Agriculture: What Can Sierra Leone Offer You?
Sierra Leone’s economy is strongly reliant on the agricultural sector as it contributed 47.9 percent to GDP in 2014. It is also one of the largest sources of job creation employing 68.5 percent in 2014[1]. With an estimated 5.4million hectares of arable land, abundant farmland, varied ecosystem, fertile soil, and sufficient rainfall is a mainstay to agricultural success over the years. The government is investing heavily in the sector by improving transport infrastructure to ease the movement of goods, encouraging and supporting private sector investment, as well as lending support to farmers. With declining international commodity prices, especially in iron ore which was one of the country’s main export, agriculture is one of the diversified sectors the government is focusing its growth potential.
The sector is dominated by smallholder farmers, in subsistence farming, using traditional methods and limited use of farming inputs. There are fairly large agricultural estates, both government and privately owned. The current performance of agriculture represents a fraction of the underlying potential of the country.
- The use of more intensive methods in the farming of existing cropped areas, together with increasing cultivable land, could accelerate agricultural growth from current levels.
- The improvements in infrastructure planned by Government are expected open up substantial new areas for profitable agricultural use.
- The sector is also attracting investments in new farm estates; the evidence also shows that, with even modest investments in rehabilitating existing farm estates and the introduction of more intensive farming, it is possible to earn attractive returns on agriculture.
Unique Selling Points
- Significant Arable Lands
- Sierra Leone has significant amounts of arable land, most of which remains uncultivated, with Millions hectares of arable land still available for cultivation.
- Even though the dominant form is customary tenure under communal ownership, the country is now very advanced in developing and harmonizing procedures for private land acquisition for agribusiness investments.
- Where necessary, and depending on the merits of a particular agribusiness project, the Government of Sierra Leone is prepared to take a head lease on provincial lands and sub-lease to foreign investors in order to mitigate risks
- Favourable Supporting Ecology
- Sierra Leone has a diverse ecology, which altogether provides ideal conditions for the cultivation of a wide range of crops.
- The coastal plains of the Atlantic stretch approximately 200 miles; relatively flat surfaces that are frequently flooded in a range of between 5 and 25 miles off the coast; suitable for the cultivation of rice, ginger, vegetables and cassava.
- The interior plains comprise seasonal floodplains (or ‘Bolilands’); rolling wooded areas; and a variety of savannah covered low plains and hills; suitable for the cultivation of rice, sugar, oil palm, cassava and cashew.
- The interior plateaus, mountains and inland valley swamps of the east are suitable for the cultivation of rice, cocoa, coffee and oil palm.
- The Western Area, which consist of thickly wooded mountains running parallel to the sea for about 25 miles, are suitable for mangoes, citrus fruits and livestock.
- Favorable Climate
- The country has a tropical climate with principally two seasons; the dry season, which lasts from October to March, and the rainy season lasts from May to October; July and August are the wettest months, whilst March and April are the hottest months.
- Rainfall levels range between 1,500mm in the interior areas of the country and 5,100 mm in the coastal areas
- Sierra Leone’s rainfall is classified into 3 climatic belts; the first belt spans from the coast up to 80Km inland; the second belt spans between 80Km to 190Km inland; and the third belt ranges between 190Km inland to the border areas.
- Adaptable Topography
- The country’s topography, high rainfall levels and numerous ground water sources offer huge potentials for irrigation all around the country
- The country has a dense drainage pattern, with 9 major rivers, coastal creeks and tidal streams. Together, these conditions make it relatively easy to irrigate land for the cultivation of crops such as rice, which can have up to 3 cycles in a single calendar year.
Investment Incentives
As a priority for the Government to promote large-scale private sector investments, there are incentives granted. These include but not limited to:
- a foreign investor irrigating at least 500 hectares or cultivating least 2,500 hectares of land or investing at least US$1 million in livestock and livestock products; or
- a domestic investor irrigating at least 100 hectares or cultivating least 500 hectares of land or investing at least US$0.5 million in livestock and livestock products.
- exemption from corporate income tax plus, 50% exemption from withholding taxes on dividends paid by agribusiness companies
- Complete exemption from import duty on farm machinery, agro-processing equipment, agro-chemicals and other key inputs specifically for the project; 3-year exemption from import duty on any other plant and equipment; reduced rate of 3% import duty on any other raw materials
- 100% loss carry forward can be used in any year
- 125% tax deduction for expenses on Research & Development, training and export promotion
- 3-year income tax exemption for skilled expatriate staff, where bilateral treaties permit
Investment Opportunities
Rice
- There are huge opportunities to invest in the production, processing and marketing of domestically produced rice produced.
- The World Bank and United Nation’s Food & Agricultural Organization have confirmed that Sierra Leone has a comparative advantage in supplying its domestic market.
Oil Palm
- Oil palm is an important cash and export crop that can be produced in many parts of the country.
- Production has rebounded despite the fact that many of the plantations are neglected, Government-owned estates comprising mainly of aged, low yielding trees.
- yields are about 1.5MT of Crude Palm Oil per hectare.
- Exports remain modest compared with periods over 2 decades ago
- The Government is promoting the rehabilitation and expansion of its oil palm estates throughout the country with private sector participation.
Cocoa and Coffee
- Cocoa and coffee both have the potential of becoming major cash and export crops, as they were during the 1970s and 1980s.
- The current average yields for cocoa and coffee beans are encouraging.
- There are opportunities to invest in the rehabilitation of existing plantation or establishing new plantations.
Cassava
- Cassava has become the second most important food crop in terms of level of consumptions and area under cultivation.
- As the diet of many Sierra Leoneans become even more diversified to include cassava based foods such as Gari and fufu; and with opportunities for industrial production of starch and cassava flour, the cultivation of cassava offers tremendous opportunities.
Groundnut, Pepper and Vegetables
- There are favourable opportunities in the cultivation and processing of all these crops both for local consumption as well as for export.
- There are a number of local farmers and farmer groups looking for strategic partnerships to expand their farms as well as to enter into bulk off-taker agreements as a means of minimizing post-harvest wastage of these perishable crops.
Fruits
- Over the past years, there have been notable fruit juice factory investment in the country, whose operating input demand levels are significantly higher than current production levels of these fruits.
- There is scope to facilitate the regeneration of the nucleus-estate activity that existed before the war, stimulating also growing by smallholders and in developing the marketing infrastructure for these high value crops.
Livestock
- Total domestic production is not sufficient to meet the needs of the growing population which is gradually recovering purchasing power and so consuming more meat.
Agricultural Inputs
The supply of fertilizer, improved seeds, agro-chemicals, animal feeds and veterinary inputs is well below potential demand
[1]https://www.kpmg.com/Africa/en/KPMG-in-Africa/Documents/2015%20Q1%20Snapshots/KPMG_Sierra%20Leone%202015Q1.pdf