputs, and feeder roads in virtual collapse ihibiting increases inmarketed output. Improved transportation facilities concomitandy with measures to increaseproductivity will therefore be a central part of the Government's stratey for assessing ruralpoverty.

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2.6 Agdiculte in Siera Leone i curety In trsnsition from a predominantly subsistenceshifting cultivation system to a system of setled agriculture. The former system has been inplace for centuries, and has served people well in the economic environment of the past. Underpopulationpressure, and changed economic circumstances, the bush fallow interval has shortenedsgicantly, from at least 20 years In the past to only about 7 years today, and the traditionalsystem Is no longer sussinable. At the same time, production has been intensifying slowly Inthe lowlands, and some expeience in accelerating this has been gained recently under smaHlprojects in the Inland valleys supported by the FAO. The transition from a subsistence shiftingcultivation system to a settled, more intensive system in which economic surpluses are producedis, however, difficult to manage. Yet, a determined, systematic effort is needed now to speedthe transition.

2.7 There are repotwly 400,000 farm families in Sierra Leone (about 60 percent of thepopuation). Of these, an estimated 120,000 men work in diamond and other minng enterprises.The combination of health and nutrition problems, which result in a very low life expectancy,ensures high ratios of dependents to workdng adults. There is also a high level of urbaniztionarising from lack of economic opporunities in rurl areas and the lure of cheaper food inFreetown. All these factors taken together have raised the wage rates needed to obtain labor forarculture. Development strategies, therefore, must emphasize ways of increasing laborproductivity if agriculture is to be economically viable.

1. Poley and Performance Prior to Structal Adjustmeai

2.8 Ihe primary objectives of the Government's agricultural policy in the past were toaheve self-sufficiency in rice, higher sectoral productivity and farm incomes, reducedmalnurition, greater agricultural diversification and increased export earnings. Before to theadjustent reforms, these objectives were to be achieved by direct government interventionthrough the Sierra Leone Produce Marketing Board (SLPMB), a parastatal monopoly, and the

tegrated agricultural development projects (IADPs), combined with regulated prices forproducts, and input subsidies. These policies were pursued in the environment of a highlyovervaued domestic currency. In the rice subsector, quantative import restrictions were usedto establish the wholesale price of rice and influence the retail price. Coffee and cocoa were, incontast, subject to explicit export taxation, in addition to the penalty imposed by an overvalueddomestic currency. Producer price incentives for all three crops were low.

2.9 These agricultural policies failed to attain their objectives: agr.cultural productivity hasremained at more or less subsistence levels; rice imports have increased more thm seven-foldfrom levels in the mid-1970s (to 30 percent of total consumption curently); levels of mnritionhave not improved, and per capita consumption of rice is reported to have fallen by almost 30percent; crop diversification has not increased; SLPMB purchases and official export volumes felsharply as heavy taxation of coffee and cocoa did not encourage their production; and the highyinput- and management-intensie LADP approach proved to be beyond the Government'sresources to implement effectvely.

2. Agriculurl FOley In the Context of Stuural Adjustment

2.10 Against the backdrop of almost dree decades of disappointing agricultural performance,the Govement, in the late 1980s, changed its policies fundam6y. In addition to exchangerate a94 trade liberalization, it relinquished its trade monopoly for rice, coffee and cocoa, andbegan to allow market forces to be ihe principal demina of agricultural production,proceing and marketing. It was anticipated that as the private sector gained strength, the

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SLPMB would confine itself to produce inspection and quality control for exports. Menwhile,to improve the efficiency of its opeations, the SLPMB was to be restuctured. To improveproducer incenives, and enable coffee and cocoa to com efctively on the wodd market,SLPMB buying agents were to ensure that the producer price would fail below 60 percet ofthe FOB price. The results have been mixed. Befbre the border disubaces, the SLPMB, withits bigh overhead costs and relative inefficiency, is reported not to have been able to withstandcompetition from the private sector; since the border disturbances, coffee and cocoa farms havebetn abandoned and some produce procured under duress ty parties unkmown. Pending aninvestigation of its activities, operations of the SLPMB have been suspended.

3. AgrIcultural Strategy-Outline

2.11 The primary objectives of the Government's cuent agricultura strategy are to promotesustained growth of agrcutural output, food security and the reduction of poverty. Takingaccount of the sector's poor absorptive capacity, weak rural financial institutions, and, as yet,undeveloped private network for the import and marketing of essential farm inputs, the strategyshould comprise dee main dewopment prograns, for rice, other food crops, and exportcrops.3/ On grounds of both growth potenial and equity, the proposed strategy is stronglyoriented toward smallholders. In support of these programs, acdons would be need in fivemain areas: maintaining good policies and incenives for farmers, developing infastructure,strengthening Iituions, carrying out a program of agriculturatrning and education, andesuring tight donor coordination.

2.12 lhe Dewlopment Programjfor Rke.41 The essential components of a rice developmentprogram would be: Q) preparing an inventory of suitable inland valey areas, giving fis priorityto those widh the best water supplies, and where cropping bas already begun, and designing watercontrol structures (these tasks would be carried out by the Land and Water Development Divisionof the Department of Agricultre, which has the skills for doing such work, and is already doingit under an BC-financed project); (ii) encouraging frmer associations to organize land clearanceand establish water control structures; (iii) exploring possibilities for supplementary irrigation,using low-ift pumps and tubewells; (iv) promoting Ndama draft cattle for cultivation;(v) facilitating the availability of power tillers as another option for draft power;(vi) dissnating appropriate crop varieties for the main rice ecologies (this task would be doneby the rice research station at Rokupr); (vii) ensuring timely avaflability of seeds and ferdlizers;(viii) training, equipping, and deploying a tightly orgaized extension service with good link toresearch stations, and a mandate to teach farmers how to change tradional practices;(lx) expanding the availability of threshers, drying floors, parboiling and milling equipment, andstorage facilities, while improving post-harvest handling of the rice crop; and (x) liberalizing therice marketig system, and carying out a rice marketing and policy study to guide policies aimedat keeping domestic production competitive with imports. Studies of potental health andenvironmental problems associated with Itensive rice culture i the lowland valleys have beencarried out within the FAO program; the studies conclude that many of the problems cited arenot reated to rice development, and that satisfacory means for dealing with them are availablein most cases. There would also be emvironmenta benefits associated with a rice program,

aI lbe rationale for these tree deveme progmam u be descid in detai in a dwhcoming agrioultasate memoraufm preaed by World Bank sgaff.

I Thi seXton draws on FAO 'Uified Action Progamme for Incaed Rice Producton by SmaflSoaeFamwal.Field Documen TCP/S18952, Decembr 1989.

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making possible a reduction in pressure of dsftng cultivation on the uplands and a moreappropriate vegetative oover in these ares.

2.13 lhe Programfor OtOer Food *o. The major other food crops re cassava, sweepotato, legumes (maiy towpea, pigeon pea and beans), groundnuts, maize, onions and othervegetables. Food crops wth export potentia Include pepper, ginger. fuits and vegetables. Mostof these crops are tditionally grown in the uplands, and intensification of both upland riceculture and its assocation with improved rice in the land valleys will itsef inmrove uplandcropping. The componen of a development program for these crops would be: (i) providingadequate resources to the Institute of Agricultura Research at Mala and the Rice Research Stationat Rokupr to enable them to carry out effectively their research mandates; (ii) transforming theetension service front4line agents into "generalists," able to handle farmers' questions;(il) intensifying adaptive research on maize, pepper (chilis) and ginger; estabisig a good,improved seed industry for all crops, but especially vegetables; (w) expning ditribution ofimproved varieties of cassava, sweet potato and groundnut; (v) ensuring availability of small-scaleequipment for pmcessing tuber crops; (vi) improving the efficiency of marketing all crops; and(vii) carying out a study of gender issues in order to learn from experlence elsewhere how tomove from traditiona cropping systems to others characterized by much greater inusity withoutadding inordinately to women's work burdens, reducing their cash incomes, or jeopardizing theirown nutmiional st or that of children in the farm family.

2.14 lhe Program For TradhWonal Eyport Crops. World markets for coffee and cocoa havebeen charaized by depressed prices in recent years, but there are ways in which Sierra Leonecould gan furter advantages evea in the face of current market conditions. Appropriate stepsshould be tak to realize these gains. In addition, there are significant opportunities to expandproduction and marketing of cashew and kola, which should be explored. Components of adevelopmet program for tree crops would be: (i) encouraging better plantings as widely aspossible; (ii) acceleratng selecdon of the most promising seed and clonal plantig materials fomeither local or foreign sources; (iih) ensuring the extension service is knowledgeable about treecrop propagation and care (including cocoa grading procedures); (iv) expann aailability ofbetter, small-scale processing equipment; (v) re-introducing strict grading procedures for cocoa;(vi) coissioning a cashew study to review externa market prospects, disease problems,varietes and production methods; and (vii) fostering propagautA methods for cashew and kolawhich would reduce to time between plantng and bearing fruit by at least half.

4. Ma Actions and the Bank's Role

2.15 Actions in support of the above agricultural development programs are needed in theareas of policy, infrastructure, isuions, trining, and donor coordinatioL A start has beenmade on some of these actions, but further work is needed. The following sections outine thepresent situation and suggest what remains to be done.

Polkes and Incenaw. At the macro level, a number of measures to reduceeconomic distortions and promote the private sector's role in agriculture havebeen initiated, among them privatization of public sector plantations and mills,removal of input subsidies;, reducing the Government's role in input supply, andhiberaizing import policies for tobacco and rice. Except for the divestiture andprivatization of public sector plantations and mills, these reforms are expected tobe fully achieved in the short term. The Government is commid to removingthe subsidy on specific fertlizers over the next three to four years; this needs tobe extended until it has relinquished completely its role as supplier and

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distor of its. Action plans for the divestture of the oil palm, coffee,cocoa, rubber and sugar eate would be implemented over the medium term.In th matme, Mnagement services contracts, linked to performance citeia,would be called for. A rice mrketing and policy study would provide anest baeline from which to monitor market development, aud decidewhether any ientlons by the Government are called for, and to ensure thatprice fluctuaons do not prematurely discourage domesdc production. inaddition, a thorough review should be done of regulations and the general policydimate for impott and marketg of all agricultural inputs (seeds, fertilizers,plant protecoion materias, fuel, equipment and spare parts, livestock feeds, andso on), to ensure that there are no policy distortions which would hinder privatesector delivery of these essen requisites for intensified agricultural production.

* InatCture Deweopment. The dilpidated state of the existing feder roadsand an insufficient road network has isolated many agriculturally productive areasand become an impedimn to increases in marketed output. Throughrehabilitation of exsting feeder roads and expansion of the rural road network,the straegy would be to reopen remote productive areas and promote integratedand balanced regional development. Once peace is restored in the coffee andCocoa-gowing areas, the rehabilitation of war-ravaged rural roads would also bea priority. The agricultura straegy will call for adequate funding for the regularmaintenance of these roads. Another focus would be development of small-scaleirrigatio with active participation by farmers in the construction andmanagement of the schemes. Priority would be given to the consolidation andImprovement of existing intensified frming in the inland valleys and, in themedium to long tUm, the development of new areas. Buiding on experiencealready gained under FAO supported projects, firther pilot projects in inlandvalley development to find solutions to remaining problems would be animportant part of the strategy over the next two yeus.

- Institutiond Siregtening. The strategy will require the efficient delivery ofagrcultural services to farmers, especially field etension services, on-farmaeda research, and monitoring and evaluation. To accomplish this, financialand teical assistance will be needed to: (i) transform the agricultu researchand extnsion services ino organizations capable of generating new technologiesthrou problem-olving adaptive research, and teaching them to farmers;(ii) improve the capacity of the Department of Agriculture and Forestry to planand implement projects and programs; (ii) strengthen budgetary management atall levs; (iv) establish a comprehensive daa base, startingwith an agriculturaicenus, and Including regar production, income, household and market surveys;(v) strengthen monitoring and evaluation, particWarly impact assessments oftechnology adoption on value added and farm incomes; (vi) promote voluntaryfamer groups for input and output marketing, obtaining credt and managingirigaion schemes; (vii) carry out studies of gender issues in the transition fromsbh'Ig subsistence to intsive setded agriculture, and of issues in cashewproduction and marketing; and (viii) review the regulatory and policy climate forimport and markeing of all agriculral inputs, with a view to establishingefficient private trade.

* AgrIculhUtal Traing and Eduadon. A staff development survey for sectoragencies, including research and training institutes, will be prepared in thecoming year. The survey will assess the existing professional, technical andmanagerial capacity in sector instutions as against the skis mix and staffsreogth required by a higher growth straegy. A public investment program to

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meet the additional kimet for training od education would be preWedas part of th agriculua saegy.

* Role of Wamen. Since women do the lion's shr of agriculual work, therneeds should be given patidar attention when fomulating policies for taining,technological imment, and credit in this sector.

* Donor C ooAfnado. In view of the curre limited implemeion capacity ofthe public sector, and Ihe backdog of actions which need to be taken, it is of theumos importance that the donors act in concert to prevent the overall segyfrom being stalled by overwhelming demands. Donor coordination is especiallycritical in the management of food aid, input marketing and pricing,strengthening of finacial Instituions, cost-reowvery, the development of strongreerch and extension services, and in maintining adherence to the crtical coreof the recommended agricutural srateg.

B. The Mining Seor

1. Prmu Stau

2.16 The mining sector has been Sierra Leone's main source of freign exchange earning overmany decades. The sector curntly oonsists of two prvately owned mining operatons tproduce rutile (Sierra Rutile Limited, SRL) and bamxite (Sierra Leone Ore and Metal CompanyLimited, SIEROMCO, a subsidiary of Alusuisse), one stateowned commercial-e diamondminn operation, (National Diamond Mining Company, NDMC), which is presently nealyinpeative, and nusme small scale and artisnal diamond and gold miners. In addton tommeralization of alluvia diar.onds, several regin show excellent geological prospects for gold.Currenty, the production of rudle and baxite has reached its deiged and installed technicalcapacity, while development of additional nw production appea consained manly by theinvestment climate and world market condidons. Since the late 1970s, howeve, due toinappropriate policies and institutional frmework-resulting in most of the diamond and goldexports flowing through unofficial channes and discouraging several potential new invesors-combined with depressed markes and depleting reserves of alluvial diamonds and iron deposis-the sector's conuono the economy has declined sharply./ Despite tids, in 1991 thesector stil accounted for about 10 percent of GDP, about 90 percen of tota czorts, andgenerated substaial employment, particiarly in small-scale diamond minig, and productionof rutie, bauxte and arti gold. The sector provides employment for about 14 percent ofthe labor force. In the diamond- and gold-bearing rural areas, mining is a major source ofemployment and cash income. In rural areas in she Eastern and Southern Pwvinces, close to 30percent of the households are involved in mining activities.

2.17 Over the past dIree years, the Govenmen has taken important steps to enhance sectoraldevelopment and improve its performance. Ihe adjustment policies that have been implmentedin the last couple of years provide an improved macro firaework for expansion of output in theminig secor. In order fully to realize the sector's freign exchge eaning capacity, additionalsector policy measurs are required. Several initiatives bave been taken to regularize the smallsce diamond mining and trading acdvites, and to channel these activities through the formalsystem. A comprehensive review of mining policies, includng preparaton of a draft new MiingCode, has been carried out with assistance from UNCI`r, and more recently with World Banksupport Furthermore, subsiies to NDMC have been eliminated, and the company is beng

i/ bon mnding at Marapa was d ootinuod in th mido 1970I duo to on reerve depleion. Effot to teaciprodudion frm isti th ho eirly 1960. w U_mOOm

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brought unr fui state conol in prparation for its subeque liquidation, which is aimed atestablishig a "clean slate" for NDMC to fiitat ts privatizatlon by introducing fil

to the cuntly vey complex fnaci debt siaon.

2.18 Dimnds. Officially recorded exports of diamond in value terms peaked at US$81.3milion in 1980, countg for 40 percen of total exports. By 1988, official diamond exportshad fallen to only US$8.S million and contrbuted less tdaon 8 percet of recorded exports. Thisdrastic decline was prmariy eplained by a shift in trade from official to ilicit channels inrespone to a widening diferenal beween the official and the paralel exchange rates,compounded by the efects of dtaconian controls-aimed at ensuring official access to exportproceeds though stat trade monopoly combined with stiff penaltes for smuggling of gold,diaonds and currencies-introduced in November 1987 as part of the Public EconomicEmergency Rguaons, and not by a faU in actual eports.

2.19 RealIzing the gross failure of its diamon sector policies, the Govermem in 1989embarked on a new approac by allowing licensed deaers and exporters to trade in gold anddiamonds combined with monthly fees for traders, low tax rates, and a requirement that exporterssurrmder 60 percent of their foreign curmr proceeds. As a result of these measures, there wassome revi in official expors in 1989. Several meaures to streamline this strategy have beentae since 1990. Under a new minhi policy which came into effect in January 1991, sevenfirm are licensed to export dmonds. A transparent valuation system for diamond exports hasbeen in operatio since February 1991. Iho Government has engaged a qualified diamond tradeconsultt as valuer. Since Jamury 1992, dimond exporters have been allowed to retin 100percn of their export proceeds. At the same date, the tax on diamond exports was raised from2.5 perent to 3 percent and its structure rationalized with a view to increase the Govenment'sshare from the trade; exporters curnay pay an annal fee of US$ 100,000 per license. Servicesof a foreig security firm have been contacted to minimize iRegal diamond trade. Despite thecontuing dispariq between th official and the paralel exchange rates until very recently, thenew policy has met with init success, reflected by an increase in official diamond exports fromthe US$8.5 milion recorded in 1988 to an estimated US$35.1 milion in 1991192.!k/ The needfor additional mprovemeIs well recoized by the Government, but specific measures are stllat the fomulation stage.

2.20 Rutile. Sierra Leone is one of the leading world producers of rutile concene,accounting for about a third of world producton. The prin use of this product is formanufacturing pigmnents in white paints; it is also widely used in the manufcrin of bothmilitary and civlian airplanes. Rutile has become Sierra Lewne's main source of official foreignexchange erings with over 50 percent of export value in 1990/91. SRL has establiRhedsufficient ore reseves to continue operation toughout the next 12 years in its current minnmg

/ae and has receny undertakn a major investment program with support from IFC andbial crdits. SRL has a totl work force of about 1,850 employees. A major issue forSRL is its comparavely high production cost, which is sificantly above that of its maincmpedti due primarily to the high cost for power required by metalurgical procesing. 'Me

Gin veqy cope g nature, it in ary diffiult to eiat thdo valu of smugld diamnds, but it isoffaly ectmatd to be at ka US70 miion, comae_d to offical expo"s of US$35.1 million in 1991/92.Rsdmat by td and dealr frequnly put the vale of smugg_d diamonds in the rang of US$200-300milion per yea.

21 Addiional S for 24 more yea (f operain at pres production rates have been establshed by SRL inad-areas.

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longer-term market outlook remains favorable since relatively scarce rutile i preferred to moreabundant but lower-quality ilmenite products. Consequendy SRL is actively eaed in an Initiphase of improvements to establish a more favorable and competitve cost structure, which maylead to implementation of a second-phase project to expand production, still under study.

2.21 Bauxwbt. Bauxite has been mined in Sierra Leone since the early 1960s by SIEROMCO.Production has increased substantially, establishing bauxite as the second most important foreigexchange earner since the mid-1980s with over 18 percent of the total export value in 1990/91.It employs about 960 people, but equipment and facilities arc in rather poor conditon becauseinvestments have been kept at minium levels in the past, but are expected to improve as a newreplacement investment program of about US$20 million over the next 3-4 years gets under way.SIEROMCO's revised agreement for mining bauxite has recently been renegotated withassistance from UNCrC. The new agreement has substanily increased the fsc contributionfrom bawute expors. However, it fails to include adequate provision for righs to inpetvohumes and qualities of bauxite product being exported. The long-term market outook forbauxite remains gooi. However, production increases at SIEROMCO are restricted not bymarket, but by reserve amounts as disclosed by SIEROMCO, which at the existing bauxite gradecontents would barely support production increases of about 40 percent, which is notcontemplated by SIEROMCO. This creates an urgent need to execute studies, contemplated InSIEROMCO's agreement, concering the viability of mining existng lower-grade miera widhabout 46 percent aluminum trioxide (ore currently mined contains about 52 percent alumimtrioxide).

2.22 Gold. Production of gold has experienced large swings since its beg _ing in 1930,reflecting fluctuations in world prices and shifting government ex ge rate and mining policies.Since the 1950s, when main mining operations ended, gold has been produced by panning alluvialdeposits utilizing highly labor intsive ardsanal methods. Because of the difference between theofficial and parallel exchange rate which emerged at the begining of the 1980s, offici exportsvanished during the course of the decade and is now insignificant. However, it is well knownthat gold is mined extensively by both licensed and unlicensed miners, occupying an estimated25,000 to 40,000 persons. Unofficial estimates indicates that production is in excess of the18,000 ounces recorded in 1984/85, currendy corresponding to over US$7 million, almost all ofwhicb is smuged out of the county. The near term prospects of artsn gold mining are good,provided pricing and marketing mecmnisms are internaionally competitive.

2. Medium Term Strategy

2.23 To maxinize the benefits to the economy of the mining activities, prioriy needs to begiven to further measures aimed at egulonof diamond exports, and to ensure tat revenuesfrom these activities pass through official chamels in order to broaden the tax base. Ihesemeasures would also address improvements of gold actiities which, although smaller inimportance today, could still be important in the future. To achieve this, the Govement needsto (i) maintain policies which eliminate tht discrepancy between the official and the parallelexchange rates; (ii) establish streamiined and transparent licensing and export procedures; and(iii) pursue policies aimed at restoring business confidence. Success in the latter respect wouldalso encourage private investment in the sector. Furtier policy measures and recommendedadditiona actions as concerns the rutdle and bauxite subsectr are being Ientified andpreliminarily delineated. They would aim at the rossibility of incrased production fromcurrently exploited deposits, and the development of new deposis. In the case of majorexpansions, these should be preceded by firther improvements to the SIEROMCO and SRLagreements to ensure that projected fiscal benefits are clear and satisfactory. In the case of new

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projects, positve consideration has been given to following prototype model agreemes, whichhave yet to be prepared by the Dparment of Mies.

2.24 Although there are no conclusiv estimates of resves of alluvial diamonds and gold,avable inmtion indicates that current production levels of both alluvial diamonds and goldcan be sustained at least throughout the decade. In the case of diamonds, as presently knowndeposits are worked out, a gradual shift to more capital litensive and systematic mining methodswill be required. Separately, the development of two kInberlite pipes has been extensivelystudied by interaional mining companies with positive results achieved at the feasibility studystage. This could add significandy to diamond output over the next 10-15 years. However, thiswill reqW active and well focused efforts leading to the joint venturing or divestment of thesekimberlite deposits. Tbis process is now at the inception stage with an offer from SunshineMining Company from Idaho and several offers from diamond traders and investors.

2.25 The Government's policies to bring the trade in alluvial gold and diamond through officialchanels must recognize that alluviad production is next to inpossible to contol by policemetods, hat smuggling is a well established and inexpensive option for exporters and that themovement between illicit and offical chnnels is highly Sensitive to severa factors including:(I) the existence of a foreign ex:haDge parallel market premium; (di) the rate of taxes and leviesimposed;/ Qiil) the requiement of minimum annual sales to dealers and exporters, whichappears arbitarily detemined and unrealistically high; (iv) tie identificaion of exorters anddealers as targets for hmassment; (v) the obligation to import foreign exchange; and (vi) thetraditional role of diamond exports as a funding source for other imports. The introducton ofa market determied exchange rate has gone a long way toward providing an appropriaemacroeconomic framework for elimtn the incentive for smuggling of diamonds. Unless dtisregime is maint oed, other meawres to encourage official trade will be meaningless..stablishmet of orpn exchange bureaus in the mining areas will assist in achieving this goal.

The Government should continue to license exporters at rates which atract a larger number ofexporers, and additionally generate government revenue without dicuraing official trade;urent levies on traders should not be raised over the medium term, but instead adjusted to

increase their number. Moderate license fees that encourage more exporters to enter the officialtrade would have the additonal effect of increasing competiion between traders and would helptributors, miners and other local participants t increase their share of the inme generated inalluvia miting. The Government's policies mut be pursued in a transparent and consistentmanner to create confidence among participants at all levels.

2.26 Management of the sector, although fornally under the Department of Mines, has in factbeen widely dispersed, with other ministries and instiuions, including the Office of the Head ofStae, taking decions regrding min of particuar areas, application of etig legislation,etc. This diffusion of responsibility should be stoppd, and the management of the sector

I reguaiom appied in tpwst, wbich forcd expoms to surrenderpartor the tot of tir foreign exchangeearings to the oenal bank in a stuatbon where thae existed a parl; exchng market whi offered hiheae than the official one, de S¢co constutd an impliit tax on epoes. For exampl, in a hypothedcal case

where the ics r exporters is US$100,000 per year and the diect tax on assessed export value 3 percent,where expotr am forced to surnder 60 perent of their foreg exheu ening at the offidia e, and the

dif l between the officil and paral1 maket exchange rats is 10 perct, the de facto rat of taxation fora diamond exporter with an annual revenue of US$7 milflon would be 10.4 percent, compaed to the 4.4 percetrae of expicit taxation. Thi should be seen in relaidon to the low costs-probbly less than an addiional thpercent of cosad ri asociated with smuing is illusa that, combined with only modesta ofdirect taxaon, he paaMel mdet premium does not have to be high to provide a sufflicient incfive for Mllcittrade.

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consolidated witn a reoganized and substially strengtened Department of Mines. Thegeological uvey needs considerable assistance since the preparation of much-neededcomprehensive geological char will require campaigns of remote sensing, aeri survey,geological inpretaton and field evaluatons. On the other hand, the Mining Dision will haveto address its fPnctions of enforcament and sectoral development agency more effectively.Emphasis is on the former at prent, but in an inadequate manner due to budget restrictions.

C. Pubic Sector Reform

2.27 The main feature of the decay of the 1980s was the rapid erosion of public sectormanagement and efficiency. Wasul expenditures, fictitious contracts, etc., between privatesector entrepreneurs, govement officials and politicians became common. These developmentsoccured concomitantly with the viru breakdown in government institutions responsible forenforcing acwunability. (No govment accounts have been prepared and audited since 1979.)The public sector was used more as a source of private income and patronage than as anistument to provide services to ensure the well-being of the population and expansion of theprivate sector. Economic management generally had the character of ad hoc respons toemerging cris without gidae from a clearly defined strategy. Policies foused on short-termrather than long-term problems. Weakness in public sector management and poor impl oncapacity were the main reason for the failure of previous adjustment programs. Under thecurrent structural adjustment program, the Government has adopted a two-pronged approach inaddressing the key issue of weak public sector performance: first, scaling down govenmetinvolvement in the economy by divesting islf of industri and commercial acves andprbvaization of parastatals, and focusing its activities on the provision of basic services; second,implementing policies to sengthe Its capacities, particularly in fiscal management. In the lattercontext, meaures a being taken to rationalize public expenditure, eradicate corruption, ensureaccountability and s gthen auditing. Cases of suspected misappropriation of government fundsare ben investgaed.

1. Fiscal

2.28 More effective fiscal management will require measures to strengthen institutions and therecument of staff with the requisite managerial and technical skills. Several steps aimed atimproving e_entur conto and revenue coUectdon have already been taken. Ihe Govemnmentalso sees more efficient aid coordbiaton as an important part of its policies to improve fiscalmanagementX

2.29 Budget and Expenditure Control. The Governmentes policies aim at improving theefficiency of public exediur and eliminting waste by imposing financia discipline andaccountability and focusing on the provision of basic services. Until recently, there was littlecoordination between the Depam of Finance, which was responsible for preparing therecurrent expenditre budget, and the Departent of Development, and Economic Plannig,which was responsible for the development budget. In addition, recruitment of staf, in paiculardaily workers, took place widt little or no consideration of expendiure priorities and budgetaryImpact. As a first step, the two Departmen were merged in Sepmber 1991. Secondly, in1991/92, steps to integrate the preparation of recurren and development expendre estimateswere tamen (cf Section f.A). A Fiscal Monitoring Committee (FMC) has been established to(1) review all public sector activities in the context of the adjustment program; vi) determinequarterly and monthly targets for revenues and expenditures for each fiscal year; and (iii) monitorexpenditures relative to targets and flows of revemnes. Self-accounting arms of the Government,such as the mitary and the police, will also be subject to review by the FMC. The Governmet

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has also take tps to improve control of eedlte related to the war activities along theLban border. Preparations are also being made to Improve budget execution, monitoring andreportig procedures m key spending datmenbt, including Education, Health, Agricultre andWorks. Whereas recitment of pemanent staff has been subject to a relatively efectve freoein recent years, there is stil laxity In the hirig of daily workers.

2.30 The Accountant Genr's Office (AGO), which is responsible for monitoring, processingand controlling all financial transactions of the Government, has been significandy strengtenedand steps to improve its intemal auditing capabilities are under way. Issues in the AGO that needto be addressed over the medium to long term include: (i) excessive centralization of fnlctionsand responsibilities; ultimately, the functions of AGO should be limited to those that belong toa treasury depanment, and (ii) further improvement of the control and monitoring of payrollexpenditures. These issues will be addressed as the required expertise becomes available to theSecretariat he Auditor General's Deparment (AGD), which has been largely inoperative inrecent years, needs to be strengthened to enable it to perform its function of external auditing ofall govemment departmes, local authorities and parastatals. The Financial Orders require ataU government procurement above a specified threshold is handled by the Central Tender Board.Lack of autonomy and political interference with the Board has undermined its efficiency in thepast. As part of the reform program, the Board has been reorganized to a purely tcnical bodyand the Gove-ment has commted itself to maintain the Board's intrity.

2.31 Aid Coordination. More than 90 percent of budgetary development expendir arefinanced by etuemal sources. Currenly, there are several agencies of governmen involved inoordinaig ext assistance: the National Authorizg Office, the Natonal Aid Coordinaig

Secretariat, the Depanrtmt of Foreign Affairs, ad the Department of Finance, Development andEconomic Planning. The Government recognizes the need to improve aid coordination, and isworking toward centralizing aid coordination in the Departmnt of Finance, Development and

conmic Planning. The Govermment will not undertake any investment project outside thethreyear roiling Public Investment Program (PIP) prepared in the context of the 1992/93budget. The Government has adopted the public Investment Program (PIP) framework as theappropriate vehicle for coordiatig and directing donors assistance for the Sierra Leone program;no investment will be undertaken by the Government which does not meet the PIP eligibilitycritea, including meeting the Govermment's development priorities, and yielding an acceptableeconomic rate of retum.

2.32 Revenue Enhancement. The second element in the Government's strategy to improvefiscal management and moblizing resources to finance the restoration of economic and socialservices is aimed at strengening the institutional system for revenue collection. Revenueprospects have been enhanced in the past two years by renegotiating mining agreements wit therutile and bauite companies and putting in place a marine/fisheries surveillance system. A bonssystem for Customs and Income Tax Department staff introduceJ in 1989/90 has resulted Insubstan_ia improvements in collections. Measures to improve tax admini tration and collectionwill ilude strengthening the key revenue departments, the Customs and the Income TaxDepartmen, with technical assistance from the United Kingdom. Recognizng the majordeficiecies in the Income Tax Department, legal assistance will be provided for the preparaionof consolidated income tax legislation, a training adviser, training awards, and equipment. TheGovernment is committed to setting up an enhanced investigation and enforcement secdon, tepreaaion of legislation to bringf the tax law in line with the 1991 Constitution, and to providethe Income Tax Deparnmet with the neceary powers to cafry out in-depth eamibon ofsuspect account. In the Customs Department, significant measures have been taken in the recentpast to improve management and performance. Additional steps are under way to reform the

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organizational structure, improve the incentives system and provide comprebensive training (cfSection l1.3.b). It is essial that the reform of the Department pceeds expeditiously tobalance the work of the pro-shipment Inspection in total trade monitoring. The Government willredeine the role of the Department of Customs and Excise in the prevention and detection ofsmuggling and establish a fully trained and professioaal Investigation Branch, and allow them tocontinue to impose fines and prosecute tax offenders. A pro-shipment inspection system,administered by Specialist Services International (SSI), has been introduced for surveillance ofboth imports and exports.

2.33 The fisheries sector is a potentialy major source of foreign exchange for Sierra Leone.To increase net revenues and prevent illegal fishing in Sierra Leonean waters, protect localartisana fishing, and conserve maritime resources, the Government established a joint venture,Maitime Protection Services of Sierra Leone Limited (IPSSL), for the surveillance andmanagement of its maritime fisheries, with the participation of an itnaional fisheriesconsulting firm. MPSSL began operations in January 1991, but the arrangement provedunworkable. The Governument is in the process of revising the afrangements with a view togenerating an adequate flow of revenues to the budget

2. state tr Reform

2.34 There are currendy 40 partly or wholly state-owned enterprises in Sierra Leone, spreadover most sectors of the economy. While many of these enterprises have a strategic function asprovider of essendal social and economic infrastructure, compared to many other Sub-Saharancountties, the parastatl sector plays a relatively limited role in the Sierra Leonean economy.Direct budgetary financial subsidies to the sector have been relatively modest, pealing at 3.5percent of recurrent expenditures in FY87/88. Indirect subsidies in the form of access to foreignor government loans, exemption from import duties, sales tax, etc., has, however, beenconsiderable. Most of these companies have been severely mismanaged for years by their boardsand chief executives. Inefficiencies in operations-in recent years aggravated by low capacityutilization due to liquidity problems or lack of spare parts-are rampant and maintenance offacilities have been neglected for years. Neither loans by the Government, nor by foreigncreditors have been serviced in the past. Util recently, few attmpts were made to collectdividends from the parastatals or to ensure that taxes and other levies were actually paid.

2.35 The Government has already taken several steps to rationalize and improve the economicperformance of the public enterprises (PEs). It has stated as its policy that the individual PEs areautonomous in carrying out their daily operations. Following removal of all price controls onservices provided by the PEs, effective April 1990, utility charges have been raised significantly.This have made it possible to virtualy eliminate direct financial subsidies to the sector. Recenefforts to collect dividends and taxes in arrears resulted in a Le 379 million contribution to taeFY91/92 budget, as against Le 300 million targeted in the program with the IMF; as acomparison, in fiscal year 1988/89, only Le 27 million was collected in taxes/dividends from theparastatals. The Produce Marketing Board's export monopoly was eliminated in 1990 and it wasclosed down in July 1992. Several individual companies (The Ports Authority, NationalTelecommunication, etc.) are being restructured to improve their efficiency in operations, in somecases with foreign management contracts. Postal services, previously the responsibility of aspecial department in the Department of Transportation, have been transferred to a newpartatal, Post S- vices Ltd, which operates on a commercial basis. A decision to divestgovernment-owned hotels was tan in January 1992. Measures have been taken to enforceaccountability in the operatior. of the State Lottery, Wellington Distilleries and the NationalInsurance Company.

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a. Iey Issues

2.36 While the measures listed above have gone a long way toward improving efficiency inthe parastatal sector, severe' ' issues still remain to be addressed over the medium term. Th-eseInclude:

* weak mangement due to inadequate inceves combined with lack of opeaionalautonomy, improper recruitment policies, and shortage of experiencedprofessional staff, in particular, In finance and accounting. Transfer ofknowledge from expatriate professional staff does not seem to take place asexpected;

* technical inefficiencies due to outdated technology and neglect of mannance.Some utilities will need very large investments over the next five-te years toreplace wom-out equipment (cf Section MIB below).

* iamdequate accounting and budgeting practices in the individual PEs. Theirfinancial statements-gnerally published only on an amnual basis, and with aconsiderable time-lag-are insufficient as tools for decision making, control,planning and budgeting;

* lack of appropriate and consistently applied rules for deprecation of capitalequipment; and

* insufficient eq base, calling for injection of fresh capital. Despie recenyears' very high inflation rates and the substnti devaluation of the Leone, mostcompanies have not revalued their assets-or done this only to a very limitecddegree. As a result, profits are overstated and insufficient provisions are beingmade for replacement of equipment and other physical assets.

b. Government Strategy for Public Enterprise Reform

2.37 The main objective of the Governmen's public enterprise reform program is to ensurethe sectors ability to deliver services in a cost-efficient way and to raise its contribution to theeconomy and the government budget. This will be done by Q) prvatzaton of PEs-or some oftheir nctions-which, due to their nature could be better performed by the private sector; (Hi)liquidaton of loss-making enterprises; and (di) commercialization of enterpises remaining in thepublic sector. A Council on Public Enterprise Reform chaired by the Secretary of State forFinance, and attended by the Secretary of State for Trade, Industry and State Enterprises and theGovernor of BSL, will be in charge of deciding on reform strategies. A Public EntepriseReform and Divestiture Committee (PERDIC) will be in charge of carrying out the poiciesapproved by the Council, but will not interfere with the entetprises' normal operatons. Theregular monitoring of the operations of these PEs will remain the responsibilitr of theirsuppervisory ministries; this monitoring function should, however, be substantly strengthenedby cleady defining the objective of each PE, improved auditing, etc. Sautory monopolies willbe eliminated; accordingly, the Goverment will, for example, repeal the 1975 Insurance Actwhich granted monopoly to the National Insurance Company (NIC). A regulatory body wil beset up to oversee remaining public monopolies. Enterprises, which will remain in the publicsector, will be provided with efficient and competent management and wiU be required to enterInto peformncme contracts. A work program, covering key enteprises, which sets the time tablefor the necessary steps toward privatizaon/management contract or restructuring of the PEs, hasbee formulated. Elements of the program currenty under inplementation include: (i) divestingthe Government's shares in the National Insurance Company (NIC), the Sierra Leone PetroleumRefining Company (PRC), and the National Petroleum Company (NP); (ii) preparation for theliquilation of the National Diamond Mining Company (NDMC); (iii) putting the Guma Valley

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Water company (GVWC) under private managemen contract; and (iv) completing the review ofthe management contract for the Sierra Leone Ports Authority. After some delays, malwy dueto the cage in government, which necessitd some reconsideing and further debate by theCabinet, implementation of the program is now progressing sfactorUy.

2.38 Concomitandy with implementaion of these measures the Government will prepare asecond round of measures to fuer reduce its involvement in production and comma calactvities. This wil include idendfication of addidonal PEs to be divested. Those that wilremain in the public sector wil be restuctured according to their need. Foreign private partnerswiUl be invted to invest in some of those PEs being privatized in order to maker much-neededmanagement and tehical know-how available to Sierra Leone. This wiUl have the additionaladvantage of reducing the risk that the limit absorptive capacity of the loca capital market andthe smaU private sector in Sierra Leone delay implementation of the program.

3. Civil Service Reform

2.39 Civil service employment expanded rapidly in the late 1960s and the 1970s. Theexpansion continued during the first half of 1980s, albeit at a lower rate. Pressures to providejob opportunites to the rapidly expanding labor force combined with controls on the reutmentof pement staff resulted in a much faster increase in the employment of daily workers than inother categories of civil servants. A domint share of the new recruts to the civil service, inparticular in the lower ranks, were people who got their jobs becase of patronage.

