Capstone Scholars: Comparative Analysis of Development Trajectories: Ghana and Sierra Leone

Introduction
Sierra Leone, located on the coast of West Africa, became its own independent nation on April 27, 1961.  The country had experienced many military uprisings, and the United Kingdom finally agreed to grant Sierra Leone its independence on April 27, 1961.  In 1996, another military coup led to a multiparty presidential election, with Ahmad Kabbah becoming Sierra Leone’s first democratically elected president in the country’s history. However, another coup happened a year later that led to chaos, the loss of thousands of lives, and the beginning of decades long tension between different ethnic groups.  This civil war set the country back considerably, and Sierra Leone is still dealing with those setbacks today (Boateng, 2023). Ghana, another West African country situated on the coast, was the first British colony in Africa to declare its independence, which occured on March 6, 1957.  After a military coup in 1966, the country experienced significant economic growth for the next five years.  However, there was corruption, mismanagement, and military rule that inhibited growth in the 1970’s and 1980’s.  By the 1990s, though, the country began showing signs of improvement, and Ghana is now held up as an example of successful economic recovery and political reform in Africa (Fyfe, 2024).

Sierra Leone’s and Ghana's economies both demonstrate varying development paths and economic indicators.  Each West African Country has encountered challenges along its economic journeys yet has taken different approaches to address them.  Sierra Leone has faced historical struggles consisting of political instability and a ten-year-long devastating civil war, which considerably hindered economic growth (Fyfe, 2024).  The country heavily relies on exporting natural resources like diamonds and minerals, making it susceptible to commodity price fluctuations.  Despite efforts to diversify the economy, Sierra Leone still deals with fundamental issues such as corruption, weak institutions, and limited infrastructure.  In contrast, Ghana has demonstrated greater resilience and progress in its economic development (Boateng, 2023).  Benefiting from periods of stability and democratic governance, Ghana has created a favorable business environment that attracts significant foreign investment.   According to the World Bank's Ease of Doing Business Report 2022, “Ghana is not only one of the best places for doing business in West Africa, but also the most resilient economy in West Africa'' (Country Reports On, 2022). The country's economy is much more diversified than Sierra Leone’s, with substantial contributions from agriculture, mining, manufacturing, and services sectors.  Ghana's efforts in reducing poverty, improving infrastructure, and stable governance have propelled it to become one of Africa's fastest-growing economies.  Ghana’s success led to the following question: though both countries struggled in the late 20th century, why has Ghana grown and thrived as a country in the past couple of decades while Sierra Leone has continued to struggle in both the political and economic sense?

The economic indicators of each country show that Ghana significantly outperforms Sierra Leone economically.  Ghana has a Gross Domestic Product per capita of 2,363.30 USD (2021); Sierra Leone, on the other hand, has a GDP per capita of just 480.04 USD (Seth, 2021).  Real GDP growth has slowed in both countries in the last few years because of the Russia-Ukraine war and the COVID-19 pandemic that caused recessions all across the world.  Real GDP growth in Sierra Leone declined to 2.8% in 2022 from 4.1% in 2021, and in Ghana, real GDP growth slowed to 3.3% in 2022 from 5.4% in 2021 (Seth, 2021).  However, both countries will be looking to bounce as the global economy is steadying after recovering from inflation and supply chain issues.  Inflation has always been a massive problem for Sierra Leone, with an estimated 37.8% rate in 2023, up 11% from 2021, driven by food and fuel inflation and depreciation of the leone.  The inflation rate in Ghana is 31.26% in 2023, which is troublesome but seen as more of an anomaly when looking at the fact that inflation has been steadily under 10% for the last five years (Ghana Economic Outlook, 2023).  Recently, Ghana has focused on making its country much more privatized, so the government can save money and increase efficiency.   The government has invested less in capital investment in recent years, causing the private sector to become the main force behind industrial development.  John Defor, the director for policy and research at the Association of Ghana Industries, says “This is consistent with the government’s private sector-led agenda for economic transformation” (Defor, 2022).  On the other hand, Sierra Leone has little private sector leadership, partly because of resistance from the people and party due to a lack of governmental initiative.  Ghana's privatization has allowed its economy to become more efficient while the lack of a strong private sector in Sierra Leone’s economy has made growth much more difficult.

