COVID-19 hampers Sierra Leone’s fiscal consolidation gains – says World Bank Update

Sierra Leone Telegraph: 29 July 2020:

The COVID-19 pandemic has significantly impacted Sierra Leone’s medium-term growth prospects with the economy projected to contract by 2.3 to 4.0 percent in 2020 due to disruption in global trade, travel restrictions and domestic restrictions on mobility, according to the new World Bank Sierra Leone Economic Update launched on Monday in Freetown.

The report notes that fiscal and current account deficits are expected to increase due to increased crisis-related spending while inflation is also expected to rise.

The Minister of Finance, Jacob Jusu Saffa (Photo), launched the report which analyses recent economic developments and their implications for the country, as well as presents the medium-term outlook and prospects for the economy.

In his keynote address, Minister Saffa said the government has put in place robust policy measures to protect poor and vulnerable groups as well as maintain macroeconomic and financial stability to mitigate the impact of COVID-19 on the population.

“Through these interventions, the government is providing support to hardest-hit businesses to enable them to continue operations, avert employee lay-offs, and reduce non-performing loans. We are also providing vulnerable groups with safety nets and assistance for local production and processing of staple foods,” he said.

The minister added that in response to the current situation, the government introduced the Quick Action Economic Response Program in addition to the health sector COVID-19 Preparedness and Response Plan to reinforce the crisis response and facilitate economic recovery.

The report shows that COVID-19 has set back the government’s recent fiscal consolidation efforts and recommends in the short-term ramping up investments in public health, protecting the most vulnerable through cash transfers and other preventive measures in the context of limiting fiscal space.

In preparation for the long-term recovery, it recommends that policy measures should focus on structural reforms to accelerate inclusive growth and diversify the economy, as well as efforts to strengthen fiscal buffers, improve debt management and transparency, and deepen financial reforms will be key.

World Bank Country Manager, Dr. Gayle Martin (Photo), who chaired the virtual launch, noted that the COVID-19 crisis has had a negative impact on the country’s recent fiscal consolidation gains as loss of export earnings and lower foreign direct investment inflows have created a substantial gap in financing the balance of payments.

Dr. Martin welcomed government’s efforts to deal with the crisis and lessen its impact on people’s livelihoods.

The 2020 Economic Update takes a specific look at girls’ education and highlights that similar to the 2014 Ebola crisis, COVID-19 is likely to affect adolescent girls’ education prospects and their human capital potentials.

Evidence shows that adolescent girls are especially at risk when they are out of school as the risks of being married or having a child too early are magnified. In turn, child marriage and early childbearing make it hard for girls to later return to school, leading to long-lasting negative impacts.

The report identifies the need to prioritize investments in girls. With schools currently closed due to the pandemic, the study recommends as immediate priorities support to students and families to cope with the crisis and ensure that learning continues while they stay at home.

Two panel discussions were held: Panel 1 discussed ‘the Economic Impacts of COVID-19’ and featured Prof. Kelfala M. Kallon – Governor of the Bank of Sierra Leone, Sheku Bangura – Deputy Minister of Finance, Herbert M’Cleod from the International Growth Centre, and Errol Graham, Lead Economist at the World Bank as discussants.

The second panel discussed the topic, ‘Pathways to Scaling up Investment in Girls’ and attracted interventions from Michala Mackay representing the Minister of Education, child-rights activist Chernor Bah and Lead Economist Markus Goldstein from the World Bank.

The discussions were chaired by the Deputy Minister of Information and Communications, Hon. Mamadi Gobeh Kamara.

You can read the World Bank’s Sierra Leone Economic Update 2020 here: 

Sierra Leone Economic Update 2020 World Bank 

2 Comments

  1. The international financial institutions have always prescribed the medicine that our country needs.They have always been patient with our delinquent government’s ways of doing things in Sierra Leone. And this is going back to the Stevens government and all governments after that. The medicine they prescribed to cure our economic woes, unfortunately has always, and remains the same. It says it on the Tin. Llike fiscal consolidation, tackling corruption, transparency, diversification of the economy, such as investing in education, agriculture, good roads and taking care of the environment and the supply of good electricity. The IMF and other international bodies and NGOS have always supported us. Which is really what is needed for any hope in hell for our economy to bounce back from the ravages of this COVID19 pandemic. Our politicians are no strangers to these ideas.

    The trouble is, we are behaving like drug addicts that don’t want to give up their addiction, even though we know it is going to kill us. If we take the IMF as the doctor, we will go and pick up the prescription, in this case the IMF Loans. But once we get back home there is no mechanism to say we are taking the dosages as prescribed. We end up wasting it, or throw it away to Elephant projects that really don’t stand to benefit from the corrupt elites. They know the doctor is always out their ready to listen to their lies. Until we admit corruption has always, and remains the main stumbling block to our development, we will always go in circles. May God bless Sierra Leone.

  2. Gentlemen – dealing with the impractical JJ ‘The Hangman’ Saffa is no easy task at all,and to make matters worse the World Bank Country Director has no other choice but to frown and deal patiently with Governor Keifala Kallon whose ill-advised policies have put the livelihoods of small Forex traders in jeopardy allowing them to vanish like mists in the unruly wind,only to reappear every now and again whenever the coast was clear.The government of Sierra Leone is solely to blame for the resurgence of a thriving and robust underground black market for Forex that now operates efficiently in the shadows.These people are on wild goose chases,wasting precious time throwing hook and line without any bait attached to them into deep serene waters where big fishes can only be caught with seine nets and dredges.(lol)

    Might as well just throw in the towel – Nothing’s ever going to change or improve under the already failed direction and their insubstantial flimsy policies hatched and nurtured in the bosoms of tribalisms and incompetence.Government in power do you believe you are really capable and innovative enough to provide our people with daily jobs that pay normal wages, benefits and three square meals a day instead of one? Is it too much to ask that you get your priorities in order and quit putting carts loaded with obligations in front of the gallant horses that pull them?

    How long will you keep on recycling high interests loans that end up shackling generations yet for ages yet to come. When things were sunny warm and fine the inept SLPP couldn’t sows seeds of promise and hope,and who really thinks they can do it now with dark clouds and thunderstorms looming,and with Covid19 on the rampage wrecking havoc?

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