Agriculture in Sierra Leone is a critical component of the economy but is characterized by mostly rainfed subsistence farming with low productivity, limited farming inputs, and the use of outdated technologies. Rice is the main food crop farmed in Sierra Leone, followed by cassava, sorghum, maize, millet, sweet potato, groundnut etc. Major perennial tree crops include oil palm, citrus, sugarcane, cocoa, coffee, and coconut. Common livestock categories include cattle, sheep, goats, pigs, and poultry. Marine fishing is also a major sector. Some commercial agricultural companies are operating in sectors such as bio-fuel production, palm oil, timber, rice and sorghum production, canning pineapples, and agriculture machinery contracting services. There are five distinct agroecological zones (AEZ) in Sierra Leone, which vary by rainfall, soil type, altitude, etc. Factors such as rainfall dependency (for farming) and vulnerability to seasonal flooding vary significantly between these AEZs and to that extent, the types of climate risk insurance (CRI) products, which may be suitable, would also vary by AEZ and by the type of value-chain and risk exposures faced by micro and meso-level clients. The most significant climate risk in Sierra Leone is flooding, which includes both flash flooding and river flooding. Drought and dry spells are also significant risks, particularly for small-scale rainfall dependent agriculture. Landslides and fires are also significant risks, which are also sometimes triggered by climatic events, such as excessive rainfall and extreme heat waves.

The rainy season runs from May to November and is suitable for growing crops such as rice, cassava, sorghum, maize, millet, sweet potato, and groundnut. The dry season lasts from December to May and is characterized by cool, dry winds from the Sahara Desert. During this season, some farmers grow perennial crops such as oil palm, citrus, sugarcane, cocoa, coffee, and coconut.

Women represent about 70% of the agricultural labor force of Sierra Leone and they play an important role in natural resource management and food production. Despite the critical position and contribution of women in agriculture, women are often discriminated against ownership, access to, and control of land, and most importantly, women do not realize the economic impact of their agricultural activities. This is largely because of discriminatory, customary, and statutory laws that favor men over women. To revitalize the country’s agricultural sector, the government of Sierra Leone with support from the World Bank and other partners has launched several initiatives to help equip young people, especially women, to transform the agricultural sector and enhance economic growth. Some of these initiatives include the Sierra Leone Agri-Business Initiative (SABI), the Smallholder Commercialization and Agribusiness Development Project (SCADeP), and the Inclusive Comprehensive Agricultural Development Programme (ICADEP).

As of July 2023, there are 12 insurance companies, 1 reinsurance company, and 16 registered insurance brokers operating in Sierra Leone. There are currently no reported agricultural or climate risk insurance products available, although there is already an active interest from at least 2 insurance companies (Activa and Aureol) for introducing CRI products. There is also an interest from some insurers for developing microinsurance products in general (e.g., for health, and life) and for developing products related to machinery breakdown (e.g., for commercial farming) and also for developing CRI products for smallholder farmers, including key climate risks such as flooding and drought. There is further scope for bundling such products (e.g., excessive rainfall coverage) with existing policies, such as fire insurance for MSMEs, which would also be applicable in urban areas, such as Freetown. There are no specific regulations for microinsurance, agricultural, or index insurance currently. However, the insurance regulator is supportive of disaster risk insurance in general and there are no restrictions on the bundling of CRI with other insurance products and other services, such as loans or inputs. There is generally good access to reinsurance companies, including many of the major regional reinsurers.

The Ministry of Agriculture (MoA) and the Ministry of Finance (MoF) seem to be supportive of climate risk insurance in principle and CRI is also a component of the disaster risk financing strategy, which the government is working on with the World Bank currently. CRI products covering key crops, such as Rice and Palm Oil, would be in line with crops that are of strategic interest to the government.

Some weather data is available from the Sierra Leone Meteorological Agency (SLmet) but in general, there are severe challenges with accessing sufficient historical and operational datasets for product design, pricing, and claims settlement. However, multiple satellite-based weather datasets could be used for developing and implementing weather index insurance. From the detailed analysis of multiple satellite datasets for rainfall risks (e.g., excessive rainfall and drought/dry spells), which was conducted in the course of this study, Integrated Multi-satellite Retrievals for GPM(IMERG) is recommended when developing rainfall-based index insurance products although support from additional satellite-based rainfall datasets (e.g., CHIRPS and TAMSAT in particular) may be useful to help identify adverse rainfall conditions. For temperature risks (e.g., heat waves), although the 2-metre temperature from ERA5 shows only moderate agreement with the station observations, the known excellent skill of ERA5 temperature in other parts of Africa indicates that it is still likely to be useful for developing temperature-based index insurance products over Sierra Leone, especially away from coastal regions.