Head of the International Monetary Fund’s recent mission to Sierra Leone has observed that the country’s"economic growth accelerated to15.2 percent in 2012, reflecting the emergence of large-scale iron ore extraction as well as sustained expansion in agriculture, services, and construction.”
Malangu Kabedi-Mbuyisaid real Gross Domestic Product (GDP) was projected to grow at 13 percent in 2013.
The mission was in Freetown recently to discuss the 2013 Article IV consultation and a three-year economic and financial program that could be supported under the extended credit facility, ECF.
According to apress release from the Fund, the team found out that consumer price inflation declined from 16.9 percent in 2011, to 12 percent in 2012, aided by “prudent monetary policy and stable exchange rate”. It is forecast to decline further in 2013. Sierra Leone's external position improved in 2012, strengthening the reserve coverage.
However, Kabedi-Mbuyisaid that they also discovered that “the overall budget deficit reached 5.6 percent of non-iron ore GDP, up from 4.6 percent in 2011 partly reflecting infrastructure investment scaling up and higher spending in goods and services. The deficit was financed largely with short-term treasury bills. For 2013, the budget deficit would be contained below 4 percent of non-iron ore GDP, thanks to the expected increase in revenue mobilization, and enhanced expenditure management”.
She held discussions with finance minister Kaifala Marah,Central Bank Governor Sheku Sesay,parliamentarians, representatives of the business community, and development partners.
The discussions focused on creating fiscal space to continue supporting investment in infrastructure and human development, reducing inflation to single digits, facilitating access to financial services, and creating an environment conducive to private sector development and job creation.
The mission agreed with the authorities that medium-term structural reforms should focus on bolstering revenue mobilization, strengthening public financial management, maintaining prudent borrowing policies, and deepening financial intermediation.
In a post meeting press statement, the global financial institution said: “The mission reached preliminary understandings with the authorities on key elements of a medium-term economic and financial program that could be supported by the IMF under the ECF. Discussions between the mission and the authorities will continue in coming weeks”.
© Politico 23/05/13
