Sierra Leone’s economy set to grow in 2019 to 5.1 percent from 3.5 percent – says IMF

Sierra Leone Telegraph: 15 November 2019:

An International Monetary Fund (IMF) mission, led by Karen Ongley, on Wednesday completed its 2019 Article IV consultation with the authorities in Sierra Leone; as well as its second review of its financing arrangement with the government, under the Extended Credit Facility (ECF), which was approved by its Executive Board in November 2018.

The IMF review comes amid rising concern, both at home and abroad, about the continuing economic hardship facing the people of Sierra Leone, after decades of poor governance, misallocation of resources, and rampant corruption.

Although the country’s economy saw a 20% drop in economic growth in 2013-2015, as a result of the twin economic shock caused by the Ebola virus and falling global market prices for iron ore – the country’s main export earner, rising government debt levels to almost 80% of GDP have had greater impact on the economy.

The current government, led by President Julius Maada Bio (Photo) which came to office in May 2018, is facing serious challenges, trying to manage an almost bankrupt economy.

Following its review of the economy last Wednesday, the IMF head of Mission to Sierra Leone – Ms. Ongley, issued the following statement:

“The economy is continuing to recover, with economic growth set to pick up in 2019 to 5.1 percent, up from 3.5 percent in 2018, buoyed by improved activity in agriculture, mining, and construction. While external accounts have improved, the current account deficit is expected to narrow to 14.1 percent of GDP from 18.7 percent, and exchange rate pressures remain, in particular during the lean season in the third quarter of the year.

“Overcoming the legacy of prolonged economic instability and numerous shocks, and improving the wellbeing of Sierra Leoneans remains challenging.

“In this regard, the Government’s National Development Plan (NDP) promises to put the country on a sustainable development path. It aspires to develop human and physical capital, while strengthening governance and accountability to build an economy that is macro-economically sound, inclusive and resilient to shocks.

“However, the authorities are pursuing this plan against a tight financing situation. Pursuing these important goals—boosting education, health, agriculture, and infrastructure—will require carefully calibrated policies.

“Progress under the ECF-supported program has helped stabilize the macroeconomy—vital as a launchpad for the NDP’s goals. The Government met all of the end-June 2019 quantitative performance criteria and indicative targets—net credit to the government and net domestic assets of BSL by large margins. They also met the indicative targets on domestic government revenue, poverty-related spending, and the domestic primary balance.

“The authorities made headway on structural reforms, such as by submitting draft amendments to the National Revenue Authority Act for IMF staff review, finalizing the stocktaking of domestic arrears in September, and publishing the forensic audit report in June. Steps toward developing a remedial action plan to address the findings of the forensic audit are advancing well.

“We appreciate the open dialogue on the 2020 budget, which strikes a balance between meeting priority spending needs and navigating the tight financing situation. To this end, the Government’s efforts to mobilize domestic revenue are advancing well, thanks to significant tax administration measures, such as operationalizing the Integrated Tax Administration System (ITAS).

“Looking ahead, continuing to generate strong revenues to finance Sierra Leone’s large priority spending needs requires a mix of both tax policy and administration reforms. The IMF team welcomes the Government’s committed efforts to promote more efficient spending and improve public finance management.

“Planning arrears clearance—most of which originated in 2016/17—in a manner that is transparent, equitable, fiscally sustainable, and limits the risks to financial stability is an important step in this direction.

“Ongoing efforts to bolster the independence and effectiveness of monetary policy will support the Bank of Sierra Leone’s (BSL) objective to bring inflation down to single-digits in the medium term. Limiting recourse to domestic bank financing of the budget will reinforce efforts to achieving this goal.

“Maintaining a flexible exchange rate system and continuing to build foreign exchange reserves will boost resilience to economic shocks, while the impact of recent foreign exchange directives should be closely monitored.

“The Government and the IMF team reached preliminary agreement on macroeconomic and financial policies that could pave the way for the IMF’s Executive Board to consider the second ECF review, scheduled for January 2020. Completion of the review would make available SDR 15.56 million (US$20.0 million), bringing total disbursements under the program to about SDR 46.56 million (US$62.2 million).

“The IMF team met with a range of government representatives – including President Bio, Minister of Finance Saffa (Photo), Minister of Planning and Economic Development Kai-kai, Bank of Sierra Leone Governor Kallon, Auditor General Taylor‑Pearce, Minister of Youth Affairs Bangura – as well as representatives from private and financial sectors, civil society organizations, and development partners. We thank all our partners for their warm hospitality, and constructive and rich discussions.”

Last Friday, 8 November 2019, the country’s finance minister – Jacob Jusu Saffa presented the government’s Budget for next year to MPs in parliament which was this week approved and has become law.

What this means is that the government can now proceed with its plans to reduce inflation; increase export earnings to stem the decline of the value of the Leone; stimulate investments in the manufacturing sector; boost tourism; promote more business start-ups through a new micro-credit programme; employ more nurses, teachers, and police officers; and engage thousands of young people in farming and reforestation.

The government is hoping that by this time next year, Sierra Leone’s economy would have returned to its pre-ebola growth trajectory, with greater stability and green shoots of recovery.

