By Chernor Alimamy Kamara
Sierra Leone’s economy is expected to remain resilient over the medium term, with a projected growth of 4.7 percent in 2024 and 5.2 percent in 2025, according to the Minister of Finance Sheku Ahmed Fantamadi Bangura while presenting to Parliament the 2024 Budget.
The minister stated that such economic growth will be driven by increased investment in agriculture, mining, and continued recovery in the services sector.
Inflation is expected to ease by 23 percent by the end of 2024 and further decline over the medium term as the tight monetary policy stance is sustained and supported by prudent fiscal policy, Bangura stated. He said that the anticipated decline in global food and energy prices and increase in domestic food supply will also contribute to lowering inflationary pressures.
He noted that the current account deficit is projected to shrink to 4.2 percent of Gross Domestic Product (GDP) in 2024 and further to 2.9 percent of GDP in 2025, as the trade deficit narrows. He explained that official foreign reserves are programmed to stay above 3.0 months of import cover in the medium term, supported by official inflows and private transfers.
The exchange rate is expected to depreciate by the difference between inflation in Sierra Leone and that of major trading partners. He said that given the projected decline in inflation, the depreciation of the Leone is expected to moderate in 2024.
He however reiterated that the outlook of the economy is susceptible to several significant downside risks such as spillovers from ongoing geo-political tensions, economic fragmentation, and escalation of the Russia-Ukraine crisis, prolonged weakening of the Chinese economy, potential collapse of the prices of key export commodities, continuous depreciation of the exchange rate, and declining international donor support.
“Moreover, an escalation of the Israeli-Palestine conflict poses a major threat to global economic cooperation, which could also significantly weigh on global growth prospects,” he said.
The budget process in Parliament provides a platform for Parliamentarians to critically look at how resources will be mobilized and allocated to ensure that the government is able to fully implement its aims and aspirations for the year.
Copyright © 2023 Politico (15/11/23)
