When it comes to frontier markets, Sierra Leone is about as frontier as it gets. This is something that David Carew, the country’s trade and industry minister, readily acknowledges. The country is only a decade removed from a brutal civil war, and has for years been stuck in the lowest levels of the UN's Human Development and Human Poverty indices.
Yet Mr Carew believes his country is undergoing a transformation. Sierra Leone’s GDP grew at a solid 7% in the three years preceding the financial crisis. While it has since slowed down, the country should still post a decent rate of growth in 2010. In Mr Carew’s opinion, however, the biggest challenge the country faces is its own mindset.
He says: “The biggest challenge is how to move away from the mindset of an aid recipient. That is what has happened to us since the end of the war. Over the past five years, we have been in a post-conflict phase, and we have been given money and sympathy, but now we should move away from that. We should see how we can use our resources and transform them into growth for our people and country.
“We need policies, not reckless policies, but with the goal of achieving growth for our people. Those are the challenges.”
The potential for Sierra Leone is certainly there. The country’s natural wealth is beyond doubt. It is among the top 10 diamond, gold, titanium and bauxite producers in the world, yet the vast majority of its people remain stuck in poverty. Unemployment is high and per capita GDP is a mere $311, according to the International Monetary Fund.
While many speak of the curse of oil, Sierra Leone’s past was certainly cursed by conflict diamonds. As with any frontier market, investors will undoubtedly have concerns about stability and the possibility that violence might return. Mr Carew says these concerns are completely legitimate, but adds that the country has made great progress in terms of governance and encourages investors to see Sierra Leone for themselves.
In terms of strategy, Mr Carew thinks that the best approach is to play on the country’s strengths, which include fisheries and agriculture along with mining. He even mentions tourism and, while the idea of a European family going on holiday to Sierra Leone might seem far-fetched, the country does have miles of beaches and consistently sunny weather. If these industries can be developed and made more accessible to investment, he reasons, the rest of the country will benefit.
Mr Carew says: “Now we are competing with the world. We are stepping out into the world, so we have to use the areas where we have a competitive advantage. For Sierra Leone we should be talking about agriculture, fisheries, tourism and mining. We should focus on those four areas and put our energy and resources into them.”
To facilitate foreign investment into the country, the trade and industry ministry set up the Sierra Leone Investment and Export Promotion Agency (SLIEPA). The agency’s website has a plethora of information for investors, along with some surprising claims, such as the news that Lonely Planet listed Sierra Leone as one of the top 10 countries for tourists to visit in 2009.
SLIEPA should help attract investors but, for obvious reasons, Sierra Leone still lags far behind other countries in west Africa, particularly Ghana and Guinea. However, foreign firms are beginning to trickle in and a small private sector appears to be thriving. UK-based airline BMI has a direct route between London and Freetown (the capital of Sierra Leone), while telecoms operator Zain Communications and freight services firm Maersk are both active in the country. Mr Carew claims that, at a recent investment conference in Sierra Leone, close to 200 companies expressed an interest in investing in the country. These expressions of interest are in a very preliminary phase, but he is nonetheless encouraged. He says that in the past year SLIEPA has had 10 “successful investment stories” and he is hoping to boost that number to 20. While he recognises that this is not a huge number, it is substantial considering the country’s history.
Mr Carew spent a good part of his career, from 1979 to 1986, in Nigeria working for professional services firm KPMG. After this time he returned to Sierra Leone and remained with KPMG as an assistant manager. His role in Sierra Leone also included work with Gambia and Liberia. He denies that his experiences abroad influenced him politically, but says they have helped him see things from a wider perspective.
Perhaps this outlook explains part of the reason why he recently took part in a conference on international growth at the London School of Economics. Mr Carew says he was there to share experiences and learn from other policymakers, particularly the other western European politicians who were present. Mr Carew is also keen to learn from the experiences of China and India in developing their economies and opening themselves up to foreign trade, and while he is fully aware that Sierra Leone is in a completely different situation to the two emerging economic behemoths, he believes there are lessons to be learned from Asian success. He says: “I’m here [at the conference] to share experiences and learn from policymakers. They have the academic slant here, and we can see what we can learn from them.”
Formerly Sierra Leone's finance minister, Mr Carew was moved to the trade and industry role in 2009 after a cabinet reshuffle. Rather than seeing this as a demotion, Mr Carew says he feels much more comfortable in a less bureaucratic role that he believes he can achieve much more in.
Mr Carew himself is not a member of parliament or an elected official, as under Sierra Leonean law the president is not obliged to choose members of parliament for his cabinet. With elections due in 2012, Mr Carew says he has no plans to stand and is very comfortable with his present status. However, he does hint that he may run for election in the future. He says: "The quick answer is no. But perhaps the answer is: who knows? I can run in my constituency if I determine that I can do that effectively. If I think I have enough people behind me, then maybe [I will run], but I am quite happy with what I am doing, and I am focusing on doing my job well.”