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Determinants of Poverty in Sierra Leone, 2003

Working papers

Sierra Leone is a resource rich, but highly indebted poor country in West Africa. The

nature and depth of its poverty have not been well understood, as a devastating civil

conflict from 1990 to 2002 prevented the collection of survey data and damaged

Sierra Leone’s people, resources and economy. This paper models the determinants of poverty in Sierra Leone based on the 2003 Household Income and Expenditure Survey (HIES). An OLS regression model of poverty determinants is developed, and it is amongst the first papers to include war-related variables in its analysis.

The survey reveals that almost 80% of individuals in rural households were poor, and urban poverty outside the capital city of Freetown was also significant at 71%.

Poverty was also greater in the more remote districts. The analysis suggests that the

poor were less likely to be educated and more likely to work in agriculture, particularly in rice production. Cocoa farmers were also very likely to be poor, which could be explained by the neglected state in which the war left the plantations of this once income-generating export crop. Over 98% of households in the poorest quintile of the population indicated that they were affected by the war compared with 87% in the richest households. Sierra Leoneans viewed the war as a key factor in their poverty, despite the fact that the country was underdeveloped prior to the outbreak

of the hostilities.

Following a descriptive analysis of the correlates of poverty, a series of variables are regressed against household consumption to ascertain the factors that affect poverty, with separate models for Freetown, other urban areas and rural areas.

Determinants of poverty are found to differ among the models. Households in urban

areas were found to be generally better-off, even when controlling for other variables. Female education, in particular, both primary and secondary, was associated positively with household welfare, as was the number of women in the household. Agricultural work was associated with higher poverty in the rural areas, as was the cultivation of cocoa. The ownership of a farm without deeds was associated positively with household welfare, as was the area of land held.

One of the key findings of the survey is that the consequences of war are reflected in

poverty levels, and the association differs depending on whether the household is rural, urban or resides in Freetown. Rural households with war refugees are poorer

than others, whereas the loss or damage to property due to the war appeared to be

negatively associated with poverty only in the urban areas outside of Freetown. The

variables examined suggest that the effects of the war were not reflected in the poverty status of households residing in Freetown. The loss of property, having one’s house burnt down as a result of war and having a relative killed during the war all had a statistically significant negative coefficient in the urban (excluding Freetown) regression. The Government of Sierra Leone has begun to address a number of the issues raised here with the Poverty Reduction Strategy Paper (PRSP), finalised in 2005. In particular, the strategy has focused on strengthening governance, improving pro-poor growth and developing human capital (GoSL, 2005). However, there are some findings resulting from our analysis that should be addressed in future iterations of the PRSP, including specific programmes focusing on supporting war refugees and cocoa producers.

Sonja Fagernäs and Lindsay Wallace