Sierra Leone’s economy grew by 7.8% on average during 2003-2014 but contracted by 21% in 2015 following the Ebola outbreak and a decline in the price of iron ore, the main export product. Although the country was declared Ebola free in March 2016, the economic recovery has been volatile. Growth rebounded to 6.4% in 2016 only to decelerate to 3.8% in 2017 and remaining roughly stagnant at 3.7% in 2018. Adding to the challenge of recovery, a large landslide hit Freetown in August 2017, further disrupting economic activity and slowing the pace of the recovery.
The current growth patterns have slightly reversed the gains in poverty reduction: per capita income, estimated at US$506 in 2018, remains below its pre-Ebola level ($660) compounded by a population growth of about 2%. The 2018 Sierra Leone Integrated Household Survey provisionally puts the overall poverty headcount at 56.7% compared to 53.8 in 2011. The poverty rate remains higher in rural areas (72.2%) than urban towns (18.4% in Freetown).
Broad macroeconomic stability is yet to be assured. Inflationary pressure has persisted due to the depreciation of the exchange rate, food supply constraints early in 2018 and the adverse impact of the liberalization of fuel prices in July 2018. The Bank of Sierra Leone increased the policy rate (MPR) by 200 basis points to 16.5% in December 2018 in a bid to reduce the high inflation. The Leone depreciated by 12.0% year-on-year, underpinned by the widening of the current account deficit to 14.0% of GDP (from 11.7% in 2017), following the sharp drop in exports earnings.
The overall fiscal deficit is estimated at 6.6% of GDP in 2018, a considerable reduction from the 8.6% of GDP in 2017. Total domestic revenue increased to 17.2% of GDP in 2018 (from 14.9% in the previous year) due mainly to elimination of fuel subsidies, reduction of excessive duty and tax waivers and introduction of a treasury single account (TSA).
Total public debt reached 66.3% of GDP in 2018 (from 64.6% of GDP a year earlier), reflecting depreciation of the exchange rate as well as the increase in domestic debt. The recent World Bank and IMF Debt Sustainability Analysis assessed the country to be at a “high risk” of debt distress for both external public debt and overall public debt.
Growth is expected to improve to 5.4% in 2019 and stabilize at 5.2% by 2021, largely reflecting the recovery in mining sector but also improvements in agriculture and services.
Sierra Leone held general elections on March 7, 2018 to elect a new president, members of Parliament and local councils in the fourth cycle of elections since the civil war in 2002. Opposition Sierra Leone People’s Party (SLPP) candidate, Rtd. Brig. Julius Maada Bio won in a run-off after the first round failed to produce an outright winner. The losing All People’s Congress (APC) won majority in Parliament with 68 seats to the SLPP’s 49. Two new parties – the Coalition for Change (C4C) and the National Grand Coalition (NGC) – won eight and four seats respectively. Three independent candidates were elected. This is the first time a winning party has failed to have majority in Parliament.
The new administration on January 29, 2019 launched three Commissions of Inquiry (COIs) to probe into the governance activities of the past administration covering 2007 to 2018. Persons of Interest include former president, vice presidents, ministers, deputies, and other civil and public servants. The judge-led Commissions are expected to hold proceedings for six months though there is provision for an extension should the need arise. The main opposition party filed a case in the Supreme Court seeking clarifications on some constitutional provisions, which they allege had been breached by the government in setting up the Commissions.
The Sierra Leone Parliament on February 22, 2019 ratified a State of Public Emergency proclamation made by the President on rape and other forms of sexual violence against women and girls, but the main opposition insists the debate was inconclusive and that “a Public State of Emergency does not exist.”
Political tension between the ruling party and the opposition came to a head following a local council by-election in the Kambia District, which was won by the ruling party candidate. The two opposition parties (APC and NCG), which contested in the election, rejected the results.
Until the outbreak of Ebola in May 2014, Sierra Leone was seeking to attain middle-income status by 2035, but the country still carries its post-conflict attributes of high youth unemployment, corruption and weak governance. The country continues to face the daunting challenge of enhancing transparency in managing its natural resources and creating fiscal space for development. Problems of poor infrastructure and widespread rural and urban impoverishment persist despite remarkable strides and reforms.
Last Updated: Apr 09, 2019