By Lansana Fofanah.
The World Bank Country office yesterday launched the Sierra Leone Economic Update (SLEU) report for 2017 which analyzes recent economic developments and policies within medium-term, regional and global contexts and their implications on these developments and policies for the outlook of the economy at the Radisson Blu Hotel, Aberdeen, Freetown.
The SLEU report which was jointly prepared by the World Bank Sierra Leone Macroeconomics Trade and Investment team and the Social, Urban, Rural, and Resilience Practice team, aimed at policy makers, business leaders and organizations, analysts interested in Sierra Leone’s economy, and representatives of civil society.
“After recovering in 2016 from the twin shocks of the Ebola Virus Disease (EVD) epidemic and collapse of iron exports Sierra Leone’s economy witnessed sharp moderation in growth in 2017, reflecting weak recovery of mineral production, particularly iron ore. Economic growth remains volatile as a result of a lack diversification in the economy due to a dependence on the mining sector. Macroeconomic imbalance also worsened in 2017 due to high levels of fiscal deficit and rising debts, inflationary pressure, a fragile banking system, and current account pressures. Stabilizing the macro economy is precondition for inclusive growth and poverty reduction. Key macroeconomic and sectoral reforms will need to be implemented to reduce the imbalances and to avert downside risks to economic growth”, the report revealed.
Giving her keynote address, the World Bank Country Manager, Dr. Gayle H. Martin said that her initial stay in the country has given her an in-depth knowledge about the activities and influence of World Bank to the development of Sierra Leone’s economy.
Dr. Martin said that the reports analysis the fiscal pressure, the inflation challenges in the country and proffer factors that could help for the growth of the economy.
The Minister of Finance Jacob Jusu Saffa said that the report is imminent in providing a baseline for the Bio administration since it highlights and addresses various sectors of the economy.
Minister Saffa said that since the country’s growth is at 3.7 percent, President Bio has instituted measures that will give a facelift to the economy of the country. He said that as at March 2018, the Government owes Ministries Department Agencies the sum of Le, 10.8Trillion which is equivalent to US$1.4Billion dollars which the government is fighting hard to settle so that more attentions could be given to other services.
“We have instituted measures like the diversification of the economy, prudent management of government spending, tight monitory policy, the setting up of Presidential Infrastructure Initiative, empowering the agric sector, tourism and the Treasury Single Account and currently, there is a legal framework going on to look into tax exemption. All these will go a long way in addressing the challenges raised in the report”, the Minister said.
Commenting on the need for external debt, the Minister said that the government can only considered any external loans based on the concession and terms and conditions that are favorable to the people of Sierra Leone.
Mr. Kemoh Mansaray Senior Economist World Bank said that the banking industry remains stable but fragile as government commercial banks are carrying large loans in their portfolios.
He said that in 2017, the government exceeded the 2.3 percent domestic borrowing policy and spent more than what the country was generating due to sharp depreciation in 27% of the Leones. He said that the World Bank has projected the growth of the economy to 6.5 by 2020 but that projection will be reviewed in September since the mining sector is yet to fully recover.
Addressing the growing trend of Freetown, the Mayor of Freetown Her Worship Evonne Aki Sawyerr said that the Municipality was created for four hundred thousand people, but now that number has the propensity to grow to two million in 2020 which calls for proper planning.
“We need to have a proper tax collection scheme so that people will be willing to pay their taxes due to justification”, the Mayor said.
The Practice Manager World Bank MR. Abebe Adugna said that the GDP of Sierra Leone which is 11% is far below the 17% threshold for Sub-Sahara countries and among the Mano River Countries. “Malawi was able to bring inflation to a single digit in a year due to tight monetary policy”, he said.