Sierra Leone Telegraph: 18 June 2020:
The World Bank has today announced that its Group Board of Executive Directors has approved a $100 million grant from the International Development Association (IDA), to support the government of Sierra Leone in promoting sustainable and inclusive growth, and building economic resilience.
This Development Policy Financing (DPF), the World Bank says, supports ongoing reforms to enhance macroeconomic stability, increase productivity in agriculture and fisheries, promote transparency in public procurement, and build an effective asset disclosure system to fight corruption and improve public sector accountability.
Gayle Martin, World Bank Country Manager for Sierra Leone (Photo), said: “This financing will help address fiscal challenges and improve overall governance to build resilience and enhance the delivery of services to the people amidst this global COVID-19 pandemic.
“Sierra Leone’s opportunities to eradicate extreme poverty and boost shared prosperity rest on sustained macroeconomic stability, robust growth and a solid enabling environment for the exploitation of its abundant natural resources.”
Today’s announcement says that the program focuses on two primary objectives: creating the conditions for increased productivity in selected economic sectors; and improving transparency in selected government decision making processes.
“The World Bank continues to support the Government’s commitment to tackle difficult and needed reforms to promote inclusive growth,” said Youssouf Kiendrebeogo, World Bank Senior Economist and Task Team Leader.
Prior to the COVID-19 crisis, Sierra Leone’s economy grew by 5.1 percent in 2019, driven mainly by robust activities in agriculture and services. With the spread of the virus in Sierra Leone and the effects of the global pandemic, the economy is expected to contract by between 2.3 and 3.1 percent in 2020, and growth could be 1.4 to 2.0 percentage points lower than forecast for the medium term, the World Bank says .
Today’s announcement also mentions that the downside risks to this outlook are also heightened, depending on the duration of the global pandemic and the implications for the opening of borders and markets for Sierra Leone exports as well as essential imports, including food.
An extended crisis could lead to major disruptions in the service sector (trade, tourism and transportation in particular) with substantial job losses and increased poverty. A key challenge for the Government is to diversify the economy to raise real per capita growth above the population growth of 2.1 percent in order to ensure that the gains in reducing poverty and inequality are sustained, the World Bank warns.
According to the announcement, this is the last operation in a programmatic series of three operations to support the implementation of the government’s priorities articulated in its Medium-Term National Development Plan (2019 – 2023).
In April the government published its COVID-19 strategic economic response budget requirement. It said it will cost over $300 million to implement.
Today’s announcement by the World Bank brings total financing of the government’s budget requirement close to over $250 million received so far, with the approval of a $143 million loan by the IMF two weeks ago, in addition to a $11.2 million grant received from the European Union.
With such access to massive funds, many in Sierra Leone believe that the Bio-led government has no reason now to keep blaming the former government for the country’s lack of economic progress.
President Bio has been in office for over two years, and since then, his government has received hundreds of millions of dollars in either international grant funding or increased public debt, amid rising unemployment and poverty.
Where has all that money gone?
The majority of people in Sierra Leone are yet to see any meaningful change in their standards of living, despite promises by the government. Blaming COVID-19 is not a politically wise option for the government.
As the World Bank warns the government today, diversifying the economy is the only option for the government if it is to promote economic growth, employment and private sector led wealth creation.
Can the Bio-led government succeed where the former Koroma led APC government failed woefully?