In Sierra Leone, the cost of fuel has been steadily rising between 2022 and 2023, reaching a staggering 43 percent increase compared to prices from 12 months ago, according to the World Food Programme (WFP) Quarterly Market Bulletin.

The prices of gasoline, diesel, and kerosene fuels have remained stable in the first quarter of 2023. However, the WFP warns that the regulated prices set by local authorities may lead to even higher price hikes in the future due to the depreciation of the local currency against foreign exchange values.

Despite attempts to regulate fuel prices, the current cost of 1 litre of gasoline, diesel, and kerosene fuels stands at NLe21,500 in Sierra Leone. This increase in fuel prices has significant implications for the country’s smallholder farmers, whose livelihoods depend on the agricultural sector.

Since agriculture constitutes over half of the nation’s gross domestic product (GDP), the rising costs of transportation hinder smallholder farmers’ ability to bring their produce to markets and access essential inputs like fertilizers, seeds, and livestock feed. This barrier to economic growth poses a challenge to Sierra Leone’s sustainable development.

Furthermore, the local currency, the Leone, has experienced significant depreciation against the US dollar and other major currencies in global markets during the first quarter of 2023. As of the end of March, the exchange rate stood at NLe21.220 against 1 US Dollar, marking a 78 percent depreciation over the past year.

In an attempt to stabilize the currency, the Central Bank of Sierra Leone removed three zeros from its denomination in July 2022. However, this measure proved ineffective as the country’s economic recovery path was disrupted.

Sierra Leone heavily relies on imported goods for manufacturing production inputs, household expenditures, and essential commodities like food, medical supplies, and fertilizers. The ongoing depreciation of the local currency directly impacts the vulnerability of local households, as their income levels remain stagnant while expenditure costs continue to rise. This economic strain has significant implications for the country’s overall development.

Although Sierra Leone’s economy showed signs of rapid recovery with a 4.1 percent growth rate in 2021, the declining performance of key economic indicators prompted institutions such as the International Monetary Fund (IMF) and Fitch Ratings to lower their projections for the country’s 2022 GDP growth rate in the later months of the year. These challenges further highlight the need for effective economic measures and strategies to mitigate the impact on Sierra Leone’s population and foster sustainable economic growth.