Sierra Leone’s economy recovering from Covid contraction but uncertainties persist – says new World Bank report

 

Sierra Leone’s economy is projected to recover from the COVID-19 contraction with real GDP expected to rebound by 3.0 percent in 2021, an upward revision of 0.8 percentage point relative to the 2020 forecast, according to the new World Bank ‘Sierra Leone Economic Update’ launched this week in Freetown.

The growth rebound is said to reflect the expected recovery of agriculture, mining and services following the easing of COVID-related restrictions and Government’s Quick Action Economic Response Program (QAERP).

The report shows that fiscal deficit almost doubled in 2020 due to a combination of revenue shortfalls and spending increases to support the Government’s pandemic response.

The deficit is expected to decline gradually to 2.4 percent of GDP by 2023 as COVID-19 related spending is reduced while revenue mobilization improves on the back of the expected economic recovery.

To strengthen fiscal sustainability, the report recommends that the authorities should quickly draw up a roadmap for fiscal consolidation, anchored by robust revenue mobilization and expenditure rationalization reforms, to return to the pre-pandemic (2018/19) fiscal path.

The authors also highlight the need for government to prioritize structural reforms for diversifying the economy, and these reforms should focus on creating an enabling environment for the private sector to support long-term economic growth and promote decent and quality jobs, which will in turn support determined domestic revenue mobilization.

“It is a welcoming development that Sierra Leone’s economy is slowly recovering from the devastating impact of the COVID-19 crisis, and we are encouraged by the government’s efforts to deal with the crisis and lessen its impact on people’s livelihoods,” said Abdu Muwonge, World Bank Country Manager for Sierra Leone (Photo alongside president Bio)..

“However, improving and sustaining the country’s growth prospects will require further attention to policies that strengthen the quality of service delivery in the social sectors, and we remain committed, together with development partners to supporting efforts that aim at an effective turnaround of the economy.”