By Chernor Alimamy Kamara
As it aims to restore the 5 percent tax increase on imported rice in 2024, the Government of Sierra Leone has proposed to make an increment of 10 percent in 2025 to support local production of rice.
In a speech delivered by the Minister of Finance, Sheku Ahmed Fantamadi Bangura on the 10th November, 2023 while presenting the Government Budget and Statement of Economic and Financial Policies for the Financial Year 2024, noted that the proceeds of this tax will be ring-fenced in the Agricultural Development Fund and used to support the Feed Salone Programme.
He said food prices remain high and could be further disrupted by an escalation of the war in Ukraine, inflicting greater hardship on many low-income countries, including Sierra Leone.
Rice prices continued their upward trend throughout the year-averaging around US$ 495.0 (four hundred and ninety five dollars) in January to US$ 620 (six hundred and twenty dollars) per metric ton in September 2023, Bangura disclosed.
“Fortunately, iron ore prices have averaged around US$120.0 per metric ton and are projected to stay elevated for the rest of the year, following flooding in one of Brazil's biggest iron ore mines,” he said.
The Finance Minister explained that after recovering strongly from the COVID-19 pandemic with a growth rate of 4.1 percent in 2021, the Sierra Leone economy slowed down to 3.5 percent in 2022. He said the economy is projected to grow moderately by 2.7 percent in 2023, but admitted that the uncertain global economic environment, coupled with high food and energy prices continue to weigh on economic growth.
He reiterated that inflationary pressures persisted throughout 2023, reflecting imported inflation, domestic food supply shocks, adjustment in fuel prices, and continuous depreciation of the exchange rate. Inflation surged to 54.5 percent in September 2023, from 37.1 percent in December 2022.
Total value of exports increased by16.1 percent to US$ 659.2 (six hundred and fifty nine million dollars) during the first half of 2023 relative to the same period in 2022, according to the minister. Mineral exports amounted to US$ 584.7 (five hundred and eighty four million dollars), with iron ore exports increasing by 54.7 percent to US$ 391.0 (three hundred and ninety one million dollars).
Bangura affirmed that the total import bill decreased marginally by 0.4 percent to US$ 968.6 (nine hundred and sixty eight million dollars) in the first half of 2023 relative to the same period in 2022. He said that the value of rice and petroleum imports amounted to US$92.1 million and US$305.7 (three hundred and five million dollars), respectively, noting that the combined value of rice and petroleum imports, accounted for 41percent of the total import bill for the review period.
The budget process provides a platform for Parliament to critically look at how resources will be mobilized and allocated to ensure that government is able to fully implement its aims and aspirations for the year.
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