By Mohamed Jaward Nyallay
The Ministry of Finance has unveiled an economic plan geared towards cushioning the effect of the Coronavirus pandemic on the Sierra Leonean economy.
The Quick Action Economic Response Program (QAERP) is designed to “save lives and livelihoods”, officials said at the launch of the document on Monday.
With an estimated cost of $136 million, the program has five components: building and maintaining stock level of essential commodities at stable prices; provide support for the most affected businesses; expand safety nets; support labor based public works; and support local production and processing of staple food items.
Finance Minister Jacob Jusu Saffa said the implementation of the program was already in motion, with some funds from international lenders like the International Monetary Fund and the World Bank already in, and programs like the social safety net well under way.
“Within the Quick Action Economic Response Program, there is a bread and butter element. Social Safety net targets vulnerable people. We have started rolling it out as I speak. During the lockdown, people with disability benefitted,” Saffa said.
Some of the programs are already in the 2020 budget and some of them are new, added Alimamy Bangura, Chief Economist at the Ministry of Finance.
“So, put together, it is $136 million and that has increased government’s budget by over $100 million, because the twenty something million is already in the 2020 budget,” Mr Bangura stated.
The challenge for government now, as was pointed out by the Chief Economist, is to finance the shortfall. But Mr Bangura said that wouldn’t be much of a challenge, because talks had been ongoing for a while to finance the program.
“We had a discussion with the World Bank originally for $60 million. We have closed that discussion now for $100 million. So we have an extra $40 million dollars. We said we are going to access debt relief, we have successfully concluded that with the IMF,” he said.
All these measures mean that even though government has estimated that it will lose around $100 million dollars in revenue this year, it will also spend significantly more in the current year than it had originally planned.
Deputy Minister of Finance II, Dr Sheka Bangura, told Politico after the unveiling session that at some point in the year the Finance Ministry would have to prepare a supplementary budget.
He said the QAREP was crucial to keep the country on the path of the National Development Plan - a document that details the five-year development plan of the country.
“The QAREP is responding to a crisis that was not programmed. So to keep your economy on track and make sure the National Development Plan is intact, the instrument you use to do the adjustment will be the budget. So you have to come up with a supplementary budget and this becomes an addition to that national program, because you are responding to a crisis that was never there,” Dr Bangura said.
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