2.40 The increase in employment, combined with a rapidly increasing wage biUl for dailyworkers and worsening budgetary conditons, imposed increasingly severe constint on thescope for salary increases for permanent cvil service staff. This, together with acceleranginflation, resulted in a drastic erosion of real income for the civi service during the past 15years. According to rough estimates, salaries for higher level staff in June, 1992 stood at onlyfour percent of their 1975 levels in real terms (rable 2.1). The erosion of real incomes for thelower level ranks has been less drastc thn for higher level staff. Nevertheess, today's salarylevels for the lowest paid groups hardly cover even the cost of commuting to work, thmsprvding a strong incentive for absenteeism. In terms of basic salay, the ratio between highestand lowest paid permanent staff, whih was 22 in 1970171 and 20 in 1974/75, has beencompressed to 8.8 in 1990/91. The substantial increaes in tax rates with higher incomes reducedincome discrepancies even further: If incomes net of allowances and taxes are compared, the'compression ratio,' i.e., the ratio between the highest and the lowest salaries in the civil service,was only 3.8 in 1990/91. These trends, combined with faster pay increases in the parastatal and,in partcular, the private sector, have also resuted in very large salary disparities between thesesectors and the civil service, in particuar for higher level staff. In 1991, a manager in a seniorposition In a larger private sector company typically eaned at least 20 times more than hiscounterpart in the public sector; basic salaries for unskilled employees in the private sector werenormay 2-3 times higher than in the civil service. These disparities widen if housing, trsportand other tax free aUlowances are included in the comparison.

2.41 As a consequence of the policies pursued in the past, the civl service sector is todayfaced witi an acute crisis which will require prompt and firm action by the Government:

Seee ditorted sa4lng swe with acute shortage of skilled staff,Ltimicarly at senior levels, concomitant with significant overstffing at lower

levu. The civil service has substatialy more employees than are required forthe efficient delivery of public services. Most of the redundancies are among the

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a. The Agnda

2.42 The deteriorating quality of the civil sevice prevent the public sector from fulfllng itsfunction of delivering e ial services. It also rrent a severe constaint on the ability todesign, implemen and susan adjustment efforts. To address the issues in the sector, theGovernment has, as part of its structural adjustment program, initiated comprehensive rebrmaimed at restoring civil service efficiency and capacity for delivery of services. A Civil ServiceReform Committee, to be responsible for its timely execution in a manner consistent with theoverall objectives of Sierra Leone's structr adjustment program, was established in July 1992.The inital steps under this strategy have by necessity been subordinated to stabilization policyobjectves, focusing on restucuring civil service employment through reduction in overstaffingat lower skil levels and getting acc'derating wage bill expenditures under control. TheGovemment has, however, in tandem with these measures, begun the longer-term institution-building task to create a slim, but efficiently functioning civil service by boostng skills and workmotivation through better pay and training of existing staff, and recruitment of new staff.Priority tasks in the Committee's reform program are:

(a) Comprehenstve Review of SAff Resources and Needs. The first phase of thisexercise will review the functions and organization of five departments (Finance,Planning and Economic Development; Agriculture; Education; Health; andWorlk) to guide actions to rationalize organization of these departments. In thesecond phase, job inspections will be carried out to address staffing needs toundertake the functions of each department and match these needs against existngstaff resources. Ihe grading of aU positions in the ministries and departmentswill be reviewed. Based on the results of this review, to be completed duringFY 1992/93, staffng structures in these departments will be rationalized.

-X) Refom of dse Remuneratlon System. During FY92/93, the Government wilinitiate a comprehensive review of the public sector basic salaries and allowancesaimed at: (1) decompression of pay scales and bringing pay closer toremuneration levels in the parastatal and private sectors to enable the civil serviceto attract, retain and motivate key staff, in particular in higher level positions.The measures should aim at achieving a "compression ratiow of at least 10 interms of net salaries over the medium term; (ii) simplification of the gradingstucture; (iii) improvmg staff motivation and productivity by moving toward aperformancebas pay system; (iv) design of a straegy for implemenation ofa rationalized remuneton structure that wll adequately reflect the differentroles and responsibilities of each grade; and (v) simplification of the benefitsystm by reducing the role of allowances.

(c) Instuonal rejfrm of the system of wage negotiations, both in order tostrengthen expenditure controls and achieve a more rational salary structure, andto remove rigidities in the labor market; and revision of the General Orders(which set out the mles and regulations regarding recrument, employmentbenefits, etc., for the civil service) to make them relevant to today's needs.

(d) CreadM of a Managmen Iqfonation Systm. The civil service personnelinformation system in the Establishment Secretariat is purely manual, incomplete,and in an advanced stage of physical decomposition. The lack of relevant andaccelle inormaon prevents efficient personnel policy and public e diureplanning. A computerized management information system will be establishedin 1992/93. In the initial stage, the system wiUl be utilizing PCs and will belimited to basic information only (age, gender, education, year of appointment,years in grade, etc.), but designed in a flexible way so :ha it can be expanded

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in the fature, and also linked to the computeized payroll system in theAccoutAn General's Office. A census should be carried out in connection withthis exercise to remove remaining ghosts, etc., among pensionablehemporarystaff and reired civil servants from the payroll.

2.43 The Staff Rati Progam. According to payroll data, the civil serviceemployed about 59,700 people in December 1992. Q/ Compared to most other Sub-Saharancountries, the civil service In Sierra Leone stil has an extremely high proporion of staff in non-permanent and low-skilled positions. In December 1992, about 22,000, or close to 37 percentof the civil service, was unskilled daily workers hired as cleaners, etc., or formally hired asworkers to do seasonal jobs, but in reality being permanently on the payroll. Another 10,100,or 17 percent of total employmet, was temporary staff. The number of staff in key executiveor higher tecnical positions was only 310, or 0.4 percent of total civil service employment, byend-1992. A census in 1987 estimated that about 20 percent of the staff on the payroll wereghost employees, i.e., did not physically exist.

2.44 About 5,300 ghost employees were removed from the payroll in 1989190-1990/91.Efforts to remove the ghosts from the payroll continue as part of the structural adjustmentprogram. The Govemrment will undertake an education sector census in 1992/93 with a view toidentifying and eradicating ghost teachers from the payroll. As part of this program, theGovermnent set up as a target the reduction of civil service (including daily workers) employmentby 10,000 on a net basis in 1991/92 through voluntary departure, retrenchment, enforcement ofthe mandatory retirement age, and enforcement of strict ceilings on daily workers' employment.The target was met by a considerable margin as total civil service employment, measured bypayroll data, was reduced by over 11,400, or by over 15 percent, in 1991/92 (Table 2.2). Mostof this occurred through reduction in the employment of daily workers which was reduced byabout 8,800, or over 28 percent. Close to 6,000 workers left service with a severance packageas part of the Government's voluntary separation programll/ Aboat 1,100 daily workers,who were abst when the new goverment, as part of its efforts to improve discipline in the cilservice, investigated job attendance in May 1992, were removed from the payroll. The remainingpart of the reduction in the number of daily workers on the payroll was deletions proposed byemploying department afte the new governm had amounced its decision to take responsibilityfor payment of wages in May 1992 (giving a stong indication they were ghost workers).Concomitantly, and outside the Government's separation program, a substantial number ofpermanent staff and teachers left the civil service in FY91/92 in pursuit of better-paidemployment opportnies elsewhere, being beyond the retirement age, etc. The adjustmentprogram calls for a further reduction in civil service employment by an additional 5,000 by end-1992. Additional measures to rationalize staffing structres, based on the job inspectionexercises/functional reviews in major ministries, will be taken in 1993.

2.45 The implementation of the staff reduction program added about a quarter to the annualflow of new entrants to the nationwide labor market. Furthermore, given the civi service'sdominance of the local labor market In Freetown area-close to 80 percent of total employmentaccording to common notion-the program broadly doubled the pool of labor which has to rely

JQ/ lucluding peranet and tempoary staff, 1tauhers and daily worke, but excluding the miltay and te poLihc.

1V Daily workes who had opted to leave seviee bore aid-May 1992, and in addon could povide adequatedocumnttio regardingteir employmet, werepaid off with a svercepakepmplnteto thdir numberof yeas in servie. Those worrs who had oped to leave but could not provide satisfactory evidence of theirlength of service, will be pid a lump sum pkae of Le 40,000.

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as .... ... ...... 95

on the private sector for their gainfl employment. The pvate, modern sector is cuffiyoperating at only 30 percent of capacity. Its short tem ability to absorb a more signficantproportion of retrenched staff is therefore limited. Despite this, available information indicatesthat most of the daily workers who left the civil service through early 1992 as part of therestructring program-mainly skllled labor-were able to find alternative employmentNevertheless, redundant staff, particularly those affected in the later stage of the program, couldface difficulties finding new jobs. The Government is preparing projects aimed at thereiabilitation of social and economic infastuctre to employ laid-off staff. Over the mediumto long term, the acceleration of economic growih and employment as a result of the adjustmentmeasures will enhance the economy's ability to absorb redundant civ service staff. Experiencesfrom other countries indicate that the agriculural sector, provided incentives are adequate, wilbe able to absorb a significant part of laid-off workers.

2.46 lhe Salary RationalIzation Program. To end the practice of ad hoc adjustment insalaries and begin the process of creating a rational salary structure, the Government agreed withthe World Bank 1992 Public Expenditre Review mission on a structured salary increase forpublic sector employees in FY92193. The proposal-which is within budget provisions andassumes full and timely implementation of the staff restructring program-is designed with aview to (i) limiting further erosions of real disposable incomes for civil service employees; andiu) impoving the relativities within and between different civil service career streams, taking into

acount remuneration levels in the parastatal and the private sectors. All public sector employeesin the civil service, teachers, the miitary, and the police were granted a minimum of 100 percentincrease in basic salaries (Table 2.3). Given that pensionable civil servants have been laggiigbehid other groups for many years, and the priority need to restore their motivation andefficiency, pemanent civil service staff were given additiona salary increases by stretching theirpay scales. To narrow existg salay diffrentials vis-a-vis the private and parastatal sectors, andto enhance the public sector's ability to attract and retain key professional staff, higher level staffwere granted higher salary increases than staff in lower grades. Staff in senior executive andtechnical positions were given the maxiumm increase, 27,6 percent. A major step towardharmonization of allowances was also taken by roughly tripling tax-free (transport, medical andrent) allowances for pernmanent civil service staff to a level of Le 84,000 per anmum, whileteachers allowances were increased by about 15 percent to Lo 89,000 per year. The packageincreased the salary compression ratio between highest and lowest paid pensionable civil servicestaff from 3.8 to about 4.5 in terms of pay net of taxes. It also reduced the anomalies in paybetween lower-level civil sevant and daily workers. In order both to avoid the reappearance ofthese anomalies and to ensure that fiscal targets be met, no adjustments will be made in dailyworkers' wages during 1992/93.

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2.47 ~ ~ t.oyf?~ Tnef9 PY929 aayagem# qrse,hwe,oi9 an9/9 interim step19 io *l9

renewto be llatw d inRt 1929 wil pe., 1h *amwor for 9salsm famrpenn ien (P n sys 0s a0 n0 step,~ th.1 Gov? sbud7oudno

a s 1eI sys ntewhch~ givesmoewihtoprimeinardg l ncas.

28IeUre isEt 00 urgent need to7W get 1.2wg69rain tesune o, obst0ithe ~eripndhu* eo(t)tro a.d achiev a3. moertin alr 5ur.* Ihis wilrqure

A0 R. ston go e ero n{eTad 4u eoitn oucl,wihngdwage ~ ~ ~ .*..... 0.0ase 1for daiT 1501ss 405 adpino1 pbi5etrinoeplc,whc ?cfe

firm ~ ~ ~ ~ ~ ~ ~ 0 and~ clea guidline fo aaya js;(i)dvlpm facpbiiyt nlztr Iend tnpbi tsetorpyadt omlt aay duspoos ossetv

budgetarg ~ ~ ~ ~ P target and needs for imrvdic14e ytes n iv iecori noneodtlsfo fie diffretgroup and~ cocuso of 0 ag set4mt 7 el befor p1 re1?n

of eo ears bdgt

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D. Domestic Resource MobilIzatlon

2.49 Initially during the recovery proces, Increased production in individual sectors will bepossible through higher capacity utilization In existing facilities, sad through higher efficiencyin the use of existing resources as a result of the structural adjustment policies implemented. Inorder to create condidons for sustainable growth, however, substantial increases in investmentsin new public infrastructure and private sector production facilities as well as in human capitalwill be necessary over the medium to long term (cf chapter V). Sierra Leone's limited resourcesand run-down intiutions imply that over the next few years a relatively high proportion of theseinvestmnnts will have to be fir-anced through external assistance. In order to sustain high growthrates, an increasing proportion of the total resources allocated for Investment will have to bemobilized domestically. This will require substantW increases in savings by the householdsector, the private (cotporate) sector, and the public sector. To mobilize these savings andintermediate them to investment opportunities with the highest expected returns, Sierra Leone willneed an efficient fnancial system.j/ The emphasis on the private sector as the main vehicleto achieve sustainable growth increases the importance of establishing an efficient financialsystem.

2.50 To implement this strategy, serious constraints will have to be overcome. The formalfinancial system is underdeveloped and ill-fitted to perform its functions of mobUizing andintermediating financial resources, and does not have the confidence of the general public. Theinformal system, in contrast, is thriving, but unflt to meet the needs for, e.g., longer-erm capitalof the economy. Weak collection systems constrain the Government's efforts to contribute tofuiancial savings through increased budgetary revenues. Like many other countries, theGove,. . ient of Sierra Leone has in the past tried to promote development and secure Inexpensivefunding for its own borrowing by maintaining ceilings on interest rates. This, combined withhigh inflation, resulted in negative real interest rates, which discouraged domestic savings andpromoted capital flight. Eroding public confidence in the banking system also contributed to this.

2.51 Household Savings. Mainly because of negative real interest rates on bank depositstogether with lack of confidence In the formal banking system, the general public's holding ofcash has been extremely large-rough estimates indicate that of Le 19 billion in bank notes issuedthrough September 1992, no less than Le 16.6 billion were held outside the formal bankingsystem. Another contribt'ng factor is that the flnancial assets available to the majority of saversare largely limited to money, defined to include time and savings deposits. Moreover, with realinterest rates both negative and well below retu offered on assets in the UK and other foreignfinancial centers, there was a considerable incentive for capital flight. Fragmentary data indicatethat informal sector savings Involve both a large share of the population and significant amounts(but mainly for short-term uses). Three factors will determine the success in mobilizing thesepockets of savings for onlending via the financial system to investmnen with higher rates ofreturn: 0) the general public's confidence in financial institutions; (11) market determined depositrates to ensure that these rates are positive and sufficiently high to make financial savings inSierra Leone an attractive option; and (fii) availability of atractive savings Instruments and easeof accesing savings facilities, in particular in rural areas.

IV The Govenmnt undertook a wview of the financial setor duuinS auwmn 1992 with assistane frmm the WorldBank. The viow looked osely at issues of finawil mobilization and intamodiatin, rootgwtizatloandreoApltnion of the Bank ofShir Leone and strengthening of its supervbion, and mesmures to dewlop capitlmadet. me eviow wil provide dhe analytioal basi for a proposd second IDA ajuont loan focued onsupport for rfom of th finani system.

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2.52 The Bds Sector. Tn order tDehenp rhe pse vate sectoes abilitn ivest in newproductive faiities in response to te improved incentives, it will need acces to substantialfinanecl resources. While retained profits (after taxes) can make some contribution to this, thebulk of these resources will have to be in the form of credits and loans provided by the financialsystem In the past, ban were constrained in the rates they could charge, meaning that highrisk-but also high retu-activities were denied the credit they could bave had access to hadinterest rates been free to reflect the differential in processing cost. For this reason, together withlimited abiity to provide guarantees, suml borrowers-both in agculture and Industry-havelargely rmaid outside the fomal finncia system The recent liberaizadon of lending ratesshould help these categories of borrowers get access to credit Bank portfolios are weak,suggesting that collection perfmance is poor, and because repayment is weak, banks are payingmore attention to security than to yield. Consequendy, financial resources may not be directedto projects with the highest rates of eturn

2.53 The Public Sector. The public sector's contnbution to domestic resource mobilizadonwill be in the form of measures to enhance budget revenues while rationalizing govemmentexpendiur. Since the collapse el the tax dministration system by the mid-1980s, whengovernment revenue shran to a low of 5.4 percent of GDP, changes in the system of taxationwith a much increased contribion from indirect taxes have resulted in a significant increase inbudgetary revemnes. Further substantial increases in revenues will be required over the mediumterm (cf Chapter V). Futue tax reform should be guided by two objectives: (i) raise enoughrevenue to face necessary public spending; and (d) enhance the tax system's contribution togrowth by minimizing distortions which would lead to misallocation of resources or discouragesavings or investments. Ihe achievement of both these objectives wil be facilitated by rapidprogress in broadening the tax base through channelling hitherto parallel market activities intothe foma sysm During autumn 1992, the Government reviewed the company tax and thetaiff systems. These reviews confDmed that further strengthening of tax amstaton will becritical for achievement of both objectives. The relative contribution fom taxes on inteionaltransaons sudld be reduced while indirect taxes on consumption of local and imported goodsand services sould be in sed correspondigly to ensure that the reform is revenue neutral.The sales tax is currently 15 percent acmss the board; due to waivers and other leakages, actualyield, however, is considerably lower (about 7.5 percent in 1992/93 according to Bankestites). Measures wil be taken to broaden the base of the sales tax by xtenig its coverageto exempt goods and selectve services and increasing its de facto coverage through bettercollection. The personal income tax base will be broadened in 1993 by making all allowancesover Le 84,000 taxable, and through better enforcement of existing rules. Measures to improvecompliance with existg tax rules for non-government employees should also be reviewed.Opportunt to expand the base of the personal income tax and simplify the rate structure shouldbe explored. Efforts have recently been made to include previously nontaxable fringe benefitsin the tax base. The success of these refom efforts should be reviewed. The exisig systemwith granting companies tax holidays on an ad boc basis should be terminaed; instead, aUcompanies-incuding parastatals-should be taxed according to uniform rules in order not todistrt allocation across sectors.

2.54 mIandal Itredatlon. Successfudl implementaton of the strucural adjusunentprogram and private sector development depends on a well-functioning financial system tomobilize resomces and channel them efficiently to viable investments. Currently, the financialsystem is underdeveloped and fragmented, with, for example, the Informat and the formalsystems-and wiin the latter, commercial banks, insurance companies and development financeinstituti-all having their niches with Little interaction between them. The formal sectorcompries, in addition to the Bank of Sierra Leone (BSL), 6 commercial banks out of which 1

-32-

also provdes fiancing fiuction, 13 insuran companies, 6 rura bak, the houin ban thepost office savings bank and the Natioral Co ave Bank. Two of the commerc bankaccount for abou two thirds of ll banking business.

2.55 Over the past decade, the ability of the Bank of Sira Leon to assum its role nestablishing an efficient financial sytem has been hampered by laking autonomy via-a-vis theGovernment (and the Presidency), loss of public confidence, and weakneue in the intealorganization and management. The financial posidon of the Bank has deteriorated sharply, andcreated an urgent need for its recapitalization The activities of the commercia banks havetraditionally been geared toward meetig he central govenment's needs for credit; most of theirprivae sector lending goes to a few large customers. Compeition between the banks Is limited.Unlike the flexible informal system, the commercial bak have bee unable to resond to theneeds for banking services by smaller firms and farmers. Spreads betwee deposi rates andlending rates are high by international standards, idicating t banks re reatively infficient.To Improve efficiency and reduce the cost of financ medio ns, measures aimed atincreasn competition within the financial system should be a high priority. Formal and infrmalfinancia markets need to be developed as complemenay, not exclusive ystems. The NationalDevelopment Bank needs immediate rc g, while at the same time improving hs abtyto assess loan applications and monitor loans. The problems with low loan rpymet and highdeft rates in the rural banks-in large part caused by m ageme and intrfereanc in theopertons by local politicians-need to be addresed. Occasionly, banks do not fly complywith BSL's supervisory functions.

2.56 To address these isues, measures need to be taken to bolster the instiuonal andsupervisory/regulatory envionment of the fiancial system. As a first step, legisaon needs tobe enacted to ensure a strong and Independent BSL with authority tD detmine monetary policyand effectively supervie the operations of other financia in on. The minmm capitalrequiremetfor all banks should be inreased in accorne with the Basle Areview ought to be undertaen regardig the need for measures tD protect the banking system asa whole as well as individual depositors in the case of major bank failurs. The regulations forthe operations of financial insitutions such as the rual banks, the post office savings bank, etc.needs to be clarified. Steps must also be taken to ensure strict esorcement of laws concerningcollateral and foreclosure.

E. Private Sector imtves

1. Ova-view

2.57 The private sector plas a dominant role in the Sierra Leonean economy j./ Services,consisting mainy of trade and reated activies and ntig for awound 40 percent of GDP,is predominantly private. So is agriculture, dominated by small-scale farming and employingover 60 percent of the working popuaton and contributing about 37 pent of GDP. Mingaccounts for less thnl ten percent of GDP and is largely private. The manufat sector,which is very small, about 3 percent of GDP, consists mainly of small-sized, expriatwned

13 No iHable estimaes of te size of Ibe pd_vat satr in Sie mr on avaible. From a mntionad point ofviw, centra gDvaen seie acount r lo than S pe of GDP at ceant 1984185 pries, mpblyigta th priatesos sar in GDP su"Old exceed 95 paevc of GDP. i edimte does t, hweve, tainoacoontprductioningovenmmenwnd lausrlmpas,dhots, t. etonalaccoourtdovnoteany estimtes of the siz of the prWva setaor fn sa suil point of view.

-33 -

and maaged estblishmes ngaged in lmpott-substtutlng, and informal, ardsana actvitiesserving local denmd.

2.58 A significat feaue of the Simsra Leone sconomy is the high proportion of privatesector acdvity that taes place outside the fomal systemm The proliferation of the ilnfomal sectoris in large part a reflecdon of the exne rtat, tax and other economic policies pursued duringthe 1980s. Today, the informal sector is a major soure of employment and income. in urbanareas, the sector includes small-scale mufcting, and a variety of trade, repair and sericeactivities. Artisanal gold and daond mining i8 estmated to employ 200,000-300,000 workers,normally on a seasonal basis. Most of the activities in the Informal seCtor are not recorded (cf.para. 2.73 below).

2.59 A key dhllenge over the medium to long term will be to ensure maximum structuralbhpact of the rationalized Iocentivs system in the form of increased exports and Importsubstituionconsiste with Sierra Leone's comparative advantages: currnly, Sierra Leone hasa vey limited sector, and its exports are dominated by a few commodities acinginl c demand on forei maets. is would limit-at least over the medium term-the supplyrespo by Import-competing and export odented acdvites to exchange rate adjustments. Theete to which trade tranaors were carried out at unofficial prices before ihe exchmge rate-cumnprice reform would also limit the allocative impact of these reforms. To ensure a timely,substnta and broad-base supply response to the improved incentives and intate paralelmarket acdvities with the formal economy, the Government must restore business confidence byensuring political stability and pursuing stable and consistent m onomic and sector policieswihout arbitrary interventons, white implementing supporting measures-including actions toremove riies in goods and factor marets, and complementary investment in social, physicaland iItrative in. A key element in this context will be to encourage directforeig investnt and tecoogy tansfr.

2. Prices and Interest Rates

2.60 Prices. In the past, developme of the private seor bas been constrained byappropriate pricing policies, inuding exchange rate and trade policies, which made it difficult

for local produer In agrculture ad industry to compete against impots. The introduction ofa market-deermined exchamge rate and the iberalization of domestic trade and prices (includingInterest rates) in the last two years has resulted in a vasdy improved incentives framework forprivae secor activities (rable 2.4). Under the adjustment program, the Government will divestitself firom trade activiies. Instead, sector poUlcy objectives will be realized by providing anapppIate incentives famework through pursuit of market oriented pricing policies togetherwit essen sevices d a supportive legislative famework. Public enterprises,whi wll remainin the public sectr, vil be allowed to adjust their prices to the levelsnecessy to aceve their efficiency targets and maintain adequat Iancial performance.

2.61 nteret Rate Poldes. For many years, ceilings have been imposed on inerest rates inorder to keep govermen costs of borrowing down and to stimulate industri and agriculturaldevelpmt Combined with high into, this resulted in highly negative real interest rates.ThisrI turn, stmated capita flight, discriminated ginstlabor-intensive activities, anddisouragd domestic savings and resource mobilization. With cheap credits often allocatedaccording to politic influence aer than expcted returns on invesmen, much scarce capitalwas wased. As a fi step in adesing these problems, the Governm in January 1990 raisedcm i babks' lendig and deposit rates by 10 percent, and increased the discount rate onspecal treasury bllns also by 10 percent. Further inreases in April 1992 raised the minimum

- 34 -

c..a#t ra.te w on14 44.10 deposits to44 4670s e nu n hedsoert ne

4A l am h oolonffte commercia l b anks' lend6ng rates0 were reoedhrefor ofintees polcie coffue in8i otsto A ,0 wi4iooeci fesalihn

andtiLit matdtmpe,pstverainers ae t we.e oetcsaig ndiscuraeT caia flgt In Jaa 1992 a edrsstwsitodcdfr13* sleo

3.~ Iit fet R atatde.ePUce

*~ ~ Exc$t *1.4k l2oEd

2.6 Folwn th 5*oueo of'*J a aktderine zcert nA 90

coercial ~ ~ ~ bak4r6o.retobyadsl Weiaecg tayprc gedb hparties inolvd h eta akitrvnsi hsmre Ft,byfrinechet h

ithefrmerst ratond tme dpositse toh6aeret pere anum and thae duiscun ra1/2,the on thefspcial

- 35 -

exhange rat remaied in the ran of Le 500-S20 per US dollar IN thougbout most of1992, while th premium on the paralel market narowed to less tn 5 percent. The exchangerate has deprecied by ovr a third in real effective terms since the introduction of the market-determied regime, thus providing substtialy improved Icentives for exoe, whileIncrasing protection to domestic produs in the tradeables sectors. Despite theseimprovements, the central bak's foreign exdiange siuaton remained very difficult in the secondquater of 1992. IIn the transitional period following the change in government that took placein April, delays were experienced in the receipt of foreigp assistance. Foreign exchange earningsthat had been andcipated from the fisheries sector did not materialize, while the ability of thecentral bank to purchase foreign exchange in the commercial bank market was constaned by ashortage of Leone bank notes.

2.63 Due in large part to the fact that Sierra Leone until Aprl 1992 pursu,: its adjustentpolicies without the benefit of any significant amount of extemal financing support, the nominalexchange rate depreciated significantly. Given the openness of the economy, combined with thelimited indigenous capacity in the tradeables sectors, this has significandy contribud to the highinflation rates in recent years. The introduction of a madetermined exchange rate togetherwith measures to eliminate administratve controls on prices and trade have already resuted ina sustantial redirection of previously non-recorded export earings Into official chnnels (cfpara. 2.19 above). By maintainin ts present policy stance, business confidence would improve,resultng in an accelerated officialization' of current export and import payments.

2.64 An important step toward the broadening of the official foreign exchange market Is theintroduction of foreign excange bureaus. Such bureaus are epected to supplement the verylimited commercial bank ntwork by seting up operations in urban and mining areas. Ihe firstbureau was opened in mid-June and the rates quoted are competitive with those in the parallelmarket. With a guarane of anonymity and ease of access, it is exected ta the bureaus willhelp channel freign excange from the diamond trade into the banking system. To fiutherencoge development of the foreign exucange market and to attract foreign exchangetansacDons away from the parallel market, the deposit required to open a bureau has beenreduced from US$25,000 to US$5,000.

2.65 The parallel market in foreign exchange has been a major element in the economy sincethe early 1980s as exchage rate controls, accelerating inflation, and an increasingly moreovervalued leone, combined with vanishing official reserves, caused a loss of confidence in theleone and a rapidly increasing demand for assets denominated in foreign currncies. This, intun, created a demand for eportables outside the official channels, which was met by smugglersof, in pardclar, gold and diamonds. Part of the flight capital flowed back as payment forimport, which was a lucrative trade, given the parallel market premium. The profits made onimpors were motly invested in the producton of more gold, diamonds, etc. The level ofparall market acdvities has historically been closety lnked to the difference between the officialand the paralel market rate. Smuggling of goods into Sierra Leone has, however, remainedrampant also in times when there has been a relatively small parallel market premium in orderto avoid paying import duties. The reduction in tariffs to be undertakn under the adjustmentprogram will reduce this Incentve for smuggling. The fact that a dominant proportion of theexport-import trade is cooled by businessmen of foreig origin, whose-real or perceivedpolitical or economic-inseity is reflected in their desire to transfer pwofits abroad, may explsinanother part of the capita fiht. But even ethic Sierra Leonean businssmen are diverting funds

WI For cusos duty vauaon and offia trnsacto, t ceta bank deannins an official banr rts exveyFrd, basd on t weWad aveag of th oeucia bank Xansa oo during tat wek

- 36 -

abroad-reflecting an even more saious lack of confidence in the managemen of the localeconomy. In order to eliminate the parallel trade, efforts have to be made to creat an

!enironment in which buessmen and others would be willing to hold leonedenomiated aets.As clerly demonsated by the last decades experiences, this is best achieved by pursuing amarket-oriented policy-most impotanty, a market-determined exchange rate-together withpolicies which ensure returns on investments in Sierra Leone high enough to compete with whatcan be earned in the UK and other destinations for flight money. Confidence in the localcurrency, once eroded, takes many years of sustained policies to rebuild. The reduction in theparalel maret premium to a only 5 percent during most of 1992 indicates that Sierra Leone hasmade much progress in a short time; this needs to be sustained. Nevertheless, any return tocontrols on key markets, or random interferences with business activities that fall outside clearlystated laws and regulations-as demonstaed by the parallel market's reaction to the interferencewith the exchange rate system in autumn 1991-would immediately wipe out the progress alreadymade and result in a return to much higher parallel market premia.

b. Trade Policies

2.66 Compared to most other Sub-Saharan countries undertaking structural adjustment, SierraLeone's ecomy is open. Quantitative restrictions and import licensing bave not beenextensively used as instrument of protection to domestic producers. The unweighted tariff ratehas averaged around 30 percent in recent years with individual rates ranging between zero and100 percent. Due to duty evasion and widespread practice of duty "emption, the trade-weightedeffective rate of irect taxation on recorded imports was only 14.6 percent in FY91/92,indicatng that theoretical effective tariff protection overstates actual average protection. Anestfmate that takes into account the widespread smuggling through neighboring countries, wouldshow that the effective protection on total imports is even lower. A sales taxK is currnty leviedon both imports and domesticaly produced goods at a uniform rate of 15 percent. The de factocoverage of this tax with respect to domestically produced goods is, however, inconsistent: insome cases (flour, toothpaste, etc.) these products are exempt, thus adding an uniteded degreeof protection to local producers while reducing it in others (palm kernel oil, drugs, garments,etc.). A preliminary review indicates that specific imported products (sugar, cigaret paper,glutamate, etc.) carry different tariffs depending on end-use.

2.67 Waivers from statutory duty rates and understaement of the value of imported goods havebeen common practice in the past. Available estimates indicate that some 25 percent of totatimports entered the counry under duty waiver in the first eight months of 1992. Itroductionof a pre-ipment inspection aragement, administered by Specialist Services International (SSI),for verification of classification, description and value of imports and export has contuted toan increase in revenue collection by the Customs Departnent. Tariffs accounted for no less thanone tiird of total budgetary revenues in FY91192. (This can be compared witi an average of 26percent for Sub-Saharan Africa i- 1988.)

2.68 Steps to simplify the system of taxation of imports were taken in the 1992/93 budgeLFirst, the import license fee and invoice entry fees that had been levied on imports wereeliminated and merged with the sales tax on imports at a combined rele of 15 percent; this hadthe effect of lowering the nominal protection granted domestic producers. Second, the numberof individual tariff rates was reduced and their range narrowed as the highest rate was reducedfrom 100 percen to 65 percent (rable 2.5). Despite ftis, wide disparities remain in effectiveprotection granted different products. To stop the considerable misuse of the duty eemptionsgiven to charitable and philantrpic organizations, the Government also limited such emptonto food, lothing and medicines imported for free distribution or distribution under cost recovery

-37 -

programs; the items which continue to beneft from duty waivers are being monitored closely.The Govenment has also taken steps to reduce the practice of granting discretionary exemponsto importers.

S i@ ,',: x ,:, ,,, .. ,,~~~~~~~~~~~~~A.

2.69 FHavntght enized the exchange ra syste a and recely also making good progres inmacrecnomic stabilization. te nse phase of th ad,ustnee program wrill give priority at mionto te furher rationalization and sipilainof the tariff system. Since import xaion has amajor role as a source of goverment revenue, thiese actions wil be carefully coordinated withchnes in the syste of indiect taxation tD ensure tha government revenue objectives are met.Given the limited size of the domestic mate, the overriding objectve of these refonns will betzo mskintain an open economy, while providing iuetives for private sector development in linewith Sierra Leone's comparaive advantges, reduced opporbnites for evasion, and facilitmed;smom administfoL Tarlffs will coWmine tD be used at the tDol for providing adequaeproteedon for local producers while te ftnction of the sales tax will be to raise revenue. Thelevel of protection will, however, be further reduced, with the aim of adhievin a trade weightedaveage rates Of about 15 percent, and a more uniform structure of effecdve protection byrducing te dipesion of nomh rates in undem withi adjustmen in ft system of indiec

$xaiiao Top tariffs, to be levt on uption goods, wiU not excesd 30 perce. Exfor a very few goods, aU goods wiU fc a tarff rate of at least u percent. TIhe con ption of26y goods wiU be frizer dischwaged by applysng an rcteonatl 7075 percent excise tax onboth import and domesticalty produced goods. Intermediate and capita goods wilt catry lower-Oa aveonoe ra bs. I thi thene of a broatb industy, zero tamiff rates may be waritedfor a hmiWe number of well-seifed inteemediate and capita goods. In order to increase *eto tsparency of the system and to simlfta tion,1t tasff rates wim be tqualaied forsmao products, afespoure of end ume. Mvenuees wfll aiso be tben to ensure complete andchgstes covesyge of indirect taxes on both imported and domestcally produced goods. In ordertG avoid the te proposed danges cum a faU in budgerry revedn es, offseseing chnges will bemade in other taxes.

2.70 Rmainta maoures to improve perfoviie in the Cusfoms Department have resnted in awigtifiCea iLrovement in ravenav contes,on (dc para. 2.31). Measures to fnrther efailtmecplrection fficilcy areounder way. The Dfuntein of Customs ata Excise wti be srevenuewil suppot fiom Unilted Kinh dombODA. Ithe dWaing to be provided with ODA support weitalso facinthte dsition to n ae Hatemonind Commodity Desctmion and Codte Syste m (dcpara 2.31). No noew duty e denptions wi. be granmed and those alrgady given wcr be

- 38 -

discontiued upon exiraon. Goods imported for use by any government department or bycontactors for the Goveroment will be subject to duty at the same rate as the private sector. Tnepro-shipment inspection has improved the Government's surveillance of trade flows and isexpected to result in major increases in customs revenue as the coordination among the CustomsDepartment, the SSI and the Ports Authority in monitoring trade flows and enforcing the customslaws improves. ITe pre-shipment inspection has recendy been extended to include all importsand exports, and the fee of 2 percent of the value of the shipment, payable in foreign exchangewas halved to 1 percent.

4. Taation and Regulatory Eamework

2.71 The basic incentives cum legislative framework for business activities is embodied in theDevelopment of Industries Act of 1983, and specially enacted tax laws. To stimulateinvestments, the Act provides exemption from income tax for up to five years and also grantspartial or total duty exemption for capital goods, raw material, and intermediate goods forapproved projects which would otherwise not be financially viable. The current tax systemcombined with high inflation has resulted in major distortions in business investment incentives.Another major issue concerns the state of company tax legislation.

2.72 The company income tax rate has recently been reduced from 60.5 percent of net accruedincome to 47.25 percent, or, alternatively, a minimum tax currently at 7 percent of turnover forcompanies which cannot provide satisfactory accounts. To further encourage private businessinvestment, company dividends-which were previously added to other income for tax purposesand subject to high top income marginal tax rates-are now taxed separately according to a flatwithholding rate of 10 percent. The present tax system, which bases depreciation allowances onhistorical investment costs, combined with high infation rates, acts as a disincentive to equityfinanced ivestment, while at the same time providing a substan subsidy to debt financedexpansion. To address this problem, the Govenment in the 1992/93 budget introduced anaccelerated depreciation scbeme with the first year allowance doubled from 20 percent to 40percent and subsequent years' annual allowances increased from 10 percent to 20 percent on adecining balance basis. While this measure somewhat reduced the disincentive to equity financedinvestment, it at the same time increased the subsidy to investments financed by borrowed funds.Ihe Government is currently reviewing ways to eliminate the investment incentives distortionsarising from the combination of the present tax system and high inflation.

2.73 Like many other counries, Sierra Leone has sought to alleviate the poteial discouragingeffect of company taxation on new investment by offering tax holidays to selected new investmentprojects. There is little evidence that this has had any significant effiect on investment. On theother hand, the system is costly in terms of revenues forgone. It also grants significantdiscretionary powers to decision-makers and complaints have been made about misuse and unfaircompedtion created by the system. The practice of granting tax holidays, therefore, should, inthe view of the World Bank, betm e.

2.74 The state of company tax legislation has become a matter of increasing concern in recentyears: major taxes, e.g., the sales tax, has not yet been formally enacted. In other cases, wherelegislation has been enacted, the laws are not generally avaiable. Payment of taxes has becomein many instances a matter of negotiation rather than the application of clear, legally enforcedrules. Dynamic private sector development requires a strong framework of laws definingproperty righs, entprise entry and exit, regulaing the enforcement of contracts and establishingbankruptcy pocedures, and an effeive independent judicial system providing for fair and timelyadjudication of claims. Having made significant progress in establishing macroeconomic stability

-39 -

and a supportive and stable inentives framework, the Government should now move swifdy toaddress the legal and regulatory framework. The Government will undertake, as a matter ofurgency, in conjunctlon with tte tariff review, a review of the Development of Indstries Act of1983 with a view to creating a comprehensive (both fiscal and non-fiscal) incetives frameworkfor private sector development consistent with Sierra Leone's comparative advantages. ToImprove business confidence, the Government will also strengten legal institutions to asue thatexisig rules and reguations are applied in a fair and transaent maner.

S. The informal Sector

2.75 Ihe informal sector plays a significant role in the economy, but specific informationabout it is fragmentary. Estmates based on results from tue 1988/89 labor force survey indicatethat the iformal sector employed about three quarters of the urban labor force-about 530,000-with about half of those employed being female. Employees in the formal sector often haveinformal sector jobs too to supplement their incomes (Appendix Table 1.7). A 1990 survey ofthe iforMal sector in three large towns showed that about 90 percent of the studied enterpriseswere sole ownership, 6 percent partnerships, and 4 percent family or cooperative ownership.These entepises occupied an average of three persons, with unpaid family members accountmgfor 90 percent of employment. Start-up capital was low (on average Le 3,000), and was eitherself-financed, or raised through loans from relatives and friends. The owners appeared to eanrelatively good incomes, with one quarter of the entrepreneurs reportng earnings over Le 2,000per day; there are no data regarding incomes of employed family members or paid workers.

2.76 Owners of informal sector tpdses generally face great difficulties obtaining creditfrom the fornal finac system because of lack of collateral and high loan processing costrelative to the small size of their tractions. This forces them to seek credit from the informalfcial system. This system is weU organized with three identifiable types of institions:commercial, non-commercial (ersonal) and groups. In Freetown, the commercial arrangementsilude about 10 ethnicaly based pyramids of lenders, makdng loans to peaps 50,000 small-enterprise owners annually; these loans are normally for Le 5,000-100,000 for one to fourmoiths at iterest rates well in excess of 100 percen per annum in late 1992 (versus 35-65percent per annum i interest on formal sector credits). Nearly all adults in Sierra Leone belongto at least one group saving scheme. These groups lend money to their members to financecommerial tansactions or cover farmers' needs for seasonal credit, etc. Withdrawals fromgroup savings schemes are often used to fiance major household oudays, or school fees.

