FREETOWN, July 30, 2020 – According to the new World Bank Sierra Leone Economic Update launched in Freetown, the COVID-19 pandemic is having a significant impact on the country’s medium-term growth prospects and the economy is projected to contract by 2.3 to 4.0 percent in 2020 due to disruption in global trade, travel restrictions and domestic restrictions on mobility. The fiscal and current account deficits are expected to increase due to increased crisis-related spending while inflation is also expected to rise.
The report recommends in the short term ramping up investments in public health, protecting the most vulnerable through cash transfers and other preventive measures in the context of limiting fiscal space. In preparation for the long-term recovery, the authors highlight that policy measures should focus on structural reforms to accelerate inclusive growth and diversify the economy, as well as efforts to strengthen fiscal buffers, improve debt management and transparency, and deepen financial reforms will be key.
“To respond to the pandemic, it is important to focus on measures to save lives and protect livelihoods as part of the immediate response,” said Youssouf Kiendrebeogo, World Bank Senior Economist and author of the report. “Preparing the economic recovery will involve structural reforms to accelerate inclusive economic growth, as well as fiscal consolidation and a prudent monetary policy to stabilize the macroeconomy.”
The 2020 Economic Update takes a specific look at girls’ education and highlights that similar to 2014 Ebola crisis, COVID-19 is likely to affect adolescent girls’ education prospects and their human capital potentials. Evidence shows that adolescent girls are especially at risk when they are out of school as the risks of being married or having a child too early are magnified. In turn, child marriage and early childbearing make it hard for girls to later return to school, leading to long-lasting negative impacts.
The report identifies the need to prioritize investments in girls. With schools currently closed due to the pandemic, the study recommends as immediate priorities support to students and families to cope with the crisis and ensure that learning continues while they stay at home.
In response to the crisis, the government introduced the Quick Action Economic Response Program in addition to the health sector COVID-19 Preparedness and Response Plan to reinforce the crisis response and facilitate economic recovery.
“We welcome the government’s efforts to deal with the crisis and lessen its impact on people’s livelihoods. The COVID-19 crisis has had a negative impact on Sierra Leone’s recent fiscal consolidation gains. The loss of export earnings and lower foreign direct investment inflows, coupled with the need to sustain essential food and medical imports, add up to a substantial gap in financing the balance of payments,” said Gayle Martin, World Bank Country Manager for Sierra Leone.