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New World Bank report attempts to explain why some areas in the country are poorer than others and the role urbanization plays in poverty reduction.
Sierra Leone faces many challenges in improving the welfare of the population, but increased investment in education provision and quality skills can help more Sierra Leoneans access formal opportunities which could lead to improvement in living standards and reduction of poverty, according to the new World Bank Sierra Leone Poverty Assessment launched today in Freetown. The report reviews the country’s track record in reducing poverty and improving livelihoods and wellbeing of citizens through temporal and spatial lenses. It includes deep dives in several areas, including structural transformation, public and private services access, rural poverty, and secondary cities.
Official poverty rate in Sierra Leone in 2018 was 57 percent of the population. The incidence of poverty varies significantly across the country, ranging from 23 percent in Greater Freetown to 49 percent in other urban areas, and 74 percent in rural areas. The geographic dispersion of poverty is wide, with the Northern Province experiencing the highest rate of poverty (77 percent) and the Greater Freetown area experiencing the lowest rate (23 percent), the report notes.
“If education is a barrier towards accessing opportunities especially in the capital and other urban cities, then increased investments in the sector throughout the country could be a plausible pathway in ensuring that citizens are equipped with the knowledge and skills that make them suitable for the job market, thus improving their socio-economic wellbeing,” said Abdu Muwonge, World Bank Country Manager for Sierra Leone.
A key finding from the analysis is that, though Sierra Leone faces multiple challenges in meeting the welfare needs of its citizens, there is also an untapped opportunity in investing in secondary cities. The report attempts to explain why some areas in the country are poorer than others and the role urbanization plays in poverty reduction. As in other low-income countries, growth does not necessarily translate to poverty reduction and GDP per capita does not tell the whole story. Many countries achieve lower rates of poverty than predicted by their GDP per capita, likely because they have good economic and social policies and effective institutions, the report found. Middle-income countries (often with economies that have started on the path of structural transformation) appear to be especially successful in achieving lower rates of poverty, possibly due to enhanced productivity.
Over the past decade, the main driver of poverty reduction was strong growth in urban areas as evidenced by a large poverty decline. An estimated 43 percent of Sierra Leone’s population lives in urban centers. The report notes that though the number of private sector jobs increased in urban areas, many of them are non-wage low-productivity jobs in retail trade and to a lesser extent in transport, construction, and food services. Population growth is exacerbating pressures on the urban economy, as the number of youths entering the labor force is growing rapidly. Low investment in urban infrastructure may be constraining economic growth in cities and towns and, consequently, improvements in welfare.
As policy priorities over the short to medium-term, the report identifies that government has an opportunity to increase growth and improve welfare by: (a) investing in human capital, (b) investing in secondary cities to make them more productive, (c) increasing communication and connectivity between outlying rural areas and secondary cities to improve rural welfare, (d) continuing to aim for universal provision of basic services, including in small villages, (e) developing and improving agriculture as this will play a critical role in poverty reduction as about 80% of the rural population relies on agriculture. The authors believe this approach can yield externalities that benefit both rural and urban populations in a fiscally responsible way.
“Secondary cities could provide non-farm employment opportunities, which can lead to income diversification and higher productivity. Given that a large share of Sierra Leone’s population depends on farming and that the majority of the poor are involved in it, these benefits hold promise for reducing poverty,” said Paul Corral, World Bank Senior Economist and co-author of the report.