Comparing Sierra Leone's agricultural sector to Ghana’s agricultural sector reveals one of the primary reasons for Sierra Leone’s struggles.  Agriculture, the primary sector, contributes to 21% of Ghana’s GDP, with cocoa being the big cash crop for Ghana (the second largest cocoa exporter in the world) (Fyfe, 2024).  The Ghana federal government has supported agriculture for decades, and even though food and agricultural imports will continue to grow as Ghana’s underdeveloped food processing sector cannot meet increasing demand. In 2021, Ghana imported about $1.9 billion in agricultural and related products and will continue to significantly spend on imports to keep this sector efficient and functional.  Agriculture contributes to much more of Sierra Leone’s GDP, with the most recent estimate around 57.5%.  Rice is the main crop produced in Sierra Leone, followed by cassava and to some extent palm oil.  Cocoa beans and coffee are the main export crops (Stiftung, 2022) However, rice is crucial to the Sierra Leonean people because it is a staple crop for farmers and is eaten daily by almost every household in the country.  Sierra Leone has the potential to become self-sufficient in rice production, but it would need a massive agricultural transformation for this to happen.  The country is endowed with a favorable agricultural environment comprising arable land, abundant rainfall, a temperate climate, and several rivers with significant irrigation potential that could support the production of enough food to meet local consumption and for export (Sierra Leone– Country…, 2021)  However, of the estimated 5.4 million hectares of fertile arable land, 75 percent remains uncultivated.  Agriculture in Sierra Leone is severely limited in terms of growth because of all the subsistence farming.  Unfortunately, the sector is dominated by smallholder subsistence farmers utilizing local traditional tools with outdated methods and limited farm inputs.  These farmers also resist new ideas and changes, which makes policy-making extremely difficult (Riddell, 2018).  One solution in place is sustainable and diversified food production. The government is focused on increasing the amount of arable land and introducing intensive mechanized methods in agriculture.  This plan is called the National Agricultural Transformation Strategy 2019-2023, which plans to double the production of rice, forestry, and livestock (Grenra, 2020).  Sierra Leone has the land resources to transform their agricultural production, but they need good leadership and effective planning to utilize the resources.  

The industrial sector of each country is a critical reason why Ghana is thriving and Sierra Leone is struggling.  Ghana’s industry sector contributes 30% of GDP, with the private sector driving industrial development.  Even though Ghana struggles to resolving insolvency(inability to pay debts) and taxation (Boateng, 2023), the country’s industrial development has benefited considerably from trade liberalization, political stability, the rule of law, and the Ghana Investment Promotion Centre Act, the latter of which has created a more streamlined environment for private investment.  The sector accounts for a large portion of both employment and exports, underscoring its importance as the government seeks to bolster value-added activities’ contribution to the economy and attract investment into emerging segments (Ghana Economic Outlook, 2022).  Manufacturing is the largest employer in the secondary sector, and the government has prioritized its development as a way to bring informal workers into the formal economy. In turn, the government hopes to boost productivity and economic growth.  Sierra Leone’s industrial sector pales in comparison to Ghana’s. Industry (including construction) contributes around 6% to Sierra Leone's GDP (Powell, 2023).  Inadequate infrastructure constraints non-mining activities because the money that is meant to build sturdy roads and bridges to enable facilitated transport of goods and basic services goes into the pockets of government officials.  This constraint inhibits the major industrial activity in Sierra Leone, which includes food processing, small-scale manufacturing, petroleum refining, and commercial ship repair.  The lack of an effective industrial sector is one of the main reasons Sierra Leone’s economy is not thriving compared to other West African countries.  

