Financial Risk in Sierra Leone - Running head Financial...

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Running head: Financial Risk in Sierra Leone Financial Risk in Sierra Leone Jenny Shen International Business 113 Financial Risk in Sierra Leone Sierra Leone is an extremely poor country with tremendous inequality in income distribution. Sierra Leone contains a least developed country in western Africa. The country is still recovering from the effect of 1991 civil war and the main economic indicators still lag behind the averages for sub-Saharan Africa (SSA) and even other
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fragile SSA countries. GDP and economy system Sierra Leone’s Gross Domestic product (GDP) in 2009 was $2.0 billion. The country’s real GDP growth rate has been decreased from 2006 to 20010. (Table 1) in 2006, real GDP was 7%, but the real GDP is down to 4% in 2010. Which means the economy in Sierra Leone has been depressed over in past two decades and the economy suffers from low production, poor export performance, large budget deficits, shortage of essential goods, deterioration of infrastructure, inability to service external debts, a pervasive parallel market, an influx of refugees from the civil war in Liberia, and inflation. Inflation rate and labor cost The inflation rate in Sierra Leone has been increased for past three years. The inflation rate was increased from 1.0% to 11.7% from 2007 to 2010. (Table 2 & 3) Which means the prices in Sierra Leone goes up, demand goes down, and unemployment goes up. The unemployment rate is about 65 percent in Sierra Leone. The minimum labor cost in Sierra Leone is set at $ 10.50 per mouth with 38 hours standard workweek. The low labor cost and
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