2.77 Between 1974 and 1988, the total labor force increased by one million. About 50 percentwas absorbed in the agricultural sector, 20 percen in sales activities, with the residual going intodifferent forms of productio or employed as laborers. The informial sector is likely to continueto absorb addWional job-seekers. As mentioned above, start-up capital is very modest TheGovernms should assist the integration of the inrmal sector int the formal economy byremoving existing legal, regulatory or oher impediments; attempts to impose new regulations onthis sector would reverse this integration process. At the same time, the Govermment shouldstrngthen the Income Tax Depatment's capacity to collect taxes from the sector, therebybroadening the tax base and making the tax system more equitable.

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mL 1WE5IRING THE GOVERNMETS CAPACITY TO PROVIDEBASIC SERVICES

A. Ov0view

1. Recent Publc Expenditure Developments

3.1 Ihe deterioratin in flsca management, including wasotef public expenditure policies,ficti contruats and corruption at al levels of governumt were the main reason for the rapidbreakdown of public services during the 1980s. In 1980/81, toal government expendituresamountd to about 31 perce of GDP. Ihe precipitous dedline In budgetary revenues in the fishalf of the 1980s forced sharp cutbacks in expenditures to only about 16 pecent of GDP in1987/88; the cutbacks fell narticularly heavily on development expedtur which were reducedfom 4.9 percent of GDP in 1980/81 to only 2.2 percent in 1987/88 (rable 1.1). In real terms,recurrent public expendit fell by 16.6 percen during the sme period compared to 22.0percet for development expendures. The wage bill also declined, albeit with a lag, becauseof preres by the trade unions to maintain their members' income in real tem. Nevertheless,by 1988/89 it had dropped to a low of about 16 percent of recurr expenditures (Figure 3.1),with about three quarters of the bill being spent on daly workers. i trend was the main facorbehind the deterioration in the quality of civil service during ths period. Elimination of the ricebsidy for non-miitary civil service personnel and reductions in transfers to public enteprs

reslted in a major decline in ssidy payments from the peak levels at the middle of the decade.The decline in the share for payroll expenditures was, however, offs by accolerating interestpayment on domestc and external public debt which had been accumulated to finance earlierdeficits. In response to these developments, the Government made drastic reductions in outlsfor goods and services-from about 31.5 percent of rert expe in 1980/81 to only13.3 perco in 1984/85. While the shae for goods and services in tot recurmr ewas increased somewhat in the next few years, ths, nevertheless, left insufficient amous toprocue materials and supplies needed for governm employees to cary out their itended

ncdtions. The presence of ghost workers on he payroll and rampant absenteeism combined withrisin prices for mateals and supplies due to the fact that the Government had to secure its needsfor foreign exchange trugh purhases from the parallel market further eroded the real value ofthes expeditures. Ihe collapse of goverment Isti for enforcement of autabily andexedue control reinforced these trends toward rapidly declining efficiency in penditu.With aocations for m ai also neglected, ei faciities deterated rpily.

3.2 Faced with problems of decaying public sector institutions and services, the Governmentbegan to implement remedies in 1989M90. knproved collection as well as increasing cost recoveryresuted in some increases in government revenues. WhRe these resources could have been usedfor the rehabilitation of some essential services, the Government, in response to threats for strikesby daily workers and school teachers, instead felt forced to increase pay for these groups. Iheshare of wages and salaries increased from 16.2 percent of recurrent spending in 1988/89 to 21percent (3.5 percent of GDP) In 1991I92j./ The conflict along the Lberin border, whichbroke out in March 1991, necesaed increases in defence expendues to 14.5 percent of toalrecurren expenditres in 1991/92 (Table 3.1). With interestpayment claiming 43 percent of totabudgetay expendiues-a large part of which were in restrat of normal financia relationsthe donor communty, particularly the African Devlopment Bank, the IMP, and the WorldBank-ad in the absence of any extal budgetary support, the scope for expenditures on social

is Tha is .M very low, =&cdag both a r elively smal pbor labor Src and low ale oomWaed tootber coun in the rein.

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FgreM 3. ElOnwilo Ofasoieatlon of GovrMent Recurren Expendltur(Shaes of ToW. Percentage)

40

,||$aStS4ts*,8s ** r

30 - /00 ^r'- -. ,.A

10 : *

l9o tS8t 1980 1963 1964 1965 1988 196 i9s" 1980 1990 11 1991

,..n,..,.,InII~'III" ISPUS P-OMM in. PWS"S 01 oOOftwdSm

*-e.e.*44.ec Si*a6.& Subv~ NW Tnd Ttw 41w 1 W_OW am SaWu

and economic services was limited to 23.8 percent of recurrent expenditures in 1991/92.

Tabte 3.1: fuwatimmt Clmisficetimn of Iaenet Uucswtut tV uft4 0 OS8101l(Pecenage ofTotal).

4~41t pebtic serwites 22.6 9.1' 12.0' 6.91' 19.3 4J 7 1Oefwe ~~~~ ~~~4.9 2.8 3.9' 4.3 . * 4 6Ede~~~at1ari ~~13.6 .5.5 10.5 A.1 8.7 9? 1 2health ~~~~ ~~7.0 2.4 3.6 2.7 2O S 3)

Other isoca aervtces 3.4 1.2 1.91 2.4 2.M . .Loononle wv!c.s 11.4 ~3.1 8.6 5.4 1. . . *

of -wtAtchAgrlcuttwe 4.6 0.8 2.9 1.6 _.6Et ptici ty 0.8 1.0 0.4 .3- 2.0 8$ *? #0Roads 3.6 0.8 0.5- 3.2 2.

teAt an d6.8 27.2 34.2 3.9 2.? 30 . 3tllhulocalt A other proe 30.3 48.5 25.3 32.4 Z. 29.3 . 2-

Tota t 100.0f 100.01 100.06 O. 10.0 . 1. 1

Srt Oepamn of finace, eelopmet NW Econo:i> Ptafin. c

2. main issue0 and Constraints

3.3 in devising solutions to addres the problem of public expenditure allocation, theGovement wi be guided by the principle ta reflec its role as provider of basic services only.

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Given the huge needs for rehabilitation investments combined with limited resources for non-miitary expenditures because of weak revenue base and collection efficiency, strict priorizatlonof expesditures will be necssary. Accordingly, focus will be on effctive delivery of (i)in&astructural sevices to ensu a strong supply response by the private sector In response toimproved incenives; vi) basic social services essential for the well-being of the popuation; antdOR) speci programs to allevit the plight of the poorest segments of the populaion.

3.4 Unil recenty, In preparing the budget, sector allocations were generally made by merelyreplicating historical trends. Begining with the 1990/91 budget, following recommendationsof the World Bank Public Expenditure Review mission, the Government reallocated expendituresin favor of the social and economic sectors while general services allocations were curtailed.However, with the border disputes intensifying, during the course of the fiscal year, theGovermnt was compelled to spend a major part of the social sectors' allocation to finance thewar effort. Over the net few years, budgetuay policies wil be guided by three priorityobjectives:

* drastic reallocation of expenditure in favor of the social sectors;* substantial increase in the efficiency of fte use of funds allocated to the different

departments and programs sectors through anmna public expenditure reviews,removal of ghost workers from the payroll and strengthening of institutions forexpenditure controls in key spending ministries, etc. (cf section H.C.1);

- increase in the overall level of recurrent and, in particular, developmentexpendiures. Progress in this latter respect will, however, be determined by theImprovements made in revenue mobilization and the scope for cost recovery.Another important constraint is the limited implemenion capacity, particuiarlyin the social sector ministries.

3.5 Development expenditures were virtualy nonexstent until couple of years ago. With theresumpton of donor assistmce under the IMP and World Bank programs, developmentexpenditur are projected to rise significantly. A systematic project selection process throughannual public expditure reviews, together with preparation of annual roling three-year publicinvestment prgrams (PIP), has been initiated which is expected to improve the effectiveness ofpublic investments. The public investment program will, in the medium term, continue to bedetermined mainly by donors; thus, its size will depend on the Government's progress in theimplementation of the adjustment program.

3.6 Governmet input in the preparation of development projects is still limited. Moreover,the sustainability and recurrent cost implications of investment projects are not yet taken intoconsideration in undertaking development projects; development activity remains almost entirelydependent on the disbursets of donors. Ibis issue will need to be a main focus of furtherreform of the budgetary process.

3. The 1992193 Budget

3.7 in the context of the RIC, it has been agreed that the structure of budgetary revenues andxpenditures wil be detmined with advice from Bank anual public expenditure review

missions. 1992/93 is also the first year that rerent and development estimames are presentedin a unified budget (see Table 3.1). Total recurrent expendurs in 1992/93 are projected at 16.5pet of GDP, the same share as in the preious fiscal year. Development expe es areprogrammed at 4.8 percent of GDP. Measures to strengthen revemne collection and ratesad_stmnts are expected to reut in a major increase in budgetary revenues, from 12.4 percent

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of GDP in 1991/92 to 13.9 percent in 1992/93. In line with the targes under the RAP programtthe budget deficit (on a commitment basis) is projected to be furer reduced from 9.3 percentof GDP in 1991/92 to 7.4 percent in 1992/93.

3.8 The 1992/93 budget represents a significant departure from past practices of recurrentexpenditure management. The sectoral allocation of rcurrent expenditures has been restrucuredsubstantially to reflect the budget's focus on poverty alleviation and improving the quality ofeducation and health services; the social sectors will receive 24 percent of total recurrentexpenditures as compared to 11.4 percent for the economic sectors, 14.3 percent for defence(including 7.3 percent special defense expenditure to quell the rebel incursion), and 14.7 percentgeneral services. The wage bill (excluding the rice subsidy) will claim one quarter of totalexpenditures, or 4 percent of G1P and interest payments one third. The budget includessubsuntial allocation for the socially oriented programs, Including payment of compensation toretrenched workers (Le 2.9 billion). Allocation for routine road maintenance is substantiallyincreased to Le 2.6 bi1lion, to be strictly implemented and monitored by a newly createdgovernment body. Including these items, exenditures on goous and services are planned toincrease to 20.2 percent of total recurrent expenditures in 1992/93; 0.7 percent is explained bythe rice subsidy to the armed forces and the balance by subventions to universities and othereducational institutions. The Fiscal Monitoring Committee will ensure tuat economic and socisectors receive their intended allocations and will not be subject to cuts as a first altemative inthe event of a shortfl in revenue. The ceiling on expenditures on wages and salaries will bestric4'y enforced by the AGO.

. ^Development Expendiure 1i/

3.9 Development spending in Siefra Leone is mosty donor driven. Donors finance about 90of capital expenditure; because of this, combined with government instittional weaknesses (cfpara. 5. 15), donor views regarding the sector and location of exteral assistance normally prevail.Following the Governrnt's clearance of its arrears to the ADB through a bridge financingoperation in December 1990, ADB resumed disburements on o-,oing projects. Ihis, combinedwith the EEC investment projects, gave a momenum to development activites. Theimprovement has coninued since then with the resumption of World Bank, IFAD, and EIBprojects in the rdhabilitation of Infrastructure and the social sectors.

3.10 In the context of the 1992/93 budget, the Government prepared a three-year PublicInvesonent Program (PIP) for 1992/93-1994/95. The PIP, to be updated annually, is anitegrated part of the reforms in economic policy and management to be implemented under thestrctural adjustment program. It gives priority to two main areas of concern to the Goverment:(a) poverty alleviation and the provision of basic social services; and (b) rehabilitation of thephysical and social infrastructure, particularly roads, electricity, water and sanitation, health andprimary education facilities. The total Investment program for the threeyear period is estimatedat Le 239.5 billion (US$460.6 million) at 1992/93 prices. About 88 percent is allocated for the

16/ Comprhensive dafa on deverbpea budget alocations an expendtures for the pas and curent fiscal yeas aenot available. DEPU aff in the Depatmen of Fmance, Deveopment and Bconomio Pnning crged witi' theresponsibility of roeordig investm projet progress oomplain about lack of acoes to information about do4orprojecb and consequt dificuli in keeping ck of invesmen program. Ideally, hi sort of infionsbould be instonazed through regu quartely or half-yenly meengs of donors and DEPU. Bcamusepjet investment in Siewa Leone is donordriven howver, govanmen depuutents do not appear to takbeinitiatives to impove ptoject inraton. Furrm, up until ast yar, ptojcts were misasifed byimplementing agicy/ministy (with many projeots by donor like EEC and USAMD clified as geneal service,since these prjcts wer managed by vaious agencies atachd to the Office of the Predent).

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economic sectors; about half of this will be directed to the rehabilitation of the road network-which has strong income and employment linkages to other sectors of the economy--and povertyreduction. Power generation and distribudon s estiated to claim about one fourth of totalInvestment expenditures over the next three years, Including rehabilitation of the powergeneration facilities In Freetown and the Bumbuna Hydroelectric Project. Agriculture, fisheries,and rural development account for 13 percent of the total and include investment projects finacedunder the IDA/IFAD Revised Agriculture Sector Support Project (Le 6.9 billion), theNorthwestern Agricultural Project (Le 2.7 billion) by EEC, and Moyamba Agricultural Project(Le 2 billion) by ADB. The social sectors would receive 11 percent of total investnent over thenext three years, of which about one third is for a feeding program financed by WFP. Majorsources of support for the investment program. are expected to be the World Bank, the EEC, theADB, the WFP, Japan, Italy, and Germany. Government contribution over the 1992193-1994195period is expected to be about Le 19 billion, or about 8 percent of the total.

3.11 lhe development budget for 1992/93, which represents the first year of the PIP, isprojected at Le 22.3 billion, or 5.3 percent of GDP, up from 4.8 percent in 1991/92. Therelatively low increase in development expenditures reflects both the weak capacity of variousimplementing agencies and the long absence of several donors (Table 3.2). Donors will finance89 percent of total development expenditures in 1992/93 and the Government the remaining 11percent. More than two thirds of total development expenditures are allocated for therehabilitation of economic infrastructure to remove strucural bottlenecks that hinder the privatesector's supply response to the new incentives that have been put in place, and agriculture, about28 percent has been allocated for the rehabilitation of schools, hospitals, the provision of othersocial services, and an institutional feeding program to cushion adverse effects of structuraladjustment and improve living conditions for the poorest segments of the population. Projectsfinanced under the development budget include labor-intensive rural works, skill Improvementsfor displaced public sector employees and micro-projects executed by NGOs. Other labor-intensive projects include a rural works program in the Moyamba District funded by UNCDF andUNDP, and an WFP rural infrastructure development program which will rehabilitate andmaintain 2,8Gb km of roads, and finance construction of 320 health centers and 2,000 low-costhousing units. About 5 percent has been allocated for the provision of technical assistance andnstutional strengthening of various government agencies. Ihe Govemment's contribution todevelopment projects is largely focused on finsncing of the rehabilitation costs of governmentbuildings and schools (Le 942 million), for which no foreign financing is available, constructionof power projects in small towns (Le 140 million), and payments for land for theWaterloo/Masiaka road acquisition (Le 100 million).

B. Economkc Infrastructure

1. Ene y and Power

3.12 Power. The power sector in Sierra Leone is in a state of physical and financial disrepair,reflectng years of neglect, poor management, and a shortage of foreign exchange. For example,in the Western Area, while electricity sales grew by 4.6 percent per year in the 1971-82 period,sales declined sharply at about 10 percent per year in 1982-91 and are currendy below their 1971levels. Today, power demand Is highly suppressed due to :nadequate supply brought about bya very low availability of the National Power Authority's (NPA) insalled capacity and worsenedby fuel supply problems. Inadequate and unreliable power supply has seriously inconveniencedresidential consumers and adversely affected economic activity across a wide spectrum of usersfrom tudst hotels to commercial an industi establishments. Suppressed demnd (the gapbetween esdmated demand and available supply at prevailing tariff rates) was estimated at 81

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.

._ . MR 4 ~ *Ib.ivw#j ...

'Rise 4 *tto $ c nom due to proi9 of prvt geeain1 osnd 1*119/2N t8 r genon was ord 14 Z *eece4 of th 0ede tome h d di WsenAe

and ~ ~ ~ ~ L IAogo esdate to9 hav inrsdt bo 0Ghpr er h4ontcnoshe ~ ~ ~ 0 01nun 44rdei proec wS wtb7opee1ni Y7.Dsieficesso30 p urn 19, oloedb afrfie nceseo lSO peren 0 n Sep 1961

...JF fhaliea silton r'min weak..5 0

3.13 ~ ~ ~ 19 IhLoenetsh bede nfi oe ebrat Oo4 4et .teaeq

Owply n18/6 of whiho4werwa in the Western Area. thoeneebbiiation by prtig aivdsateWa generaorwasestimactyadipoed at40Ganategeserna Ara,aKmostlycmeca and insdintaramutsto Niaesalshm nernts wicthr addiional cosjeties to thvie econmyofUS4clitton peryerde tof ithepe higherforeleandccanital costs ofpivaelwy. Towe gheneraos Sine thenv, sprese doerand standtheg

(P eeatio waslonly 14eprcento ailbitha anedd rlaiirto mdeetatheldemes,andnth WstterghnNPAreandautgeebio etmae tohv concreasead imtovabout 60 Gits per yer. T collcinstruction o

(b) fiacial siuatio rminsna wak.ogiaiDlreDm oaheeoprtoiefce

geeaigcapct adeve mproe manageria l capabilities andug ntttiohnial arrsaaeangeet of8tNPa.i

Thedvto longer-u secttrtey or development objcieifopovd lrct toe morer sof uitsieoleingamore efficinndigcoust-effetieay Teouacheve thes objectives, the Governmentydroslstrategy;

(a) rstor ervmiceno NAval'slt and breliailiyrou adquteo oflwrlevelstn stengthe NanuymnskUle eontrat and,ath IamprvementI t iln, collectionr and g operations

training tofscldeno managel upwst and operatea theff poersctr

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() establis an automatic tariff adjustnt mechanism whch Incorporates changesIn fuel costs, and guides tariffs by long-run marginal cost of supply.

3.14 The ultmate objective is for NPA to becomoe a fiancially viable and operonallyefficient power utility. This camot be achieved unless NPA Is given an adequate degre ofautonomy and its management is held responsible for efficient operation of the udlity. As amajor step toward this goal, the future relationship between the Govemt and NPA should bebased on the following: (a) establishing clear and attainable objectves compatible with soundcommercial operations; (b) establishing clear rules and prcedur for decision making by NPAmanagement and the Government; and (c) holding NPA management accountable by monitoringand evaluaing results and rewarding them and their staff on the basis of performance.

3.15 The Petrolew Sector. An adequate and reliable fuel supply is cridcal for economicstabilization, to reduce transport costs and to provide kerosene for domestic cooking and lighting.In the past, Sierra Leone's demand for petroleum products has been met in part by an oilrefinery, owned and operated by Sierra Leode Petroleum Refining Company Limid (SLPRC),which has a 50 percent government ownership. The refiery, which is small and old, has beenshut down for eended periods due to lack of foreign exchge to import crude oil. Overall,the refiery has been a loss-making operation for the past swvera years and its only asset withcommercia value is the assoaed tank frm. Preparations for liquidation of the refiny arecurrendy under way.

3.16 Until July 1990, the SLPRC had a monopoly on importing crude oil and petoleumproducts. However, due to lmited resources, the Government was not able to proide sufficientforeigp exchange in a timely manner. Consumption of petroleum products declined from 200,000tons in 1978 to an all-time low of 133,000 tons In 1987 but increased to 163,000 tons in 1990.Periodic shortages resulted in parallel markets for products at prices three to four times higherthan the official prices. In addition, the cost of imported petroleum was often relatively highbecause of failure to take advantage of the best going prices in the market, and purchases in smallshipments with high freight costs. In July 1990, the procurement and importation of petroleumproducts were liberalized by: (a) allowing the petroleum marketig companies to import productsfreely; and (b) gradually shiftg the responsibility for providing the foreign exchange resourcesfor crude oil import from the Government to the SLPRC which would mobilize the requiredforeign exchange through the commercial banks. However, the liberalization policy did notimprove the situation since supply of foreign exchange in the banking system did not increasesubstanlly in order to meet the demand for oil imports.ll Besides, supply of kerosenedeteriorated since the refinery was shut down for exded periods, and the oil companies did notimport the product because of very low margins in its retail sales. Petroleum product distibutionand marketing are handled by Sierra Leone National Petroleum Company (NP), a state-ownedoil company, and local subsidaies of international oil companies (Shell and Mobil).

3.17 Pump prices were increased about five-fbld (in local currency terms) between June 1989and Sepmber 1990 and cross-products pricing subsidies were eliminated in July 1990. At thesame time, a pricing formula to reflect changes in world prics and exchange rates, whileallowing for distrbuo margins, was introduced. Effective October 10, 1991, pump prices forpetroleum products we raised by, on average, 63 percent, and the structure of the pricingformula was adjusted to: O) reflect the economic costs of importation of products; (d) allow fora sufficient profit margin to encourage the imortaton and distrbution of petroleum products;

V The patiod just aer eiaton of petrolon invpots alsmo coincide with the Gulf cxs amd tigh peetoleumpdca.

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and (1fl) substnIy Icrae the governm excise tax on an ad valorem basis. The chmgein the pump prices would be triggered automatically through the opation of the pricing formulawhen the landed cost (cif plus import duties and related charges) In tems of leone per imperialgallon changes by 5 percen Subsequent adjusments for petroleum products have brought theret price for, e.g., gasoline to Le 1,000/imper gallon by July 1, 192, aboutUS$2.2/impeId galon, dlose to that of neighboring countries.

3.18 To ensureadequatesupplyofpetroleumproducts, asignificantportionoftheRIC isusedto fian imports of petroleum products using intetional competitive biddig procedures. Amedium-term supply contract has been awarded to an international oil company. As a result, thesupply situaton has improved substantially since June 1992. The pricing formula was alsorevised to lower distribution margins to about one third of the landed cost and increase the excisetax rate from 70 percen to 95 percent. The arngement for surrender of the excise tax collectedby the maketing companies to the Trsuy has also been revised to reduce the financing burdenon the Goverment. An indeendet petroleum uni in charge of monitoring domestic activitiesin petroleum procuremnt, pricing and marketing has been estblished. Over the longer term,as the general economy and the foreign exchange situadon improves and donor assistance for thefinancig of petroleum import dimiishes, private marketers are expected to take responsibilityfor the financing of petoleum imports irough a procuement arrangement to be managed by thepetoleum monitong unit.

2. Transport

a. Ovevew of the Sector

3.19 Ihe read netwrk consists of about 11,330 km of roads, some 1,260 km of which arepaved and almost 4,250 km dlassified as rural feeder roads. This network carries about 98percen ofhe intena traffic flows, the rest being carried by inland and coast wat transport.Tafic has declined recently due to the economic downtur Due mainly to lack of fuingcombined with iti nl weaknesses and inefficiency in the orgaizaton of road maintenance,there has been practically no maintece of the road network in the country for the last fewyears. Because of these develoments, nearly 30 percent of the paved roads, 55 percent of thegravel, and 70 percent of the earth roads are cudy in very poor condition and near collapse.As a result, the coutry's economy is incmring add£tional costs in vehcle operation amouantgto about $35 million equivalent amually, in addition to sizable losses in reduced farm productionand other ecnomic activities. The portion of te network which is still in fair condition willmeet the same fate unless there is timely intervention of maitnance.

3.20 Road tansport is almost entirely operated by the private sector, mainly by individualsand small firm. Due to shortages of imported spare parts and the deplorable condition of theroads, the vehicle fleet is poorly manained and inefficiently oprated. Passenger fares andfreighttarffs in the privat sector are not regulated in practice, though the tarif charged by thestate-owned Road Transport Corporation (RTC) are subject to government control. Theinadequate state of the transport system imposes particular hardships on the poorer segments ofthe poputi. Iproved availability of foreign exchange through donor assistmce will partyremove supply constraints in vehicles and spares. Non-motorized transport, such as bicycles,cycle triers and ohr types are not widely used in Sierra Leone, though they would providesustaible low-cost transpor paricularly for the rua and urban poor.

3.21 The Road Transport Corporation operates a limed number of buses (about 23 in its fleet,with 13 in operaton), particularly on Iter-dty routes. On many inter-city routes where roads

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are very poor, RTC is the only longdstance operator as prvate opats do not li1 to provideservices on such poor roads. The RTC's tarffa povide conceson rates for school chldcrenand women, helping these vnerable segmen of the popuation. RTC operates at a loss due tolow trffs for many services provided, Inefficient management, high opeatig cost, andshortage of spaes which fcts fleet capac. RTC does not receive revenue subsidies fromGovernment, but govement nels blteral assia In buses, spares and techncalassistance to the RTC on concessional tems. The Government will undetake a review of RTC'sfuture operations in 1993.

3.22 Ports and Shipping. The main port of Sierra Leone is located at Freetown and isoperated by the Sierra Leone Ports Authority (SLPA). SLPA also oversees one other portoperated by private mining firms, which handle mainly bulk exports of bauxite and ntie. Theport facilities are generally in sound condition although resurfacing of the ports area is a priorityneed. SLPA is currendy managed by an international ports consultancy firm. Its operaIons arerun efficiently and have recently yielded annual financi supluses. The Government willcontine to rely on expaiate mangement for the port, and a new conct is expected to besigned shortly. SLPA has, however, been losing financially on its ferry services, cross-subsidizing them from other port revenues. These servies are important for both the localpopulation and for international airline passengers, and need to be continued. The Govenmentis seeking bilatal assistamce for replacement or rehabilitation of the vessels. The Sienra LeoneNational Shipping Co. (SLNSC) has sold its fleet of three ships, and now opertes as a shippingagent and freight forwarder, in competition with privte fims. t cuntly makes a profitThere seems to be good potential for further developing water transport through selectiveinvestments in dredging and riveridejettles. Ihe Goverment wIll initiate a study regading thepossibility of making more use of the country's Iand waerways system to open up currendyIsolated areas for both goods and passenger traffic.

3.23 AMr Transport. Sierra Leone has one international aiport, Lungi International Airportmanaged by the Sierra Leone Airport Authority (SLAA). SLAA is managed efficienty throughan expatriate general manager provided by UNDP, and is currently making a profit SignificantImprovements have taken place in recent years including the extension of the runway to 3200 m,a refiurbished terminal building, and limited new navigational aids. However, additional faciand navigational aids are needed.

3.24 The Instiuiona ramewor. The public sector is responsble for sector policyformulatin and adminisation, road construction and maiteane (with major support fromprivate, mostly foreign, conactors), and in overseing the management of ports (SLPA) andairports (SLAA). it has smal sha in freight fowading (SLNSC), air transport(SLA), and road transport (RTC). With the eception of RTC, all transport p aa opateat a profit, and non of them receives revenue subsidies from Govrmen The Depatm ofTransport and Communictions s supposed to initiate polcies, reution, bylaws andtasort sector development projects. In practice, it has not been able to perform these fiuctionsbecause of the lack of skilled and experienced staff. The Departnt of Works (DOW) has beenresponsible for planning, desgn, and m of all designated public roads in the country,inuding city roads. It has also uthe contruction and rehabilitation of roads,building, and other civil works. The DOW has been blamed for the poor state of the country'sroads: however, it has had to work with limited mateas and equipmn bcase Govermnentbudget allocations have not bem provided. Work motivation has been very low and the DOWhas lost a sizeable number of its experienced professional staff to other insotuons. As part ofthe Government's road subsector rehabilitation and matencprogram, the road unit of DOWhas been transfeed to the newly established Siema Leone Road Authority (SRA). Mme

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Govenment wil retrench ce staff, and tesfer from DOW only essnial personnel to SLRA.SLRA wi gaduay aign the bulk of road to private contors durig the nex3 years in line with the growth in domestic coractor cpaciy. A Road Fund-fnanced fromroad user charges, pardcuay a road levy on fuel consumption, with Government's assuranceof regla rele of allocations-has been set up to defay the cost of road mantenance; majorrehabiltatio and reonstructo road project will, however, continue to be funded out of thedevelopme budget. lhe Govenm raised the petroleum price by 100 percent in 1991 to acumrt price of about US$2 equivalent per Imperial gallon and will retain thi dollar value againstInflation. Road user chage collection is now over US$3 million equivalent, as against anestmated US$20 million needed annually for maintenance when the fill network is operational.R is xected ta the present rehabitaton:reconstruction phase to catch up wth past backlogwill be supported by frein funding, while road user fees will cover and sustain all regular

needs of the network. lie Government is committed to maintain road user chargescollected at a level sufficient to fully cover estimated mainenanc needs for the road network.

b. Deveopmnent Sbrae

3.25 lbe oveall strategy to improve the road network condiion consist of:

3 Well-focused efforts under a seven year road reconstruction and rehailitationprogram to clear the bacldog of maintenace, and to restore the road network toits original capacy with prioriy to roads in areas with high potent for

creased agula productin; and* Support nttionl reforms throug establishment of an efficient maienansystem and organiaton with assred fumding. Main acdons include{i) strengtheing and supporting the newly created semi-indepdent SLRA,dedicated to managi road maintenance and construction; (l) swithing the bulkof road maintenance activity from force-acount operations to private conacting,so as to reduce costs and improve efficiency and in the process promoting thegrowth of domestic conatng and entrepreneurship; (ii) ensuring a regular floiof fnding for the Road Fund; and (iv) raisig road-ue charges sfficienty tomeet esentia needs.

3. Wate Supply

3.26 Water resources daelopment is of seious concern becase of the crtical situation in theFreeow area as well as in provincal towns and rural areas. Most of the systems havecompletely mn down due to lack of spares, escalating costs of fuel and high operating costs.Only about 30 perce of the na population has access to safe water supply. It is alsonessary to reactvat and Improve the water supply systems in the four provincial towns.

3.27 Th Freetown area is seved by the Guma Valley Water Company (GVWC), owned 90percen by the Govement and 10 percent by the city of Freetown. Existing capacity, withappropriate mamagement ad conol on use, could techially supply water for 850,000 to900,000 people. Cuetly, an estimated 650,000 people are served, 40 percent by houseonnction ad 60 percent by publlc standpipes. Freetown's population is estimated at between

650,000 and 850,000. GVWC has been unable to increase deliveries of water in parity with theincrease in p agement deficiencies and lack of proper mantenance, spare parts,etc., are causing freque system breakdowns and many parts of th city have gone without waterfor long periods Unless population growth slows down considerably, demand is likely to

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surpass technical capacity well before any additional supply system could be in operation. Thislends urgency for programs to control usage by meteing and to minimize leakage.

3.28 There is some groundwater potenti in the greater Freetown area, but urgent funding isrequired for the development of this source. Assistance from the EC for reabilitation of thepower sector in Freetown will bendit the water supply considerably. Fincng is being soughtfor a major transmission main to serva the east side, valued about US$8 millon. About$2 mllion is needed to refurbish the oldest set of filters, insaled in 1961. Additional fundingof probably $24 million is needed for completion of a meteing program and for minor streamdiversions to increase inflow into Guma dam, and additional secondary distriution may also berequired. A feasibility study has been completed for an additional source of supply which isestmated to be needed by about mid-decade, at a cost of US$80 million mplemenation peiodwould be at least five years).

3.29 Industri and commercial consumers are billed according to metered coumpion. Rateswere increased from Le 120 per 1,000 ImperW Galons (1G) in June 1989 to Le 1,500 per 1,000IG in 1990/91, and fiuter to Le2,500 per 1,000IG in June 1992. Households are biledanualy according to rates linked to their property valuation. Collection fiom standpipe usersis very poor. The GVWC plans to meter all consumers in due course, starting with higher-valueproperties using epensive pumped water. The compays fahilure to make payments on its loans,partly because of the rapid devaluation of the Leone, adds to the urgency of hiproving billingefficiency.

3.30 Other Cies and Rural Areas. The Water Division in the Department of Energy andPower is responsible for water supply in aU areas outside Freetown. Most of its recent emphasishas been on rura water sWpply. With sup from donors, communities of 300 to 2,000 peoplehave been provided with wells, some with hand pumps. Mantenace and the provision of spareparts is a major problem. A contribution of Le 8,000 is required from eah community forprovision of a band pump. There is no program of sanitation although some latrines have beenprovied under donor programs. While the UN Water Decade target for rural are was 75percent coverage for water and saniaion, actual water coverage only improved from 2 percentto 15-20 percent, and sanitation to 10 percent. Arrangements are being made to establish a SierraLeone Water Company which will be responsible for water supply in major towns, InitillyKenema, Bo, Makeni and Koidu/Yengema. Ihere are about 30 addinal water supply systemsthat could be taken over in future as the company develops. All are in very poor condition ornot opeaional. The EC wil finance a study to identify further works required, scheduled tocommence in early 1993. Opnal costs are currently covered by cOutions from thebudget, but tariffs are being reviewed. The EC study is likely to identify significant investmentneeds.

3.31 lemmded Actions:

* GVWC soduld make concerted efforts to meter all consum , and reduceleakages, currently esdmated at least 40 percent of supply. Thi would alsostrengten the case for support from the donor community. Technical assistamce,such as by a twinning arrangement, should be sought;

* Improve coordinaion and information saing between the Water SupplyDivision in the Deparment of Energy and Power, which has public Ju=ictionover the development of such facilities at the village and community level andThe National Coordiag Secretariat within the Deatmet of Fimace,

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Developmet and Economic Planming, which has the mandate to oversee thepanning and coordination of the development of environmental health services;

* Conduct a study of the fica sustainabilty and continued use of the existingfaclities for providing wate and the disposal of human waste, and to ascertainhow available domesic and external resources can be more effectively used;

* Accelerate the water and saitaton program for secondary towns and rural areasconcomitanly with steps to mobilize financial resources for the expansion.

C. The Soda Sectors

1. Health and Population

3.32 There has been a significant expansion of the health service capacities in Sierra Leonesince independec. This is reflected in a decline in the population per hospital bed ratio fromabout 1,300 in 1960 to about 800 in 1987. During the same period the population per physicianratio el from about 21,000 to about 12,800, still very high by international standards. In 1990,Sierra Leone had a total of 58 hospitals and naly 500 urban and rural clinics operated by theGovernment, missions, and private firms and physicims. The regional disbuton shows amarked concentration to the Western area (where Freetown is located), which has about ten timesmore physicians relative to population than the Norther Provinc. Due to UNICEF support,immunization coverage is today higher than in many neighboring countries.

3.33 Since 1980, there have been three Important trends in the health sector in Sierra Leone.First-in acordace with the Governmene's stratw of improving the avalability of basic healthcare-there was a rapid increase in the number of rural helth centers for the delivery ofpreventive and basic health care throughout the country, despite the worsening economicsituation, while the mnmber of government-operated hospitals remained unchanged. Second,government health sector recurren enditure declined drastically both as a share of totalbudgetary outlays and in per capita terms. Whereas recurrent expenditures for the health sectorwere well over 8 percent of the total budget in the early 1980s, this share was reduced to about2 percent toward the end of the decade; real per capita recurrent expenditures in 1990 were onlyabout a quarter of the level achieved at the begning of the 1980s. At the same time, payrollcos were increasig rapidly mainly because of uncontrolled expansion in the employment ofdaily workers and temporay staff, forcing drastic cuts in expenditures for vital inputs such asdrug, fuel, euipmen, etc. and in maintenance, and constrang the hiring of essentialpersonmel Ihe td major tred was a rapid increase in the number of private hospitals andclinics proviing mainly basic health services, reflecting the increased reliance on non-govermnmt sources of health care and financing as Sierra Leone's deterioratng economy madeit increasgly difficult to fnncialy sustai the public health system. The increased importanceof health care user charges is ilustrated by household survey data, which indicate that the privateshare in total spendig on-bo publicly and privately provided-health services in Sierra Leoneincreased from 17 percent in 1977 to 41 percent in 1990.

3.34 The rate of population growth is relatively low-2.6 percent, compared to the regionalaverage of 2.9 percet This rate would be higher, however, were it not for the extremely highinfamt and child mortality-fewer than half of the children reach the age of five-because thena_ti total feratity rate remains high at 6.5 children per woman. Population growth is alsoheld in check by customary abstinence during lactaion, nonnally lasting for at least a year.However, the traditional period of breastfeeding and post-partum abstnence is decreasing, aswomen are under growing prsure to engage in the labor market. This trend is likely to reducebirth tervas in the future. Sixty percent of all women are married by age 20, and 90 percent

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by age 24; 16 perent of all children are born to mothers 19 or younger. The contraceptiveprvalence rate is estimated at 6 percent, and family planing is focused on birdh spacing ratherta fetity. Prmary health clinics do offer contraceptive advice and supplies. However, thereare shortages and difficulties in distrution. Demand reportedly far outstrips supply, even inrural areas. On the other hand, a 1988 household survey found that although two-thirds of allwomen know about some modern method of contraception, and few use such methods, in partbecaue of fear of side efects. Abortion is illegal, expensive, dangerous and relativelyuncommon, although attitudes may be changing among younger, urban women.

3.35 HEalh SerVie ISues

Vbulerabke ibanial sustainablty. Since the expansion of the primary healthcare program during the 1980s was to a large extent financed by intenatonaldonors or resort to user charges, its scope is extended well beyond theGovernment's current and near term budgetary resources. This makes thefinancal sustainabiity of the health care system dependent on the continuedfuning by these donors, but also vulneable to shiting donor priorities.

* Excessiw payroll endtures. The Department of Health has about twice asmany daily workers as acttualy needed and also excessive employment oftemporary staff. This, together with reduced recurrent budget allocations for thehealth sector and excessive wages paid to daily workers compared to odtremployees, severely limits the scope for expenditures on essential inputs, inparticur drugs and mai nce.

* Urlndefudlng of programs for bIports of drugs and m nance. Despitesuccess in the operation of the revolving funds set up with GTZ and UNICEFassistnce, the long term decline in budgetary allocations together with increasinglocal costs due to the devaluation of the Leone has resulted in drastcally fallingimports and acute shortages in the supply of phar ical, and dwindlingresources for maintenance Of esig facilides. Without access t complemsupplies and adequate facilities, health staff efficiency will be limited.

* nlas Wci emfiundig for tranng of paraprofessional stf.3 InequalIty In access to health serWces. Whle there is no indication that the tred

toward increasing private funding of health services has excluded poor peoplefrom access to these services, the issue requires close attention.

* I_udtudona rvnm. Until recendy, the Department of Health was responsiblefor management and operation of individual hospitals and rura cliics. Efficientopaion of an increasingly eended health care system will require delegationof decision-making authority to fcity level. This will at the same time raiseissues of training of local managers and other staff.

a Medium-Term Acton Program

3.36 The Government's policy agenda for the health sector focuses on six main themes: (*)the primacy of primaq health care; (ii) the impoce of essenal drugs; (iii) the need to createcost recovery sysems; (iv) the financing of health care via user charges; (v) decentraizon ofmagement and financial decision making in the health sector; (vi) expansion of local capacityfur training of health staff, in particular physicians; and (vii) the evolution of a complementarypubli-private health care delivery system.

3.37 Until a more equitable distribution of health services has been achieved, the Govenmentshodd continue its prese strategy of making relativey low cost preventive and basic curative

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health care available thouot the country. W" die guidelines set by this strateg, emphasisshould be on measures to enhance the fiacal sustaility of the primary health system. TheGovenumn has substantially increased the budgetary allocations for the health sector in the lastfew yeas. In order to gradually enhance the suslnability of the health care system and reducethe dependence on uncertain donor contibutions, recurt expenditre allocations for the healthsector should be further incrased up to levels achieved in the early 1980s, i.e., about 7 percentof GDP. Even with increased budgetary allocations for the health sector, these policies andactions will, however, have to be designed against a background of extremely limited resources.The Government should undertake an in-depth analysis of the financial requirements to sustanand exend the system and how it might be finaced from domestic and foreign sources.Concomitantly with this step, it should obtain firm long-term commitment regarding fiuding fromexernal donors. In this context, priority attention should be given to ensure sufficient fundingfor contnuation of the immuizadon program, with a view to achieve at least 75 percentcoverage.

