Welcome to Africanews

Please select your experience

Watch Live

Business

business

Sierra Leone introduces austerity measures to combat economic challenges

Sierra Leone introduces austerity measures to combat economic challenges

Sierra Leone

Authorities in Sierra Leone have introduced some austerity measures as a result of economic challenges that the poor West African nation is facing.

The new measures by the government will see the reduction in government’s spending.

In 2013, the country had one of the fastest growing economies in Sub-Saharan Africa as a result of iron ore boom.

The imbalance of government budget caused by high public expenditure, that is the expenditure exceeding the revenue that the government earns has led to cumulative high deficit.

However, the twin shocks of Ebola and the fall in commodity prices on the international market, had a negative blow on the country’s economy.

The new measures by the government are expected to reduce governments spending.

President Ernest Bai Koroma had told his Cabinet that austerity measures announced in March would be implemented until the first half of 2017 “in order to stabilize the current economic situation.”

The country’s opposition said the economic slowdown is caused by reckless management of the economy and wasteful spending.

“The imbalance of government budget caused by high public expenditure, that is the expenditure exceeding the revenue that the government earns has led to cumulative high deficit” said Sebora Samanoh Kapen Chairman Leader Main Opposition Party – SLPP.

“I don’t think so because recently we had the IMF and the World Bank team here, they came to access our performance under the extended credit facility and we were given a pat at the back for our economic policy and prudent policies “Cornelius Deveaux,Deputy Minister of Information and Communication.

Many of the citizens are doubtful if government spending would have any effect on the ordinary citizen.

“Price of commodities are increasing on a daily bases” said Santigie Conteh,a male trader.

“The Leone is depreciating in the face of the dollar, and its value is plummeting” said Hawa Swaray a female trader.

Abacha Street is one of the busiest streets in the capital, Freetown and is known for its street trading. Traders on the street normally get their goods from Guinea, but the unstable foreign exchange is affecting their business turnover.

As the country braces for this economic meltdown, the International Monetary Fund has advised the government to reduce its subsidy on fuel.

“When you look at the subsidy, which government is providing it goes into billions if not trillions over a couple of years. So it is our conviction that some of these resources are not benefiting the key poor in the country but the rich” said Charles Mambu – Board Chairman Road For Development, Sierra Leone.

The government is of the opinion that if the subsidy is removed, and money spent to support education, agriculture, energy, water and sanitation, it would benefit the citizens more.

View more