He added that this amount will come mainly from multilateral financial institutions. “This will bring the total external resources mobilized for various projects to $613 million, of which 40 percent are grants and 60 percent are concessional loans.” He maintains that this includes resources provided by the European Union (EU), United Nations Agencies, the United Kingdom’s Department for International Development (DFID) and other bilateral partners; and that the total external resources mobilized so far amounts to almost $1 billion.”
He was reading the Government Budget and Statement of Economic and Financial Policies for the Financial Year, 2020 with theme: “Fiscal Consolidation for Human Capital Development and Job Creation” in the Chamber of Parliament, Tower Hill, Freetown on Friday, 8th November, 2019.
According to Mr. Jusus, the 2020 Budget is an attempt to reverse ugly situations. “Whilst the Budget will continue to focus on scaling-up investments in human capital development, it also lays out strategies and targeted interventions to develop skills and create jobs for our citizens, especially women and youth. This will create the workforce required for greater labour market participation and reduce poverty and inequality. The Budget will therefore focus on fiscal consolidation for human capital development and job creation, enhanced by a thriving private sector whilst leveraging on science and technology.”
He went on to say that the Sierra Leone economy is recovering from subdued growth in 2017 and 2018. He added that preliminary data indicates that the economy will grow by 5.1 percent in 2019 compared to 3.8 percent and 3.7 percent in 2017 and 2018, respectively. “The recovery of the economy is underpinned by increased activities in the agriculture sector, higher production of rutile, increased construction activities, and expansion of the services sector. Excluding iron ore, the economy is estimated to grow by 4.5 percent in 2019. After a steady decline from 18.2 percent in August 2018 to 14.1 percent in February 2019, inflationary pressures emerged in March 2019. Headline inflation increased to 14.8 percent and further up to 15.4 percent in August 2019. The increase in domestic prices in 2019 could be attributed to the depreciation of the Leone exchange rate with pass-through effects on imported food and non-food prices. It is expected that the underlying inflationary pressures could moderate to 14.0 percent by end December 2019.
According to the Finance Minister Jacob Jusu Saffa the value of exports more than doubled to $556.6 million during January to June 2019 from $234.6 million during the same period in 2018. The sharp increase is accounted for mainly by re-exports, which increased to $270.7 million from US$13.0 million over the corresponding periods.
Domestic exports increased by $64.4 million to $285.9 million during the first half of 2019 due to an increase in mineral and agricultural exports.
34. The value of imported goods increased by 13.5 percent to $753.8 million for the period January to June 2019 from $661.8 million during the corresponding period in 2018 on account of the sharp increase in the imports of intermediate and manufactured goods, as well as machinery and transport equipment. Food imports however, dropped by 44.0 percent to US$ 131.4 million during the first half of 2019. The value of rice imports dropped by 16.4 percent to $76.6 million as imported volumes dropped by 13.6 percent to 176 thousand metric tons during the same period. Import values for beverages and tobacco dropped by 44.2 percent and animal and vegetable oils by 41.2 percent.
Fuel imports, he said, also dropped by 17.5 percent to $114.8 million. Due to the sharp increase in total exports including re-exports by $322 million compared to the increase in imports of US$92 million, the trade deficit decreased significantly to $197.1 million during the first half of 2019.
36. Gross foreign reserves of the Bank of Sierra Leone increased to $533.2 million (3.5 months of import cover) as at end August 2019 from $483 million in December 2018, reflecting mainly the disbursement of programme and project grants and balance of payment support by development partners.
The official exchange rate of the Leone to major international currencies came under pressure during the year. This reflects the low level of domestic exports, as well as speculative behavior by local market participants. As a result, the Leone depreciated by 11.0 percent against the US dollar from December 2018 to September 2019.
He maintained that relative to end December 2018, the external debt stock increased by 2.5 percent to $1.64 billion as at end June 2019.
Debt owed to multilateral creditors amounted to $1.2 billion, accounting for 73.2 percent; bilateral creditors, $210 million, accounting for 12.8 percent; and commercial creditors, $ 187 million, accounting for 11.4 percent. The stock of domestic debt amounted to Le 6.1 trillion, equivalent to $635.6million as at end June 2019, an increase by 7.5 percent relative to the stock as at December 2018.