3.38 Measures to restrucre expenditures will also have to be taken. Department of Healthpersonnel expenditures for w'n-essential staff must be drastically reduced to free up resources forhigher priority recurrent expenditures. The need for different categories of staff wMll be reviewedm the context of the Government's civil service reform program. While the revolving funds foressental drugs for rural health facilities contribute to the financing of the health care system,sbsanil increases in the budgetary allocations for supplies are urgently needed to reverse lastdecade's drastic decline in the availability of phceuicals. The Government should moveswlMy to implement the proposed revolving funds for the financing of special drugs forgovernment hospitals, and for improved food supplies in hospitals. Since user charges havebecome a de facto policy of fiancing health care, a carefid review of the scope for furtherexpansion of such chages should be undertaken with particular attention to their impact on theaccess to basic health care by the poor. Several failities for training of paraprofessional medicalstaff have been closed in recent years or lack materials for their operations due to reducedfunding. In order to ensure the efficient functoning of the health care system, includig ruralclinics, the Department of Health must ensure sufficient fumding for these training programs. TheDepartment should also provide sufficient funding for in-sice trainig of staff in rura clinics.Following a pledge by one donor to finance consuction, the Government has decided to establisha new teaching hospital at Jui. Running costs for this facility would, however, be very high.To avoid new ependiu commitmen crowding out exisfing priority programs, the Governentshould, therefore, in the view of World Bank saff, not proceed with the project, which Is notincluded in the public investment program already agreed with the World Rank. Instead, medicalteahn should condnue to be lined to the existg facilities at Connaught Hospital in Freetown,and upgraded as the rehabilitation of the hospital proceeds.

3.39 Rehabilion of the hospital facilities of the country, most of which bave not beenadequately maintained since indepedence, should be a priority over the next few years. In orderto provide guidace for this acdvity, the Department of Health should prepare a list of medicalequpment, buiding repairs, etc. needed in order to quicldy improve the efficiency of the healthsystem. Meanwhile, investnts in new government-financed facilities should be put on hold.in order to ensure efficient use of donor funds, the swings in invements experienced in the pastshould be avoided; instead, the Government should maijnin a more steady flow of domestic aswell as donor financed investments to be allocated in accordance with a nationa plan forexpenditure priorities during the 1990s.

3.40 In a significant departre from its previous approach, the Department of Health hassignalled its intenion to launch a policy for institutional reform aimed at decentralization of

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management authority. Tbis would allow a reorientation of the role of the Departm from itscurrent responsibility of operting health facilities throughout the country to a primarilyregulatowry body. In accordan with this new policy, management authority-includingresponsibility for both personnel and budgeary decisions-would be transfed to regions anddistricts for rural health care facilities and to special boards in the case of public hospitals. Sinceonly limited finds would be provided from the central budget, the facilities would be requiredto obtain most of the resources needed for their operation through user charges for servicesprovided. For this refrm to be successful, the individual facilities must be empowered with theright to institute appropriate incentives to ensure their ability to retain professional staff. Salarieslevels must be increased and further differentiated-before the adjustments made on July 1, 1992,an unqualified daily worker employed by the Department of Health received virtually the samepay as the most senior doctors in public employment-to eliminate the common practice by healthcare staff request private pay for medicinal services provided wfthin public facilities. For thedecentralization program to be successfil, the Government needs to establish a local managementtraining proga; it must also implement an information system to monitor perfomance ofindividual facilities.

3.41 Assuming a rate of natural increase of 2.5 percent, Sierra Leone's population is expectedto reach 7.3 million by 2010, and to double within 27 years. A national popuation program wasadopted in 1989. The program emphaizes the negative impact, which rapid population growthexerts on both individual welfare, in pardcular for women and children, and the ability to achievedevelopment goals and reduce poverty. t also outlines broad objectives and general strategiesand actions to achieve these objectives. However, no steps have yet been take to implement theprogram.ll/ Due to current strains existng services and insttutions, it is imperative that thepopulation program be given higher priority. This effort should begin with the specification ofconcrete priority measures to be taken over the next few yeas, in conjunction with actions tomobilize donor support (cf. parn. 4.33 below).

2. Education 121

3.42 Sierra Leone has an imposig educational tradition. Fourah Bay College, founded in1827, is the oldest institon for higher learning in Sub-Sahaan Africa. Missions and otherforeign agencies over the years established a number of facilities for basic education. SierraLeone was an intelle inspiration to the rest of the African continent. Policies and programsaimed at ensuring equal educational opportunities and providing educated and trained personsneeded for national development have been in force since independence in 1961. TheGovernment's *White Paper on Educational Policy* of 1970 made strong ons fora strengtening of primary education, making education more relevant to the economic and socialneeds of the country by linking it with the special skills and knowledge needed for the ruralpopulation. Actual developments do not, however, provide evidence that these policies have beensuccessfully impleented. Instead, the education system in Sierra Leone is approaching an acutecrisis situation, a trend driven by lack of sustained political will and fincal support, resulting

V The Mipotnce of demming population gowth i illustratd by ee dmple exampls: if economic growth issusine at 3.5 pecnt per annum over the nex two dcads whie population growth acceates up to thecurent rat of 2.9 peen per annum in the Sub4Sahann region, the per capity income level would be only about30 percent higher in 2010 a tody, broadly one gan from now. Should economic growth instadacc_lerato an avegeof 4.5 perentwhie population gowth tough eayand trong effor is reduoed to 2.0percet per annum, per capita income would be 85 porcent igher in 2010.

j/ The descv pat of this sect0n draws on UNESCO 1992. Sia Leone. Education Sector Survey. ReportNo 2 preprd by the UNESCO Conlney Msin.

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In weak insdtuto at all levels, as well as shortage of funds due to te general deterioradon inthe economy. Tedcnc and vocational training ines rwe not In a position to meet thcountry's demand for skilled craftsmen and middle level technicians. A large prportion of theteachers lack the required qualificadons.

a. Truds During the 190

3.43 PImary Education. According to Department of Education (DOE) data, ihore are closeto 2,100 primay schools in Sierra Leone (Table 3.3), about a third of which are feeder schools-many of doubtu physical existAce-originally set up to avoid long walks to school for theyoungest student. lhe number of schools in each category is not fully documented.2Q/ It isassumed that about 70 to 80 percent of the puolic schools are government-assisted schools,managed by missions and other voluntary agencies. Ihe balance of the public schools aremanaged by district education committees or, in Freetown, the city council. There are also anumber of private shools of shifting quality. Ihe differnt categories of schools are subject todiffrent financial and admistrtve regulations. The Govement pays the salaries of alteaching staff in government and government-assisted schools; it is facily fuUly responsiblefor the schools run by the district education committees, or the Freeown City Council. TheGovernment's responsibility for pedagogical supewision extends to all primary schools. Due tolack of staff, means of communication and funding, this responsibility is hardly exercised today.

.~~~~~~~~~~~~~~~~~~~~~~.M

3.44 The primary school eSlImffllt ratio fell for both boys and girls during the seond partof the 1980s. Ike declin was stevpest in the Norte and Eastern Provinces. The inability ofparent to pa the required sdmol charges is a major fictor behind tbis trend. While the nmmlbof teachers per studet, about 32 at a national level, ape asacory this aveeae concslpwuced regional differsnes, and the fact tbat only about half of the teachers have the formal

quSiction. Eroding real salares has reSted in a sharp exodus of prinuu level teachers toth nformal sector, the police and the a=We force. At the same time, the mumber of eDtr

to the teahers training colleges is declining. Ihus, as the size of the teaching force isdwindling, the proportion of unqualified teAaces is on the inctease. On top of these trends,stock of texbooks are rwming low throushout thie country due to lack of finding, ftcingparenb to seach for textdboks in the open market. Physica facSities for education have gmea simihr deterioration due. to lak of funding for a . .

3.44 TQ educrimon sool oenrollmen ratio sfe ool r both noy dogierlsdri the DOnp

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3.4S Secodar El :o. Th secondary school systwe, like the primary, s bae on"partners" in ruming and managing of the schools. Two hundred five of th secodayschools reciv f cial assic from he Government with some minimal contribIons forequm and libraies. Dr-out rat are about twice as high as in Gambia and GhanaStudets at thi level ar equred to pay a stadadized fee, last known to be Le 4,500 per yea.A reform of th structure of seonday education has been decided. 'Me new system, whichwoud give a stronger emphasis on tecical and practical skills would counta two cycles ofthreyears each, replacing the old '"O and 'A' leves of five years and two yeas. TheimplementatIon of the new system was set to start In the 1992/93 academlc year, but has beedelayed due to lack of fmding. This change, if implemented, would bring the structure In linewith other English-speaking West African countries (df para. 3.53).

3.46 TechsiallVocaind Traing. There was a rapid expansion of techical and vocatonatraining during the 1980s. If run propedy and with appropriate training programs, theseinsttutions would be able to flly meet the county's demand for skiled craftsmen and middlelevel tcncians. These suions are currady fcing severe problems. The greatest problemis the shortage of materials and equipment; machines, tool, etc. are very old, or not working,and spare part can not be obtained. To somewhat alleviate these problems, the Governm hassince 1992 requested a fee from the students, a measre which has reportedly led to a drop inenrollmeu

3.47 Teahers' Training. The trainig of teachers i prvided in six coHeges. The BmumbuTeachers' College, well known for its development efforts related to a ruraHized" trainingpogram with support from UNESCOIUNDP, has been destroyed during the recen rebelincursions; the rebuildn of this college is a priority. Recenty, enrollment in these colleges hasshown a marked downward tread, a reflection of the teachers' peception of their condits ofservice. The proposed change to indigenous languages in primary education would necessitatecoevsponding revisions of the curricula for these colleges as well as development of thetextbooks, etc.

3.48 Highe Eduato. Higher education is maiy offered by the utnOmOUs Univetsityof Sierra Leone (USL), comprisng three constet colleges (Foura Bay, Njala, and Collegeof Medicine and Applied Health Sciences, and four hntiue, the Itute of PublicAdminisation and Management (IPAM), the Instie of Education (INSTED), the Institte ofAdult Education and Extramural Studies (INSTEADEX) and the Instte of Library Studies.outside the USL, two other institutions, the Milton Msrgai Teachers' College, and the PreeDwnTednical I e, both under the Department of Education, are planing to upgrade theirprograms. Cunt enrollment is around 3,000 stuS. The enrolnt structure is genalyperceivd as distortd with too many stu in the liberal arts, while the mber of studentsreceivng degrees in applied and basic scances, for examle, is regarded as below the nation'sneeds. Since most of the increasing budgety allocations for hihr education have been usedfor payment of staff sali, leaving only limited finds for materals, equipmet admaintenace, the quat of higher education has seen a deteriorton in recent years.

3.49 Expedture and Fundlg Trends. From a level of 13.6 percent in 1980, the budgetayallocaton to the education sector fell to a low of only 5.S percent in FY86/87. Higher priorityto educadon in the last couple of years raised this figure to 12.4 peret in the FY92193 budget.Ihe hortage of domestic financing for education in the late 1980s was reinfrced by a major

drop in foreig asstace from US$8.3 million in 1988 to only US$3.3 million in 1989, or by60 perent The last decade also wnsed major dcanges in the expenditum s going to thedifft forms of educatio Thus, while the allocaton for secondary education re d fiy

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COstant omund 30 percent of the total, te uhe for primary educato out of total recmepnue for tlhe sect fel from abou 46 percent In FY82/83 to only 35 percent in PY91192.Durng th sam peid, the allocation for teachers aini more than halved. In a starkcontrs, the exenditure share for the university level has seen a vitual explosion in the recentpast, from 15 pecent of to' eduaion sector recurt expenditure to no less than 30 percenin FY91/92. Cost per stdent at the univerity level is over 50 tmes that of the pdmary level.As a comparson, the corr po ratios for Ghana and Senega are 30 and 22, respecvely.

b. Key twis

3.50 Against the backgound of the recent survey of the education sector undertken by aUNESCO mission in late 1991 an early 1992, and additional analysis undertaken by the WorldBank CEM mission, the following key issues emerge:

etrmey bi Iiteracy rateamong the highest in Afiica coupled with fllingenollment firs at primay level and in related teacher education iNstiu ;

* low quality of education at most levels due to an Inuffcient number of qualifedpersomel at all levels-in particular primary school teachers, doubtful relevanceof curricum, and hadquae DOE magement and supevison,

conmItay witi an enonrous need for rehbabiliati of educationaIAltrcture and equipnen;

* Inadequat capcity for policy analysis and educational planing andmanagement, together with weakaes in coordination and Imple tion ofdevelopment projects;blow budgetary allocation-acerbated by falling donor assistance-and distrtedallocations between levels in favor of university education; and

- shortage of maerials and equipmen, and ained manpower to promoe tecnicaland voconal traiing.

c Medium TeOm Strateg

3.51 The Govnmene's education sector acdon pla over the next few years should be guidedby three pivotal targets: Q) reducg e Illiteracy rate to 40 percent (from about 80 pecent in1990) by the year 2000 with special atention gven to measues aimed a. reducing femaleilteracy; () ataing a 75 peroent enrollmet ratio in primary education by the year 2000; and(iii) developing educational facilties to improve th quality of basic education. The staeg forreahig these agreed tarets has to include a two-pronged approach, using both the formal soolsystem and the non-r avenues. In this aming situation, strong and coceted actions arenecessy, involving both domestic forces and intetonal assistance agencies. The evere DOEinstiional weakness ar, however, an obstacle in this process. A nationa educational planshould be prepared as a maer of priority.

3.52 Given the shortage of fnds, the Government's eforts to address the wOn crisis inthe education sector over the net few years will bave to be stry prioridzed. ITe followingacions shoud be given priority:

* vigorous efforts to scure substally higher inaows of foreign assistamce foreducation in conjunction wih praration of well-specified projects forrehabilitation of educational faciliides plus ocueme of equipment and otherpriort needs for preetation to dowrs;

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* enlsure sigificanty increased supply of textbooks and basic learing materalsthrugh Increased budgetary allocations, with priort tD primary education; asecond priorty should be rebabilitation of aducatioial facilities;

* the secondary education curriculum reform should be phased in at a ratecomuensurate with availability of government and donor resources for retraningof teaches and new textbooks, etc. Until sustinable financing has been fiundfor priority needs, emphasis should be on rehabilitation of existing facilities;

* establish an institutional capacity for (i) educational planning and management,and coordinton of Ineniaonal assistance; and (*d) assessing the needs forrehabiliaion of educational institutions throughout the county plus planning andcosting of these activides;

* undertake a study of the financing of education, with focus on budgetaryallocations for the sector, the potental for additional resources tiroughcontributions from non-government organizations, and redistribution of fimsbetween differe forms of education, and improved wordination of externalassince; and

* measures to strengthen and upgrade tewhnical/vocational education in terms ofprovision of materials, equipment and manpower training.

3.53 Over the longer tm, issues related to policy formulation and insfitutional capacitybuildig must receive high priodty. On the curriculum side, more emphasis should be given toscientific, technical and practical subjects; the related instions for teacher education,curriculum development, and examinons have to be reinforced.

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IV. ADDRESSING POVERTY IN THE YEARS AHEAD

4.1 As emphasized in Chapter I, falling real incomes and deteriorating physical and socialinfrastructure resulted in worsening standards of living during the 1980s. More recently, therebel activities in the agriculture and food-growing Easten and Southern Provinces, by displacingabout 15-20 percent of the populion, have severely aggravated the already tenuous food supplythroughout the country and put severe strains on housing, education, and health facilities. Whilebroad groups, including poor, are already benefiting from the substantial reduction in the rate ofinflation and better availability of basic necessities such as rice and transport fuel-made possiblethrough the liberalization policies-general living conditions remain extremely precarious for bothrural and urban poor. The program's supply response, which would create an economy-wideimprovement in employment and income opportunities, is still awaited, mainly due to the securitysituation's causing low business sector confidence in the economy. Meanwhile, specific actionstaken as part of the adjustment program may put additional strain on some of the poorest groups.This would make special actions imperative to protect these groups during the transition process.

4.2 But in addressing the most acute poverty problems, the Government is facing severechallenges. The continued security problem in the districts affected by the rebel incursionsprevent the Government from taking measures to alleviate the situation in these areas, and-bycausing additional pressures on the already strained budget-limit the resources that wouldotherwise be available for poverty-oriented programs. Basic information on the poverty situationis also lacing. This makes it difficult to provide specific answers to key questions such as: Whoare poor? Why are they poor? and What is the most effective way to help the poor? Moreover,a comprehensive strategy to guide poverty-oriented policies is yet to be completed. And evenif such a strategy was in place, the Government lacks the institutional and financial resources toimplement it. The poverty profile presented below puts together infornation from recentlycompleted household expenditure and labor market surveys, and fragmentary material from othersources. An outline of a medium term strategy to address poverty problems is also presented.

A. Locating the Poor-Pover.y Profile

1. Income and Expenditures

4.3 Per capita income in 1991 is estimated at US$210, making Sierra Leone one of thepoorest countries in the world. While no hard data is available, the income distribution isgenerally held to be extremely uneven. Although there is no official poverty line, UNICEFestimated that about two thirds of the population lived in absolute poverty in 1985. Anindependent estimate for this report, based on results from the recently concluded householdexpenditure survey (conducted with support from the UiNDP), and using household expendituresof less than Le 15,000 per month as the poverty line 211-corresponding to annual

_I The definition of absolute poverty is arbitary and involves subjective elements, which differs from country tocountry. lbe 1990 World Development Repotr defines absolute poverty as living on an annual per capita incomeof less than US$275-370 (expressed in 1985 purchasing power parities). Adjusted for US inflation, this wouldgive a poverty line roughly in the range US$325440 for 'I89/90.

The 1989/90 household expenditure suivey presents data on expenditur for only three groups of households.Expenditures for households with the lowest level of outlays-less than Le 15,000 per month-have been used aspoverty line in the calculations for this report. Convered at the official (overvalued) 1989/90 exchangerate andassuming on average 5.7 members per household, this tanslates into about USS325 per capita and year. ltisestimate coincides withe lower lmit of the poverty range as defined by WDR 1990. Since 1989/90, per capita

(continued...)

-b ',. 't.e 'f tPbte'-S.li tlation iving

.ural - >. ... ;,,Urban ProvifcePr.vince/area aopuiti , , (94) . .re"e area

Us.:of people 71.00 , .78,000 349,9000" Qor~of :region's populaatIotn (, 1)' (491) (541)

I. of people' 5346,000 . E #92,000 638,000(S.;har of region's population) (761) (6<8) (741)

to.: of=i peopv e .3.3-: 4:: .0 .: . - .71,000 0*-,of region's poputation) .7' - (67X) .6i

.Uo. of people 960,000 ~~~~~~~~ ~~~~~150.,000 ~ 1,110.000i * . v ;: I . i;;. (:.:7 Ho ( E>

expeditres of abgonus US$325 ion)prcpt em-niae htaot28mlin r6 ec

~~*tion ~ ~ s o

>1*. total peopulation, lived in absolutep in 11989/90 (Table .691.000 Most ofthe p .oor, ove

(Share milon, lietot rluas vrtreqareso hual population were poo (53y this

... ,?otM popul~i~ Th 1989190 Z789.000 1.3 04,000. 4.9.0

mimae. Ie nuber f uru por ws clse or0.7 million, over al of, ti"heranpplain

c average expenditurtatist' foire, most. h Preliminareporto 1 Households wixpenditures b h Le 15,

expenditures of about US$325 in per capita terms-indicates that about 2.8 million, or 68 peretntof the total population, lived in absolute poverty in 1989/90 (Table 4.1). Most of the poor, over2.1 million, lived in rural areas; over three quarters of the rural population were poor by thisestimate. The number of urban poor was close to 0.7 million, over half of the urban population.Actua average expenditure for most households with expenditure below Le 15,000 per monthwas, however, much lower than this povert line: about 2.2 million people, or more than 80percent of the number of people falling below the poverty line as defined here actually lived onless than US$180 per capita and year. This latter group of poor-accounting for well over halfof the total population in Sierra Leone-can be characterized as those in 'extreme poverty".Another estimate, based on national accounts data, indicates that per capita incomes in agricultureaeraged about US$130 per year in 1989/90; calculations using data from the 1988/89 labormarket survey give a similar result, US$150 per capita and year. At the same time, agricultureaccounts for over 60 percent of total employment; over 60 percent of all rural households workin agriculture-most of them on farms of four acres or less (cf sections IV.2 and IV.4 below).This suggests that the concentration of employment in low-productive agricultural activities is amajor cause of poverty.

4.4 The household expenditure data shown in Table 4.2 indicate marked regional disparitiesin nominal incomes. Households in larger towns spent on average over 43 percent more than thenational average, and 75 percent more than households iu rural areas. The data indicate tha thepoverty problems are particularly severe in the Northern Province, where spending by householdsliving in smaller towns and rural areas was 30-35 percent lower than the national average.

U/(..-_od)wincome has fMllen dstally, primay due to devaluation of tbo exchag e, and was estiatd at onlyUS$210 in 1991 acoording to World Bank Atlas metbodology.

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4.5 Monthly expenditure perhousehold in Sierra Leone averaged about *:;:.:.:...Le 11,700 in 1989190, corresponding to (3^4- - atot Ae.only about US$255 per person and year ~Sot ue(rable 4.3). In the rural areas, close to 30 Pcein c ,a ..- easpercent of the population lived on less than Veste:; 15.124 150Le 5,000 per month, i.e., less than Southem V. 106 83US$110 per capita and year. As is the 1or i 10$case in other poor countries, a very high -. share, or over 60 percent, of allexpenditure is for food ItW;- 7v N : ital aYerije p trnfitt**(Table 4.4). On average, about one fifth e 20 th.of all expendite is foi 1ce-the local Source: Centr:a StatletceOfce 92 Pe

-tfiminar potoSueyf oeolfood stple. The incidence of poverty in If . ' EoshoW ns1the rural areas of the Southern and ; Activites 199O t.' . . ,...

Northern Provinces is indicated by thevery high shares of food in householdexpenditures, 75 and 67 percentrespectively; in the Southern Province, | T-t 4 Y U UPj&O _over 35 percent of total spending by rural . _ _households is on rice, compared to only12 percent in large towns in the Western it' ot o

Area (Annex tables 2.10-2.13). At the e iuXr G enational level, expenditures on non-food . .- 4,9 a2.5....2 ..Items account for one third of total Q , 3s.i 44. 3

expenditures, with clothing, fuel and 10.000-14.99 20.8 3 .power, firniture and education accounting 15,00019,99 . . 18.6for the largest shares. 3000039 ;

4.6 Expenditure patterns vary W 0.4 -.a 3significantly between different income s-60`000- 6999S V. 1 0categories. This is illustrated by the data X 1 0given for households in the Easternm.0 bve 01 0~0 Province presented in Table 4.5. For TotaL 100.0 10 100. 00example, while poor households-those . A EAere househ-old expendtr,with monthy expenditures of less than Le ul.e 1168/month 15,OO-in the Eastemn Province spent Source. Cn att1.about 70 percent of their total outlays on mnyteotnsue oNuhWfood, households with expenditures 1969J90aexceeding Le 30,000 per months spentonly half that share (35 percent) on food;nvertheless, members of households in the latter category spent on average 3.5 times more inLec'e tems on food than individuals belonging to poor households.

2. Employment

4.7 About 62 percent of recorded employment is in agriculture (able 4.6). In mral areas,close to 80 percent of all households are engaged in agriculture. Over tw- thirds of all women

W Including imputed vahle of consumption of own produce and food items aqupiod as gifts, thiugh bater, el.

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~~~~~~~~~ten #mtg da~ai,ig-S B E E E E E g S S E E eB mUXfEwE

O~~~~~~~~t@sht c0t in10 iom tow i 4WWEEE||

w thoarticipte in) 45e labo mahe work in.14.re n hqacon o S e eo

vler.ebs, lanessftam oksan tean 1.07)s 1hre 9ur o 5.4 fann ar9.tweone ~ ~ ~ ~ ~ ~ ~~,* 1na four acre 14bl 4.).ot 9.1w sbite rie

Inlrge towns, t2 co o bu 45 pecn4fttlepomn.2 LZos on if o l

mining an quarring. Ihe6 publi seto 94O£ for abou 51e*o ora sco0empoment; of2 these ovroetidaeuskle al okr.V The .d .eto1s o

appant & over 44 fo. 5eto in tem fb nom n mlya$,acrigtsamle urvys ond in197-76and 1902 in thre cites 12cas mot01sco

acdvities ~ ~ ~ ~ ~ S ar aiydne,upi aml okr osheaot 90 perc 1fth 9une

-.rog partf4it.thttals antted to9* e inceas yoi iunlima #**uo employ tovr th

ratdcae ecorded uemployment in thisrsector. he4pooregroup in th1rra9res ,r upfrdonm1nt1

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M ous*tosd eeiue g ;

Per 4itrt. ?erX ~1tr~ PerI dstrP:n i _<...a.p.1;..*t= butin capita u tton capita buton:

F.o4 902~~~~~~~~~~~- a 70.2, 136 4 3,181- 35.2tIco 387 30.0 415 .16.9 72 .1

'eh : i 140" -. 9 16 6.9 365 3.9~~eat~ pOultry II 0.9 177 7.2 686 7.6

.4g.tab;8. fruits . wta 130 10.1 210 8.8 3 ..QH,~~ 4.~~ry ~~n~o4~~*cte 161 1,2.S 1436" 5.5 519 .5.7

65 5.0.

3^; 2...t 1.3. 81: 3.3. 126 1.

C4 =M~ &ot. 1 :9 116..* 204. 8-.3 1,496 ::16H^ .6

' g~L4~wR f, :.fi..f:: tO 3.. 't.... 1 2,45 5.1; . 234 26..R ,s~P~porJfpM'; , : 0 '0 .0 '' -. 1 '1.2

a ~ ~ ~ ~ 1 0.7 :181 7.4 ~~~~~~~~~~~~ 311 '

ISRR :; Df ,' ,,:<25- f;i r;,'s.: .. ;,,, .s . ... , , ... .. ...

; e ; ' ^ ' . . toMrnSse :t .... . .

.. wi-turei -328`.7: 45' 3 1.6 032' 3.

13; 1.0 195 8.0. <400, ',.2

IOt0.3 ID 1i0. 1. 100.0 * oo 10.

#~ie~C'0*rl %ft~4tcprfice('00199."rlmn 1, e8o. t 985. Survey of5. Mosehl :1,448ft.4

a ~ -~*bI c013Uof 400ttvIti. 198r9/-90.er 19/

percent: in 1988/89, and10 perce iunenty E d Jhe rsory Sector bhnd tsneres 1s81he

migrado to uran ares. Whie indiations r xtms ff al warker laid offin1a9/9

as partoi Govem ent' sev rfotr p ram wemeable tow ns w jowns ir'N , *3 .'

a- i~~~ actw~~Ir~~ ~~' ' 2.1 'LB 0.3 6.2kt," 3 6 .0.9

c~~onstruct~~~~~otl 0~.9 1,6 0.2 3. 1. 0.>IiOl*s&l~t retaIl'U~*~e, tc. 144 9.3, 19.5 43. .21 56

~~ .toruge~~~~~ etc. ~~~1.2 2. 0.1 5.7 0. 0.financIal. ~uuIhea'servIce~.. etc.0.3 ,0.4- 0.3 1.5 0.1 0.0,t0i*l.8~~~.rsonaIse'~~~Ices 5.4 .8.2 2.6 21.4 6.9 1.4

-100.0 100.0O 100.0 100.0 100.0 100.0

Tote ' r f eaptoya persons('000) 1.980.?' 985.5 995.2 345.7 186.6 1,448.4-

~~tg8,tt~st1cs0(1 Ice 191#Report on Labor Force Suirvey 14M9888

percent in 1988189, and 10 percent in 1974. The major factor behind this increase is thestagnaton in formal sector economic activity in recent years concomitantly with continuedmigration to urban areas. While indications are that most of the daily workers laid off in 1991/92as part of the Government's civil service reform program were able to find new jobs in the

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inormal sector, measures tD remove redunda workers fom the payroll may have conrbutedto the hicrease in uban umplome Recorded unemployment is negligble in the rural areas.

3. Basic Needs and AWing Standards

4.10 Health and Sanitation. M* :

health situion In Siea Loone Is among | e4 ?ithe worst in the world. Life exectacy, . ..... W .. Rwile up ftom only 33 years at MMTndependenc, Is still only 42 years, the e.....eond lowest in the world rable4.8). is

Despite considerable improvemen in erecen years in the health of youngchildren and women via donor isuportedprogras m in immunization and maternal aand chold hefalt services, and a program a sof essenti drugs for rural health $cuo r-i.ve S.

faiities, tet health status of these two ..sm groups remains low by inerational o t sstandards. About one infant in seven diesbefore its fUt bthsrdxray and about oneahesd in four dies before its fifih bsiirday.

ee materal mortity rat is high as in many other Sub-Sahara wounties. The predominanthealth problems are diarrhea, malara, measles, pneumonia, and other lnfecti and parasiticdeceases. Acthough m ni s not yet a major cause of mortlity, Ia prevalence is increasing andrepreensa new threat. The current, dim health situaon is to a lage exten a conseqceof the sharply reduced budgetay allocation for the socia sectors during the course of the M98s(rable 4.9).

4.11 A UNDP health sector reiew In 1991 esimated ta 37 percent of the populadion luaksaccess to basic health smervce. Moreover, existin servce ar grossly mdstue,with 80percent of al medical pasonnel workig in the Westen area where only 16 percent of thepoplation lives. The health system relies heavily on NGOs (missions, voluntary organizationsand private companies), which provide nealy 50 percent of all health servces in the county, and30 percent of all health care in the rora areas. While much progres has been made In recentyears, only about 40 percen of the populaton has access to safe drinking water, in rural ares,where most of the populaton lives, this shae is only about one fifth. Inadequate waste disposalfacilities is a major cause of poor health and disease.

4.12 Nutrition Standards. Although aVruue is the major source of employment, cropproduction is inadequ to meet the need for food of most farm famniie. Daily calorie supplyper capita for Sierra Leone averages about 1,800, only 80 percent of req m , and the fourthlowest level reported in World Development Report 1992. Since 1965, per capita calorie intakehas fallen by over 10 perc Since intake of calories is the most importt nutritional factor,this low and falling indicator is of grarve conce The most seious nutritional problems areprotein/calorie manubiton among young children, seasonal food shortages, and widprdanemia among women and children. A national nutrition survey in 1989/90 found that onequarter of all families eat only one meal a day-typically rice-spplemented, when possible, withsome protein source such as fish, nums, peas or, more seldom, meat; as regards children under

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Ig ~~~~~~~~~~~~*'. | *.*g* g N/ 54 85 !mU

,* gW . #M* |s tl!wu ! v* vi ef 1.!t$ uny.ft%v

five, the sludy finmd nO bV emt in iekimrkna standard since 1978.2W Close tone uw of all dbldren under w yew of age are eat to suffer rom modee

malnton, whfle three pecent are esmated to suffer severe malnition. Nutrion-relateddeatbs emer aftr te initiation of weaning. Cbild growlh failure is most prevalent during thewet (or y"hugry) season, becase rice is mo stcar and expensive then, and impassable roadsobstrc rural households from access to helth service faciltis.

4.13 AEadoen and IJtera. TIe adult iliteray rate i8 esdae at 79 perce, withi 69perent for males and 89 peseS for fmemal, amngde b4iet in Afiica. Mm grms earollentrat Is es_mte at SS perce at primr level, but gendr and regional diffiences are

proouned.For exapl, an estimaWe 65 percent of die boys, but only 40 percent of the girlsauet pdmary sdool; gw llmoent o es mate at 70 to 80 percenrt te greaer Freetownarea, compared tD only 20 paed in parts of 1he Northern Province. At thie secondary level,

2yMafty of Ho tCS, Nlod Nudw Suy, 1989/90.

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23 percent of boys, but only 11 percent of the girls are enrolled. Educaton Is of poor qualitythroughout the ystem: children who do attend school generally learn very little, and what theyactually learn is of little relevance for their lives. Only those students who can afford elite schoolsor private tutors succeed in external examinations: less an 23 percent of the candias at theO level m inatons succeed in qualifying for a school cerficate. While there are no reiablenadon-wide data on dp-out rates, sample surveys indicate that at least one third of all primawyschool pupis fail to complete grade six, and many drop out within the first two yeas of priaryeducation, before they can achieve a sustainable level of lieacy. But even if the quality of theeducation was better, economic pressures would still cura school atendance. As the data inTable 4.2 show, education accounts for 3.8 percent of household expenditures at the nationallevel, but only 1.5 percent in rural areas. The very low hare for the rura population indicatesthat deteriorating economic circumstances forces families to keep their children out of the schoolsystem to free income for buying food, or to support family income; the relatively high share foreducation in larger towns (6.6 percent) supports the obsraon tat the disiteang nationalschool system increasingly forces urban families that can afford this to place their children inprivate schools. Unless firm policies are immediately implem the low enrollmt, poorquality and weak nsttutional capacity within the entre educational system will deprve onegeneration of children of the opportity to get at least some modest education.

4.14 Urban and Rural IUving Conditions. Boti rurd and urban dwellers have suffered sharpdeclines in lig stndards in recent years, but the erosion is believed to have been mostdramatic for rura families. Because of agriculture's poor perfmance, combined with steady,albeitrlatively slowpopulaongtowth by Sub-Saharan standards, there was a condnuous erosionin rural per capita incomes during the last decade. Detrating transport systems have virtualyisolated large areas. Many rural areas have reverted to subsistence exitce. Rural households,accountlng for close to 70 percent of the total population, allocate on average neary 70 percentof their total expenditures for food. Even those who can meet most of their minimum mnuftri!*lneeds through home-grown food must stil pay cash for healh, education, and oter services.Becse agricultura incomes are so low, such sevices are increasingly beyond the reach of ruralfamilies.

4.15 Throughout the 1980s there was a ntuous rural to ura migration, contributing tothe farm labor shortages in the rural areas and the rapid increase in urban population (58 percentover the decade), in particular into the Freetown area and cities in the Eastern Province. Adominant share of the migrants came from the rural Northern Province. Whereas the numberof male and female migrants was about the same, their motives for migrating differedsgnificanty: while men moved mainly because of employment opportnies, most womenmoved because of family reasons (marriage, moving with husband, etc.). The Influx of migrants,combined with poor finaci resources and institutional capaities to accommodate new residents,resulted in overcrowding, severe scarcities of food, shelter, transportation, educa4on, health andother basic services, unemployment, and environme degrdaton and aggawed urba povertyproblems. Lvig condiions in the slum areas of Freetown are at an extremely low level.Lowerlevel pmaent civil serva and people involved in petty tradig constute a highproportion of the urman poor.

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4. 1im and WWes

4.16 Both rura and urban fmilies experienced drastic erosion in purchasing power during the1980s becae of high iflation rates exceeting increases in nominal incomes.24/ Theexchange rate and price controls, which were in place during most of the decade, moved domesticterms of trade against farme and rral areas. In the rural areas, the deoration of the

ansport sysem reinforced this trend by depressing km-gate prces for food products andincreasing cost for most imported goods to virtually prohibitive levels. The much higher wagespaid to agdcueural workers in smal towns than in ural areas (Table 4.10) indicate thatdifficuties in bringn products to the market becuse of lacking trasporton facilities andresuting low farm gate prices is a fctor, together with low productivity, contributing to the lowincomes for farmers in the rural areas. In urban areas, the exchange rate controls protectedgroups with privileged access to foreign exchange and imports, while the broad masses of thepoplation had to pay high pallel market prices for these goods.

..... . i a

frof~~~~M~~~1ftsAn$~~~~~ 14* 161 89~K~100 ftZO $26 188

iuAhea b*a~~~~~WM. y 51.... .0 5 ....... 0a m a.....~. l ~.

.. :.:........:.~, ...... ".

4.17 A notable featre of the labor market is the pronounced divergences in wage levelsbetween different occupations, genders and areas (Table 4.10). For example, administrative staffin large towns ear about seven times more ta employees in rural areas. Wages foragricultural workers in rul are was only Le 425 per mont (corresponding to an annual percapita income of about US$53)-about 40 percent of the national average. At the same time,agriculture accounted for close to four fifths of total employment in rural areas and 62 percentof national employment. Ihis suggests that the concentration of employment in low-productiveagricultura acdv is a major cause of poverty. Female employees earn on average less t80 percent of the wages of their male colleagues; gender difference in pay vary considerably,however, between occupaions. While these large diffrncs in pay between different groupsand areas to a large extent merely reflect relative scarcities of different kinds of labor, they alsopoint to the importance of measures to improve the functioning of both the education system andthe labor market

S. Vulnerable Groups

4.18 Among the many poor in Sierra Leone, certain groups stand out as patiurlyvulnerable. The situadon of dte groups is discssed in some detl below.

ZN C;osume primsam avaa f orhe Preelow ara, but vot for the of th country. The sectio is basedoa fragmev bfWatha fto diauxat ses.

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4.19 Womm. &cloecoomic ndicators demonstat that women are predominat among thepoor. ITey are more likely to be illerae, unskilled and malnourished, and their productviyin both ral and urban are I hampered by limited access to credit and productNe assets.Female-headed households, which are increaing in number, are also much more prevalent amongthe poor. However, Sierra Leones women do not constute a homogenous group. Their livingstandards are heavily influenced by religion, region, and age. Women who are non-Chistian (80percent of all women), or live in r ares (two thids of al women), especially in the non-cashcrop producing Northem Province, are least likely to have access to services and opportndtesto enasure their health, education and economic participation. In contrast, many women in thetowns, especially in the Western area, control a large share of the trade and distribution activities,have secure and real incomes, and are least adversely affected by the stabilization measures. Thilatter group of women is not in need of support from poverty alleviation programs.

4.20 Over 80 percent of aU women who live in rral areas depend on low-productvity,subsistence farming or reated pursuits for their living. Most of them are relatively impoveished,particularly in the northern area. Generally, they do not have property rights to land; the fewacres they farm come to them through their husbands, but they themselves have no rights to theprofits from cash crops, and little chance of obtaining income or build up savings. In urbanareas, womens higher level of illiteracy compared to that of men compounds other consaintson their chances of entry into the formal labor market and forces most of them into low-siledand low-paid jobs in the Informal sector. In this sector, they are predominantly engaged inwholesale and retail slle, and petty trading and hawking, accounting for 83 percen of toaemploymnt in these activities. Although the majority of these women eke out a marinalsubbsLitnce income, many of those who live in the towns, especially in the Western area, controla large share of the trade and distribution activities, and are relatively well off.

4.21 Due to a combination of economic and cultural factors, women also sffe from highlevels of mortality and mlnutrition. With sole responsibility for child and home care actdives,women are under greate strain in poor households, where the Irck of labor-saving ecnologymakes domestic chores (such as the collection of food and water) particualy ardous. At least20 pecent of aU women, and an even higher percentage of pregnant women, suffer from anemia.Food taboos and trJtional methods of cooking further lower the nutritional sts of pregnantand lacting women. The high proportion-17 percent of all children-who are born with lowbirth weight reflects the poor nuitional status of their mothers. Frequent pregnes also takea heavy toll on health. Mhe high materna motaity rate is mainly a resiut of closely spacedbirths and malnutrition. Female morality is euced by the praice of female cimcision,which 80 to 90 percent of all women undergo at puberty or earlier, usually with no antsepticmeasures or use of anesthetics.

