An International Monetary Fund (IMF) press release read by the Country Representative Madam Iyabo Masha yesterday at the IMF country office in Freetown stated that budget implementation will be even more challenging in 2016 than in 2015 because of the decline in budget support and drop in domestic financing, Awoko reports.
“Growth is expected to recover moderately in 2016, with average inflation edging up slightly, driven mainly by further exchange rate depreciation. However budget implementation is expected to be even more challenging than in 2015, given the expected decline in budget support and constrained domestic financing, combined with overspending on wages and the failure to eliminate fuel subsidies,” the release stated.
While the country has not specified ways of stopping overspending on wages and stopping fuel subsidies, the authorities have laid out reform plans to address the challenges of budgetary support and generating revenue domestically.
“The authorities are committed to stepping up reforms and improving public financial management. Key reforms include liberalization of the telecommunications gateway, imposing Goods and Services Tax on all electricity bills and significant reductions in tax exemptions and duty waivers,” the release said.
The IMF has disbursed $34.12 million to the country as the executive board of the world body is impressed with the country’s performance. This is the fifth review under the Extended Credit Facility arrangement, bringing total disbursements under the arrangement to $226.45 million, Madam Iyabo Masha said.
“After many years of strong growth, Sierra Leone’s economy has deteriorated significantly since mid-2014 when the country was hit by twin shocks: the ebola epidemic and sharply lower iron ore prices. Growth declined from 4.6 percent in 2014 to -21.1 percent in 2015. The budget and exchange rate came under pressure, while banking vulnerabilities have increased,” she said citing the press release.
Madam Iyabo Masha sees the country’s economy revamping with the resumption of mining activities and with investments in the agricultural sector.