Overview and role of the EITI
Sierra Leone has a substantial mining sector, primarily driven by the large-scale production of iron ore, diamonds, rutile and bauxite. It also hosts small-scale and artisanal mining of gold and diamonds. Mining plays an important role in the country’s economy, although the sector has been in decline over the past years. According to EITI reporting, minerals accounted for 67% of total exports in 2019, a decrease from 91% in 2016. Sierra Leone is also conducting exploration activities to develop its petroleum sector.
Natural resources played a significant role in sustaining conflict during the Sierra Leone Civil War (1991-2002). Subsequently, the transparent management of natural resources became a national priority. In 2018, President Julius Maada Bio made a strong commitment to use the EITI as a tool for reform to improve the country’s investment climate. Sierra Leone’s Medium-Term National Development Plan 2019–2023 includes a target to mainstream transparency and accountability practices into the extractive sector, in accordance with the EITI Standard.
The EITI has played a key role in reforming license allocation management. It continues to serve as a platform for improving disclosure of mining contracts and streamlining revenue payments. Sierra Leone EITI (SLEITI) is currently working to advance beneficial ownership disclosure and strengthen accountability at the subnational level by clarifying payments streams, expected revenue and recipients of subnational revenues.
Economic contribution of the extractive industries
- to exports
- to GDP
- to total government revenues
- to employment
Innovations and policy reforms
- Recommendations from Sierra Leone’s EITI reporting and implementation have contributed to establishing a digital mining cadastre. This has resulted in increased government revenue, consistent regulation and timely access to data.
- The Extractive Industries Revenue Taskforce (EIRT), a platform which was established as a consequence of EITI implementation, has contributed to reducing export duty on gold to levels more comparable to neighbouring countries, thus decreasing smuggling and increasing official gold exports.
Sierra Leone’s mining sector is governed by the Mines and Mineral Act and the National Minerals Agency Act. The petroleum sector is governed by the Oil/Gas-Petroleum Exploration and Production Act. The more recent Extractive Industry Revenue Act 2018 applies to both sectors. The fiscal regimes for the extractive sectors are incorporated in the Income Tax Act and its amendments, as well as the Finance Act. The main fiscal instruments in the extractive sector are corporate income tax and royalties.
Oversight bodies include the Office of the Vice President, the Ministry of Mines & Mineral Resources, the National Minerals Agency, the Ministry of Finance, the National Revenue Authority, the Petroleum Directorate and the Corporate Affairs Commission.
The National Minerals Agency (NMA) oversees the allocation of mineral rights. Mineral leases are allocated on a first-come-first-served basis, while petroleum rights are allocated through either direct negotiations or a tendering process.
Sierra Leone has one of the most comprehensive cadastre systems in West Africa. The Mining Cadastre Administration System (MCAS), managed by the NMA, provides information on license holders, coordinates, application dates and duration. This data is publicly accessible through an online repository, which also provides information on license payments made during the year.
While Sierra Leone does not have a contract disclosure policy, both the Extractive Industries Revenue Act and SLEITI bills have provisions to promote contract disclosure. The NMA has published some mining agreements on their website.
Sierra Leone does not have a legal framework mandating the disclosure of beneficial ownership in the extractive sector. An independent review, published in 2017, assessed Sierra Leone’s legal framework to identify gaps for data disclosure and collection, and proposed corresponding reforms. President Julius Maada Bio made a commitment to advance this agenda in 2018. SLEITI’s 2016 EITI Report includes some ownership information for larger companies.
In September 2021, SLEITI produced a scoping study to help streamline various legal provisions and provide a legal basis for collecting and maintaining a central register. A forthcoming amendment to the Mines and Minerals Development Act is expected to include provisions mandating beneficial ownership in the mining sector.
The National Revenue Authority (NRA) collects mining payments and the Petroleum Directorate (PD) collects petroleum payments. These revenues are subsequently transferred to the Consolidated Fund of the Treasury. Other payments from the mining sector, such as surface rentals, are made directly by companies to local councils and chiefdoms that host mining activities through the Ministry of Mines and Mineral Development.
Specific contributions, such as the Diamond Area Community Development Fund (DACDF), are distributed from the central government to certain district councils and chiefdoms based on pre-determined formulars for social development.
SLEITI is administered by the Sierra Leone Multi-Stakeholder Group (MSG). The MSG is hosted by the Office of the Vice President and chaired by the Minister of State in the Office of the Vice President. It is comprised of representatives from government, industry and civil society. The Vice President of Sierra Leone, Dr. Mohamed Juldeh Jalloh, serves as the EITI Champion.
Multi-stakeholder group is formed
Government announces commitment to join the EITI
Sierra Leone joined
2006-2007 EITI Report published
First Validation (EITI Rules) completed - Designated candidate country
2008-2010 EITI Report published
Second Validation (EITI Rules) completed – Country suspended
2011 EITI Report published
Open-ended extension (due to Ebola outbreak) to submit 2012 report granted
2013 EITI Report published
2014 EITI Reports published
2015 EITI Report published
2016 EITI Report published
Sierra Leone status
2017-2018 EITI Report published
Next EITI Report expected to be published
Next Validation is expected to begin
Sierra Leone was found to have made meaningful progress in implementing the 2016 EITI Standard in June 2019, following its first Validation. The Validation identified 14 corrective actions to be addressed by the country’s next Validation, which commenced in April 2022.