4.22 Childreo. Sierra Leone's combination of high fertlity and high mortality has resultedin a very youthful age structre, with children under age 16 constituting about 50 pert of Ciepopulaon. Te dire status of these children Is reflected In their low health, nutriion andeducational status. About one infant in seven dies before its frst birthday, and about one childin four dies before reaching age five. Among the children, certain categories have been identifiedas partidcularly vulnerable: children under three who are at the greatest risk of malnutriion,children in rural areas, and the approximately 75,000 so-called -chldren in especially difficultcircumstance', which includes sub-cagories such as homeless children and the hadicapped.During the last decade, families with school chdildren have also been adverely affected by highercost for apo n, basic textbooksb boardig scl meals, and school untorm.

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4.23 Employees on Ibed Incomes. AU ths on fixed incomes, but especially low- and mid-level permanent civil servants, have been hit hard by the rapidly eroding real wages, andeteriorating tort and other servics associated with the economic decline over the last

decade. While the salary increases implemented In the 1992/93 budget and the rapid dow-downin inflation as a result of the adjustment program has somewhat ameliorated their lot, thepredicament of tis group must be carefully watched. Daily workes being laid-off as part of theprogram to prune the government payroll of redundant staff i also a vulnerable group.

4.24 Person Affected by the Rebel Activites. An esmated 600,000400,000 persons havebeen displaced by the rebel iusions in the Southern and Eastern Provinces since March 1991.The damage to life and economic activity has been extensive. Ihere has been a wholesaleabandonment of villages, as many Sierra Leoneans have fled to neighboring districts or urbancentes for saety. Agriculeur production has been severely affected, precipitating local foodshrtages. As many as 40 percent of the refugees have suffered severe malnutition. Destuctionof social infrastrucre has been enormous, with, for example, over 270 primary and secondaryschools being either destroyed or severely damaged, affecting over 63,000 pupils.

B. Polcies to Address Poverty In the Years Ahead

4.25 The Government considers alleviation of poverty as one of its key objectives. In linewith inteional experience, its strategy for rapid and sustainable progress on poverty alleviationfcuses on two equally important elements. The first is to promote efficient growth, making useof the poor's most abundant asset-labor. The secnd is to use strengtened sector and publicexenditure policies, programs, investments and instittions to ficilitate a strong, broadbasedprivate sector supply response in labor-intensive activities and ensure equitable access to basicsocia services. These genera policies will, however, have to b3 complemented with specific,well-targeted and cost-effective programs aimed at protecting the most vulnerable groups duringthe adjustnt process.

1. The Strtural Adjustment Process and the Poor

4.26 What is the impact of the struc adjustmet program on the poor? In answering thisquesdon, it is important to remember that structural distortions in the economy due toinappropriate policies-reifced by adverse terms of trade trends-over the last 10-15 years isthe cause of faulling incomes and decaying government ability to provide basic social services.A contnaon of the policies pursued in the past would ondy result in further economic declineand a worsening poverty situation; for example, a return to state controls over prices for keygoods and services-combined with government subsidies-would cause a further deteroration ofproductive capacity in affected sectors, be circumvented by markt actors, and woud in any casenever beneft itended groups. While no specific data exist that illuminate how specific groupshave fared in recet years, there are reasons to believe that cerain groups, for example farmlabor, low-level permanent civil sevats, pensioners ad er groups on fixed incomes, hvebeen bit pardtularly hard by the high inflation rates. Inflation is now coming down rapidly; inthis imortant regard, the poor, particularly in the urban areas, are already being helped by theadjustment program. To the extet that the adjustmen program has been associated withincreased prices due to devaluatin of the Leone and liberaization of domestic markes, it shouldbe kept in mind that most poor people in all likelihood were paying paralel market prices forthese goods before the adjustme program. Nevertheless, despite these reservations, there arereasons to believe that specific groups, in padtar urban poor and farm labor in rural areas,may suffer from the stabilization policies and otr meaes implement as part of theadjusmert program.

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4.27 The adjustment program, by revesing the adverse trend in tem of trade betweendomestcally produced goods, inluding foo products, and imported goods during the 1970s and1980s, vil result in a relative improvement in the incomes of a large part of the rural poplationcompared with that in urban areas; producers of coffee and cocoa were already benefitting frommuch improved frmgate prices before production was disrupted by the rebel incursions. Giventheir dependence on agricultural activities, poor women are particularly likely to benefit from thisshift. The expected increase in agriculiral production and improved integration of markets asa result of trade liberalization and improvements in roads-coupled with the impact of a morerealistic exchange rate-will result in higher incomes for farmers even though they will be affectedby increases in fuel, transport and input costs; the increased competition that these measures arelikely to bring about will also benefit farmers by reducing the share of the market price capturedby urban based middle-men. They wil also benefit from increased social services expendituresin rural areas. Expansion of the mining sector will primarily bnefit male employees, but willat the same time aggravate seasonal labor shortages in the agricultura sector. General, broad-based growth in production and income will have nwltiplier effects on employment and incomesin the trade sector. The impact on poverty among women is likely to be significant. Those whowere exploiting the scarcity and distortions in the market have lost as the adjustment programreduces the rents they used to enjoy. Many urban dwellers have been adversely affected by theincreased costs of electricity and transportation, and more generally, by the higher prices forimports. However, before the program, the supply of electricity, petroleum products and othergoods and services was extremely limited and erratic, and few enjoyed access to them. As aresult of measures taken under the adjustm program, avilability of these goods and sriceshas improved markedly; the majority of the urban population therefore stands to benefit from aresoration of these basic economic services. Over the nedium to long term, resumption ofefficient, labor-intensive growth, which is the objective of the structural adjustment program, willcreate resources for increased private consumption as well as improved availability of publicservices and wil help reduce poverty.

2. Improvements In Basic Sevces

4.28 lnernational experience shows that effective poverty reduction stategies require thateffective maco-economic policies to promote labor-itensive growth need to be supplemented byprograms to improve the health, education and nutrtion of the poor. The principal asset of thepoor is their labor, and education improves the productivity of this asset Educated famers aremore likely to adopt new technologies and produce more; and more education gives the workera wider range of employment options and allows him or her to choose more profitablealternatives. Better health and nurition also enhances the productivity of the poor and improvesa child's capacity to leam Family planning is also important because accelerating popillationgrowth would put additional pressure on already strained education and health services and thepoor are usuly the last in line to benefit from these services; at the household level, highferlity can also damage the health of both mother and child.

4.29 The Govemment recognizes the critical importance of this second element of an overallpoverty reduction strategy. Accordingly, improvement in both health and education services isnow a priority targeL Partiular atetion is being given to improvements in primary health care,and prmary education and other measures to address the extremely high illiteracy rate. TheGovenme's priority to addressing pressing poverty issues is manfesed in substantiallyincreased budgetary allocations for the health and education sectors. Thus, expenditures on thesocia sectors as a whole were raised from 11 percent of non-interest recurrent expenditures in1989/90 to 16 percent in 1991192, and furthez to 19 percent in 1992/93. The Government hasalso adopbt a national populaton policy which emphasizes the negative impact of rapid

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poion growth on both Individual welfare, In partidular for women and children, and theability to achieve developmen goals and reduce poverty. However, few steps have yet been takento implement this policy.

4.30 To provide the poor with Increased access to health and education facilities, the ubanbias In the provision of sevices must be addresed, ad the quaLity of these services be improved.Since primary health care and primary education are the services most needed by the poor, theshares allocated for these services within the budgets for the socia sectors must be increased.The poor must also be able to afford such services. Many times the poor may not takl advantageof services even when they are provided at low fees or free of charge; the poor must thereforebe educated and encouraged to use these services.

4.31 Given the extremely tight budgetary situation and the magnitude of the poverty problemin Sierra Leone, the Government will not be able to implement these programs on its own.Assistance from the donor community and NMOs will be essential and several projects supportedby UN agencies, bilateral donors and NGOs are underway to improve social services for poorgroups. For example the water and sanitation project of CARE, an NGO, addresses basicpovert concerns in the rural areas. UNFPA's Materal and Child Health Project addresse theissue of survival of mother and child at birth, problems most acute in the low-income, low-education segments of the population. The Department of Health's drug cost recovery andrevolving fund-supported over the years by UNICEF-contains the kind of management and

ndg approach which should assist poor groups. Poor groups will also benefit from the Jl)A-financed health and education projects, and the Freetown infrasttucture project. And WFP'shospital feeding operation could be developed into a possible broader nutition program forfeeding poor patients.

3. Specal Pgm for the Poor

4.32 The Govement recognizes that the structural adjusent program and other efforts toimprove basic social ! -evices may need to be complemented by targeted interventions aimed atpoor and vulnerable groups. A Social Policy and Poverty Alleviation Commite has beenablished to deZtmine priorities and assist in the formulation of appropriate programs and the

African Development Bank is providing support. Le 2 billion has already been set aside in a"social fund for employment creation and social projects through NGOs and compensationpayment to retrenched governmt workers.

4.33 There are now many precedents for such soci funds from other countries. Otherdeveloping counties which bave already established such fwnds uave used them to undeake awide spectrum of poverty-alleviation social programs; virtualy aU of these funds have includedboth short term employment generadon and longer term development objectives. As a generalrule, most fund, have besn set up to finance-through grants or loans-small-scale employmentand income generating projects and social assistance programs aimed at helping the poor orvulnerable groups hit by economic recession or adjustment measures. Bolivia's EmergencySocial Fund", created in 1986 and often referred to as the most successfl of these funds, hasfour basic categories of eligible projects: (i) economic infrastructure-road mainteace, urbanimprovement irrigation, flood control, reforestation; Qi) social infrastructure-health, education,water and sanitation, basic housing, and some cutural projects; (Ci) socia assistance-recurrentcosts in educaion, trining, vacaination, production of school materals; and (nv) productionsupport-mainly credit throu NGOs to productive units without access to the formal financialsystem-

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4.34 To es efficient functoning of the fumd, creria fr its operation will have to bespecfied. They would provide aswes to, Iater alia, the following questions:

* What kicns of socal sector activies or nves would be digible for fundingconsirton?

* Is the fund to bpe tor of l ited duraon(3 to 5 years, for example)?* Is the fimd to be - govenmen body, a semi-autonomous agency, or a private,

non-rofit entiy?* Would finaeial support to recipient Institutions be on a grant or reimbursable

bads (a revolving fund), or tbrough a combination fiuding scheme reflecting hiekind of insdution supported?

In order for the fiud to be efficient, its desig ad mode of operation nust ensure tha thebeeficiaries are the most poor and needy. Furthrmore, to ensure that the bulk of resourcesunder the find reaches the intended beneficiaries, the desg of the program and the compoentsshould contain as w new miniaive structures a possle to avoid high overhead osts.

4.35 In fuirther specifying thenatre of any specil programs or funds for poverty redutiWon, the Govenmet should also take intoaccount the traitional systms for social support that have helped the .

poplatonto cope with the calamities teetIy u m~ ae m stha have fallen upon e country over 2 U I W i i i p U *.'

the last decade (Box 4.1). Since the . n b f . >Govemnt lacks the financial N resources and the istitutonal . .capabilities tD design and .peme.an eaborate soci safety net, it a hshould assess was of utilizing and V.supporting exst, tradtional 3 Esystns Jfur social support. L

4.36 Experien from othercountries demonstrate tha the field-leve eprience of non-govemenalorganization can be of particular value In the desig and implentation of special povertyalleviaton programs and in Sierra Leone a number of NGOs are already enged in suchprograms. CARE, for xample, has a specia maketng project designed to give low-incomuneducaed mers an opportunity to benefit -m frm their eoowmic actit by improvingtheir baran positon vis-a-vis middlemen and other mareting agens. Epience shows thatNGO and communy paticipatio in the planning, mnmaname and superision of social act' programs can help ense both cost effectiveness and sustalnablity.

4. Key mEnl_t of the Povty A iaton Stat

4.37 The Government's policies for addressiog povert over the next few years should includethe folowing:

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etalishment of a government povety reducton staegy which Inludes furerwor on te n of udrbn and rura poor (mal fam, pesonsdisplaed by th rebel activ , trenched workers and low-income erners Inthe public sevice), the devdopment of well-defined policies d progam toaddress the needs of th poor and the identfiaidon of specific mecaim forngpookwgre in hu l -----dof the strategy. Given the cnk of detaiedknowlede about the poverty siution, efots to Improve statstical bomationshould be a priority. lhe poverty dllvatio strategy diould be flexile andinorporate lessons leant whie implementing now programs;priority to development of the agricultural secoMr to provi jobs and incomeopportunities for tie rura populaton, and achievo general Improement inmnritional standads by mainBtinin approprate pricing policies, constuction andMainten of rural and feed roads and other marketng failit , ex ionservices, etc. Meaues to pmote inasd prduction of rice and rice-substiAt together widh iwrved facilities for the tranport of thm productsbetwee dffeent areas of the vountry should be given special aenion;priority to th social se8tr and hIman resour development in aocation ofpublic epeditu and donor contrbutions togeher widi grate reft tocoordinate poverty measu by th Government, donos and NMOs;dshif in health and education strategies and pogms in favor of rur area andprmary services; activation of the population program by specing concretemeYRlres to be tamen over the next few yeas conomi y with actions tomobilize donor support;special budgetary and donor-ficed program for maintenance and repair ofroads, sewag syms, etc., which crea employment and income opportunitesduing a tasitional period for employees laid off as part of the Govern tscviv sevice refom progm, or other vulnerable groups, while at the same timeimproving living condiions. Such employees could also be deployed on ceaindonor funded food for work project, such as the UNDP/FAO-sponsored swamprice scheme;in caUying OUt this strategy ihe governmen would rely on non-gvenmentoa (NOOs) to asume te main responsibiity for Imple

- 74 -

V. MDIUM TERM PROSPECTS AND EXTERNALASSISTANCE REQREMENTS

A. The Stategy

3.1 The Government's medium-term strategy aims at fostering an environment conducive toa sustained supply response by the private sector. It views this as essential for achieving the dualobjectives of broad-based economic growth concomitantly with poverty reduction. To realizethese objectives, its policies will be geared toward stabilizing the economy by maintining fiscaland monetary discipline, substantfitly lowering the rate of inflation and achieving a sustainableGDP growth rate of 4-5 percent per annun concomitantly with externa! viability. The strategyfocuses on developing the agriculture sector, improving the management of Sierra Leone's naturalresources, in particular the mining and fisheries secors, and reestablishing the Government's roleas provider of basic services, with priority to health and education. The Government's successin achieving these objoctives depends mainly on the availability of external financing onconcessiona terms and further improvements in its implementaion capacity. Insufficient fundingin the initial years of the program has made it susceptible to external shocks, and could weakenthe Governes resolve to continme with the program. Unlike some other Sub-Saharancountries, the sustainability of the structural adjustment program in Sierra Leone will not beendangered by a shortage or lack of diversity in naura resourees.

5.2 Major improvements in fiscal managent are fundamental for the successfulimplementation of the program. A more buoyant tax system is critical to the success of therevenue mobilization efforts. The latter is centered on measures to increase revenues from SierraLeone's natural resources while at the same time ...oadening the tax base to avoid distwrtions andevasion due to excessive tax rates, increasing fairness and transparency by the removal ofexemptions and deductions, and improving collections by streamlining tax administration andensurng more rigorous enforcement. The structure of tariffs will be firther simplified. lTesemeasures are pojected to increase revenues from 13.9 percent of GDP in 1992t93 to 15.6percent in 1995196 Crable S.1). Recurrent expendiures as a share of GDP are projected todecline from 16.3 percent in 1992/93 to 13.5 percent in 1995/96 by reducing waste andunproductive government spending in favor of projects that rehabilitate infrastructure to facilitateprivate sector participation in the economic recovery process and restore basic services,partiularly in the socW sectors. While reducing the share of recurrent expenditures,development expendiures will be raised from less than 3 percent of GDP by the end of the 1980sto 5.4 percent in 1995/96. The development budget will focus on rehabilitation of eentalpublic services such as power and water, reallocation of expenditures to socially orientedprograms, and achieing an increase in resources for priority projects. The overall fiscal deficitis projected to fall from 7.4 percent in 1992/93 to 3.3 percent in 1995/96.

5.3 On the stuctur side, the Government will maintain a competitive exchange rate andtrade systems to encourage the shift of trade from parallel to official markets, particularly in thecase of gold and diamonds, enforce a transparent mining policy, maintain real positive interestrates and improve the efficiency of the commercial banking system; equally important adjustmenttargets will be to redefine and reduce the role of the public sector, strengdhen the civil service,and create an economic envioment conducive to private sector development with a predictable,transparent and fair regulatory frameworL

5.4 The Goverment is committed to improve living conditions in Sierra Leone, partcularlyamong the poor. Recognizing that effiient, labor-intensive growth is a necessary condition forsustained poverty reduction, it consiers policies to promote economic growth as an integral part

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AMt Est.______________?:vrag .!'mM ;.9mW "' percent

NtIIIa ecew .... .. ? conS tant ¢ e ,.p ;DP 2: .8., ^ ffi ... .... ......... :: N:: .- -. .: v : Z*t 4.5 -. . 1;2 44.0 4.8 S.3

: riosa dtli: Income : 21 -5.3 1.0 3.A 4.8 5.260T per :capIt -s > - H0.5 -. ? -1.S 0.0 2.2 2.5

-:ElqVts:: ~~~~.2::::..........0 * 14.6 -1.3l 3.9 9.7 10.tO31 -ota . .10*5 *-22.0 3.9 25.6 8.4 3.0

UlI CanIwat average) 1019 98.7 -33.3 17.9 10.0 10.0(As percntage of .)

criross estmextc . . .- 11.9 11.7 9.3r 11M.0 -1A 12.6DomesliaXtic 11vifW * >e 3 \t7.1 12.1 8. r 46 5.6 Jh:-Nationalsavins 6.5 4.0. -3.? *?.9 -4.9 .1.7

: Centrat R -s.Svenu --. > ;;...12.3 1t2.4 13 14.3 1.2 15%.6S,

22.5 .21.7 . .21*2 20.4.. 194 18.9: ecurrent'. 18B,.*3 16. 5 IS. 14.? 13.5Cpita . ; . 4.2 5. 2. 4 si. 4.6 .41 . S43

Ovrl 4f$cit ::.: ..-10,,2 -. 3 -7 :f.4 .- 6-;1 ' 4. 4-S3

Exports 21.1 23,1 *2.8 22.7'.' 24.2 26.1Irports.:.*:. :*... .. ^ .3.2 32.2 30.2 3 .5 , .4 . 36.2

-184 13.7 -13.0 1. -16.? -14.3

oilcat Oapsr t o' Finelo t aI 8 n111o mnJ Centra i ricftic* * end Bu*. staff grojectto

li ,Le srvt h in' recbfded uutput. Income, ed exports if the nto east of th weriod to s*- xtent reflects the aht ft In tranations from unofficial to official cbrmla .The 4.5

prcent drop in QP In to a 3 percent drop in food prooiyct1mn awn

of its poverty reduction strategy. Complementig these policies, imprvements in health care andprimary education are also at the core of the Government's poverty reduction strategy. Initly,the program will benefit the poor through a substantal reduction in the rate of inflation andimproved availability of essential products such as rice and kerosene. In the medium to longterm, the reforms will assist the poor by promoting growth and employment through a higherlevel of private investment in labor-intensive activitias.

5.5 The adverse impact of the security situation is assumed to result in a continued declinein private savings and invesm through 1993/94. Achieving a recovery in private investmentwill require a general improvement in economic and security conditions, as well as greateravailability of term credit. As these factors improve, private investment, including direct foreigninvestment, is expected to respond positively and recover from the currently depressed level of4.5 percent of GDP in 1992193 to 7.1 percent of GDP by 1995/96. The latter also reflecs twolarge mining projects that are currently being pwcessed. Ihe increase in total investment-from9.3 percent of GDP in 1992/93 to 12.6 percent in 1995/96-reflects both the recovery of privateinvestment and a program-related rise in the level of public investment fom the grosslyinadequate levels of the mid-1980s. Domestic savings will be mobilized in y through anincrease in public savings. The current account deficit of the budget is projected to Improve from4.1 percent of GDP in 1991/92 to a surplus of 2.1 percent of GDP by 1995196. Private savingswill be e uraged trough maintaing macroeoonomic stability, and market-based interstratesand exchange rates. The enal current account deficit would improve, after a sharp increase

- 76 -

in 1993194 to about 19 percent of GDP, many due to a recovery in import to 14.3 percent ofGDP by 1995/96.

B. Growth Prospects

5.6 Provided the policies outlined bove ae implemented in a consistet and dmely fashion,Siera Leone would be able to reah a susainable growth rate averaing 4-5 percent per annumover the medium to long term after the dip in 1991/92 caused by the seurty situation. lhesupply response is expected to come from two main sources: agriculture, particularly foodproducdon, and mining. The agnculture sector, which wil remain the main source of incomeand employment, is projected to recover from the devastation caused by the war, and achieve ahealthy growth rate over the medium to long term. Mining will continue to be the main sourceof oeign exchange earnings; sector outut and Investment is projected to respond positively tothe improved macroeconomic policies, particiarly the market-determined exchange rate. Growthin the utilities sector will remain buoyant, retlectng rehabilitation investments currently underway. Construction is also projected to grow in response to higher investments. Services,accountin for more than 40 percent of GDP, will grow to support the expansion in outprt inagriculture and industry.

C. Balance of Paymet Projectons

5.7 While dominated by minerals, in partiar diamonds, mtile, and bauxite, Sierra Leone'sexport base is nevertheless fairly diversified. The volume of exports is projected to grow at anaverage annual rate of 5.4 percent during 1991/92-1995/96, reflecting in part a shift of diamondexpors from informal to formal channels, as well as the impact of rutile and bauxite expansionprojects. Imports are expected to increase twice as fast (about 11 percent per anmnm in realterms) over the same period, reflecting a recovery from the repressed level of only about US$135million in 1991M92 and the resumption of programs al. projects funded by extenal assistamce(Table 5.2). Imports of petroleum products, essenta raw materials and spare parts wil alsocrease to supprt the expansion in output. lbe private sector's import requirements wfll be met

throgb improved availability of foreign exchange resources in the commercial bank, which isexected to be brought about by the liberalized exchange and trade systems and balance ofpayments support. Maintenance of the current macroeconomic policies, concomitandy withaddional investm to expand productie capaciy, particularly in large-scale mining, are crucialto the Governmen's ability to realize the expansion in expors necessary to finance requiredimports and meet debt service obligations.

5.8 A key objective will be to achieve extenal sector viability. Substantial increases insavings, the introduction of a market-determined exchange rate, and the removal of excessivetation on export w:Jl strengthen the balance of payments in the medium term. After a sbarpreducton in 1991/92 and 1992/93 due to depressed imports, the extnal current account deficitis projected to rise to 19 percent of GDP in 1993/94, reflecting resumption of project- andprogram-related imports. In the medium term, a steady growth in exports, while imports andinterest obligations stabilize, will contribute to a reduction in the current account deficit as a sbareof GDP to 14.3 percent by 1995/96. The curret account deficit is mainly financed by grantsand conceeaional funds from bilateral and multateral donors and direct foreign investment, aswell as debt reseduding and relid.

$ R'~~~~~~R ~~I

. U ~~~~~~~~~~~~I.

II 'U~~~~I

i;k-

NM~

~~.. I; ~ii~~U~AI IC ~~~~~~~~~~' huh~~~~~~~~~~~~~~a

.~~~~~~~~~~~. ~ ~ ~ ~ W

-78 -

194) btqdriD8 USS89 -30lio a lfn ggp fU$3 mBli emn,tO be*WT*b adingoua* bt of VatR ulp r n fhm ma1or dono4 in*e1W, 42Wod

B theAiD,theBC dbltrldng swl sfirdb d lwal ei£

5.11 Eal Debt and o . Sierra Leones boS ex teA hnchldEg~~~~~~~~~ ~ 4 i n~5;;rreu~ ~ ~ 9 ate-92wseXb taotUS. il 1 4 pece o A -D),rpr)s

a do aba*cMsan e 198/8 $Tbl 5.) Of -1* b 0p soe o=e ifaciltittiD8 annlaueal at piate crttr each ar owd349ce fba db am

Wtrauw i we re usems at~ aboust US55 milo,icldn S127 milo in io *1198Scd ~ ~ ~ ~ ~ ~~~3 40b setic obiain r r3cedt 4r bu S10 milio 156al oethe ~ ~ ~ ~ ~ ~ ~ * 1939 perod 3$b sevc sapreto#1d n srisepn spoetdbf

sharply ~ ~ ~ ~ ~ ~ ~ ~ * *o05preti 919 oaot3 eceS 959 n esIa 7pxetbIhe~~~~~~ ~ en f9i eaea br fonesonldb ntt i ne n h to

resl tdnutl hi tc of d ~pto aieve 60o 43geu 4? f 3$blt.lti

co iraLoei1c et h s of4 the 104ou iclti6 avilbl toit

mtby ditoarblne fpymnssupr from mtho donors _Incl,ding the IDA, thet WeudnFcliy os orldthDakwte ADB athe EEC,r and biaerale donos has well as furthrdebt resNodelbeg and reli2f

5.11 EParnalu Drebitor anerd Sierra Leone s toa externals debt (Including nterEhnest

intitutonl tms. Bilaera biand private creditors eaclar owd3 pe renet of totalid debt. Payent

-79 -

aon terms no less fworable than given by the Paris Club. As regards non eed privawcommercal debt, it is as_m that such outsbatadn debt, inclusive of arrear, would be bougbtback at a Ifum disom in tthe contet of a possible IDA debt and debt service redutoz

S-13 Pirojed Ass.w Substat donor pfojest awsiunc is required to support theGovent Ws efrts to cteate condWons for sumable growth anld make progres on povertyafnevionv To mm tb" dhs sb is successM, it sbould be in hig priority scaors andproeds kiedM in te CGovaenets public investment program: agrdcultume and ruradevelopev ifa r rCrIe qwidcarly roads), and the socif secors, including hefith and

ti"cLSW fuporr puiblic sector projecb shoxdd mainly be concesned with rdhabilition andmdn ~of exsisXg physical or sociS infirastrucoire; aid for new ivvesnet in :he public

sector should be kept at a minignn, and concenuated on the removSal of ctiteca botdlenecs,because of Sierr Leones limitd caaiy to cope wit now ptojeca at this stage. Ihe projecXshxxld be designed in a manner to eoure early d_bmm of aid. They should finance asmuch as possible of loca capita Costs and, wherever possible, foreignl exchange rqiremeno ofrecurrent costs. Given that food currely accounts fokr about one dird of aU imports (minly asa resultof the war impact), food aid to cover shortages of rice, millc powder, and othe msenti

comn ~remains a prior*. Bodi food and commodity aid should, however, be kQept underclose reviw as part of the aid coordinatio effort to avoid that such aid is depressing localproucer inoentives.

S.14 TecbnW As jhtcw Despite strong Govetuu commitmen to the stmucwuaad3ustpogm weak adiitaive capaity poses a ris to the sasibiity of the. program

over the next few cicalW years. Tecdmied assisace has, therefe a cridcal role to play, UDSSierra .aoWsown IWQ i - --ve andratnwerili&aua has been r"abisthed. Periywfll be given to area of exprenk control, budgeft, outg and maud Management

aeat swag lievels of ft public uadmb'usin is also required to help widi policy nman8and plsi as weU as projea ip_i. Priority should be givenl to die training of SieffaLem cot6 ,b 41m6ig ammgements, etc.

POLICIES FOR SUSTAID ECONOMIC GROWTHAND POVERTY ALLEVIATION

STATISTICAL APPENDIX

TABLE OF CONTENTS

Table No.

1 Pouation and EM

1.1 Demographic Indicators, 1950-20101.2 Population by Gender and Age, 1950-20101.3 Poulaon and Popuaton Density by Adminisative Divions, 1974 and 19851.4 Employment by Gender, Sector and Ar, 1989-901.5 Employment by Occupation, Gender, and Area, 19884891.6 Labor Force Participation Pate by Age, Gender and Are 1988491.7 Forma and Ionfrm Sector Employmt In Large and Small Towns by

Sex and Occupation, 1988-891.8 Number of Migrat, Aged 10 and Above

2. NaIonal Account

2.1 GDP at Factor Cost by Kind of Economic Activty, 1980181-1990/91(Currt Pr=)

2.2 GDP at Factor Cost by Kind of Economic ActiIty, 1980/81-1990191(Constant 1984/85 Prices)

2.3 GDP by Epedliture, 1980181-1990191 'Curent Prtices)2.4 GDP by ExpendItu, 1980/81-1990/91 qConstma 1984/85 Pries)2.5 National Disposable Income, 1980/81-1990/91 (Curret Pices)2.6 Gross Domesdc Capita Fornation by Kind of Asset, 1980/81-1990191

(Curr Prices)2.7 Gross Domestic Capital Foraodion by Kind of Asset, 1980/81-1990191

(Constant 1984/5 Prices)2.8 Capial FIMance 1980/81-1990912.9 Monthly Household and Per Capia Expendiure, 1989/902.10 Monthly Per Capia Household Expendit in Large Towns In the

Wester Area, 1989/902.11 Montly Per Capita Household Expenditure in Rural Area in the

Souther ProvIn, 19891902.12 Montly Per Capita Household Epende in Rurld Aa in the

E r Provilce, 1989/902.13 Monthly Per Capita Household Expenditure in Rura Ares in the

Northen Province, 1989190

Table No.

3. Balance of Paynts

3.1 Balance of Payments, 1980/81-1990/913.2 Merchandise Exports, 1980/81-1990/913.3 Imports by Major Groups of Commodities, 1980181-1990/913.4 Value, Volume and Unit Value of Sales of Petoleum Products, 1980-1990

4. D cmal DAM

4.1 Structure of Extemnal Debt, 1980-19914.2 Commitments, Disbursements, Service Payments and Outstanding Amounts

of External Medium and Long Term Public Debt as of 31 December 1991

S. lik Finance

5.1 Summary of Central Government Finance, 1980/81-t990J915.2 Functional Classification of Government Recurnt Expendiures,

1980/81-1990/91 (Millions of Leones)5.3 Functional Classification of Government Recurrent Expenditures,

1980/81-1990191 (Percentages of Total)5.4 Economic Classification of Government Recurrent Expenditures,

1980/81-199O/91 (Millions of Leones)5.5 Economic Classification of Government Recurent Expenditures,

1980/81-1990191 (Percentages of Total5.6 Development Expenditure by Sector, 1980/81-1990/91 (Millions of Leones)5.7 Development Expenditure by Sector, 1980/81-1990/91 (Percentages of Total)

6. Money Ad Credit

6.1 Monetay Survey, 1981-19916.2 Summary Accounts of the Bank of Sierra Leone, 1981-19916.3 Summary Accounts of Commercial Banks, 1981-19916.4 Distribution of Commercial Bink Loans and Advances by Sector, 1981-19916.5 Interest Rates, 1982-1992

7. Agricultual Sco

7.1 Husk Rice Production, Milled Rice Imports and Prices, 1976-19917.2 Husk Rice Production and Area, 1970/71 and 1984/857.3 Coffee and Cocoa Production, Purchases and Prices, 1980-19927.4 Palm Kernel and Ginger Production, Purchaes and Prices, 198019917.5 Summary of Agricultural Input Usage, 1976177-1987/887.6 Production of Major Agricultural Crops, 1980181-1987/887.7 Distribution of Agriculural Households by Farm Size, Area and

Gender, 1988/89

Table No.

A.-Industrial Set

8.1 Mineral Production, 1980/81-1990/918.2 Production of Manufcturing Establishment, 1980/81-1990/918.3 Electricity Generation, 1980-1988

9. Prices and Wages

9.1 Exchange Rates, 1980/81-July 199%9.2 Consumer Price Indices (Freetown), 1978-August 19929.3 Adminhstered Prices, March 1989-December 19909.4 Average Monthly Salary by Occupation, Gender and Area, 1989-90

10, Educatin. Health

10.1 Health Facilities, 1987 and 199010.2 Distribution of Schools, Teachers and Students by Level (1960-1990191)10.3 Primary Schools, Enrollment and Teaching Staff, 198919010.4 Secondary Schools, Enrollment and Teaching Staff, 1990/9110.5 Technical/Vocational Training Institutions and Enrollment

Table L1 DeuoSrapbie ndiator 1950-2010

Eatlna#es ?oi.etioua

1950 1970 191 1975 1950 1955 1990 1995 20W 2010

Pcpn1atab (tbouswds)

Total 2,199 2.475 2.834 3,049 3,295 3,602 3,970 4,386 4867 5,959Males 1080 1,212 1,387 1,494 1,61S 1765 1,947 2.151 2.390 2,930Pomabs 1.119 1,263 1,47 1,555 1,680 1,37 2.023 2,235 2,477 3,029GanderRatio (men per lOOwomen) 96.5 96.0 95.9 96.1 96.1 96.1 96.2 96.2 9.5 96.7Median Age 202 19.9 19.8 19.7 19.6 19A 19.1 19.0 19 19.5

tJrban 203 322 513 644 809 1,018 1.277 1489 1957 2868Rural 1,995 2,153 2,322 2.401 2,487 2J84 2,691 2,799 2,910 3,089Percent Urban 9.2 13.0 18. 21.1 24.6 283 32.2 36.2 40.2 48.1

School Age Populatia6-11 . . .. - 504 S60 627 705 783 94712-17 427 466 517 582 6S7 81618-23 .. .. . 370 400 437 484 546 694

BcaomicaOy Actv Populaion

Total 1,002 1,073 1,162 1,216 1,278 1,352 1,438 1,546 1,674 2,027Males 627 684 749 788 835 896 967 1,050 1,148 1,399Females 375 389 414 427 443 456 470 496 526 629

Agriculure: Tota 858 873 878 882 890 893 895 904 914 952Females 343 346 354 358 363 364 364 370 378 412

In Non-aogriuture Total 145 200 28S 334 389 459 542 642 760 1.075Females 32 43 60 69 80 92 107 126 148 216

Prcent in Ag ture: Total 856 814 7S.6 72.5 69.6 66.1 62.3 S8.5 54.6 47.0Males 82.1 77.1 70.0 66.5 63.0 59.0 55.0 50.9 46.7 38.6Females 91.5 89.0 8S.6 83.8 81.9 79.9 77.4 74.6 71.9 65.5

1950-55 I90-65 1970-75 1950-85 1985-90 IM90-95 9-20( 130-05

Vl Ssujks pegdoad W)

Crude Birth Rate (per 1000) 47.5 48.0 47.9 47.4 46.9 45.6 44.2 42.2Crude Death Rate (per 1000) 36.3 34.7 33.6 29.7 27.6 25.5 23.5 21.STotal FertilityRate(per woman) 6.1 6.1 6.1 6.1 6.1 6.0 A8 Si

Li Expectancy (as)Both Sexes 29.0 29.9 30.6 34.0 36.0 38.0 40.0 42.0

Males 27.6 28.5 292 324 34.5 36 385 40.4Females 30.4 31.4 32.1 35.5 37.5 39.6 4L6 43.6

fabnt Monality Rate (per 1000 birffs) 226.00 224.00 203.00 180.00 169.00 160.00 149.00 1)37.0

_am UnbMd.tN_S. duo_Nsb_tiPrcmCM.tm-as tdw1.USA.

Table 1.2 Population by Geder nd Ag., 1950-2010(7hor&*

1933 1960 1960 195 19 1 1985 1_ 199 22 2010

Totda: Mas 1,080 1,212 1,387 1,494 1,61S 1,76S 1,947 2,151 2,9 29300-4 179 203 234 252 275 304 338 371 407 4615-9 137 1SS 181 195 213 235 264 297 330 39910-14 119 137 1S7 170 184 201 223 251 284 35215-19 107 122 138 151 163 177 194 215 243 30820-24 94 107 124 131 143 1SS 169 186 207 2662S-29 82 94 107 116 123 135 146 160 177 22530-34 71 81 93 100 108 11S 127 138 1S2 18935-59 61 70 81 86 93 101 108 119 131 16040-44 S4 S9 68 74 79 85 94 100 112 1364S-49 46 49 57 61 66 71 78 86 93 its50-54 38 42 46 50 S3 S9 64 70 78 9S5S-59 29 33 36 39 42 46 S1 S6 62 7S60-64 24 25 28 29 31 34 38 42 47 596S-69 18 17 19 20 21 23 26 29 33 4270-74 12 11 11 12 13 14 16 18 20 277S-79 6 S S 6 6 7 8 9 10 1480+ 3 2 2 2 2 3 3 4 4 7

Total: Femals 1,119 1,263 1,447 1,SSS 1,680 1,837 2,023 2235 2,477 3,a290-4 118 204 23S 2S3 278 308 341 373 408 460S-9 140 158 183 197 214 240 268 301 333 40010-14 122 138 160 172 18S 203 228 256 288 3SSlS-19 110 124 14- 153 165 178 19S 220 248 31220-24 96 1lt 126 134 146 1S8 171 188 213 27225-29 8S 99 112 119 127 139 151 164 181 23230-34 74 84 98 105 112 120 132 143 157 -19735-39 64 73 8S 91 97 104 113 124 136 16640-44 S4 62 72 79 84 90 97 106 117 14245-49 48 53 61 65 72 77 84 91 99 12250-S4 42 44 S1 SS 59 66 71 77 84 10355-59 34 38 42 4S 48 53 59 64 70 8S60-64 28. 30 32 3S 37 41 4S S1 55 6865-69 21 21 24 24 27 29 32 36 41 S170-74 13 14 1S 16 16 18 20 23 26 3475-79 7 7 7 8 9 9 11 12 14 2080+ 3 3 3 4 4 4 S 6 7 10S.m hgsdNm $GM WAdP Es*ndPmpctbow. .wo-2M .w wYo*tx

Table 1.3 Populatios and Population Dewity byAdmisative Diviouis, 1974 and 1985

1.974 Cm=ss 1985 C,i,s

Admiisutrtve D'hoi0 Male Faae Total (pesso Male Female Totd (psosper per

(dhusaa*) Sq.Km) (ousm*)

Totil Populat 1,358 1,376 2,734 38 1490 1,633 32 45

Northein Province 498 547 1,045 29 S78 628 12.C 34Bombli Distdct 109 124 233 29 131 146 277 3SKambia 74 81 lSS S0 86 94 180 58Koinadugu 76 83 1S9 13 86 94 180 1SPart Loko 141 1S5 292 S1 1S6 170 326 57Toakoi 98 108 206 29 119 124 243 35

Sothent Provae 288 309 S97 30 330 351 681 36Bo Dhftict 106 112 218 42 130 13S 26¶ 51Bootho 39 41 80 23 47 49 96 27Moysmba 91 98 189 27 97 lOS 202 29Pujdon 49 S4 103 2S S3 S8 111 27SherbroUtban 3 4 7 695 3 4 7 700

Easter Aovine 40S 370 77S S0 455 440 89S 57Kallahun District 86 94 180 47 lS 122 237 61Kenema 136 130 266 44 170 164 334 5SKano 183 146 329 S8 170 154 324 58

Westem Ars 167 150 317 S68 227 214 441 778T'. *tkn 146 130 276 21,2S0 198 186 384 29,538Westen Rura Aea 21 20 41 74 29 28 S7 103

Om=s OSdawovwM 166. AwdmI"6Ob

Taob 1.4 Bmploymmat by Gender, Setor md Aes. 1989-90

Nata Lug. Tom SauU TOas RwalArg

Totl male FemaleT Tota MaMe Feale Tota male Fmale Tal Malo FAle

AgrIculturo 1224.S SS2 673.3 29.6 12.8 16.8 72.7 31.8 40.9 11222= S6 6156

Mining ad Quaing 274.2 180.6 93.6 32.2 26.7 S.S 39.7 29A 103 2023 124 77Manufactuing 40.7 37.3 3.4 21.6 19 2.1 6.7 63 0.4 12.4 lLS 0.9Electdcity. Oa and Water Supply 3.0 2.7 0.3 23 2.0 03 0.4 0.4 - 03 03 *

C _Muucti 16.9 1S3 L6 10.5 9.2 1.3 23 2.2 0.1 4.1 3.9 (2

Wbleade ad Rtail Trade. etc. 284 91.2 1916 1503 50.6 99.7 50.6 17.7 32.9 83.9 22.9 61.0

Trlhort and Cmmunlcatla 23.8 23.2 0.6 19.8 193 O.S L2 1.2 - 2.8 2.7 0.1

Finance. nsumance. Busines SewIes, etc. 6.1 3.6 2.5 S3 3.2 2.1 0.2 0.1 0.1 0.6 03 03

SocialServices,tc. 1067 80.4 263 74.1 S3.8 20.3 12.8 10.1 2.7 19.8 165 3.3

Total 1980.7 98S5. 9952 345.7 197.1 t48 186.6 99.2 8?7A 1448.4 689.2 7S9.2

mum c__a U.OUour IWI. bpaht cnFXwPcstl uaw~ UN-0.