The third sector, the services sector, is the most similar sector when comparing Sierra Leone’s sectors to Ghana’s.  The tertiary sector constitutes around 49% of Ghana’s GDP as a result of growth in the education, health, and Information and Communication Technology service industries, among others (Powell, 2015).  Favorable government actions and relative political and economic stability have helped support strong growth and earnings in several Ghanaian service industries. However, infrastructure weaknesses and other issues hinder business activity in these same services industries and limit their contribution to growth in other sectors  In Sierra Leone, the third sector contributes around 33% to the country's GDP.  The sector comprises trade and tourism; transport, storage, and communication; finance, insurance, and real estate; public administration and defense; and other services, with the largest sub-sector being wholesale and retail trade (Ravichandran, 2019).  Even though Sierra Leone’s service sector is not elite compared to first world countries, more focus and attention should be given to the other two sectors in order to maximize the country’s economy.

Ghana has taken political stability and good governance very seriously because the country understands how crucial it is for a successful economy to have a stable government.  In the 1980s, the economy started to recover because of the stable democracy Ghana developed. This stability in government has allowed for a healthy investment climate, as investors aren’t worried about significant political turmoil (Ghana Rising: Sustainable…, 2023).  

Ghana has also diversified its economy.  Instead of just committing to cocoa, gold, and other cash crops that are effective for sustainable growth, Ghana has diversified its economy by making efforts to diversify its economy beyond traditional sectors such as agriculture and mining. The country has prioritized industrialization, manufacturing, and services, which has helped to create jobs, increase productivity, and reduce dependence on primary commodities (Ghana Rising: Sustainable…, 2023).  Under a stable democracy, government initiatives to formalize the economy and introduce a more favorable taxation structure are starting to bear fruit. Policies aimed at diversifying the economy and preventing an over-reliance on the commodity markets have helped its once floundering manufacturing industry.  Ghana also discovered offshore oil in 2007, which heavily aided the economic boom it has seen in recent years (Ghana Economic Outlook, 2022).   

While solid governance has greatly benefitted Ghana, rampant corruption and instability have plagued Sierra Leone’s economy for decades.  One of the most basic factors causing poverty in Sierra Leone lies within the government. Since colonial rule departed, the government has been either under primarily a one-party rule or a military rule: a one-dimensional rule that does not allow for opposition and breeds corruption (Fyfe, 2024).  For example, the removal of funds, both from within Sierra Leone itself and from assistance given by donor nations, have hurt projects that could truly benefit the people to bring them out of poverty. Instead, government officials and the urban elites have used these funds to serve their own specific and inordinate needs, which mostly comprises paying loyal government supporters (Henry, 2017).  Infrastructure has also severely impacted Sierra Leone's economy.  Weak infrastructure has caused a spike in diamond prices, causing poverty within Sierra Leone. Costs to get diamonds from one area to another are high since roads and highways continue to remain in poor shape. Transport costs, including petrol, are very high to move these diamonds from mining areas to port cities for shipping and trading purposes (Ravichandran, 2019).  

Another economic problem is the people of Sierra Leone rely much too heavily on rice and subsistence farming.  Analysts believe that the minister is right to push for other crops. Rice is Sierra Leone’s staple food, but the country’s agricultural sector is largely subsistence and does not produce sufficient rice for domestic consumption, not to mention export (Seth, 2023). Subsistence farming often generates low-income levels, making it difficult for farmers to invest in their farms, access healthcare and education, or improve their living conditions. Subsistence farming and the lack of utilization of resources contributes to rural poverty and hinders economic development.  The economy needs diversification and to capitalize on its precious natural resources.  But, since gaining independence in 1961, Sierra Leone has been plagued with civil wars and poverty and still has a lot of issues to overcome before it can be seen as an investment-friendly country.  

