The Effect of Local Content Policy (Lcp) on Economic Growth in Sierra Leone, 2015–2025

This paper estimates the association between the implementation of Sierra Leone's local content policy (LCP) and sectoral economic growth over 2015–2025. Using a balanced panel of six sectors (mining, construction, agriculture, manufacturing, tourism and energy) observed annually, giving 66 sector-year observations, we regress sectoral output growth on a composite LCP implementation index. The models control for sector investment, export intensity and inflation, and absorb sector and year fixed effects. The baseline two-way fixed-effects estimate is positive: a one-point rise in the 0–100 index is associated with 0.20 percentage points higher output growth (HC1 p = 0.007; wild cluster bootstrap p = 0.013), or about two percentage points for a ten-point rise. The estimate is similar when 2020 is excluded (0.16). Among the index components, the evidence points to local firm participation (0.07; bootstrap p = 0.037) rather than local procurement or local employment shares. The result is not robust, however. It disappears when the index is lagged by one year, and no within-year association is found with the log value-added index once common time effects are controlled. We therefore read the evidence as suggestive of a contemporaneous but short-lived growth association, not as proof of a causal long-run effect. With six sectors and eleven years, the study is a transparent first quantitative assessment rather than a definitive evaluation. We discuss measurement, data-consistency and identification limits, and draw implications for the design, monitoring and phased review of the Local Content Agency Act 2016.