T-le LS Eapho.eut by Oesupatla, God sad Amt , 1988-89

No" Lae Tom Snall TOWs RWlSAAM

Totl Male Feao Total Male Femalo total male Foae Totl MalWe Fmae

ProtesuIoeaIItedanicd 46.0 31.2 14.8 26.1 16S 9.6 6.2 4.4 1.8 1I. 10.3 S.

AdmlnlstrationlManagulal 2.5 2.3 0.2 12 LO 0.2 0.4 0.4 - 0.9 0.9a.li..i Wiois 37.7 222 15.5 32.7 18.8 13.9 2.7 1.9 8 2.3 S 0.8Sl Workea 2832 87.9 19S3 146.2 466 99.6 51.6 17.9 33.7 85.4 23.4 62.0

SwiceA Wod 35.0 29.6 5.4 24.4 20.1 4.3 S.2 4.5 0.7 5.4 5.0 0.

Arioulte Aninal Hudbmaday 1224.S 55L2 6733 29.6 12.8 16.8 72.7 318 40.9 12 5066 616

ProdUAAboura 337.7 247.1 90.6 79.4 7S.3 4.1 44.7 3S.2 9.S 2116 136.6 77.0

Not C3assifeid 14.1 14.0 0.1 6.1 6.0 0.1 3.1 3.1 . 4.9 4.9

Total 198Q.7 985S. 9912 345.7 197.1 148.6 1866 99.2 87.4 14484 689.2 7S9.2

$mim O0Me O tNt. RP-esnt_ab"Fm 6uaw ,6-IS.

Table 1.6 Labor Forco Participatio Rate by Age, Uender nd Area, 1988-89(Perent)

Total La ToM Swaag Tows RuralAra,

Total Male Femae Total Male real Total Male Fern.). Tota Male Femdao

TOWal 78.2 80.0 76.5 58.6 64.3 52.8 682 72.4 64.1 87.3 88.1 87.3

10-19 54.5 51.8 57.5 19.7 18.1 21.4 36.8 33.1 40.7 7S.2 71.3 79.720-29 84.6 88.1 823 713 79.2 65.1 76.8 83.6 71.4 92.5 94.4 9L530-39 92.9 97.4 89.4 88.4 96.6 79.4 853 9&4 763 95.8 985 94.240-49 95.6 982 92.4 903 97.3 80.1 93.4 97.2 88.6 97.6 98.7 9635O-5 91.6 963 8S.2 82.4 93.S 69.5 93.0 98.4 80.5 93.6 96.7 89.160 + 69.S 83.5 49.2 49.2 63.7 313 66.1 81.2 48.0 743 87.6 S4.1

Mgmoradm Item:Tota Employmeat (in thousands) 1980.7 985.5 995.2 34S.7 197.1 1486 186 99.2 87.4 1448.4 689.2 7S9.2

S&um OWSWSW1tOU0otW. RepAptcn#bw FemSuriv1_e§-.

Table 1.7 Formal and Informal Sector Employment in Large and Small Towns by Sex and OCcupation, 1988-89(housands)

Total Formal Sector Informa lSector

Total Male Female Total le Female Total Male Female

ProfessionalfTecbnical 32.3 20.9 11.4 27.7 17.6 10.1 4.6 33 1.3

Administration/Managerial 1.6 1.4 0.2 1.6 1.4 0.2 0.0 0.0 0.0

Cerical Workers 35.4 20.7 14.7 34.8 20.1 14.7 0.6 0.6 0.0

Sales Workers 197.8 64.5 133.3 7.8 5.4 2.4 190.0 59.1 130.9

Service Workers 29.6 24.6 5.0 22.5 18.5 4.0 7.1 6.1 1.0

Agricuture, Animal Husbandry, Fisheries, etc. 102.3 44.6 57.7 2.7 2.2 0.5 99.8 42.6 57.2

Productionfransport Workers 124.1 115 13.6 45.2 41.8 3.4 78 68.7 10.2

Not classified 9.1 9.0 0.1 3.0 3.0 0.0 6.1 6.0 0.1

Total 532.2 296.2 236.0 145.3 110.0 35.3 387.1 186.4 200.7

Sume: CerWSWwOUo., 1091. R.pcxtantabo=Faos 8uww 19M-.

Table 1.8 Number of Migrants, Aged 10 and Above

Present ResidencPrevious Nsdatial Western Souten Easten NorthernResidence

Total Urban Rurl Tota Urba Rural Total Urba Rural Total Urban Rua Tota Urba Rura

Westena Area

Urban 13.4 13.4 0.0 8.4 8.4 0.0 0.3 0.3 0.0 0.8 0.8 0.0 3.9 3.9 0.0Rural 33.5 26.2 7.3 17.8 17.8 0.0 0.4 0.4 0.0 10.8 3.5 7.3 4.S 4.S 0.0

Southean PmvnUrban 27.0 1S.4 11.6 14.0 9.0 5.0 7.2 0.6 6.6 0.9 0.9 0.0 4.9 4.9 0.0Rural 121.2 S0. 712 19.5 18.2 13 52.0 18.1 33.9 18.S 10.9 7.6 312 2.8 28.4

EFum ProCOUrban 16.2 14.3 1.9 S.6 S.6 0.0 1.5 1S 0.0 8.4 63S 1.9 0.7 0.7 0.0Rural 38.0 20.8 17.2 5.9 S.9 0.0 9.4 1.4 8.0 19.2 10.0 9.2 3.5 3.5 0.0

Ndomter PiwdceUrban 42.7 34.6 8.1 22.6 22.6 0.0 2.4 2.4 0.0 2.6 2.6 0.0 15.1 7.0 L1Ru._ 347.3 197.3 1SQ0 106.S 96.5 10.0 74.7 13.2 6LS 121.4 63.2 58.2 44.7 24.4 20.3

O lte ountries S2.8 48.1 4.7 29.8 28.8 1.0 6.4 6.4 0.0 16.6 12.9 3.7 0.0 Q0 0.0

NumbmrwfM*mts 692.1 420.1 272.0 230.1 212.8 173 1543 443 110.0 199.2 1113 87.9 1O8S Sl.7 S6.8

NuxberdNon-Migrants 1,900.6 S17.7 1,3829 2382 206.0 32.2 369.6 6S.9 3037 347.6 137.6 210.0 946.0 109.2 8368

Totl 2,592.7 937.8 1,6S4.9 4683 418.8 49.5 S23.9 l1f 2 4137 546.8 24L9 297.9 L1OS4S 16Q9 893.6

am_ ON homOe Ut. tAt a n F imWto-.

Tablo 2.1 r Domestic odct t FaCtor Cost by Kind of ieAl Aetit 19"I 1-1990

17dIkmw of Loner at O,awt Plce*)

t/81 8/ 8am 83184 80 5/ 8*8 8I 8am saw Wm

Agutu Fresty. Huntng and Fing 379.2 538.6 686.0 1,052.6 2,069.S 2,88B.1 7,6983 11,665.4 16,60 30,496.6 S2,491.8AgrIctr 293.3 355.9 39&5 5269 1,154.4 1,471.2 5,130.4 64832 -6 -Animal Husbandry 17.5 72.8 10&0 1181 182.9 300.1 446.9 68LO . . -Foret. LAgging and Hunting 26.4 AS3 781 133.8 232.4 2853 56L2 1,317.2 - _ _Fisbing 42.0 56.4 1OL4 273.8 499.8 83LS 1559,8 3,185.0 - -

bining and Quarrying 116.3 92.9 99.0 137.9 290.0 1,3062 2,135.1 2,1978 2,622. S5671.1 13*2Manufactuing and Handirt-. 53.7 100.2 1083 135.0 165.9 2S62 907.0 1,3SS0 2.777,8 5.20) 6776.3Electicity and Water Supply 7.4 80 10.9 14.4 12.2 21.3 109.2 W078 13316 194.1 773coostrucdon 53.9 54.8 47.S 71. 127.9 1733 4184 500.0 1,100 1451.6 1,867Wholesae and Retail Trade,etc 16L8 172.3 232.4 2944 758.3 1,0424 3,241.6 58A70 85(5A. 206413.0 30,113.1TrnpoRt and Communlcalo 1963 286.1 323S 468.7 545.9 60(W 1.861.6 2.567D0 4,428.0 8,81.9 13,284.0Finance Inunce, Businesm Sevi etc. 96.7 126.0 146.9 269.7 433.9 662.0 1,749.9 2,607.8 3,66144 63OL9 18,503.9Ohr Servioes 51.8 63.8 73.7 98.1 102.8 1243S 26LS 417.0 4S8.1 S"16 SSS.1Produceto Govennmnt Services 62.9 90.8 102.9 12L9 181 252.4 S461 878. 1,06.9 1,70S8 4,S2.9LAS Imputed Service Charges at Financial Intodiaries -6.4 -29.S -3L9 -39.0 -31.0 -S&O -140.0 -174.6 -192.1 -1061 -366.

GPS FWacr ast 1.173.6 1,S54. 1,799.2 2,624.7 4,653.1 7,6 18,788.7 27,99.7 41,584 7954 138,430

_Om =. d d _ , _ _

Tatio 2.2 Grow Doestic Product at Fwtor Cast by Kind of Economic Actit, 1980181-1990191(Moms Of Leam at Castat 19*4/85icer)

19. 81 1/81 543 8 W 8a/8 85/ S887,78 89, 9) 904'1

AIute, Porety, Huntg and Fshing 1,819.6 1,877.7 1,860.1 1,866.9 2,6.S 2,008.1 2,152.4 2,309.5 2225.6 2,3413 2,36.2Mining and Quartn 406.0 3383 302.9 3412 290.0 340.7 3S4.9 353.6 399.7 442.7 4622Maufactuing and HandIrafts 165.9 2068 185.8 191.3 165.9 1S9.5 147.1 14L2 127.1 133S 1OS8Eloctriity and Wat Supply 9.2 10.9 10.9 10.9 12.2 13.4 9.8 8.2 8.2 8. 6.1ConstSUcto 221.3 17S.6 '360 1614 127.9 131.8 136.S 100.0 147.0 130 124.2Wholeale and Retai Trade, etc. 842.8 8S7.4 9802 809.8 7583 762.6 78L8 7960 87S.6 963.2 1,59.5Transport and Commu_natio 517.6 619.4 614.1 633.0 S45.9 439.7 399.6 360.0 414.0 434.7 282.6Fiance, iourance, Business Service etc. 364.8 407.3 417.1 4319 43319 4364 4S6.6 46L0 4615 524.0 62188Other Services 75.0 807 87.1 99.1 102.8 106.0 107.4 109.4 109.4 109.4 109.4Producers lovefnmment Sices 128.6 160.7 182.0 1767 181.7 19L7 2187 237.S 225.7 2257 225.7LA IWted Sevic auges of Financl Intemediaies -3.2 -20.4 -21.9 -26.3 -35.0 -36.9 -38.3 -39.0 -40.0 -74.1 -83.9

ODPetFatcasCt 4,547.6 4,714.S 4.7S43 4,70Q0 4,63.1 4,S53.0 4,726.5 4,837.4 4,95.8 S,247.1 5,2806

5tm Cd5smoUmm C hM_ _ds6Mw^ _1

Table 2.3 Grow DmesS ftdut by Rrp4dtur.. 1601-199Y91OWm= tL.ema at sm Prwhiam)

11 Om* 2t am J a8m S 8am 8 8

Gooenment Cemsupti Expenditure 90.1 137.6 1666 189.2 345.4 497.6 1,209.8 .83 3311.1 S,49L. 15,676.0

Prive. Cosmption Expenditure 1,171.5 141S.5 1.6473 2,21 399.5 6,2382 16,267.1 2,295.4 3x117.1 70,19.0 117,0353

ncerm in Stoobs 10.5 9.6 32.6 15.0 52.6 1093 204.5 22.3 331.7 4141 2,7285

Fxed Capital Formation 236.2 20S.1 23S.3 33L8 424.2 729.7 1,853.9 2,274.9 S,574.9 112220 1 5,185.4

Epors of Goods and Srvices 297.4 252.8 207.7 29U0 4632 85S0 2,51S.6 4,4913 6,3903 16,343.2 38,t23.7

LAss Imports of Goods and Servces -S135 -416.1 -4114 -338.6 -469.8 -94.5 -2350.4 -4393.3 -9783 -20773.8 -38S74.4

Erpdismoen GWDPat Mark*etPrim 1,29L2 1,604.S 1,876.1 2,729.5 4,785.1 7,4813 19,100.5 29,019.9 43,946.8 82,837.1 1 75,15.1

8:s CltaSbtmUe #hlmmmt.Ls,I sb

Tae 2.4 Gro Domei Product by BhpdiW 1980181-199191(Mom OfLuoas at Cazat lJ85Pdc)

19/i 1/ 8Z5 &WE S SSW SW 87AU 4M SOW 51

Oovenmeot Caamptioa Bpemdituto - 339 497.1 3411 345.4 36S.0 292 SOLO 380.0 339O 37A.Pdvat Camptim BEpditure - 4,40.7 4.165.1 40SIS 3 .5 3,9.7 42361 4,487. 4.46.7 4,53.8 4.37O1hIco in Sock 23.9 183 43.8 16.7 S2.6 68.0 52.0 4.0 40.0 270 100.9Piod Capit Fonaldon 768 S94 23 6186 424.2 47&7 322.6 323.5 492.9 470.7 342.0Extat otGoods and SenvIes 672.3 S803 4SL7 47L6 4632 4510 412.0 417. 316. 4000 3764Lw Impots of Goods and Sevmices -14210 -9S3.S -90.9 -518.1 -469 e -5380 -392.0 -478O -523.0 -513 -417.S

&puaditowaz kP at M,atPM 4,810.S 4,9tL2 4,825.1 4,981.S 4,785.1 4,668.4 4,922.7 5,53 ,16.6 S.5 S1W4

_m O _ _IOmS to_d _I___mwwibg

T&ble 2.5 Na al Dhipass ba_me, 19O8M1-1991YI(MAW a" Leaset Qwwith*.r)

i,aW, 81 am &M 8"a am SW6 " 8 8W 8W NW

GDP at Maket PgIo 1 2 1t04.S 17.1 2729. 4,785.1 7,48.3 19.7W.5 2979.9 4396 82.8.1 1175lIndiroct Tas 11&6 100.7 773 10.A 139* 2234 912.7 1U03 2,46 399. 1184.7Lou Sutbides 0.0 -0.2 -0O4 -0.8 -7.4 -10.7 -0.9 -11 -6.2 -69 0A

ODPatF OtCont 1,173.6 1.5044) 1,799.2 2,624.7 4,6S3.1 7,268.6 18.79& 27^nJ) 4184 79.45 L13860CompentIm Of Employs 345.4 409.5 489.0 7105 8360 1,35L4 32J93 , 7.8 67W.2 105943 20,8Operaws Suphus ncluding lce of Sdf Bmpoed 704.2 942.0 1,127.6 1,634.1 3,457.1 5,4102 14,194.4 21,376.7 32.404A 64,0680 1A9,091.Cosmption al Fed Cspital 124.0 1525 182.6 280.1 360. 507.0 t;3*.S 1,42 2,S372 4,8.2 8,4112

Noet DneatprodcAt Satct Ce 1,049.6 1,3SLS 1,616.6 2,344.6 4,29I1 6,761.6 17,403.7 26,44.5 38,97L2 74,623 129,92Not PFeton Imoame frm tbe Re f thoe Wadd -22.9 -42.7 -43.4 -39.5 -812 605 1.823 -198M7 3945 6807 -757L8

Not Nonal PgxW at FtCt 1Co2I 7 1388 1,73.2 2,305.1 4,21L9 682.1 1966) 24W96S.8 39,36S7 75S3434 122377AOthereCumtTrisfesfr* theRestaoftheWoMd SSA 50.7 62.4 69.0 83.4 lOLI 9"8 23Q8 282.7 435.3 12

Donbicamo 1,200.9 1,460A0 1,712.5 2,478.9 4,394.5 7,135.9 20,276.6 2S,384.3 4208 70709 13S,2383oovC_1mt Consupo Bpnditure 90.1 137IN 166.6 1892 345.4 497.6 1,209.8 1,3893 3,3111 S,49lU 15676.0Pdivte Consmton Epedur 1,171.5 41SS 1473 2242.1 3,969.S 6,2382 16,267.1 25, 38,117.1 70,1394 117,9358Sap -60.7 -93.1 -101.4 47.6 79.7 400.1 2,799.7 -104 6586 3,439.9 2,564

_mm C__011U1nOU _ a*MWd_UIAWW.hk3.SM

Table2.6 Gra Domestic Capita Fomatios by Kind of Aet, 1980/81-190191(M Jk ofLeaes at Chwt Piem)

1931 8AM 84? 83,d 84,5 8S/35 M647 87AM 88J8 89690 M0

Fied Capital Fatdio 236.2 2051 23.3 331.8 424.2 729.7 1.8S3.9 2,274.9 S,S74.9 11t21 1185.4Improvaemnt to Land 10.8 14.1 14.9 4.2 1S.4 24.1 22.2 0.0 0.0 0.0 0.0Constioa 120.5 114.1 110. 1839 237.7 40L? 9653 15.A 2878.8 5,283.8 6,199Mohbiney and Transport Equipment 104.9 76.9 110.4 143.7 1711 303.9 864 1,020.9 2,696.1 5,9383 8,96.

Irear inSt 10.5 9.6 32.6 1S.0 S2.6 109.3 204.5 223 33.7 414.7 2,72LS

GarDaestieCapital Pmatiam 246.7 214.7 267.9 3468 476.8 839.0 2,058.4 2,297.2 5,910.6 11,6x.8 17913.9

Om=s.C__lxUOb. I_ d nib u_

Tab 2.7 arm Daensti catl Pormtla lyib d .AsseJ 1980151-o99p91(Mimas dfL.wa at CGmwt I9E5fk)

19MW/ 8I W 8ZJ8 84 84i5 55*6 S87 87AN 84& 8AW OM

Fared CepiFbmnioan 760 59C4 23 61&6 424.2 4. 322.6 3235 492.9 470.7 342.0Improvement to Land 7S.6 32.9 35.0 8.4 15.4 15.1 S. 0.0 0.0 0.0 0.0Construtieo 297. 227.2 1582 202.1 237. 2SL1 242.5 2155 3444 321.3 2293Machiney and T=sport Equipment 38U3 334.3 379.1 400 171.1 21S 74.S 108I0 148S 149.4 1105

hiomoiw Stoob 23.9 183 43.8 16.7 S2.6 68.0 52.0 4.0 400 50.7 109

GrosDas tcaulCpitF atkmA 78U7 612.8 616.1 635.3 476.8 S467 374.6 327.s S329 S21.4 4419

kum _ , .

TAbb 2.8 Capit oIae, 19801-1990191(Miv dLeona f Camt hi..)

1951/81 81/81 82* ON 88 85AS SW 8713 890 89F) 9(

GMWAMulatkIn 184.1 97.9 124.1 180.7 2S64 518.9 429.2 1364.8 4.324.8 11,0018t 7,S12.tIncrome in Stock 10.5 9.6 32.6 15.0 52.6 1093 2045 223 33S.7 414.7 2,728SFxed Capital Formation 236.2 205.1 23S.3 33L8 424.2 729.7 1853.9 2,274.9 5,574.9 112220 S,54Not Lending totheRedoft e Wedd -o2.6 -116.8 -143.8 -166.1 -220.4 -320.1 -1629.2 -932.4 -S8S5.8 -634.9 -10401.8

Finceah of GrmAomulation 184.1 97.9 124.1 180.7 256.4 S589 429.2 1,364.8 4,324.8 11,001.8 7.512.1Sapwp -60.7 -93.1 -101.4 47.6 79.7 400.1 2,799.7 -1300.4 65&6 3,439.9 2,SC umption of Mzed Cial 1240 152 182.6 281 360.0 507.0 1,385.0 1947.2 2,537.2 4,882 8,4112Caita Trnes from the Rest of to Woddincluding wors end omuuo 1208 38.5 42.9 -147.0 -183.3 -388.2 -3755.5 71.0 1,129D.0 29.7 .3425.S

uaw O= Sm_e Nls bd_I_

Table 2.9 Mondily Household and Per Cqpita Espencditure, 1989190(LOOes)

Total Lew Troos Sos Tow=s R lAmaltem Per Per Per er pr Pr Per Per

H d Cdt Hsehd o Houehdd Capita Houseod

Food 7223 1,276 8,69S 1,578 6.537 1321 6.76w 1.1SRies 2,699 477 2,175 395 1.9M 398 3.045 520Other Ceueas 253 4S 617 112 141 28 130 22Fsnh 916 162 1,241 225 764 154 816 139Meat pouttq. etc. 435 77 594 108 947 191 275 47Vegetabes 1.07S 190 1,365 248 996 201 973 166OiL tsuer. et6 922 163 1,017 185 999 202 870 148Milk.Romsate. 8S iS 254 46 43 9 26 4Sugar,Salt. etc S41 96 707 128 430 87 497 85COffee4TMea et 30 5 88 16 24 5 8 1Ohewr Food 24 4 74 13 9 2 7 1FoodTokeinOusde Home 242 43 S62 102 217 44 120 21

Bneveagesaid Tobsco S23 92 676 123 364 73 493 84Soft Drinks 84 1S 139 2S S2 11 67 12Alooholcs 135 24 210 38 117 24 108 16TobbacooKolanut ec. 30S S4 326 S9 19S 39 318 S4

Non-Food 3.938 696 6,921 1.256 4.489 907 2,6S0 452Cotbing and Pootweer 1L161 20S 1.472 267 1288 260 I.013 1V3HwIng 212 37 4S9 83 132 27 129 22Water, tC. 10 2 28 S 7 1 3 0FuelandPower 467 82 820 149 442 89 331 S7FE_Ust 463 82 7S0 136 Sto 103 340 S8Perau" Thaspont Eqipetnne 182 32 640 116 140 28 6 1Transpor4tiomunamcMalo 326 S8 624 113 418 84 190 32MOdWL, Helth Servios 413 73 496 90 493 100 36S 62Educatbm 439 78 .1,08 194 641 129 I15 26bMlsolaneous 267 47 S64 102 418 84 120 20

Grand Total 11,684 2JD64 16,291 2.957 11.390 2,301 9.92 t692

Sox Ou"OleUmOtS. 180.L lPunAw.pd HnEndnudHrAdamm g Bs m

Table 2.10 Monthly Per Capita Household Expenditure in Largo Towns in the Western Area. 1989190

BEnditurmperHousehold(Lermes)

AD Housholds -14,999 I,OO - 29,999 30,0DO -

Items Per Capita Percentage Par Capita Porcetage Per Capita Peroertage Per Capita Percentage

Erpenditures Dtiution Ependitures Distnbution Expenditures Distribution Editures Distrbution

Food 1,770 54.7 1,480 57.2 1,785 57.0 2,848 46.2

Rice 389 12.0 343 13.3 403 12.9 511 8.3

Other Creals 160 4.9 127 4.9 159 5.1 287 4.7

Fish 261 8.1 223 8.6 259 8.3 417 6.8

Meat, Poulfty, etc. 92 2.8 36 1.4 101 3.2 276 4.S

Vegetables 271 8.4 244 9.5 275 8.8 362 5.9

Oil Buter, etc 204 6.3 187 7.2 200 6.4 287 4.7

Mik. Eggs, etc. 6' 2.1 44 1.7 74 2.4 128 2.1

Sugar. Salt, etc 149 4.6 141 5.4 145 4.6 196 3.2

Coffee,Tea, etc. 23 0.7 13 0.5 20 0.6 70 LI

Other Food 21 0.6 11 0.4 14 0.4 87 14

Pood Taken Outside Home 134 4.1 109 4.2 135 4.3 228 3.7

Blovrae and Tobwooo 143 4.4 99 3.8 137 4.4 337 5.5

Soft Drinks 35 L1 23 0.9 34 1.1 84 IA

Alcoholics 53 1.7 19 0.7 49 1.6 204 3.3

Tobaoco,Kolanut, etc. 55 1.7 57 2.2 54 L7 49 0.8

Non-Food 1321 40.9 1,006 38.9 1,210 38.6 2,974 48.3

aotbing and Footwear 257 7.9 207 .8.0 280 8.9 367 6.0

Housing 104 3.2 79 3.1 84 2.7 275 4.5

Water, etc. 8 0.3 3 0.1 8 0.3 26 0.4

Fuel and Power 174 5.4 148 S.7 160 5.1 333 5.4

Purniture 148 4.6 118 4.6 129 4.1 337 5.5

Peoal Transport Equipment 110 3.4 3 0.1 60 1.9 719 117

Transpart/Conununication 111 .4 103 4.0 116 3.7 123 2.0

Medical, Health Services 93 2.9 75 2.9 63 2.0 272 4.4

Education 197 6.1 176 6.8 197 63 279 4.5

Misceilaneow 119 3.7 92 3.6 113 3.6 243 39

Grand Total 3,233 100.0 2,585 100.Q 3,132 100.0 6,159 100.0

S:wi CoumISaUUmOf P5C, ItS r Rn*ueoyAspaet aon SdHdusohddESN oand Houa_dd EaamonicAAe 0M4IOO

Table 2.11 Monthly Per Capita Household EBponditure in Rural Areas in the Soutbern Province. 1989/90

Erpeditweper Houmsoldg(eues)All Households -14,999 15,00 - 29,999 30,000 -

Itoms Per Capita Perentage Per Capita Percenteg Per Capits Percnotago Per Capita PeetageExpeuditures Ditibtti Expenditures Distrbution EBpeafditmure Distnbution Eperdinuru Ditutiofi

Food 1,279 7S.0 1,04S 73.2 2,048 78.1 _ .Rice 599 35.1 443 31.0 1,112 42.4Other Cereals 7 OA 3 0.2 19 0.7Fish 182 k0.7 176 12.3 204 7.8 .Meat.Poultry. etc. 33 2.0 40 2.8 12 0.5 . .Vegetables 187 10.9 150 10.S 308 11 .. Oil, BDtter, et. 157 9.2 151 10.6 173 6.6 .Milk,Eggs etc. 1 0.1 2 0.1 1 0.1 . -

Sugar,Salt, etc 73 4.3 65 4.6 97 3.7 . -

CoffeeTeT, etc. 0 Q0 0 0.0 0 0.0 . .Other Food 0 O. 0 0 0 0.0Food Taken Outside Home 40 2.4 1S 1.1 123 4.7 .

Iemvag and Tobaoco 54 3.1 57 4.0 44 L7 . .Soft Drinks 0 0.0 0 0.0 1 0.0 _Alcoholics 7 0.4 5 0.4 13 0. S _Tobacoo,2Kdanut. etc. 46 2.7 S1 3.6 30 1.1 I

Non-Food 374 21.9 326 22.8 530 20.2 _ aodb gand Footwear 137 8.1 114 8.0 21S 82 2 .Houshg 11 07 10 07 1S 0.6 .Water, etc. 1 0.0 1 0.1 0 0.0 _ - .Pul nd Power 63 3.7 59 4.1 78 3.0 _ .Purniture 43 2.5 40 2.8 SS 2.1 Peoaal Trsort Equpment 2 0.1 2 0.2 0 o0 -Trmspor/camUuiCRtiou 40 2.3 36 2.5 51 2.0 - .MedicaL Health Service 27 1.6 27 1.9 26 LO - .Eduation 27 1.6 18 1.3 S7 2.2 -Misellmeus 22 1.3 19 1.3 33 1.2 - .

Grnd Tota 1,706 100.0 1,428 100.0 2,622 W00.0

ewxt CmeW*AmOfIoe, U. iWa ypat WHouldEu and HaoId GonbA 19

Table 2.12 Monthly Per Capita Housebold Epesdituro in Rural Atoas in the EAktem Proce t989"90

!uditureper Housedd (Leenes)All Householdsd -14.999 t15,O -2 -. 999 .W1AOOO-

item Per Cta Prct4ag Per Cqpta Pe tag Per Capita Peentasg Per Caits Perentg

Brpe ditrwa Distrutkn Rpwdltues Dbutkua Ripw4ditma Dltbution Bipeditwc DbitbUtdon

Food 1,419 66.7 902 702 2,152 730 3,11S 593S

Rice 616 29.0 387 30.1 1,112 37.7 126 23.0

Other Cereas 12 06 3 0.2 33 11 33 06

Fish 17S 8.2 140 10.9 206 7.0 310 59

meat, Poultry, etc. 111 5.2 11 0.9 142 4.8 539 10.3

Vegetables 196 9.2 130 10.1 314 10.6 395 7.5

Oil, Butter, etc. 222 10.S 161 12S 225 7.6 502 9.6

Milk,Eggs, etc. 7 03 0 0.0 6 0.2 40 08

Sugar,Salt, etc 74 3.5 65 S.0 110 3.7 82 L6

Colfee,Tea, etc. 1 0.0 0 0.0 4 0.1 0 0.0

Other Food 1 0.1 0 0.0 1 0.0 8 0.

Food Taken Ouftide Home 4 0.2 5 Q4 0 0.0 0 0.0

Boera and Tobawco 70 3.3 39 3.0 71 2.4 210 4.0

Soft Drinks 0 0.0 0 0.0 0 0.0 0 Q0

Alcoholics 17 0.8 2 0.1 23 08 79 LS

Tobacco Kolanut, etc. S3 23 . 37 2.9 48 L6 L30 2.5

Non-Food 638 30.0 344 26.8 723 24.S 1,914 365

Cothing and Footwear 216 10.1 149 11.6 24S 83 494 9.4

Housing 17 0.8 16 1.3 12 04 24 0.5

Water, etc. 1 0.0 0 Q0 4 0.1 0 0.0

Fuel andPower 54 2.5 S0 3.9 67 2.3 59 Li

Furmiture 69 3.2 46 3.6 75 2.6 166 32

Pezscmal Transport Equipment 0 0.0 0 0.0 0 0.0 0 0.0

TrnspotiCommunicatio 70 33 8 0.7 93 3.2 330 63

Medical, Health Sewices 161 7.6 48 3.7 148 S.0 699 114

Education 23 I. 13 1.0 27 L9 70 13

Miscetlaneous 28 13 13 1.0 52 18 72 I4

Grand Total 2,16 100.0 1,28S 100.0 2.945 100.0 S.8 1000

aaINoe COwAm iOo.ee i. i 'Pd*"sIpott lan Surwyd d AHaMitu1 HaauIddEnstOIe t

Table 2.13 Montly Per Capita Housedh ldxpeuditure in Rura Aas in the Northen PM *c., 1989190

Brp diture pgr Houehdd (eaes)ARl Hoe bodds -14,999 1I0AV - 29,99 XAM) -

Itels Per Copts Pesentage Per Capita Pemat age Percapita Peea ge Por Cata PemantagB_ _diM Distiutin Ezpenditwr Distbtn Bqp4ftures Ditributita Epanditure Distdiatoh

Food 967 67.1 929 682 1,095 64.1 - .Rice 449 31.2 412 30.2 57 33.8 - -

OtherCereos 30 2.1 28 2.1 36 2.1 _ _Fasb 103 7.2 102 1.5 109 6.4 A .Mea ,Podtry. etc. 21 1.5 24 1.8 11 0.7 - _Vegetable. 141 9.A 141 10.4 139 82 _ -

Oil, Butter, etc. 109 7.6 106 7.8 120 7.1 _MM6Ek}gs, 3 0.2 3 0.2 4 0.2 _ Sugar,Salt, otc 93 6.4 94 6.9 89 5.2 _ Co(fee.Tea ltc. 2 0.1 2 0.1 2 0.1 - _otherFod 1 0.0 1 0.0 0 0.0 _ _Food Taken Outde Home 1S 1.1 17 L3 8 04 _ _

Beweg sad Tobaoo 87 6.0 69 S.1 148 8.7 Soft Drab 20 1.4 0 0.0 89 5.2 _Alcholics 20 1.4 26 L9 2 0.1 _Tobacco, Kolmt, eo 46 3.2 43 3.1 S8 3A4 _ a

NOe-Food 387 26. 364 26.7 464 272 - _aohng and Footwea 165 11.5 168 12.3 156 9.2 _ Housig 27 L9 22 1.6 43 2.5 _ _Water, etc. 0 0.0 0 0.0 0 0.0Fel and Power 55 3.8 56 4.1 48 2.8 _ _FOtur 57 4.0 46 3.4 97 5.7 a -

Pessonal Tapot Equipment 2 0.1 0 0.0 7 0.4 _ *TransorAlmUMUftcatIcu 13 0.9 13 0.9 14 08 - ,Mc"lkal, Heuh Scnfces 28 1.9 26 1.9 35 2.1 _ _Eduatin 25 1.8 18 1.3 SO 2.9 _ .Mlmoellanecs 14 1.0 14 1.1 13 0A _ _

rand Totl 1.440 100.0 1,362 10.0 1,707 lOO -_

Qmurm owuSbIsdinoua 1665 Vm pAp cn _wiwdII I I S*qmi WHo dNa ahhad mmd _ GW In

Thb% 3.1 Balawe of Payments, 1984/83-1991)9(MilUowof ESDoiar)

19841 ON 8 7 87* W9, A X91 91.

Erprt (aob.) 1393 20 125.9 16.1 l1L9 1423 137.1 145.8

lim (cdt) -169.1 -142.7 -138.0 -1472 -1742 -1l -17W -345Oil -26.4 -20.4 -249 -23.0 -283 -27.4 -3L9 -29.5Non-Oil -142.7 -1223 -3.1 -124 -145.9 -149.7 -1383 -105.0

Trade Balance -29. -20.7 -I12 -311 -63 -34. -33.1 11.3

kka-Factorevies -43 1.4 -0.0 13 0.7 -205 -3.4 -82Receipts 6.3 82 8.1 13.2 13.1 12.7 22 26.8Payments -12.6 -6.8 -8.1 -11.9 -12.4 -332 -25.6 -35.0

Resouze BaLace -36.1 -19.3 -12.1 -29.8 -61.6 -55.3 -36.6 32

NetfacbrtPapw -512 -4S5 -S0.1 -56.1 -S83 -845 -102.4 -945InterestPayments -36.4 -34.6 -35.6 -43.0 -43.1 -48.6 -S4.9 -48.6Factor Payments and Otbers -14.9 -10.9 -145 -13.1 -152 -359 -475 -45.9

Net Piate Trafes 1.9 2.7 3.1 0.3 3.3 4.9 0.1 0.1

CuetAccouWtBalan -85A -621 -S9.1 -8S5 -116.6 -134.8 -1389 -91,3

Ftml Capital nflow 23.6 02 -9.8 -19.0 5.1 27.4 252 23.9Grants (net) 173 22.1 232 19.0 14.7 4L4 36.0 37.0PublicForeip Borowins 10 -31.9 -' 5.0 -42.7 -30.0 -16.9 -13.8 -17.1

Meditm andLong Term (net) LO -319 -35.0 -42.7 -293 -16.9 -13.8 -17.1Gross Inflos 325 131 16.0 7.6 162 20.7 27.5 25.0Amortization -315 -45.0 -SLO -50.3 -455 -37.6 -413 -42.1

TrustFund - _ _ - -0.8 0O0 0.0 0.0Priate Foreig Boroww (net) 33 2.1 -2.4 0.0 0.0 0.0 . 0.0Direct Foreig Invesmet 2.0 8.0 43 4.7 SO 3.0 3.0 4.0Short Term Flo 0.0 0.0 O 0.0 15.4 0.0 0.0 0.0

Emi and Omiwsw 18.9 -4. -125 -4.6 23.8 133 202 -53

Oara Balance -42.9 -65.8 -815 -1092 -87.7 -94.1 -935 -72.7

Ftacksg 42.9 65.8 81A 1092 87.7 94.1 935 72.7Net Use of IMFResoure -93 -109 -125 -29.7 -123 -83 -12.4 -43

Purcbases 0.0 0.0 99 0.0 0.0 0.0 0.0 0.0Repurchases -93 -10.9 -22.4 -29.7 -123 -83 -12A -43

DebtRelief 72 O 17.1 12.8 0.0 0.0 0. 0.0Cbange in Gross Rsem 9.6 5.7 -2.4 3.1 05 13.1 -L7 -10.6ChangeinPaymentArears 3S.4 71. 64.8 123.0 995 893 107.6 63.7SAF/ESAF 0.0 0.0 14.4 0.0 0.0 O 0.0 0.0Other BoP Support 0.0 0.0 0.0 0.0 0.0 O 0.0 23.9

Scum,e: 18* t SImLoot l. ld WOetdUus .