As previously mentioned, Ghana's sound governance and political stability compared to Sierra Leone with frequent insurgencies and corruption has shown why Ghana is outperforming Sierra Leone.  In Sierra Leone, national trust is at an all-time low.  Since February 2018, trust in the National Electoral Commission (NEC) has fallen by 49 percentage points. In the first poll, 67% of Sierra Leoneans identified that they trust the NEC a great deal. By the final poll in January 2022, only 18% identified that they trust the NEC a great deal.  In the middle of 2019, Sierra Leone dropped 10% on the Global Peace Index and was among the five sub-Saharan countries with the worst deterioration of stability (Sierra Leone GPI…, 2021). In early 2020, a new Afrobarometer survey revealed that 80% of Sierra Leoneans surveyed believed that politics “often” or “always” leads to violence. The survey also shows that more than half of the population experience violence at political rallies and events.  One example of these violent protests is on August 10th, 2022, when a violent protest broke out in the capital Freetown and other major towns in the Northern region. Although social media reported an imminent demonstration over the rising cost of living in the country, almost everybody was shocked and surprised by the heinous brutality resulting in the gruesome death of six police personnel and 21 civilians and the wanton destruction of public properties (Writes, 2019).  Even though the civil war came to an end in 2002, political conflict and violence have continued, often at a localized scale that goes unnoticed by the outside world.  Sierra Leone stands out in the West African sub-region for experiencing one of the highest levels of peacetime political disorder per capita, even though its political violence tends to be less deadly (Stiftung, 2022).  All of this political instability greatly inhibits economic and social growth.  

In terms of political stability, Ghana is considered one of the more stable countries in West Africa since its transition to multi-party democracy in 1992.  Ghana has practiced the longest traditional democracy in Africa, and is ranked second most peaceful country in the sub-Saharan Africa region only behind the island nation of Mauritius (Sasu, 2023).  Even though Ghana has around 24 parties, it is a stable two-party system and despite the havoc caused by the COVID-19 pandemic, Ghana enjoyed both political and economic stability in that time (Sierra Leone GPI…, 2022).  The Republic of Ghana is a significant proponent for Ghana's success as a whole and should be looked at as a model for struggling West African countries such as Sierra Leone. 

It is important to know the structure of each country's government to understand why the governance systems are either ineffective or effective.  Sierra Leone has three branches, with the executive as its first.  The President of the Republic of Sierra Leone is the head of state and the head of government of Sierra Leone, as well as the commander-in-chief of the Armed Forces. The President appoints and heads a Cabinet of ministers (including the Vice President), which the Parliament must approve.  To be declared winner, a presidential candidate must secure 55 percent of the total votes.  Julius Maada Wonie Bio is the 2023 president. The next branch is the legislative branch.  The Parliament itself consists of a total of 124 seats, 112 directly elected members from single-member constituencies, and 12 Paramount Chiefs from the 12 Districts of Sierra Leone.  The Speaker heads Parliament and is elected by the members of Parliament.  The branch is the judiciary branch.  The judicial system, headed by the Chief Justice of Sierra Leone, comprises the inferior courts, represented by the Magistrates courts and the Local courts, and the superior courts, represented by the High Court, the Court of appeal, and the Supreme Court.  The High Court of Justice The High Court has supervisory jurisdiction over all inferior and traditional Courts in Sierra Leone.  Ghana follows a similar structure, except the president only has to win 50% of the votes (Stiftung, 2022).

Corruption in Sierra Leone’s government has historically been a tremendous problem for Sierra Leone.  Sierra Leone is widely considered to be one of the most politically and economically corrupt nations in the world and international rankings reflect this. We see this in Transparency International's 2022 Corruption Perceptions Index, where Sierra Leone scored a 34 on a scale from 0 ("highly corrupt") to 100 ("very clean").  For context, the best score was 90 (ranked 1), and the worst score was 12 (ranked 180).  According to Transparency International, 52% of public service users paid a bribe in the previous 12 months (Manning, 2023). Sierra Leone has struggled with corruption since its independence from the British in 1961. The All People's Congress (APC), which was in power from 1968 to 1992, dealt with significant corruption and engaged in numerous scandals, including misappropriation of funds and the creation of a patronage system to hold onto power. Under the leadership of President Siaka Stevens, powerful government officials, including the president, stole large amounts of wealth from state treasuries to enrich themselves and their allies (Henry, 2017). Corruption in the APC was well known due to the public nature of these scandals and their frequency. This widespread corruption contributed to ineffective governance and a lack of trust in the state.  In 2007, a leaked audit commissioned by then-president Ernest Bai Koroma revealed widespread corruption in many government ministries including suspicious loans and missing international aid funds. The report identified corruption as a significant barrier to development in Sierra Leone and recommended thorough investigations (Fyfe, 2024). 

