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Sierra Leone News: IMF discusses capital flow, future of work and its implication for Sierra Leone

The Resident Representative of the International Monetary Fund (IMF), Iyabo Masha, has said it is clear that Sierra Leone’s economy has evolved in the past one to two years, “But, this year we can say that recovery is underway.” Iyabo Masha who was speaking at the IMF Seminar on the October 2018 Sub-Saharan Africa (SSA) Regional Economic Outlook – Capital Flows and The Future of Work, at the Ministry of Finance Conference Room on Monday 3rd December 2018 added “What we see in Sierra Leone is not different from what we see happening in other African countries.” The IMF, she said, expects the recovery to continue this year, even though they were of the opinion that it would have been a stronger recovery had it not been for the production halt in the iron ore sector. Iron ore production accounts for 25% of the country’s GDP, which means that the country is only running on three quarters of GDP. “This year, we were looking at 3.7% GDP growth, but with all the reforms put in place with support from donors because of the IMF program and with the Treasury Single Account (TSA), public finance management and revenue mobilisation reforms, we are looking at 5.1% growth next year and a good chunk of that will be coming from the non-extractive sector,” she hoped. On capital flows, Masha noted, there is more foreign direct investment (FDI) here because Sierra Leone does not really attract portfolio flows, as there are no foreign holders of treasury bills and there is also a liability flow with a sizeable chunk of debt. “So for the FDI flow, we need to improve policy implementation frameworks, the business environment, policies to be introduced that is supportive of private sector participation. That includes being able to protect investor’s rights and dispute resolutions processes. As these are the little things investors look for when they determine where to invest,” she said. “Can our economies create enough jobs to move people out of poverty?” she asked when commenting on the future of work for SSA countries. The continent is faced with an environment where the use technology poses challenges and opportunities, and as such countries need to put in place whatever is necessary whilst mitigating the challenges. Moving forward on the job creation front, the Representative said, Africa must look to its educational system, which is not modeled to create jobs. The curriculum in SSA countries was developed at a time when the only job available was as an officer in Her Majesty’s Colonial Office. “We cannot be bringing out people who are medieval in literature or history. We need to focus on skills and technology, so that when they move from the classroom they jump into the next job,” she said. “The World Bank will start working with countries on a curriculum review.” In response to discussant Sheka Bangura, Director, Central Planning, Ministry of Planning and Economic Development, on where investments are being made, Masha said that Sierra Leoneans are not in a position to determine where foreign investors go but agrees that a lot of it goes to mining. “I believe that there are a lot of opportunities in other areas than mining but we need to do a lot to show them that there are other areas they can go into besides the mining sector,” she said. Bank Governor, Kelfala Kallon, said in terms of foreign direct investment all that is required of them is to be a good government by doing the right things, which are reducing the cost of doing business. “… So that foreign investors have confidence in our economic system and they will trust us with their resources.” Presentations were done by Iyabo Masha on Recovery and Rising Risks and Capital Flows to Sub-Saharan Africa: Causes and Consequences, whilst the Future of Work was done by Mathew Sandy, Senior Economist at the IMF Resident Representative Office.

ZJ/3/12/18

By Zainab Iyamide Joaque

Tuesday December 04, 2018.

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