7 Comments

  1. I once saw a hungry caterpillar dressed in green,munching furiously,and tirelessly on some fresh green leaves,kinda like the way freeloaders like Saffa and Francis are gobbling down huge salaries for doing absolutely nothing,while the poor masses continue to suffer,languish in poverty,and die of starvation. Oh mercy,mercy,me! In another instance,I was shocked out of my wits,to see a giant caterpillar neatly dressed,again in green,angrily chewing and devouring an elegant bunch of red fragrant roses,just like Maada Bio is now doing to leaders,and members of the APC, because he is desperate to become a magical butterfly that rises, soars and flies away.(lol)

    Patience in all things is a virtue,gentlemen! Greatness comes in due time,in rotating seasons chosen by the prudent hand of the divine.To put it simply,the process through which caterpillars are transformed into butterflies that ascend to the heavens,and sit on thrones of light,is a gradual and tedious one. See Mr Boima,I am already a Red Butterfly,an Admiral to be precise, that can out-soar,and out-fly any caterpillar in the world,because they are crawlers that don’t have wings.(lol).

    Your empty childish threats,and evil pronouncements towards me,are just laughed at and shrugged off – the SLPP can’t do anything to me;nope,not a damn freakin thing! They are sell-outs and criminals,and people of such questionable character can’t tell me anything! Rising Sun Will Rise Again.

  2. Mr Saidu Conteh is a hard-hearted APC supporter that any thing good/positive that the current SLPP led government is doing is a sham, nothing to write good about etc, and also condemning the western democracy nations and financial institutions despite his residence in those very western countries all his life time and enjoying there excellent medical, educational, technological, financial institutions and standard of living etc and these western nations and institutions are trying to help those less fortunate to better their soci-economic welbeing/welfare because they know from hindsight to be their brothers’ keeper.
    Shame on you Mr Conteh and I hope that these nations will take notice of you and kick you of their midst as they did to Micheal Golley in the UK during the pick of the civil war in mama Sierra Leone. If you dont change your negative criticisms of others especially the current SLPP led administrations because they are not your APC party. you should be held to give account one day and being kicked-out of where you are living. A word to the wisw is quite sufficient

  3. Another CHRISTMAS and NEW YEARS present in the making for our beloved country by the IMF. More DEBT. That is really unfortunate and SAD. I hope the Bio Administration will refuse their offer this time around. It’s time for the IMF to stop putting our country into financial difficulties with these never ending debts. Are they not tired of lending my country knowing very well it can’t pay back? What a shame. There will come a time when we will renegotiate all those agreements with the IMF and ask them to go. AMEN AND AMEN.

  4. Absolutely agree this is a bare-faced, impudent lie. It’s time to tell the effing IMF to pack their criminal belongings and other useless gadgets and,” CLEAR OFF!!” The IMF, World Bank and WTO are our triple enemies, yet they profess to be our friends. Wolves, they are, disguised in the clothing of harmless sheep. Their main objective is to create and maintain an enduring trend of abject poverty across the African continent, for scores of years, yet to come. Why? To give themselves,the advantage in financial and economic relations and negotiations worldwide. Another reason? Because your skin is as black as charcoal polish? They are racists? Damn straight!

    You wanna know how the Europeans and Americans keep on getting richer? Yup! Well it is by exploiting Africa. True. The IMF will go to great lengths to ensure our natural resources, end up at the doorsteps and backyards of their major partners, the United States and United kingdom. And if only you can find the courage to plunge boldly into the past and reexamine the relationship of African Countries and the IMF, you will notice, that nothing much has changed – we keep on borrowing, and paying high interest loans and our people keep on starving and dying of extreme poverty. Absolutely nothing has changed, except that the dimensions and levels of poverty has gotten extremely worse. What’s wrong with Saffa? You think you can connive with the enemy to paint us a favorable economic picture that is a total sham and get away with it, because most of our people are uneducated? Well think again, because the only suckers out here are those caterpillars dressed in green, singing you loud undeserved praises…Rising Sun Will Rise Again.

  5. Am I the only one having doubts over the title “SIERRA LEONE’S ECONOMY SET TO GROW IN 2019”. Is this a typo mistake or it is actually what the IMF representative said as reported in this article? Well 2019 is almost gone. We have but 45 days remaining. The Economy is bad and there is no light at the end of the tunnel. So what is the empirical evidence that the IMF is basing its prophesy on? Things do not just add up and I hate it when politicians think that they can continue to lie to people just for political expediency. This is a lie!!!

  6. The only credible organization that has the mandate to rate countries economic performance is the IMF just like FIFA having the mandate to rate countries performance in Football. The new direction government achieved the conditions set by FIFA few months ago and this week to play a match behind closed doors, so we now qualify to be amongst respected Football Nations around the world.

    This 2019 IMF economic report just proved that the New Direction government is heading in the right direction by also fulfilling all their conditions after the past APC government destroyed our economy for their on personal gains after Sierra Leone was the fastest growing economy in 2012 . Instead of saving the money for rainy days, they used it to build private mansions and sprayed most of the cash on their supporters to “wet the ground “ and that’s why presently “D Gron Dry“.

    The people of Sierra Leone need to stay the course and stop listening to the destructive APC propaganda which is bent on copying from the chaos taking place in Guinea that are having political problems because the President is trying to change the constitution by extending his terms. I personally predict that the APC party members and supporters will definitely try to destroy this positive result instead of celebrating.

  7. A Happy Christmas and Prosperous New Year to Sierra Leone. My wish for the country is that a million trees are planted in Freetown, not only to enhance her natural beauty but more importantly to prevent floods. God bless Sierra Leone.

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