 Ghana has done much better with its corruption problem.  When ranked by score among the 180 countries in the 2022 Corruption Index, Ghana ranked 72nd out of all 180 countries.  In the succeeding years, Ghana's score has either risen or remained steady; in 2022, Ghana scored 43 (Manning, 2023).  The country’s anti-corruption campaign led to increased investor confidence in Ghana's economy. After effectively addressing corruption, businesses in Ghana can expect a more transparent and predictable environment, which encourages domestic and foreign investments. These investments spur economic growth, create job opportunities, and promote industrial development.  Also, corruption diverts funds away from essential public services and projects. By combating corruption, Ghana can allocate resources more efficiently and direct public funds towards crucial infrastructure projects, education, healthcare, and other social programs. This improvement in corruption has led to an improved quality of life for citizens and fosters long-term economic development.  The last benefit is that international donors and development partners often prioritize working with countries that demonstrate a commitment to fighting corruption. By taking significant steps in this regard, Ghana has attracted more aid and assistance, which can further support its economic development goals (Boateng, 2023).  

However, for Sierra Leone, this corruption has significantly reduced foreign investment. Widespread corruption deters both domestic and foreign investors. Investors are hesitant to invest in a country where bribes and kickbacks are common, as it increases business risks and uncertainty.  The corruption in Sierra Leone has also exacerbated income inequality and poverty. The diversion of resources to corrupt practices reduces the funds available for poverty alleviation programs and social services, leaving most of the population without adequate support.  This corruption leads to significant political instability, which has caused the “brain drain” phenomenon to strike Sierra Leone, in which skilled professionals and educated individuals are constantly leaving the country in search of more stable and secure environments. This loss of human capital has hindered economic development and innovation (Henry, 2017).  

It is important to discuss infrastructure, the backbone of these two countries.  Sierra Leone’s infrastructure was badly damaged during the country’s decade-long civil war (1991-2002), and the country continues to suffer from deficits in both the quantity and quality of its infrastructure (Fyfe, 2024). There are only a handful of paved highways, transport routes are deficient even in urban areas, and there is no centralized water supply, proper waste disposal, or sewage system. Only about a quarter of the population of Sierra Leone currently has access to electricity.  All these deficiencies in the infrastructure severely slow internal development (Manning, 2023).  Currently, Sierra Leone has been spending about $134 million annually on infrastructure in recent years. But, because of corruption, the lack of roads and transport, and other developmental reasons, $66 million is lost each year to inefficiencies (Seth, 2023).  On the other hand, overall, Ghana's infrastructure situation is promising. Unlike in many other African countries, Ghana's infrastructure backbone covers the entire national territory and helps to integrate its different regions.  Though Ghana struggles with infrastructure project planning and has lost a lot of money to this deficiency in planning, over the past three decades, Ghana has made great progress in its infrastructure development, driving socio-economic growth.   Electricity access has become ubiquitous, with 85% of the population having access, a 32% increase since 2010 (Boateng, 2023).  By 2017, 81% of the population has access to basic drinking water services, a 26% increase since 2000 (Boateng, 2023).  Also, access to basic sanitation services has more than doubled since 2000, with 19% of the population having access by 2017 (JMP, 2021).  

In terms of energy, Ghana outdoes Sierra Leone on all fronts.  Sierra Leone lacks a stable and reliable public power supply and domestic demand remains significantly unmet. The current electricity supply is challenged by generation capacity and seasonal variation and is disseminated using inadequate and aging transmission and distribution networks.  The country's energy needs are hugely under-served and the lack of a reliable energy supply is the principal impediment to Sierra Leone's development. Electricity transmission and distribution network problems result in losses of around 45 percent of generated electricity.  Only 26 percent of Sierra Leone's population has access to electricity – and that's mostly in urban and peri-urban areas. This is among one of the lowest rates of electricity access in the world (Sierra Leone–Country…, 2021).  However,  Ghana, which receives electricity supply from Nigeria, is one of the African countries with a stable power supply.  This country is endowed with natural gas reserves which aids a proper power supply.  The electricity access rate stands at 86.63 percent, with 50 percent of rural residents and 91 percent of urban residents connected to the electricity grid.  Thanks to strong government leadership since the 1990s, Ghana had an electricity access rate of 84% in 2018, one of the highest in sub-Saharan Africa (Sierra Leone Country, 2021).  