Table 32 Merchandise xports, 1980181-1990191

198/i 81/8 82'U 83184 84/81 8/86 86/87 87/W8 8889 89 9Value (USM ns)Diamonds 66.1 51.7 52.4 40.1 29.5 27.5 27.7 13.3 8S 211 20.6Bauxite 11.6 11.2 28.3 19.8 23.S 20.9 21.2 20.9 23.9 25.5 2S.4RutIe 20.8 11.3 27.3 24.9 26.9 27.9 41.3 38.7 53.7 72.0 70.0Iroan Ore 1U 0.0 0.0 6.S 4.0 1.0 0.0 02 0.0 L9 3.8 4.1Gold 1.7 3.2 1.2 8 5.6 4.7 3.7 2.0 1.6 0.7 0.1Palm Xerdl 3.1 1.6 7.1 4.6 2.5 0.8 0.2 0.0 0.1 0.0 0.0Coffee 18.1 S.0 13.3 4.4 U.2 19.9 I1.8 17.4 S.4 6.0 6.5Cocoa 14.6 15.0 18.0 23.2 24.7 19.0 1S.6 17.3 10.3 8.1 6.4

Subtotal 1360 109.1 1S4.2 129.3 137.9 120.7 12L6 109.6 105.3 137.2 133.1Other 29.2 5.5 7.1 8.3 1.3 1.3 43 6.5 6.6 5.1 3.0

Totl f.ah 165.2 114.6 16L3 137.7 139.2 122.0 1259 116.1 11L9 142.3 1361

VdumieDiamonds (Carats) 311000 303.000 331,000 318,000 312,000 360,800 339.30 147.400 62.000 115800 1SO.440Bauxite (Metrictons) 608,000 606,000 950,000 1.045.000 1,269.000 1,179.000 1.266,200 1.30700 1.4S4,200 1.68000 1,251,10DRuth!. (Metictons) 64,000 38,000 69,000 92,000 99,000 8600 107,900 1O5,600 13S,500 LK=OO 138,00Iron ore (Metrctons) I 0 0 356.000 373,00o 1OOW 0 21,000 0 22 55 60Gold (ounces) 3,881 10,033 2,042 20,643 16,700 15,500 13,400 6,133 5,012 2,687 266Palm Kernels (Metric ton) 12,000 10,000 11,000 12.000 8s,5 5,700 2,00 0 300 0 40Ccifee (Metictons) 9.142 8,522 5,474 1,894 7,422 7,714 4,623 9,106 3.659 S,877 7,330Ccoa (Moetic to) 8,8S4 8.901 8,184 10,127 10,913 9,080 8,0 10,451 6,436 8,162 608

Unit ValueDiamonds (S/caral) 212.7 1107 18.3 126.0 94.5 76.2 8L6 90.2 1372 182 136.9Bauxite (S/Metro ton) 19.1 18.S 29.8 18.9 18.6 17.7 16.7 16.0 16. 163 20.3Rutil. (S/Metric ton) 324.6 297.6 394.9 270.2 272.0 324.4 382.8 366.5 396.3 529.4 513.7Iron Ore (SMetfic ton) 11 - . 18.3 10.6 10.1 9.8 9.9 70.0 86.4 6.7 684Gokd (S/ounce) 450.2 322.4 61Q9 410.0 33S.3 303.2 276.1 326.1 320.0 260.6 26317Palm Keneds (S/Metricton) 2561 160.7 647.0 386.2 298.4 140.4 100.0 1500 200.0 t14 15.0Coffee (S/Metri to) 1,980.3 1,759.7 2,423.0 2,330.7 3,259.7 2,584.4 2,543.5 1,910.7 1,4683 1,9 8867cocoa ($/Metrcto) 1,639.4 1,689.8 2,204.9 2,291.2 2,263.7 2,087.9 1,950.0 1.6553 1,594.5 9923 1,052.9

1, CwWle W 1OWS./8 U MIiSU Dabt.

8o OaW SmtOUlotl Woa9u*_9

Table 3.3 Imports by Major Groups of Cmmoditles, 1980181-199U92(AwL eofLra)

9/i 8OM2 8W 83M 44 8W 8W17 87AW S#9 89 5 M9 PW2 I/

Foodsutf 713 97.8 82.S 74.1 143.2 2S7.1 1,18S.0 854.6 1,8183 SlS6.0 10100.0 17.98010Bnage and Tobacoo 10.8 6.7 SA 4.1 9.3 18.9 152.9 78.3 296.2 202.1 7010 649.0Raw Matedls 6.4 6.3 4.9 6.4 5.9 14.0 99.4 58.7 110.7 303.9 703.0 757.0Mneals Fuels, and Lubricants 62.2 104.9 66.1 134.3 167.5 134.2 790.6 S843 131L8 2,28.1 7.23.0 8,68.0Animal Oils and Vegeaes 10.5 82 6.7 5.0 32 9.3 127.2 333.4 233.1 2899 821L0 1,534.0Chalas 27.4 18S 16.1 22.9 28.7 40.0 360.S 1987 2560 884.9 2,354.0 6,4180Mufted Product aaified by Material 67.7 60.1 433 49.4 76.6 106.1 714.8 S02.9 1,109.0 2,015.6 3,844.0 S,626.0Mwhblney and Tr1anatio Bquipment 913 71.1 48.S 63.6 112.4 2024 1,216.9 9115 247.5 4,512.S 7,506.0 10,3780

Milaneous Maufctured Atces 19.2 17.0 10.6 11.8 24.S 34.0 18L8 194.4 464.8 S74 1,40 2,1760Other 4.0 2.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Totl, al 370.8 392.8 284.1 37L6 S713 816.0 4,829.1 3,7168 8,007.4 16,228.4 34,59.0 54,176.0

U EPA I m wbdopnA u,u b um.

Table 34 Vauo Volume and Unit Vaue of Sales of Peltr Products, 1980-19l

19 198 12 198g I9W 9 1m 987 1 198 9 15 191

Vduo oflite)

Prmim Motor spirits 49.910 51,492 26.421 34,08S 37.074 33.9 26.481 1811 27.244 28.776 t3.9780 2049.0Keroseoe 33.59S 33,963 29,497 40.175 39.840 27,143 17.217 12X34 17A47 2O.360 10,5U80 1,13.Avutno*oe Onail 0 10476 114J027 54.570 61.590 74.82 58.08 48,872 3S,681 S0.38 43.28 26.971. 2.?2S.0Fuel 0il 37.732 49.SD6 43.532 53659 43.893 SS,9S7 38.118 4.918 17.680 20.57 1$,699h 140.0kquifled Petroeum Gas 1191 1.36 656 7S1 868 738 365 415 486 424 194.0 800

Speci Distilate 22 15 10 9 7 8 7 5 3 2.0 -

Lead-Fm Napbhta . 234 223 129 107 123 92 36 79 80 63.0 19.0

Val (thuads ofLeoes)

Premium MotorSpirits - . 20.660 33.34 58.340 67.189 102.068 23.121 375.242 520336 690.970 209S 04Kerosene - - 11.307 20081 26.097 26.290 44.657 119,783 169.318 283n0 478.181 101.495Automotine Gs Oil 26,723 39.8S 76.106 86.472 149.240 377,720 542%M90 6187 1.131.236 221.019FuE On . 13A32 18.373 18,66S 36.791 25080 10.240 36X14 84.94 31.401 52,752L3quified Petroleum 0n. 206 340 820 225 1506 7,512 9,099 10,478 12.76 14,929Special DistMate - 9 6 5 5 2S 69 52 40 121LevA-FPeeNapbaba - . 69 52 93 200 306 3s7 1.D67 1.372 3A96 2,129

Unit Vale (Loom per 'ie)

PremiumMoto Spiris . - 0.78 0.98 IL57 2.02 3.85 13S6 13.77 18 49.43 10225KeroPsen 0.38 0.50 0.66 0.97 2.59 9.71 9A5 13.92 4S.18 89.Automotive OssO .. i Q0.49 Q64 1.02 1.S1 35 10.S9 10.77 14.3 4L94 8Lllfed Oi l _ 0.32 0.35 0.43 0.66 066 2.06 2.0S 4.13 16.78 3S.14Liquffied Phet m s n _ 0.31 0.4 0.94 3.1S 4.13 18.10 72 24.71 6S.75 18661Speea Distfat . 0.60 060 0.56 0.71 3.13 9.86 1.40 1.3 6QD _Lad-P NaNh . 031 0.40 0.87 63 3.33 9.92 13S1 17.15 49.14 1t205

earn TtwftUWWftdWRh*ft*U W.Y

Table 4.1 structur of Exteal Debt, 1980-V991(WlSDa of USDdar)

1i 19# 198 1984 1985 l* 1987 1l9 19* 19 19

Tota Eteinaf Dobt 435.0 617.0 64.0 622.0 722.0 8580 1,019.0 1024.0 I9.0 1,177. IO 9O

Long Te . Deb 323.0 36&0 367.0 327.0 3860 465.0 545.0 5380 530.0 5960 642.0Public and Pubidy Guaranteed 323.0 3680 367.0 327.0 386.0 465.0 545.0 S38.0 530 596.0 6420

Officil Creditors 212.0 265.0 27L0 25L0 307.0 384.0 453.0 456.0 449.0 SOLO 540Multilateral 62.0 85.0 92.0 99.0 123.0 142.0 162.0 1700 173.0 18.0 1860

cessional 40.0 64.0 72.0 85.0 107.0 125.0 1430 157.0 16i.0 17Q0 1750Non Coancesiond 22.0 21.0 20.0 14.0 16.0 17.0 194 13.0 MO I0 lL0

Bilaterad 15O 180.0 179.0 152.0 184.0 242.0 29L0 2860 276.0 319.0 363.0Concusldond 103.0 1330 136.0 88.0 110. 135.0 16L0 169. 16Q0 179.0 226.0

Private Creators 1LO 103.0 96.0 76.0 79.0 81.0 920 82.0 810 950 93.0Commeriad Banks 20.0 23.0 21.0 19.0 17.0 17.0 17. 17.0 17.0 17.0 17.0

Odter Private 910 80. 75.0 S7.0 62.0 64.0 75.0 65 64.0 78.0 76.Prve Nonguaranteed 0.0 0.0 0.0 0.0 0.0 0 0.0 .O 0.0 0.0 OA

Use of lbMFCPe d 59.0 78.0 93.0 96.0 1OLO 1OLO 1160 109.0 10' ? 10. 101.0

Saout TeaM Debt 53.0 17L0 183.0 199.0 235.0 292.0 358L0 377.0 459.u 4730 S47.0Interest Aneason Lag Tena Debt 7.0 13.0 18 17.0 280 19.0 340 S7.0 1I0 - 14L0 202.0

_mem waddOd T%i-

Table 4.2 Commitments, Disburtsments, Servie Payments and Outstanding Amounts of Ekternal Medium and Long Teom Public Debtas of 31 Dcmember 1991(Jousds of US Dollas)

Debt Ou&tanmwFod at End Period Trmotk_ n Du4dg Perdod othicYagesYear

Disbused Inluding Commit- Didwsre- Sw o Paw rets Caocet- Afjust-OOty Undisbursed meats ments Pindpal Iterest Total la v mats 2/

1986 465,717 592,990 16,802 21,510 5,412 2,111 7.S23 3.731 _1987 543915 707,331 35.48S 13,806 4.98S 1,247 6232 2,89D 86,7311988 537,714 674,30 12282 31,672 6,701 Z1901 9,602 374 -380081989 529,721 766,966 110,863 5,753 1,104 7S8 1.862 S;230 -12D9199D 595,391 820,074 13,106 37,247 2,432 3,229 5.661 6.504 48,9421991 642.249 8S2,107 45,941 47.89 1,440 1.260 2,700 1O0609 -1858

0 TheFolIowingFiJrsamProejed

1992 483,8S2 630,9S7 62.752 27,459 11,606 39,065 - -1936891993 508,367 599,614 55,859 31,343 10,438 41,781 -1994 S18,052 S70,626 38,674 28,989 9,418 38,407 - 11995 513,632 541,627 24.580 28,999 8,331 37,330 - -1996 503138 517,665 . 1470 23,96S 7.181 31,146 - 31997 495,42S S02M033 7,919 15,628 6,625 22,253 _ -31998 486,223 487,628 S503 14,404 6,487 20,891 -1999 472,96S 473,024 1,48 14,60S 6C277 20,882 - 12000 4S7,949 457.972 35 15,02 6,16S 21,217 _ -

17 22,561 5,946 28.57

11, ua I r;~ e*ddmethibleuammda em pema i*m mu6 sbuwt.

SI1mm.wmuhabUmnm. c bdngbg,mdsbud hemoeen odtoUu.u

6.u: Wcdd8u*s^ Sab_

Table 5.1 Summy of CeotUal Govenment Fnane, 1980/81-1991M

(3ffIk,. of meone)

19* il S1AM 4 8 84.45 85W 86 8716 8W 8AW MA 91,

ReoVeues 212.0 1832 1560 20S53 276.0 406.2 1,414.8 2,3303 4,060.2 7.8350 18,493.3 35,384

Toaen Icme and Prperty 53.1 42.6 42.7 55.7 76.5 104.4 255.7 698.0 963.0 1,824.0 4299.0 7,866.0

Taes an Intemation Tralatos 983 84.0 57.8 81.7 109.2 1841 832.2 6733 1,6A8 3,30. 6,6;SL0 12,1

Taes an Goods and Service 43.7 45.2 38.1 504 69.2 83.1 281.3 8133 974,6 2,S968 624 13,631.0

Oter Revenues 16.9 1L4 17.4 17.5 21.1 346 45.6 145.7 5018 11112 1,69 1.SSW

E _=dfua 406.5 4083 409.0 4682 816.0 1,432.2 4,98U8 4,634.3 8,0086 17,10 33,119.0 61845

Recutt Expe. Jiture 342.7 3134 309.8 364.9 6880 1,220.1 4,089.7 3,9853 6,8311 1400 27,472.0 47.060

Catl Epedts 63.8 94.9 992 1013 121L0 2121 89K1 649.0 1.177.3 3,201. 6,337. 14,0.

O01a1D t (omamibent bask) -194.5 -225.1 -253D -262.9 -540.0 -1026.0 -3574.0 -2304.0 -39482 -996.0 -15315.7 -2646L.0

CMaWbAma 24.3 41.2 -42.1 43 69.0 107.0 777.0 42L0 1,891. 3,S02D S0 9,99A

OwanU Dedi* (oash bobu) -170.2 -18&39 -295.1 -258.6 -471.0 -919.0 -2M79.0 -1883.0 -20S7.2 -6464i. -9309.7 -16502O

TOaFIalJf0 170.3 183.9 295.1 2s54 47L0 919.0 2757.0 188. 20S72 64640 9909.7 1650

Domest (net) 12t.6 128.9 227.6 207.1 293.0 778.0 2,155.0 1,30 1611D 3,.M 3,8.0 37.0

Banking Stm 113.6 14Q0 22U8 1683 269.0 757.0 1946.0 1,312.0 1,89.0 27160 2,0 -1010

Non-Baik &fl -1L1 2.8 S8u8 24.0 21.0 209Q0 26.0 22.0 8S60 1.70 1,0.0

Foe* (not) 48.1 5S.0 67.S 513 178.0 ' 0 64.0 S4S.0 8K3 2,80A.6 S,896. 16,8A

Crnals 16.3 23.1 2S.5 59.6 53.0 .1050 710.0 486D0 73 1,249.0 2,524D 6,135.

Disbuteements 64.1 63.6 69.0 40.0 750 65.0 89.0 20 1410 717.6 3,792L0 12,250

Amortdadion -3L7 -3L? -27.0 -4U3 50.0 -29.0 -157.0 47.0 -12L0 -1060 -420L0 -1727.

Roatj:Uaccounted . * - - . - -367.10 31.4 187 -1930

Sm ADP (peret)

Tota Re"venues 16.4% 11A4% 8.3% 7.5% 5SA% 5.4% 7.2% L0% 9."% 9-5% 123% 12L4%

TotldEBpnditurus 3L5% 25.4% 21.8% 17.2% 17.1% 19.1% 25.34% 159% 18.2% 21.5% 22JX% 2.79%

Recurrent EBpenItures 26.S5 19.5% 16.* 13.4% 14.4% 16.3% 20.8% 137* 15J% 171Xb U3X6 16.5%

Capita Expniue 4.9% 5.9% S3% 3.8% 2.7% 2.8% 4.6% 2.2% 2L7* 3WM% 4.2 52*

Overs Deit (oanmtentabsd) -15.1% -14.0% -13.5% -9.6% -11.3% -13.7% -tll% -7.9* -9.0% -12.0% -102* -93%

Net Dometil Feanein 9.4 8.096 129% t.% 6.1% 1Q4% 10.9% 4.6% 3.7S 43* 2.5% O%

Not Foreign Fa 3.8% 34% 3.6% 19% 3.7% L996 33% 1.9% L9% 3.S9 3.9% 59m * __ * _

Table S2 PFdtonal aadncatlcn of GomeQm t Recuret 1xaitre. 198181-9" M92(MauI= efLeene)

19SI 8W0 840 &M ^W $SW 871, &W 0jW OM 9PW

GeeralFwokSew*s 773 SU 60.2 6d 59.2 97.2 373 4 468. 1,1L4 3,83. 3.700Defens 16.7 183 17.S 193 24.9 32.0 1163 156. 292.S 8M0 1,70 6.Edwi 46.7 52.6 S63 72.0 77.7 12L9 226.6 417.4 483 1,276 2,667 5,30

General AdInisim 4.9 4.4 10D L7 L3 2.4 37.1 70.9 69O 109.7 167 35s8Sehoos 32.4 3S 393 S.1 S4S 82.8 153 W203 2814 8204 1,5.6 39.2

Muany 193 20.3 21.7 28.7 3L3 47.1 72.6 1S46 162.2 4752 875.2 2,05OLSecondary 13.1 S.0 17.6 2L4 23.2 35.7 82.7 95.7 1212 345.2 6344 197.7

Uneniaes d Conlege 8.3 11 10.7 1.4 12.2 173 23.8 88.7 10.7 320.1 917.0 1715Technia and VocatIon 1.1 L2 13 8.8 9.7 19.4 1.4 7.5 25.2 26.4 704 1315

Mel" 24.0 23.2 22.1 333 37 46.7 967 1433 1823 4117 769.9 1,53SocalSomadtad Wufar 6.1 6.7 7.4 7.7 .2 15.9 33.8 44.1 89.5 214.1 30.1 437.7

Cenwl Adm_lstal 0A 0.6 0.6 -. O 4.1 1.9 7.2 143 44S 89.8 142.7prnso 5.5 6.1 6.8 7.7 82 1L.8 39 369 75.2 1694 270.3 2950

Housg mnd Cmmunl4yAneiti 2.8 2.6 2.1 73 6.6 9.8 4.6 4.7 6.4 70.2 147 12Otberr C muay ard Soa Swaice 24 2 23 3.2 34 6.4 12 29.0 65.4 4.8 238 4293laWmic SWW= 39.1 383 41.0 654 59.0 1043 127 343.S 3683 L93 2,350 398

CealAdnnltatko S.6 S.1 5.4 10.0 - - _Aguro 1.7 15A 143 23.6 144 28.8 34.2 1163 1060 239.5 6529 927.7MIliog 1.3 1.4 L2 11 1.0 3.8 3.5 8L 17.8 680 20. 22LOElectdicty and Water 2.8 2.7 8.0 7.8 7.4 108 39.3 15.6 21.7 143.5 '2S1 34M1Tlrn tn 1s 12.7 11.9 17.1 14.4 46.6 329 123 215.5 4012 2920 2661Other enomic Servies L2 1.0 0.2 6.0 214 143 18.8 19Q8 7.5 10783 9505 1,638.9

Unaaoo h and OtherPrpos. 127.2 110.6 100.9 93.9 415. 7819 3,0.8 2,37.1 4,87.4 8,327.1 35,195.1 25,319.8Pubic Dobt lntent and Cmkm _l 23.2 39.4 43.0 47.1 66.4 199.4 1,11t6 1,363. 2,6S8D 5,800D 9,617.0 20?,193.TetoIncalAthogAudie 03 03 0.2 L4 . - . . _ - _Othe Purpose 103.7 70.9 57.7 47.4 348.7 S863 1.985.2 1,0C7.1 2,214.4 2,527.1 S,S2 S,126.8

Total 342.7 313.4 3098 364.9 688L0 1,2201 4.08.? 3,9853 6,831.1 14400. 27,4720 47S85.0ow=m DsP dF h,s__Emlbq,_JtWlsWd_

Table 5.3 Functionl dassification of Govemeat Recumrat Expenditures, 1980/81-1991U2

(icwetga OfTotd)

19 W82 40 S3W 8W4/ 858 8W 7 87/8 819 ,)W AM 9vim&sL

Omen)al PubWe Srvic 22.6 18.7 19.4 16.6 8.6 8.0 9.1 12.0 6.9 10.3 14.2 7.9Defeae 4.9 5.8 5.6 5.3 3.6 2.6 2.8 3.9 43 S.9 6.8 14.SEducat 13.6 16.8 182 19.7 11.3 10.0 S.S 1OAS 7.1 8.7 9.7 It3

General Adminisaon L4 1.4 1.6 OS 0.2 0.2 0.9 L8 1.0 0.8 0.6 0.8Scools 9.5 113 12.7 13.7 7.9 6.8 3.8 63 42 5.6 55 6.9

Pdmazy 5.6 6.S 7.0 7.9 4.5 3.9 L8 3.9 2.4 3.3 32 4.4Seoaday 3.8 4.8 5.7 5.9 3.4 2.9 2.0 2.4 1.8 2.4 2.3 2.5

Unvrtios and Collegs 2.4 3.7 3.S 3.1 L8 1.4 0.6 2.2 LS 2.2 3.3 3.3Tecmical agnd Vocatioal 0.3 4 0.4 2.4 1.4 1.6 0.3 0.2 0.4 0.2 0.3 03

HeAlt 7.0 7.4 7.1 9.1 4.9 3.8 2.4 3.6 2.7 2.8 2.8 3.3Sicial Seauu(ymad Walfre 1.8 2.1 2.4 2.1 1.2 1.3 0.8 L1 13 LS 13 0.9

GeneraAdministatn 0.2 0.2 0.2 .. 0.0 03 0.0 0.2 0.2 0.3 03 0.3Pensions 1.6 1.9 2.2 2.1 1.2 1.0 0.8 0.9 LI 12 Lo 0.6

Housiog and Cbm nityAmeitui 0.8 0.8 0.7 2.0 1.0 0.8 0.1 0.1 0.1 0.S 0.5 0.2Othr CwAumaty ad Soail wnti 0.8 0.8 0.7 0.9 O.S OS 0.3 0.7 L0 0u0 0.9 0.9EBonom Svices 1L4 12.2 13.2 18.0 8.6 8.S 3.1 8.6 5.4 132 8.6 72

Oal aAdnznltrat 1.6 1.6 17 2.7 .. - _ _ .. _ _Ap4lote 4.6 49 4.6 6.5 2.1 2.4 0.8 2.9 1.6 1.6 24 2.0Mhng 0.4 0.4 04 03 0.1 03 0.1 0.2 03 05 0.7 0.SMoectandWter 0.8 0.9 2.6 2.1 1.1 0.9 L0 0.4 0.3 L0 0.9 0.7T _^rnoto 3.6 4.1 3.8 4.7 2.1 3.8 0.8 03 3.2 2.8 1 0.6Othr Ecoanic Services 0.4 03 0.1 1.6 3.1 1.2 O.S 4.8 0.1 7.4 35 35

UnaUo oae md Ot h rsPzp 37.1 3S3 32.6 26.3 60.3 64.4 75.7 59.5 713 S7.0 553 53.8Pubic Dobt t and ComIssiom 6.8 12.6 139 12.9 9.7 163 27.2 34.2 389 39.7 35.0 42.9TranfenstoLoculAuthoa,es 0.1 0.1 0.1 0.4 _ _ . . _ _ .. -

Oter Ppoes 30.3 22.6 18.6 13.0 S0.7 48.1 48.S 253 32A 173 2.3 109

Tot) 100.0 100.0 100l0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 t100 100l0GMm _Wd P .eZfPdI

Table 5.4 IHoCoa Camfioadoi of Gavuamaat ReOumat E _mndIIuro4 198OV81-1991

I9/I 81 *0 &.W 858I1 AM7 87)W 8W 5W M11 9V1MHaL

WaJ8 aid Sallal 101.8 117.5 125.1 1753 194.9 226.8 598 928.0 1106.0 2813.0 5622.0 9,875ORJico Sqdlaent 0O 0.0 0.0 0O 1tau O 1600 170 559. 409.0 120 X130hageoh oo*o ad Sevim 108.0 76.9 723 81. 91.8 265.7 692.5 1006 2229.6 4527A 7510.0 7,5430&tuiddeao S&*b,dh and Tazsfe 13.3 15.0 213 29.2 0.0 373.6 465.8 267.4 139.4 0 104.0 isitestPpmeints 23.2 39.0 43.0 47.1 66.4 197.0 1111.6 1S0 265.0 S800 9617.0 201930

Domoslo .. .. .. 26.0 9L4 321.9 6500 130 2520.0 4095. S69Foreip . .. . - 40.4 10S6 789.7 732.0 1350 3280. SS22.0 14,S.0

Soia Or ed OutdaOs 0.0 0O 0.0 0O 0.0 0.0 0.0 0.0 0.0 0.0 10.0 1620Em.eqwdDefwew 0O 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 210 S,38D.0{ibmian RefOp.hf os 0.0 0.0 0.0 0.0 0.0 0.0 . 00 0.0 0.0 439.0 202OOther ( ahilab,4.t) 96.4 6S.0 481 32.3 146.1 157.0 1100 169.3 1391 1051.0 0.0 0O.

Tot81 342.7 3114 309.8 36W9 6880 122.1 409.7 3S88.3 6,83.1 14A6DO 27420 47AS.

GM=. D_ d *mta r 6*_ _

Ta S5 B.5Domi asflcateI of Gowemrait Rcuumt HxmdkWuv 1980/-199"1i2(F=Mtq fTotuI)

l 11 8Om am 841 S SW 8 167 876 84W0 8*9i 8 1 9Esl

Wags and Salades 29.7 37.5 40.4 48. 283 1L6 13.7 23.3 16.2 193 20.S 210IUDo supFleht 0.0 0.0 0.0 0.0 27.4 0.0 3.9 43 82 2.8 41 4.

P earg fGoo and Savi 313 243 233 222 13.3 21.8 16.9 266 326 31.0 273 160S&, ih"de Sbvtika d w 3.9 4.8 6.9 80 0. 306 1L4 6.7 2.0 0D 3.8 33latwet Pa, .s 6.8 12.4 13.9 12.9 9.7 16.1 27.2 34.7 389 39.7 35.0 42.9

Daslic .. . .. 3.8 7.S 7.9 163 19.1 173 14.9 11.9Poreig * - .. . S.9 6.7 193 1.4 19.8 225 20.1 31.0

SoWIOratedOudewd 0. 0.0 0.0 0 0 0.0 0 0 0 00 0.3EmblazoyyDfefa. 0.0 0 0 0.0 00u 0.0 0. 0. 0. 0.0 7.7 11.4ZJbe Re.OpeadOOw 0.0 0. 0.0 0.0 0. 0. 0. 0.0 0 0 IAGOther (maiWm*trabudaqy) 28.1 20.7 153 8.9 21.2 12.9 26.9 4.2 2.0 7.2 O 0OA

Tote 100.0 100.0 100 100.0 100.0 IOO 1Q00 10I.0 100.0 10OU 10Q 10.

8m: O.PM_ROItId6IIdS E U SUd6m*IOIIIUS

Table 5.6 Develpeont Ehpenditur by Sector, 1980/81-19912

1980/81 8*VW 82403 8$ 84SW 8*16 8S7 87A1 8W 89W OM 91#2_ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Ea

irc,anio Sea 2.S 773 8S.2 828 843 1483 5818 221,6 4213 2.552. 4,915 12.AgrltUm 22.6 217 24 34.8 37.0 71 102.2 119.4 222.0 369A 169 2,766AMdn and Mwanfatui 7.8 6.0 - 0.2 0.1 0.7 23 172 6.1 842 49A 3.Hectridl 13 9.9 213 33.2 84 19.3 63 1.0 65 1.73.8 63m0Wtr Supply 2.4 SA 6.7 4.2 4.S 26 3S.4 26.9 72.2 8S8 89.6 65Tnspwt_lm and Coumunctlom 73 21L6 14.9 .0 17.9 42.3 2. 186 230 283 35L3 510Trad and Indus1 0. 0.1 Q. 1.0 - 1. LI S. S.3 3i 28 64Other 110 12.6 139 1.4 16.4 1. 43317 33.0 862 219.5 2,70.0 3429.0

Scold SeaVkn, S.1 6.9 8.2 12s 4.5 361 613 10L. 9S5 2SL9 18Q1 2087Bd*catku 4.5 3.4 7.4 2.8 32 7.2 11.8 14.6 14.8 30.7 24 85.s

Social Wf1e - 0.1 - 0.1 3.6 3.6 87.1 12.3 70Health 0S 1.1 0.7 3.6 13 7.3 484 82.9 76.9 .4 12.S 17.0Homlng ad Pmnig a.1 23 0.1 0.6 - 1. 1.0 0.2 2.9 - 22.0Other - - . SS .. 20.6 . - .. 7.8 23.9 77.2

Geneml sen* 6.2 10.7 5.8 4.S L7 9.3 201.3 169.7 2826 16.0 689. 1,2

OtherPpov*e. - 3.S 37.S 184 S2.7 15 377.9 376 S8 6

Total 63.8 94.9 99.2 1033 128 212.1 8".1 649.0 1.1773 3I00 6,37 14,760

OM= Db_d_D__I_b n dudU ll

Table 5.7 Dedopment Expenditure by Sector, 1980181-199U92(Peratg.s of oto)

198 SI/82 8/ 8S 41S 8W 8417 87,18 W8 89M W9M9 9vim2FSL

EcA*mm Srcces 82.3 81S 85.9 80.2 65.9 69.9 64.9 34.1 35.8 79.7 77.6 90.0

Agure 35.4 22.9 28.6 33.7 289 33.7 11.4 i1. 18.9 11.5 3L4 18.7

Mining and Manufachuing 12.2 6.3 0.2 0.1 0.3 0.3 2.7 0.5 2.6 0.8 0.0

Elctict 2.0 10.4 21.S 32.1 6.6 9.1 0.7 0.2 0.6 54.9 - 432

Water Supply 3.8 5.7 6.8 4.1 3.S S.9 3.9 4.1 6.1 2.8 14 4.4

Tanportetin and Commun. ation 11.4 22.8 15.0 7.7 14.0 19.9 03 2.9 2.0 0.9 0.6 0.3

Trade and laty 0.2 0.1 - 1.0 .. 0.5 0.1 0.8 0.5 0.1 0.0 0.

Other 17.2 13.3 14.0 1.4 12.8 O.S 48.2 5.1 7.3 6.9 43.4 23.2

Social Services 8.0 7.3 83 12.1 3iS 17.0 6.8 IS.6 &.1 8.1 2.8 L4

Education 7.1 3.6 7.5 2.7 2.S 3.4 1.3 2.2 13 1.0 0.3 0.6

Socidal Wefare - 0.1 .. - - . 0.0 0.6 0.3 2.7 1.9 0.0

Hoalth 0.8 1.2 0.7 3.5 1.0 3.4 SA 12.8 6.S 4.1 0.2 0.1

Houing and Plannlng 0.2 2.4 0.1 0.6 - 0.5 0.1 0.0 0.1 .. 0.1

Other .. S . 53 .. 9.7 - - .. 0.2 0 4 O0.

oGenersen*a 9.7 11.3 5.8 4.4 1.3 4.4 22.4 26.1 24.0 05 10.9 8.6

OtberPo .. . . 3.4 29.3 8.7 S.9 24.1 32.1 11.7 8.7 O0

Total 100.0 100.0 100.0 100.0 100.0 I00. 100.0 1O0.0 100.0 lOok 100.0 100.0

8S0m O_ todFPb.n.Osw*prm rad sftx b* uadl d.s l_

Tamble 61 Moetay survey, 19SI-1992(Ailon of Leos at wd AMe)

1981 1982 198 1984 9 Ig5 I98 1987 198 I 9 19w) 19 192

FeignAsswe (Net) -163.1 -269.6 -292.1 -730.4 -1547.8 -2135.6 -9197.2 -87S1.6 -19050.6 -45954.6 -64603.0 -112367.Centrl Bank -173.0 -27S.8 -3143 -761.6 -IS82.6 -2175.7 -982S.0 -9129.0 -20621.0 -46770.0 -6669L0 -1180040Comecial Banos 9.9 6.2 222 31.2 348 40.1 627.8 377.4 1,015.4 8154 2,088.0 5,637D

D.m l Credit 462.0 627.1 867.7 1,046.1 1,360.6 2,142.7 437.S S,,7023 8,388.6 11,471A0 17,952.0 21,733.0Contral Onment (not) 367.3 S2S.0 749.9 922.9 1,191A 1,947.9 3,893.6 4,879.9 6,468.0 8,S33.0 12,698.0 11,915.0Pub11cEnterprises 3.7 3.6 3.9 3.0 4.6 17.4 22.9 37.6 25.6 26.0 102.0 107.0rivate Sector 91.0 98.S 1139 12032 164.6 177.4 4540 7848 1,89S.0 2,912.0 S342.0 9,71L0

Mc.ey and Quasi-MCoW 2S8.6 324.6 4419 570.2 882.3 1,551.3 3,51L4 487.7 7,497.0 12,181.4 28,854.1 3S.0Money 1S0.0 169.4 259.5 373.5 619.1 1,1853 2,958L2 3839 6,129.0 10,047.7 17,542.1 26,393.0

Cunnacy 87.7 91.8 133.7 226.8 352.9 612.2 1,S003 1 4 2,837.3 S,844.0 11,315.4 _Demand Deposd 62.3 77.6 121.8 148.7 266.2 573.1 1,457.9 1,974.S 3,29L7 4,203.7 6,2267

Quasi-Money 08.6 lSS.2 184.4 194.7 263.2 366.0 S53.2 990.8 1,368.0 2,133.7 11,312.0 8,805.0

OtherIts 40.0 33.0 13L8 -254.S -1069.6 -15443 -8337.9 -7877.0 -18714.1 -46665.0 -75SO5.0 -12832.0

Merandm hsew (raits kvhpeot)

Clais on Gore austicredt 79.5 83.7 86.4 88.2 87.6 90.9 89.1 8S.6 77.1 74.4 70.2 S4.8CwtenqYBroad Money 33.9 283 30.1 39.8 40.0 39.5 42.7 38.6 37.8 48.0 3932 49

QW-M0ne9B/oad Moeq 42.0 47.8 41 34.1 29.8 23.6 15.8 20.5 183 17.5 39.2 25.0Rosewn Money/Broad Money 481 59.9 71.6 6L9 S7.1 59.9 63.6 69.7 6S.0 70.1 SL1 S82Cent Money S8.5 54.2 51.5 60.4 S7.0 51.6 50.7 48.S 46.3 58.2 64.5

smwm UPRm _t Dm$4twlKwbWu.s

Table 6.2 Sumaz=yAeeaeats oftheBnk of SiezrLeo.., 198t-IM9(Miliku of Lowen at end Jim)

198 198 193 198 1985 191 198 1M 198 19 19

Fof*fpAaut .19.0 7.1 32.9 5.5 7.3 64.5 30V. ..

ExternalReseivaand SecuritI 17.4 6.4 32.7 5.2 7.2 64.2 3018 .

ResemPosltwantheIMF LS - .. .. . 0.3 0.9- -

SDR Hoilng 0.1 0.7 0.2 0.3 0.1 *

Pa op LIabiiie 276.9 290.5 678.6 7619 1,89.4 2,24.5 10.128.1 Foreign Bank 66.2 60.7 126.5 142.5 354.1 3507 1,987.0 --

Useof Fund Credft 65.3 63.1 171.1 21067 420.1 1,0666 3,221.2 --

ThatFund 33. 33.3 33.3 30.4 28. 27.6 27.6- Extena Faqnants 112.1 1334 347.7 378. 768.5 739.6 4,6?2.S Otder 18. 36.0 219* 8

Q7imanmm ovumuent 425.2 5817 718.9 849.2 987.3 1,510. 2,845 -.

Waep and Mean 33W 499.S 15.8 25.4 1014 80.7 1,447.2 .

Hed4ngs of Goverment stocks 50. 46.8 682.3 674.2 769.1 1,287 1,5.2W .lTreuuqBis 15.6 15.6 - 128. 96.0 200.1 271.3 ---

OdierAdvane 1.2 .2 1.2 .2 1.2 1.2 1.2 --

SDR Alocaton 19.6 19.6 19.6 1946 19.6 19.6 19.6A... OoMMekat DepWl 27.6 19.6 51.8 41. 44.6 59.8 X85s

Clkaiman PdvabeeSA3. 3A 3.4 14 13.8 10.7 132I"

Rerve m LIU' 14. 251.0 316.7 350.9 S04 930. 2,3336- Cumfnoy OutsdeBank 862 121. 197.4 .226.8 352.9 612.2 14.M3 --

Curre HcyHdbyCa.arercllBaks 6.9 10. 11.9 129 22.2 36.9 29.1 ---

Bank.e Deposit 386 1166 101.5 106.7 1204 276.7 797.4 -

Private SectrDepxsits 2.5 4.5 5.9 4.5 8. 4.2 68-.

Ccsmtepart Rindr 0.9 2.7 5.2 6.5 5.2 10.5 20.8-- CaptlAccounts 29.3 31.6 32.1 32.4 33.3 35.2 421Z-. OderItems SA4 26. -315.1 -307.2 -1143.9 -1690.4 -9372. .

V&alutmaA*whals at- -81.9 -12.5 151.2 157.8 157.8

mowsMA Rm ta*wufwdowmlapAu. 1ul.um barA.

TaWo 63 SmagyAcoun_ of Cam o Banks 19SI-1992(MOM tL.Ao at end Am)

I1M1 192 19 1984 1f' 19M 1987 1956 1959 91 1 1991 99

Not PnIga AMes 6.3 9 182 31.2 34S8 78.0 627.8 377A 1,017.9 81S4 2,8 5 A637D

Assets 6.3 9.2 19.0 43.6 S5.3 59.1 8083 458,7 127.6 8S64 2,10. S,648.0Uslities - -0.2 -0.6 -124 -20.S 18.9 -180.S -8L3 -9.7 -41.0 -14.0 -1LO

Ret 4SS 127.4 .4 1216 142.6 313.6 826.S 1,469.4 1,994.7 2,615.7 3j30D 3,0S70CashioHad 6.9 10.8 11.9 12.9 22.2 36.9 29.1 117.6 59.7 2248 1,04 2,98Depot at Central Bank 38.6 1166 1L0S 108.7 12064 2767 797.4 1,3518 1.935.0 2,3909 2=2A0 910

auhs en Govemt S2.6 61.6 121.S 1211 2SS S W0. 1,0818 1,161.8 14553 140 2,191.0 2,168.0Tro y Bis 483 S6.8 75.7 782 121.2 230.S 7867 851.4 1,023.4 10 2,010 1,66.0OLa andAdses 0.3 03 .. .. - - .. - *

Governnt cSites 4.0 4.5 45.8 42.9 1343 2710 295.1 310.4 2319 24610 181.0 50tGovemuestlpDoeitv 2.0 3.6 5.6 A 6.6 8.0 235 -112.4 -176.9 44.0 S2. 1110

CaQ wt fan a0 lhuddes 3.9 3.6 3.8 3. 4.6 174 22.9 37.6 SU3 229.0 174. 340.DqpisR of Oft0 Eadt li 5.1 39 L8S S. 4.0 SO 114.2 -1316 -M175l 2788LO 5,189.0 9,596.

Qa.en, mte PNvse Setm 95.7 110f3 128L9 116.8 1507 166.7 440.6 672.0 1,77S.7 2,788.O S189.0 9,596.

