Resident Representative of the International Monetary Fund (IMF) in Sierra Leone, Dr. Iyabo Masha, has predicted a 5.1% growth in Gross Domestic Product (GDP) in 2019 for the country.
Dr. Masha was speaking to economists and newsmen on Monday, 3rd December, 2018, in Freetown at their Bi-annual IMF seminar on the 2018 report on ‘Sub –Saharan African Regional Economic Outlook ‘Capital flows and the future of Work.’
“IMF is going to release 172 million dollars to spread over 6 disbursement, and we are expecting that with the new policies been implemented by this government, the outlook for growth will be brighter than it has been. So next year, we are expecting 5.1% growth in GDP for Sierra Leone,’’ she said.
She told the gathering at the Ministry of Finance conference hall on George Street in Freetown that the seminar was to look at the development in Sub –Saharan Africa (SSA), as a region in terms of the economy and to see the economic future of Sierra Leone.
“The past few months, there has been a wake up in many African countries coming out of a deeper recession that some countries went through in 2015,’’ Madam Masha said.
She further noted that despite the growth in Africa, they foresaw some risk going forward as the size of debt kept increasing.
“Now we are seeing that many countries are at risk of debt distress at double digit. Just two years ago, the average debt in Sub Saharan Africa countries was 37% of GDP but now, this year 2018, it has risen to 47% of GDP debt given that we have projected growth of around 3.1%of GDP,’’ she said.
Madam Masha revealed that they were concerned that many African countries might not be able to meet their debt obligation, noting that they have seen lot of differences in the resource rich countries like the oil exporters, the non-resource countries that are rich in other resources like Zambia which is rich in copper.
“Whatever the difference, our the concern is that countries are moving towards a situation where the burden of paying debt, the burden of giving up more than 10% of their revenue to pay for interest on debt is going to be too much and they may not be able to put in the required resources into education, health and other social services. So the policy advice we are giving is that countries should more conscientious about revenue mobilisation,’’ she said.
Governor of the Bank of Sierra Leone, Prof. Kelfala Kallon, remarked that government will create the enabling environment for investors and business people and that they will continue to enforce the rules of the bank and to make sure anybody’s ‘reckless act’ that has the potential of throwing the economy into disarray, will face the stiffest resistance.
“In terms of foreign direct investment, all that is required of us is to be a good government, to do the right things, to make sure that we reduce corruption, to make sure that we reduce the cost of doing business in this country,” he said, noting that by that foreign investors will have confidence in the country’s economic system.
The Governor said his job was to keep the Leones strong and to encourage more investors into the country, adding that he would work hard to restore the economy.
Financial Secretary, Sahr Lahai Jusu, expressed commitment that the new government would borrow towards a more responsible and sustainable drive to boost the economy.
“We have over drafts but what we have done is to minimise those over drafts and rely on domestic revenue mobilisation which will help us to consolidate the finances of the state,’’ he said.
Mathew Sandy, Senior Economist in IMF Resident Representative Office said the world’s Labour force has transformed from agriculture to services and industry.
“If technology substitutes Labour, it can boost GDP when labour cost shares are high. Labour cost share drops steeply in advance economies compared to SSA and Vice Versa,’’ he said.
Sandy said SSA countries growing population and labour force is projected to nearly double in the next two decades, from approximately 900 million in 2015 to 1.7billion in 2040, noting that as the labour force increases, there is need to create 20 million jobs each year.