FOREIGN DIRECT INVESTMENT AND ECONOMIC DEVELOPMENT IN SIERRA LEONE: AN EMPIRICAL ASSESSMENT OF ITS ECONOMIC IMPACT FROM 2010 TO 2025

Autori

  • Dante Allie Bendu Dr., Fourah Bay College, University of Sierra Leone, Sierra Leone
  • Abu Kai Kamara Dr., Fourah Bay College, University of Sierra Leone, Sierra Leone
  • Musa Abdullah Kargbo Fourah Bay College, University of Sierra Leone Sierra Leone
  • Joseph M. Conteh Peking University, China

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https://doi.org/10.46827/ejefr.v10i5.2255

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foreign direct investment##common.commaListSeparator## economic development##common.commaListSeparator## Sierra Leone##common.commaListSeparator## institutional quality##common.commaListSeparator## extractive sector##common.commaListSeparator## enclave economy##common.commaListSeparator## transmission channels

Abstrakt

Sierra Leone presents one of the starkest disconnections in development economics: a country with abundant mineral wealth that in 2023 ranked 181st out of 193 countries on the UNDP Human Development Index. This article examines the relationship between foreign direct investment (FDI) and economic development in Sierra Leone across the fifteen-year period from 2010 to 2025, a window that encompasses the iron ore boom (2010-2014), the compound Ebola and commodity price crisis (2014-2016), the post-crisis recovery phase (2016-2020), and post-pandemic stabilisation. Using ordinary least squares regression with structural break tests at the identified turning points of 2014 and 2020, and drawing on World Bank World Development Indicators, UNCTAD FDI statistics, IMF country reports, and the World Governance Indicators, the study finds that FDI exerts a statistically significant positive effect on real GDP growth over the full study period, with the coefficient on FDI as a share of GDP estimated at 0.312. This aggregate result, consistent with Bah and Cooper (2022), Kougbaka and Korsu (2025), and Turay et al. (2025), masks substantial sub-period heterogeneity: the FDI-growth coefficient is positive and significant in the boom phase, turns negative and insignificant during the compound crises, and recovers partial significance during the post-crisis and stabilisation periods. Critically, institutional quality consistently moderates the relationship across all sub-periods, a finding aligned with Bah and Cooper (2022). The transmission channel assessment reveals that capital formation is the only channel operating with moderate strength; employment generation, technology transfer, export diversification, fiscal revenue capture, and domestic backward and forward linkages are all weak or absent. These findings carry direct policy implications: Sierra Leone requires a shift from maximum FDI volume attraction to quality-selective investment promotion, enforceable local content requirements, renegotiated fiscal regimes in the extractive sector, and deliberate institutional reform. The study contributes the first fully periodised empirical treatment of the FDI-development relationship in Sierra Leone across the 2010-2025 arc.

 

JEL: G11, G15, D81 E15

##submission.authorBiographies##

  • ##submission.authorWithAffiliation##

    Dr. Dante Allie Bendu, widely regarded as the father of accounting in Sierra Leone, was the country's first chartered and certified accountant to hold a doctorate. His qualifications include a BSc Honours in Accounting and Finance, ACCA, CIMA, FeICM, an MSc, an MA in Marketing and Management, and a PhD in Accounting and Strategic Management. A lecturer since 1986 and later senior lecturer at Fourah Bay College, University of Sierra Leone, he has taught undergraduate to doctoral courses and supervised numerous theses. Seconded to KPMG from 1988 to 1990, he leads on corporate governance through the APRM, has published in journals and textbooks, and heads the Sarante Experts Group Consultancy.

  • ##submission.authorWithAffiliation##

    Dr. Abu Kai Kamara holds a BSc Honours in Economics and Accounting, FCCA, CA, MSc, MPhil and a PhD in Accounting and Finance. A lecturer in accounting, finance and the wider management sciences since 1999, he has taught from first-year undergraduate level through to MSc, MPhil and PhD courses, covering financial reporting, auditing, investments, corporate governance and human resources management. He has served as Director of Finance and Administration and headed international projects in Sierra Leone, Malawi and elsewhere. He is now Director of Finance of the University of Sierra Leone, Dean of the Faculty of Economics and Development Studies at Fourah Bay College, a former Head of Department of Accounting and Finance, and the author of several textbooks and journal articles.

  • ##submission.authorWithAffiliation##

    Musa Abdullah Kargbo is a Master of Philosophy candidate in Accounting at Fourah Bay College, University of Sierra Leone. His research interests centre on national development, with a particular focus on public financial management, accounting, trade, policy development, and finance. He brings practical grounding in financial management, international trade and political development to his scholarly work, and his broader academic ambition is to bridge theoretical frameworks in accounting and finance with applied development practice.

  • ##submission.authorWithAffiliation##

    Joseph Momoh Conteh is a PhD candidate in Theoretical Economics at the Institute of South-South Cooperation and Development (ISSCAD), Peking University, Beijing, China (https://www.isscad.pku.edu.cn/). His doctoral research examines national development across several interconnected domains, including aid effectiveness, international cooperation, trade, ICT for development, public administration, policy development, and finance. His work seeks to advance economic theory while generating policy-relevant insights that inform sustainable development strategies across the Global South. His academic profile is available at https://ufl.academia.edu/JosephConteh and his ResearchGate profile at https://www.researchgate.net/profile/Joseph-Conteh-6.

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Publikované

2026-07-07

Číslo

Diel 10 Číslo 5 (2026)

Sekcia

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