D.pitWl2Jabidhln 1738 290.1 335.2 33 5226 8769 l1,890 2J,827 4,445.6 6,0289 10,059.0 17,434.0Demand D t 58.0 1237 142.2 138.7 259. 510.9 1,3.9 1811.9 3 A077.6 3,895.1 SO9. 8,63T.md Savns 115.8 1664 193.0 194.7 2612 3660 SS2 990.8 1,3.0 2.133S8 4,113.0 8,804.0

CW"Acco as 11.7 16.9 17.8 20.3 23.1 29.4 41.4 95.5 150.7 190.4 677.0 1,03.0

Othwltn (At) -11.4 2.6 -13.3 -432 -3S0 2817 -639.6 -75.8 -1443.1 -1197.0 -ISSS.0 -767.0UnclassifiedAssets 27.1 107.6 62.7 52.8 83.2 389S 464.1 6281 . _ - _Unoassifid Usabilhes -38S -105.0 -76.0 -96.0 -121.2 -107.8 -1103.7 -1203.9 _

6emmowmmuksbwM

Table 6.4 Dstribton of CmercSal Bank Loans and Advaces by Sector. 1981-I92(Peet at end JAme)

2981 1982 198. 1984 1985 1986 1987 1988 1989 1950 1991 1992

Comme 52.6 49.8 51.3 SS.0 72.7 57.4 61.7 63.9 63.3 S8.0 61.0 51.3Canstitwuctn 53 6.8 6.8 9.2 6.5 S.0 21 4.4 10.2 6.9 6.6 9.7Manufactuing 7.7 3.9 7.1 S.7 4.9 11.7 13.6 4.S 8.9 95 115 lLlAgrcuture 4.S 4.0 2.9 2.1 2.S 4.4 3.8 3.7 7.4 7.3 S.4 7.2MIimn 14.2 14.2 9.6 13.2 2.7 11 5.6 4.7 3.2 4.1 4.3 2.9Otber 15.7 21.3 22.3 14.8 10.7 10.4 13.2 18.8 7.0 14.2 11.2 17.8

Tota 100. 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100

8= SFR EoD"_

Table6.5 InterestRates, 19M-192(Pet perAnnum)

1982 1983 1984 1985 1986 1987 1988 1989 199) 1991 1992

Len ding RateemsuilJs I/Ordinary 10.0 10.0 10.0 12.0 19.0 21.4 21.4 21A 70.6 70.6 93.7Special - . . . 36.7 31.8 31.8 103.2 103.2 103.2

DiscountRates 12.0 12.0 12.0 14.0 16.0 16.0 16.0 16.0 16W 16.0 16.0Cammrexaalabank'Priie Lending Rate 21 15-18 15-18 15-18 18-24 30-36 30-36 27.0 27.0 35.0 SS-60 75-80

DepositsRates 3/7ime DWsits with Commeral Baks

Up to ooe Month 9.0 9.0 9.0 11.0 19.0 12.0 17.0 17.0 22.0 42.0 57.01-3 Months 10.0 10.0 10.0 12.0 20.0 12.0 18.5 18.5 23.0 43.0 S8.03-6 Months 10.5 10.5 10.5 12.0 20.5 13.0 20.0 20.0 24.0 45.0 60.0

6-9 Months 11.0 11.0 11.0 13.0 21.0 14.0 21.5 2LS 25.0 45.0 60.09-12 Months 11.5 11.5 11.5 13.5 21.5 15.0 23.0 23.0 25.0 46.0 61.0

12-18 Montbs 12.0 12.0 12.0 14.0 22.0 16.0 24.5 24.5 26.0 46.0 61.018-24 Months 12.5 12.5 12ls 14.5 22.5 17.0 26.0 26.0 26.0 46.0 6L0

Savings Dq,osits 10.0 10.0 10.0 12.0 20.0 15.0 16.0 16.0 20.0 40.0 5S.0

Post Cffice Savinps Dqpsits 10.0 10.0 10.0 120 20.0 15.0 16.0 16.0 20.0 40.0 S5.0

Ni.: De ab meeahyerawep 9UwbdtteamforAuguBt

1,AmwuAl meeqielt Orawytou bU. meo bantdhwingAenmroinwu d tIdnmwt_espda basy bsa.mddtotenmnba*pubUh

Ske t Januia,r tem nerdnwy bmwAy tbils Iavgbeue d Itd bytheBSL -bwh ranr bang.

VlRat.a Pqbe te mrd*dbycn basn e49 1990.

S/ the Oi*lBnk SmNnmdepe rie CesnnirdWl b afte to howh n..

SeUres BW*edSkULN

Table 7.1 Huk Rice Prodcdon Mied Rico Imprts and Pu!, 1976-1991

Husk Mild Huk Hoor Equvdent AveneYeer Rice Rice Rico Prn Moilod IMpOt Reta

Production hmpors Nomina Real Price Prime Price(thuand (toand (LeAkz) (Le/tne) (L4mm) (LeAwe) Atonoe)of toae) of tmes)

1976 620 1S 250 298 385 343 4941977 641 7 294 325 452 264 4941978 641 23 294 294 452 320 4941979 556 77 294 255 452 356 705193D 556 54 294 226 452 432 6001981 524 53 448 279 689 525 7761982 524 92 514 252 791 641 9521983 460 24 734 214 14.29 703 1.031984 505 74 1L101 192 1694 1,114 1.9401985 430 107 1.468 145 2,258 1.461 61381986 525 119 2,202 120 3.388 4,162 10,7941987 466 38 5,505 108 8,469 7.549 184481988 493 n.L 12,830 203 19,738 . 4241051989 S18 120 27,510 279 42,323 14.816 49.1231990 544 124 36,670 124 S54415 27,724 80,7021991 411 108 73330 112,815 "9,224 11=2,1

to",

1) Nen 1bIIoopdo. W IIu* do p*si at tUmRIa.C.eomtIneSI8bn.1Pmaa Mmthig3md (UAUb ~aeptO.dWplm .nsma.cfm s s_

4 keyed psiub t78mbahdi"edrafI. besd , 1.18%basm OSh0ko sdo_dl.anatn.wpa ngsatssth.r.Othrb*ea pdmmasulW w.gpIdVA

8am: _1*w UkeMtdStuOeI Palliq EmmUn,bdngus LhUntI; M(dIVtW.*S NtmRes. sndPmb MW ia tUSSlum IJODPte Mml.Wnamrd 0LP~) Rio. O _pub~wU Urn. LawRsmsrdi OLPasmn uo.a

Table 7.2 Husk Ric Producion and Are 197W/71 and 19U/8S

19w71 19815

DAMotd Ame Prods*tio Aws Pfodudont(thousands of ha) (thousds of turns) (thousands ofha) (thousa of tws)

Swamp Upland Swamp Uplad PMr Mked Pam MirdStands Stands Stands Stands

Southern Fiove 14.7 94.6 21.7 1281 22.4 44.2 71.8 40.6BoDPitrict 6.7 36.6 93 S3.5 3.7 113 10.1 12ABanthe 1A 43 1.8 5.0 11.3 7.8 39.6 3.0Moymuba 4.8 403 83 S2.4 4. 182 15.0 20.2Pujdun 1.8 13.4 23 17.2 2.6 6.9 7.1 SO0

Eter. Phroince 20.4 57.0 33.S 85.4 1S.9 32.6 67.1 47.4Kulabun Dbsist .5 1S.9 87 21A 4.6 89 20.1 1S5SKenea 10.1 29.0 1S.1 46.S 8L 18. 34.2 24.9Kono 4.8 I.1 9.7 17.5 3.2 4.9 t28 7.0

Norditen Provkne 48,2 90.9 70.4 1107 47.7 44.2 138 36.2Bonbali Distr 2.8 19 4.0 223 7.4 9.8 13.1 6.0ZambIa 17.8 7.6 22.S 12.0 7.4 87 24.6 63Koinadugu 73 11.6 12.0 17.S 15.2 3.5 4.A 33Part Ldko 17.4 26.1 282 405 13.7 9.5 3LS 9.6TonkoUi 2.9 26.7 .7 18.4 4.0 127 8.1 10.S

Western Pai*e 0.4 0.5 3.7 0.7 03 0.4 04 0.2

Tota 83.7 243.0 1293 3249 N63 121.4 2711 124.

1. 8 k puidoa.shtPO171 b MfhOndwkVms, fd,mi _ _

O.hI. OWstme0gisewfl e h ikmmnW equ poiV71au.onmrmMtspfuamt1W& Addot Irantso twop m e*stamms,t%wo_d wn i; dp de M 1E L N7N

Seuws .mbl ar S ,ulSemOlewS_iItv.tS dy~ UNoeUS*WI,S~IoU.tbICWuU1(~

Tall 73 Coffee and Cocoa Produon, Purchases and Pd... 1980-12

roowameatpri*o SLPMB zDaatiocYear E,sated SLPMB _ Sdl4 tOS UPW

Prodx*din Paumhus N<and. Real pIk*o Sd&Mgo(kumnav) s(tmna) (Wwnc) (L#44m) (Uftlm) _ tmt)Coffee

1980 20,300 10.061 2,016 1,547 3164 641981 18,500 9,182 1,792 1I115 1.9 901982 16,500 ,599 2.016 gm 2,60 761963 18,000 5,475 1.344 391 5,092 261984 26,000 206 3.472 606 12,848 271985 23,000 10,126 S,376 532 18,258 291986 24,000 6,042 35,840 1,969 104C124 341987 25,0O 5,458 53.760 989 . _1988 25,300 7,592 53,760 - _ 961989 2S,00 2,678 S3.760 - - 491990 2S,800 - 89.600 -_ _1991 36,000 -

I192 7,900 - 2891)00 - 70

C-.1980 8.600 7.459 186 1,40 1,772 1041981 14,500 984 2,016 1254 2.048 961982 1SU1D 8,783 1,792 986 2,461 731983 12,500 9,192 1,456 424 S5704 261984 16,000 11'364 1568 274 8,962 171985 18,6OO 9.621 3,024 299 12,530 241986 20,900 7,847 8,960 490 80.7S1 111987 23S00 30.240 ' S57 _ 1988 23.00 7,673 30.240 - - 681989 23.700 4,972 30,240 _ _ 481990 24,000 - 100.800 - _ -1991 24.200 0 - _ - -1992 5,300 467.000 g o 9D

Nfm Rd pAM PWuMb iPIM&htdyIWi pmhbrusdm im §- t , uaUus Ab *H mb 111 It l 1 uthf d Im*a mRm u.l.bdAIffr t, -I

SkmLmwPnxkMr I oa 98 .' i(aLPIO Sm P.tau.t

TWo 74 FPa Kr .d and Gaigtw Ptod_a.th. Pmzase ad Pd.. 1980-1991

Proageaewtpdie SE PAfB Dsnal sYew BhEstated 8dPSUMB Sdhi tSLPM

'oiwtoi Pvmrae NamW Rod PA" SdlUIqiia(lai (tasa) t7tie iZta. tZ4kw) Oia)

Nsa kernel1980 41,400 20,100 134 103 254 531981 44.00 1SO0 163 101 263 62ssa 3500 t11. 163 s0 203 so

1983 40,000 16.100 246 n72 3 261984 39.500 13.200 672 117 1011 621985 3760D0 9.70D 896 89 810 1111986 36.900 5,200 1.44 74 2.663 so1987 36,100 2.68 50 _ _1988 32.500 _ _ _ _1919 29.100 _ _ - _ _1990 26,3D0 . _ _ _ _1991 7,900 -

1980 1200 1.150 806 619 606 IL1981 I.00 854 806 502 704 11S1982 1.100 330 627 307 1.20 521983 1900 76 874 25S 5.S32 161984 700 gO 4.256 743 8143 521985 L.6O 42 6.720 665 11.389 591986 1,00 18 22400 122S 35.778 631967 L,O0 31.36O 7 - -

1988 900 . - - -

1989 9001990 800 _ _ 1991 700 - - -

wanL.Pm_ ft^im Swd EbPW m Pbo .Dpwrt

Table 7.5 S.mmaq of Agrcltuara Input Usage, 1976177-198718

Improved Rice Seed Used by Input Se, PimJ IhpotPric SeulmPZ n U k er _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _

Yew Used lAWs 1/ IRDt* I/ Otbems Pa 1ke Sod 1enew Peweatof Sed Pemtno(tamu) (Owes) (lSam) (LeArn.) (Waswe) (Lone) Conw#AM (L*%ma) CON

Sdfi Pries

1976177 2,511 _ -. _ . -

19"/77171.57 . _ . .1S.. *

1978179 2,500 1O0 - 200 . 400 . - 1.500 s0

1979100 2,O5 332 - 299 . 480 - 240 72196081 438 43S .. 2SS . 480 _- 1.200 711981U82 7000 243 .. 138 . 600 - - 2,040 771982/83 3.400 318 - 480 1.000 _ 1.000 SD

1983/84 1.200 636 - 734 . 1.200 - _ 640 3S

198U85 7,000 564 - 229 477 1.400 186 39 1.040 431986 s50 527 m 262 411 3,000 46 9 s0 31968 SO0 .. S49 6.248 11.200 3,249 52 1,90 1iS1967/88 .. . 1.625 6248 15,200 3,249 T 3,S60 19

1. W - hiMgA9624"mookpogt P=Ok - bUd?mtn 'l i P ojmiL

S wA _l-l lAGilf. E__8A*d4;an Fal ,I. tU

Tabe 74 Pr_dmedom .1Major ui.hard Cqr, 1960181 - IAW

~~~~~~(11whauea8 .8Tm,

Rico (padd) 547.0 .5 583.0 W SS S 43 S2 57.9 4911 517.8 _ O ud (dhed) 12.0 11 15.0 13.S 1.6 9.5 181 147 17 21 20.1 2LI 192Palm Kenel 40.7 44.5 30.0 30.0 32.5 39.5 37.6 36.g 36.1 36.1 299 26.3 105Pa Oil 483 45 4. 4S.S 48. 51.0 49.0 Su 50.7 507 59 58 47.0

Pmn_sod Li LS 1.6 1 LS 2.1 L7 LS 2.0 20 24 2.7 24Coffee 20.3 1lS 12.5 18S 18M 26.0 23.1 24.2 25.3 22.8 2 36.0 7.9Cocoma 6 145 10.0 14.5 1S.0 16.0 18 20.9 23.5 2t2 24. 242 53Ginger L2 L5 It L LB 0.9 L6 LO LO tJO 0.9 08 0.7KOdMt 9.0 6.5 70 7.5 7.5 5.5 4.6 4.1 36 4.0 7 37 15prus 24 2.7 2A 2.9 2.4 3.1 4.0 4.5 4.9 4.9 5.1 -Cma 80a0 97.0 100 11llQ 100.0 1100 10 114.7 116.1 lt7S. 234 89.9Cuw FPnts 65.0 62.0 6S.0 67.0 70.0 660 680 70.0 70.0 735 77.2 Tomate 9.4 14.0 16.0 18 18.S 17.0 19.0 20.0 21.0 22.1 212 - -

MM"et . - . . 23.0 23.0 23.0 20.3 21A4 226 237 22.6Maie . - . 140 14.0 8D 1LO I. 1W7 123 1LOPm ePon . 2.0 .15 1.5 LO LO 1 Som - . .. 19.0 2 20.0 19.1 201 21.1 22 212swt Pot I I 13. 10 13.0 138 14.0 14.7 14.7 ILlBodf O - LO . . .. . 1.D 1.0 LB 1. L0 LO .. _Cco. .. .. .. 3.0 3.0 3. 3.0 2 3 Magom . .. - 4.0 4. 4.0 S.0 53 S Banana. ..- .. .. 25.0 26.0 27.0 280 29.4 09 _ -OtherFnui .. .. .. .. . Su. S. S. 50.0 S2S SS.1 _OterVogaes . .. . - 24.0 24.0 25.0 26.0 27.3 28.9 _ _

Saw=u PAIuUt; dA.b*m Wu8) ;ewidPWt OClIl hmOUao. .m aSlh_IL tt.

Table 7.7 Distibution of Agdckultural Households by Area, Par:m Size and Cender, 1988/89

Large Tons Stall Towns Ruraf AreaFrm SzeitAcre Totd Mate Female Totd Malte Female rTOWa Male Female Totad Male Femoe

Heads Heads Heads Heads Heads Heads Heads Heads

Lss than 1 14,416 L .414 2,002 1,296 1,145 151 3,439 2,945 494 9,681 8.324 1.3571 - L.ss than 2 87,494 69,741 17,753 2,112 1,603 509 8073 6,162 1,911 77,309 61,976 1S,3332- Less than 3 15,928 102,556 13,372 3.400 2,903 497 9.426 8,143 1,283 103,102 9LS10 11.5923 - Less than 4 68,440 63,848 4,592 2,004 1,858 146 S,033 4,664 369 61,403 57,326 4.0774 - Less than 5 39,771 37,725 2,046 1,018 969 49 2,881 2,690 191 35,872 34,066 1.06S - Lass than 10 46,446 44X586 1,860 1,403 1,335 68 3,876 3,65 311 41,167 39,66 1,481

10 - Lass than 20 13,009 12,744 265 310 289 21 1507 1.44 53 11492 11,001 19120 - Leass than 50 2,038 2J,38 0 80 80 0 282 282 0 1,676 167 0SO - Lest dm too 111 111 0 0 0 0 19 19 0 92 92 0100- 0 0 0 0 0 0 0 0 0 0 0 0

TolNd nberofHouse fdAs 387,653 345,763 41,890 11,623 10,182 1441 34536 29,924 4,612 341.494 305,6S7 35.837

PemcetapDisXbtaon 100.0 89.2 10.8 3.0 2.6 0.4 8.9 7.7 1.2 8.1 7U8 9.2

sm o_ h.as st S

Ta. Sli MIon.t P!oduton, 1930/81l-1991192

15&1 8hU 1# 1W 8W & S Vl 887/ AM 8 0 I VWSf

DiamondsNatoa Diaod MiigCoalpan (DIMINCO)

QuanDiay (thsafcnd of tCaYats) 179.0 163.0 163.0 1730 108. 79.0 3.0 18.0 3.0 9.0 10.0 1.BupotValue (mions otL os) 42.0 29.1 30.2 60.0 S4.0 50. 32.0 1. 290 202.0 S31L 200

iAlulf Diamond Miing Ilams

Quantity (thousans offtrat) 147.0 1110 99.0 42.0 154.0 276.0 3010 2480 62.0 - 141. 30prt Vauo (miions ofLes) S2.6 35.8 39.4 18.8 493 97.9 9088 S94.3 S14S - 418.S 14,JSI0

IndustrialQuantity (thousands of amI) 1250 40.0 14060 S0. 73.0 - _ - - - ..

portValhe (milionsfLoes) 1.3 0.6 2.0 0.9 2.7 . . . . . ..

Badte (tdwm*ofm*et to=s) 835.0 S84.0 648.0 950.0 1,239. 1,114.0 1,337.0 ,359.0 1,46.0 LS18.0 1,40L0 1,261.0RutS, (tho banrOfmetdO tm) 48.0 72.0 32.0 88.0 99.0 83.0 10.&0 1120 4L0 134.0 1SL0 144.0hw Ore (thoand ofw.tr tang) 21 ., 144.0 390.0 15.L0 . . . .. .. 2 -Gold (thouasatoumas) . 8. S 5.7 7.3 17.9 13.7 133 61 22 0.2 . .0fhi.eWto (ouamofdine ¢e s) - - 53.0 62.0 S6.0 660

V OUkIusms XUsGnnutiddCbsandU pond,t.

W ThwyudpdhdihUa

W OUH^ 1 pmdaIaaosIspIdM 131 "i O.

.. ,_ b

Tabls82 Mnufdn odcion. 198082-1991M

1WM1 SAI 8t SW 8467 7/w S 8w 9OM mm *37/

C4arettel (thousaind; Ofpies) I/ 16S1 15 . 8s 84S 1,784 1.0 10 958 931 1.196 764 52S0Boer d Stout (dt nds of trs) 1168 7.793 6.274 3.0 5.0 4.421 381 5109 2.314 S,915 3.9030Spdti (thousandsOiteas) 105 78 63 110 48 64 16 36 4 9 18 2.0Acetliae (thousandsfcubic feet) 924 726 843 872 561 409 507 490 461 169 997 50"1.Oxygen (thousandsoftcubicfeet) 2.175 1.715 .;90 1.935 1.674 1.152 1.419 1.198 1.67 453 2.290 IC10.Cauban Diozdi (thousand ofpounds) 430 222 428 376 202 124 139 101 88 46 169 92.0PlastlcFootwear (tousandsofpahs) . 600 274 52S . - . - - - - -

NaRs (meudctauns)2/ 610 400 4SQ 381 388 2S5 182 139 2.48) 3.553 2.0 Wasig Soap (metrto s) 3/ 2,193 825 900 529 S8o 309 496 38 2,613 8O41 1.437 1.30.Palnt (_usadOflteas) 401 360 310 170 401 98 91 25 7 4 . 27.0Mats (ros bos) 4/ 32,780 5.118 S,2S0 5,200 . 101,076 298,S22 2S.334 14.777 21,S2U 21,174 12L68O.0CoofectoM (thoundf pomds) 45 4,329 3.021 2.132 t,914 1.403 t285 990 1.149 1.777 L596 1404.0MctorSW its (miasoflitrs) 59 51 49 46 49 32 - 28 63 34 5 14.0as6DieaeSlandFuldOils (raMons oflites) 5 195 188 165 134 144 98 123 84 59 46 19 31L0

ICosme (mnio.sOflitos) 16 20 19 19 33 16 . 13 26 21 5 80Salt (metrictams)6/ 9.20 4.457 2791 1.186 882 3.947 676 2.146 . 6,10 225 145.0

q O b r1h famm_bjmm

41 WO _

Sow=i Uu*dmumLmw.

Table 83 Electricy Geratokm 1980-1988

19 1951 198 1983 1954 1955 1986 1957 19

IWledC4aadSY (MNational Power Authory S4.8 59.2 59.2 60.7 60.7 76.7 56.4 71.4Others .. . - 22.5 22.5 22.5 22.5 24.9 525

FJecWtyiiOGeAaene (KWllmilaw)National Power Utility 146.1 1549 1510 . 196.0 112.0 88.6 81.3 860Otes 20.5 19.9 18.8 52.1 64.1 63.6 70.0 752 84.5

Dktdi (NPA) (KWXImXllw)Domestic Comuxmers (thousands) 23.0 23.5 25.0 26.0 29.0 30.2 30.1 -Coimmercal Con onmers (thousands) 12.0 13.0 14.0 15.0 6.1 6.0 6.0

Tota Sales (KWHlmikw) 107.8 1106 119.4 148.4 101.5 70.4 49.4 67.0 4S.0Domestic 36.0 38S 24.8 39.9 49.5 36.8 32.2 -Commercial 12.8 10.9 203 29.1 11.4 7.5 8.2 -

Industia 44.5 45.9 62.8 66.7 40.2 25.8 8.8Stet LIghting 14.5 15.3 1LS 17 0.4 0.3 0.2 -

Value ofSaes (miions ofleons) 11.3 11.3 21.8 - 26.4 35.9 24.5 L2 -

Seu dmPhw. FPsn

Table 9.1 Echange Rate., 1980/81-luly 1992

Nominda Bbaagv RatesOfiil Parald Paid Spied Effective ReoEdff A*e(LWeoUS) OveOffile Exhange Rato Exhag Rate

(1980-100) (1980=100)

1980/ L18 L1O 0.93 IOuo 104.301981/ 1.25 3.00 2.40 107.60 128.601982J83 2.50 6.00 240 113.70 183.001983/4 2.51 7.00 2.79 62.70 177.101984/85 3.52 10.63 3.02 56.00 208.101985/86 5.20 19.75 3.80 31.70 199.601986/87 34.92 42.23 L21 4.70 66.801987/88 2S.4S 42.17 166 S.50 41.90198889 46.1S 68.08 1.48 3.36 llS.11989/90 964S 14S.46 1.51 1.87 10303199D091 199.03 22185 L12 0.79 81.781991 January 19608 210.00 L07 0.76 82.83

February 20408 21.00 1.03 0.73 84.18March 21L19 220.00 1.04 074 88.82April 231.59 263175 L14 0.70 86.92May 245.59 295.00 1.20 0.67 8S26Jun 2SL32 315.00 1.25 0.68 92.70July 282.01 400.00 L42 0.60 86.89August 328.19 390.00 L19 0.51 7.71September 35357 410.00 L16 0.46 77.S1October 394.14 490.00 1.24 0.42 74.14November 420.9S 507.00 1.20 0.39 74.42December 425.42 S2000 L22 0.39 74.73

1992 January 444.29 525.00 .18 0.37 73.6DFembuary 461.96 527.00 1.14 0.36 73.36March 476.74 530600 1.11 0.36 73.96April 49471 530.00 L07 0.34 72.17May 498.60 S26.00 l.OS 0.33 73.20June S07.56 53L00 1.05 0.32 72.8July S10.00 S30.00 1.04 .. .

Omnc f R.mtBmnUsmipneg,_a.bu

Tabl 92 C=wumer Prie Indices X_( n), 1978 - Jauay 1993(1978- IW0)

Food Tobeo Housing aowdg Mkc AUDriks Kolanuts Footiear Goo,b Items

(VeIght,) (63.1) 8(3) (182) (5.4) (95) (1(0o)

1978 100 100 100 100 100 1001929 lS 94 107 138 123 lS1980 133 108 113 161 140 LIO1981 165 122 145 19W 161 161192 215 187 164 2S. 188 2041983 3SS 374 269 432 349 344984 543 1049 501 878 546 57

1985 976 1,638 786 1800 981 1,0111986 1,733 3,131 1,440 3,551 718 1,8291987 4,724 8023 4,101 14464 S,275 5,0971988 6,442 11,186 4,026 14,882 7,802 6,761

199 1283 26,776 5,244 15,670 11,164 11,00

Jnauary 8,210 12,796 3,884 13,032 9,260 7,955February 9,281 12829 3,779 13,173 9,263 8,625March 9,504 18,686 3,810 13,198 9,267 8,992April 10,824 18,812 3,922 13,247 9,384 9,864May 11,192 24,569 4,488 13,430 10,121 10,498June 10,521 24,690 4,692 13,564 10,4 0 10136July 1!,30 24,703 5,086 IS,497 10,837 10,863Augut 12,068 24,811 5,212 159 11,157 11,408Sqptember 12,70 24,811 5,212 17,473 11,926 11,994October 12,153 38,688 6,698 18,499 12878 12,79November 13,829 47,909 8,010 19,786 14,456 14,445December 13,942 48,013 8,130 21,40 15,178 14,705

1990 228 49,349 11,723 38,292 28,646 23,215

January 17,175 48,670 8,259 24,908 17,95S 17,240February 18,855 48,420 8,917 27,717 21,261 1,873March 19,075 47,971 8,921 31,298 23,687 19,419April 19,341 48,719 8,900 34,093 24,720 19,929May 19,98 48,906 9j877 39,015 25,375 20,755June 21038 49,092 10,055 40,424 26,096 21627July 23,434 49,646 11,712 41,506 29,066 23,802August 24,996 49,646 14,091 43,413 29,80 25,397Sqepteber 26,792 50,483 14,031 43,565 33,323 26,891October 26,0W0 49,230 14,208 44,447 35,074 27,1S7November 27,291 50650 17,429 44,319 38,207 28335December 29,331 50,758 14,Z78 44,794 39,122 29,158

1T 92 COmu ie Indlces (FP_etow), 1978 - Jaauq 1993

Food Tobac Hbo*w ao. a bhw AMise MDi*ks ICIuts Footwr Goodc& Itam

(We hms) (631(3J8) (18.2) (5.4) (9) (lOQO

1991 47,466 131,348 237 58,121 51,811 47,047

JanuMy 35,455 49,954 15,82 49,069 54,314 34972Febrmay 36,963 121603 16,094 49,069 42jB62 37,593March 35,603 121,230 17,025 53,317 44,428 37;268April 36,145 123,661 17,061 55,121 45,018 37,865may 37,321 123,661 17,520 57,284 45,317 38,729IJne 40,959 146,87S 19,158 57,528 46,078 42,394July 46,741 146,875 20,490 58,593 48,579 46,582AuguWs 5279 146,857 25,017 60,506 51,83 51,444September 55,939 146,875 25,452 60,506 54,494 53,956October 61A63 10,690 29,084 60,536 60,647 58,859November 65,041 149,870 32,03 66,116 62,27 62,106Dcember 65,487 148,000 32,328 69,806 65,279 62,800

1992 80,792 164,S57 41,895 97,455 81,761 77877

Januay 69,494 146,77 32,836 79,284 72,10S 66,S37Februy 72,000 147,548 33,499 86,940 72,986 68,692March 73,33 183,569 38,854 90,083 76,287 72,447April 81,710 124,785 38,1 93,083 78,21 75,716MAy 82,626 122,541 42,737 95,8 79,i79 77,286June 81,377 127,479 42,611 101,086 85,470 77,519July 85,089 174,206 44,981 102,128 83,390 815930August 84,143 173,907 46,663 103,239 85,107 81850September 84,690 187,261 46,203 103,888 85,344 8677October 84,828 18,321 46,248 104,237 86139 82,907November 82,912 206,391 44,912 104,885 87,590 82;14December 87,276 191,800 44945 105,064 88910 8446SS

19January 92,389 185,814 4S,239 105,763 96,583 88,474

80u Oud OWN=olo

Table 9.3 Adinistered Pries Much 1989-Doember 1991(Lepo.per Uoit)

11119 mlS

adofPeriod Me*W Juoe Sopt. Dee MMr. u"ne SOpt. Dea

Petrleum Rodws )Petrol 55 110 110 110 00 5 02 5S0 3J 900Q/Diosel SO 100 1O0 100 450 5002V 50 3/ 890 4Kerosene 45 90 90 90 435 45021 4503/ 845 4

Teeomm lokos (Pert)TelephoneTarlff 2 2 2 5 / 10 10 25 51 5Telephone Rental: Domestio 800 800 800 1,200 3,500 3.00 7,2005/ 7,W0

Commercial 1200 1,200 1,200 1t800 6000 400 13.00 5/ 13200Water (per 1L=aoas)

Motered C-mmercial 120 12 120 120 SW SW 1o L500 1 100Bieerlay (pOr unit)

Domestic TasifA O-S0 lS LSO L50 l.SO 6.0 6.0 23.0 1 23.0S1-100 l1.O 1.50 1.50 1.50 9.0 9.0 34.0 7/ 34.0101-200 1.75 1.75 75 1.75 9.0 9.0 34.0 7/ 34.0Over 200 1.7S 1.75 L75 1.75 13.0 13.0 500 7/ 50.

Minimum Cbwrge (per month) 64.0 64.0 250.08 250.NondomesticTarifE Below 15Kw

0-S0 units 2.50 2.50 2.50 2.50 13.0 13.0 50.0 7/ 50.051-100 units 2.50 2.50 2.50 2 14.0 14.0 63.0 7/ 63.0101-200 units0 . 3. 3.50 2J0 14.0 14.0 63.0 7/ 63.0Over 200 units 3.50 3-_ 3. 3.50 20.0 20.0 76.0 7/ 76.0

MinimumC:haige (per month) 80.0 60. 300.0 71 300.0Nandomestic Tarif Above 15 Kw

over 100 Units 5.00 5.00 50 5.00 - .. - .(pigh tensio) 6.00 6.00 6.00 6.00 ..

Educational InstitutionsAll Units .. . - 8.0 8.0 310 71 31.

Minimum Charp (per month) . .. . . 200.0 200.0 760.0 7/ 760.0Mosques and Churces

All Units .. .. .. _ 12.0 12.0 46.0 7/ 46.0MlnlmumiCharge (per month) . .. . .. 200.0 200.0 760.0 7/ 760.0

Tratnsoratiow (stndard far) 9/Southeastn Routes Minimum 48 170 170 170 600 600 900 1O/ 1.4001/

Masimum 120 180 180 180 L50o 1.500 1400 10/ 2,100 1V/Northoastn Routes: Minimum 68 200 200 200 650 650 1.00010/ 1,500 11U

maumum 90 210 210 210 1,0 1,00 140 10/ 200 1V/

I Um~ Oe~l 1,09.

W 9saIApiS 10.

t Ib"whm2t. tswt.V Eotcbw1, tOlto

ElJbi dy I. 1001.

Uf am" o0p_9tl. tNt.

71 UbtAug I, SOt.

U usuf.s.pamuelowsoU .Pub _to. MLUUutadw _tt.CepaUmai.

1W Ub Jm t10.

mean Ninnr1UOt,

8s0u F or wt , a g __nanUowp tm

Table 9.4 Averg Monthly Salary by Occupation. Gander and Area, 1989-90(Leona)

Natiod Lae Tom Sma TO*uS RuralAre

Total Mae Female Total Male Female Total male Female Total Malo Female

Profesuonal/reckniCh 1479.9 1709.4 939.9 1268.4 1443.0 969.S 1335.1 1517.3 958.7 1141.2 1202.6 757.0Administration/Managerial 1855.7 1908.S 1170.9 2990.3 3293.7 1170.0 12343 1234.3 - 4662 446.2 .aerdil Worken 956.7 1005.6 885.2 986.2 1035.8 918.S 933.4 1000.2 770.3 m68.3 6314 457.3Sals Workers 974.7 1112.7 607.8 903.8 984.9 698.0 1355.1 1749.6 - . .SericeWorkers 876.4 8809 848.0 920.2 920.6 918.0 630.7 647.3 S13.1 929.5 940.5 776.1Agriculture. Animal Husbandry 6419 7412 524.8 .. . .. 6714 671.4 - 425.2 440.6 410&8Prodtion/lAboure 979.S 987 8863 943.9 948.4 787.2 1369.1 1369.1 - 8316 8202 1396ANot asified 8316 833.9 807.5 9311 9714 807.5 789.3 7893 M 804.0 804.0 -

Totl 1059.4 1104.5 880.8 1030.S 1060.6 935.4 1042.7 1089.0 778.7 908"1 935.0 665.9

Reinin O WmbO tlt. flhpM antab lmlDT S 1ON-U

Table 10.1 Heloth Paclita;m 1987 and 1990

_ . . .spftais -cY pop. akw,prGovrment MWwis Prto Totd Hwopu Bed Qi.

Provhe PoPlpadt Govt M}sons Pdvate Total(Wm Na BDe No Bedu Na Be& NoN Bed Gov AU Govt Al

1987 1000 4 334 3 339 10 487 17 1160 111 S 1 117 2994 862 9009 85471990 1061 4 Qa 3 na 11 na 18 a 142 7 12 161 na na 7472 6590

Nonthem1987 1303 6 547 6 40S 3 181 15 1133 100 11 2 113 2382 tS013030 11S311990 1371 6 na 6 no 2 na 14 a 137 1S 13 165 Da naICOG? 830l

1987 78S 6 456 2 218 2 63 10 737 83 9 2 94 1721 1065 94S8 83511990 85S 6 na 2 no 2 Da 10 na 111 7 9 127 us as 7703 673

Western(lad. Faetomi)1967 613 10 1408 1 43 3 91 14 1S42 23 0 9 32 43S 398 26652 191561990 714 11 na I Da 4 na 16 D 13 1 12 26 na na S4923 27462

1987 S18 8 Oa 1 43 3 91 12 134 19 0 8 27 Oa Pa 27263 1918S1990 600 9 na I na 4 na 14 a 5 0 6 11 Oa na 12000 4545

1987 3701 26 2745 12 1005 18 822 56 4572 317 2S 14 3S6 1348 809 1167S 10391990 4001 27 na 12 na 19 as 58 a 403 30 46 479 na na 9928 8353

Na_ .F .. am._. d

am= l" bd H"OW

Table 10.2 Didunibutio of Schools. Teachets and Students by lAwf, 1960-1990/91

Primay Seconda|y TchokaWocatkal reade's Trainn uaivsiy

YewSntdents T,dejs Schools Studnts Tschacs S_hools Students Teasbens Inhisutiuos Studs Teachers Institks S_udet Tea

1960 81.81 2.334 563 7.097 384 36 950 40 3 608 S3 6 300 1791961 94,218 2,672 605 8,SS 434 38 778 38 4 673 55 6 341 1471965 126438 3.966 948 16,414 8S6 62 949 64 6 919 63 9 706 17S1970 166,107 5.142 1.023 33,318 1,495 91 924 63 4 1075 141 8 114S 2041971 176,658 S.447 1,031 35.507 1,706 97 930 68 4 1053 121 8 1,19J 2401975 2QS910 5,894 104 46S 2,188 132 840 98 4 1,519 168 6 L701 266198D 330,731 7,992 1- 68.890 2,720 18 1,891 87 6 1,914 200 6 2,166 254198S186 421.684 10,837 1.807 93.509 2,865 195 1,208 141 10 3.304 308 6 2.314 2991987188 43364 13,221 2,262 104.452 3P017 232 1,286 219 14 3,189 335 6 2,472 3521988/89 388,088 12,571 2,254 101,69S S,S18 205 3,861 259 19 2,974 351 6 2,641 4151989/90 395.604 12,272 2,072 108.915 SS64 227 4,151 307 19 2,32 348 6 2.821 4901990191 414,198 14,972 2,072 116.648 5.610 227 4,S30 326 19 2,138 343 6 3,014 578

_um D e__~UinnO.YaIai_d U9

_~~~~ X1. (fiIE g!§§V3 §

X l2§! 8fi ls8S s

:1 1g^lae2 !atla I ~~...X §{Ri; §|n 4'. Al@

E sfistes22B@3g 6

2 Rpe§ ga §"|0 !

-- X ^0l}§B {d'5!

*, i X§d !0 |!s !!wffls~~~~~~~~~' t ^gB E0 sf-B-$

S~~~~~~. X. X UI2

io neZ".

i -S$SRS fS-tl '4~~

1. 1.i-k sX ]a'}S ]1X

Table 10.4 S.cuday Schools, Daralaat and Teaching Staff 1990191

Quafie Uqud Quaiied and Uhqualified

Male Female Totil Male Ple Total MalO Fale TOta Matle Fmll Tota

Norwh 775 81 8S6 380 29 409 1,155 110 1265 15,30 7,11 t511South 689 140 829 286 32 318 975 172 1.147 12,712 7,137 19.849Eat 712 93 80S 454 SO S04 1.166 143 1.09 16,349 7,661 24,017West 1,085 475 1,S60 221 42 263 1,306 S17 I.823 17.749 12,923 30,672

Told 3,261 789 4,0 1.341 1S3 1,494 4,6M2 942 S,S44 62190 34.809 97.049

Taleo 10.5 Tessl/Vood Trainig tattosm and E srollent

lndstid Trades Building Trades Canmeciad Serty Aitral Trning Hem Ba1..iTrainin

M_ale Fmale Male Falme Male Femde Male Feale Made Feale

Tdmca_, hwdte Fretown 117 90 2381tKnma Tedhnicalsti 197 103 3Kii Trade Center 363 73MgbraTrad oCed ter 245 159 1OIC Do 77 19 109 S 666 13 6OIC Madei 10 43 1OIC Freown s0 1801USt. soep VC Magburka 120SL JsBip VCLunsar 50 100Sl Mary VC Bo iYCWA Vocatna Instute 69 541AbbaoVocatioal Institute Makemi 113 2 26Wizan Vocatonal center Makeni 2 82Kori CEC Taima 80 40Manima Agriutural Center BoCECrPujCAu 40 vMama Agriulr Center Makeni i s 18 2Ev Agnd. bstite P. Loko 146 V 17S 2S

Total 1109 19 S77 10 5 1,20S 286 27 4 69S564S 401/

_NA. MA, "It*tb is_

Ut Thm_uwubiau.jhbh_)uu d_d(aits

S_.. L01MA 16

0 10 20 -_r <_"0

4 Nt (r { 8 WN* - ~~~~~~~ X,At'N" - fk

_ s a t j K:mol"Ae a NhltuS~~~~~Km ,;8 A9X 1o;) 0 ,8 X jogy -, X ; Lt af kmoronX O~~~~~~~~~~~~~000

- -Kr zMB>

Kw* M O Y A M 8AthM;§ZKet7 8¢gtWl2

1 ~~~~--BO0NTHE; . , /iR NEMA_

, SC)TOI LODUI / K ~~~~~~~~~~~~~~~~PAVED ROADS

of d o>rf= a _ 1c ,P E 0 m UNPAVED ROADS

4r -f Ea U~~~~~~~~~~~ N r - - - FEEDERROD

Aqr l ~~~~~ />87W - -< J\F&{O)T I ~~~~~~~~~PIPVATE RALROD

7 : Co O \4X/4 *~~~ NATIONAL C4PIR

Q ' 4 PORTS

\ 16> ~~~~INTERNATIONAL AIRPORT

\ + ~~AIRSMP

SIERRA LEONE DITRC -B_UNDARIES. \ . . ~~REGION BOUNDWES

\ . ~~~INTENTONAL BOUNDARIES

f 1', l

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