Sierra Leone has several potential solutions they could focus on.  On the pure macroeconomic side, Sierra Leone needs to prioritize protecting vulnerable households and keep focusing on long term reforms that deal with fiscal and debt sustainability (Seth, 2023).  With the economic setbacks suffered during 2022, resulting in rapid debt build-up, rising inflation, and food insecurity.  By renewing their commitment to consolidation, honing the fundamentals of their economy, and active debt management, they can effectively support debt sustainability (Muwonge, 2023).

Another aspect that Sierra Leone needs to focus on improving is its infrastructure.  Although Sierra Leone has significant energy potential in various forms including biomass from agricultural wastes, hydro and solar power, it remains underutilized (Ravichandran, 2019).  Sierra Leone should develop ways to utilize these resources for several sustainable and efficient sources of energy.  They also need to focus on upgrading their ports, and developing newer ports to facilitate the importation and exportation of natural resources.   However, before they do these two things, the most important thing Sierra Leone can do for its infrastructure is vastly improve its transportation network.  As reported by a blogger in Sierra Leone, the roads are often non-existent or in poor condition. Potholes and cracks in the road are a common sight, if roads are even paved in the first place. More often, dirt roads are the common feature of the rural transportation network .  Sierra Leone has 11,300 kilometers of roads. Of these, only 904 km are paved – about 8 per cent (Writes, 2019). Paved roads greatly ease the transportation of people, crops and other products.  One government project should be dedicated to trying to pave more roads and fix existing roads.  

The reason the transportation network needs to be fixed before most other infrastructural aspects is because nothing productive can happen in the country if people can’t get from one place to another.  Even though Sierra Leone has the most diamonds out of any country in the entire world, they can’t even properly transport these diamonds from one side of the country to another (Grenra, 2020).  Sierra Leone struggles to utilize their natural resources due their poor transportation network, which can also be improved by fixing the railway system.  The government needs to conduct studies to assess the viability of the railway systems, especially for transporting bulk commodities like diamonds or other minerals.  Once they connect these new and improved railway systems with the ports that have been fixed and improved, they will be able to export their natural resources which will severely boost the money supply in Sierra Leone's economy.  

After dealing with infrastructure, the other core issue that has plagued Sierra Leone above everyone else is its corruption issue.  There are several ways to deal with the issue, with one as the strengthening of Anti Corruption institutions.  Sierra Leone has existing anti-corruption agencies, such as the Anti-Corruption Commission (ACC), but these agencies have received historically low funding (Fyfe, 2024).  They need to be provided with the necessary resources and authority to carry out their dealings with corrupted officials and politicians.  Another necessary policy to fix the corruption issue is whistleblower protection.  The government needs to establish and enforce proper laws that protect whistleblowers who report corruption or other shady dealings within government.  These laws also preferably provide incentives and safeguards to encourage individuals to come forward with information.  A third and final potential solution is merit-based appointments.  The country should implement merit-based hiring and promotion processes in the public sector to reduce nepotism and patronage.  This process would require applicants to demonstrate certain skills and have specific educational or training qualifications in order to be hired.

By establishing clear criteria for job appointment to key positions based on qualifications and competence, the country will thrive and be able to make beneficial policy decisions. The government is actively trying to help the country with different policies or laws. However, when officials are constantly accepting bribes to not carry out these new policies, no policies can make an effective change.

This research paper has attempted to illuminate the different trajectories between Sierra Leone and Ghana, showing the differences between their respective political and economic landscapes.  By learning from Ghana's newfound success, Sierra Leone can develop and contribute to the border narrative of African development and sustainable growth.  This research paper has identified key factors contributing to Ghana’s success, including stable governance, addressing corruption, and commitment to infrastructure.  Sierra Leone would greatly benefit from using comparative analysis and adopting these factors previously mentioned in order to successfully achieve its development goals.