Recent Developments & Prospects
Economic Cooperation, Regional Integration & Trade
Economic & Political Governance
Public Sector Management, Institutions & Reform
Natural Resource Management & Environment
Thematic analysis: Structural transformation and natural resources
Author: Jamal Zayid
- The outlook for the Sierra Leone economy remains positive in the current and medium terms, with sustained economic growth, falling inflation, and improved fiscal and external positions.
- Sustaining the gains achieved requires enhanced service delivery and job creation.
- The policy focus needs to be on achieving inclusive growth through accelerated human development and good governance.
The authorities in Sierra Leone have made reasonable progress since the end of the civil conflict in 2002, albeit under challenging economic and social conditions. The economy continues to record impressive growth rates; domestic revenue is gradually improving despite the historically low revenue effort; the deficit has been falling as a share of GDP; inflationary pressures are trending down, following a surge that had been reinforced by the global crises. Despite increased external borrowing to finance infrastructure projects, Sierra Leone’s risk of debt distress remains moderate, amidst recent fiscal consolidation. The external position is also (marginally) improving following a surge in export of minerals and a growing volume of cash crops. The exchange rate is market determined and has remained relatively stable over the past few years. The socio-political situation continues to remain peaceful and social indicators are steadily improving, as poverty headcount and inequality generally declined. The outlook for the economy in the medium term is favourable with sustained economic growth, low inflation, and improved fiscal and external positions. Real GDP growth is projected in the double digits for 2014 at 13.8% and it is estimated at 16.3% for 2013. This will follow from continued increases in irono reproduction and export, increased productivity in non-mineral sectors, especially agriculture and construction, and continued public investment.
Going forward, the authorities will face some economic and social challenges mainly in the governance area. They need to sustain economic growth and entrench macroeconomic stability, create jobs and improve social indicators, support private sector development, develop social policies and enhance programmes designed to protect the most vulnerable segments of society, and above all, continue the fight against corruption.
Table 1: Macroeconomic indicators
|Real GDP growth||15.2||16.3||13.8||11.6|
|Real GDP per capita growth||16.9||10.2||11||8.8|
|Budget balance % GDP||-5.6||-2.1||-4.6||-4.1|
|Current account balance % GDP||-39.4||-17.2||-11.2||-15.9|
Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.