What's the point of a 100-day Benchmark three years After the Fact ?
Julius Maada Bio has been president of Sierra Leone since April 4, 2018. One hundred days from that date is Friday, July 13, 2018. So why are Sierra Leoneans talking about his “First 100 Days” more than two years after he took office?
What's the importance of his first 100 days as a benchmark for an administration when non-mining activities are still constrained by the lack of access to power and good roads; and corruption and undeveloped human capital continue to deter investors?
Sierra Leone still ranked 43rd among 47 countries in the region, and although its economic freedom improved earlier in the decade, Sierra Leone fell back into the repressed category in 2019 and remains there in 2020.
An influential public policy organization in the United States calls Sierra Leone 'one of the world’s 10 most impoverished and least developed countries' with the most pressing areas for improvement being financial freedom, government integrity, and labor freedom.
Moreover, Sierra Leone's overall business environment is very challenging and lacks transparency.
The IMF said in a recent report that deepening foreign exchange markets could help level the playing field for businesses. They welcomed efforts to strengthen financial sector stability, through improved guidelines and oversight, and to promote financial inclusion, including by leveraging the Financial Sector Stability Review.
Since coming to office in early 2018, the government implemented key reforms and launched a new National Development Plan with an emphasis on investing in education, infrastructure, and improving governance.
Growth stabilized at 3.5 percent in 2018 before picking up to an estimated 5.1 percent in 2019, on the back of a broad-based recovery of economic activity. At the same time, inflation moderated to under 14 percent by end-2019.
A focus on fiscal sustainability and prudent budget execution saw the overall budget deficit decline from 11.3 percent of non-iron ore GDP in 2017 to 7.7 percent in 2018 and an estimated 6.3 percent in 2019. This helped to stabilize domestic borrowing needs.
The current account deficit also narrowed substantially, although pressure on the exchange rate persists.
While the Sierra Leonean economy has great potential, the immediate outlook is overshadowed by the global COVID-19 pandemic. Based on programmed policies, growth was projected to average around 4½ percent over the medium term.
However, prospects for the remainder of 2020 are subject to considerable uncertainty. The magnitude of the impact will depend heavily on the extent of vital prevention and containment measures—nationally, regionally, and globally—and the associated economic spillovers.
With the fragile Sierra Leonean economy still recovering from the Ebola health crisis and past lax macroeconomic policies, the COVID-19 shock will add to the country’s vast development challenges.
Noting the serious risk posed by the global COVID-19 pandemic, IMF directors welcomed the decisive actions taken to protect the health of the population and to minimize potential economic spillovers. They acknowledged that the discussion on medium-term issues had taken place prior to the outbreak of the pandemic, calling for contingency planning and continued external support given the country’s high debt burden and capacity constraints.
Once the immediate priority to combat the COVID-19 crisis has passed, IMF directors stressed the need to continue ensuring fiscal sustainability and creating space to meet development needs over the medium term. They emphasized the importance of mobilizing domestic revenues, strengthening public and debt management, and improving the management of fiscal risks, particularly from state entities and the financing of large public investments.
Directors welcomed the new Medium-Term Debt Management Strategy, and efforts to develop a transparent and sustainable plan for arrears clearance.
Directors encouraged continued efforts to bring down inflation and enhance the central bank’s operational independence. They recommended in particular improving liquidity management to better align the policy rate with money market rates.
Directors welcomed the National Development Plan, with its focus on addressing governance weaknesses and investing in the education of a young population to establish a strong foundation for sustained development and inclusive growth. They looked forward to further progress in improving the business climate, thereby facilitating private sector-led growth.