Sierra Leone: Sub-Sahara Africa Hits Lowest Growth Level In 20 Yrs

The International Monetary Fund (IMF) country representative,Dr. Iyabo Masha said the World Economic Outlook October 2016 regional edition Growth in Sub-Sahara Africa (SSA) is projected to decline to 1.4 percent in 2016 the lowest in the past 20 years. Growth in 2010 for the sub-continent was 5.3 percent and in 2015 fell to 3.4 percent. 

Sierra Leone is projected to grow at 4.9 percent in 2016 and at 5.4 percent in 2017. This, she emphasized shows how the situation varies in the individual countries and in some places above the 1.4 percent average in the region.

“The situation is not all that gloomy, we see differences in individual countries,” she said. She stresses that non-resource countries like Ivory Coast, Ethiopia are doing very well. The overall growth picture of the sub-continent is not encouraging, but the individual stories are different. A growth of 4.9 percent in 2016 is a strong growth prospect for a country like Sierra Leone and this will increase in 2017, she noted. Commodity exporters especially oil exporters like Nigeria and Angola 2 of the 3 largest commodity countries in the region are under severe economic strains.

The Deputy Governor of the Central Bank Ibrahim Stevens spoke on the second chapter of the report which deals with the evolution of exchange rate regimes in the region since 1980 and considers the impact on inflation, output growth, output volatility, and fiscal outcomes relative to other emerging markets and developing countries in Asia. He noted that the peg or floating exchange rate regimes have been adopted by different countries. Some he said have adopted the intermediating regime that is flexible partly pegged and partly floating.
He said that at some point Sierra Leone pegged the value of its currency to the Pound Sterling but the Leone was too strong and this regime was later abandoned.

The impacts of natural disasters on the various economies were also discussed. This forms the third chapter of the report. “It finds that sub-Saharan Africa is highly vulnerable to natural disasters.”

Severe drought that has recently affected most of eastern and southern Africa is cited as examples. “Structural factors such as a high reliance on rain-fed agriculture, capacity constraints for preparedness as well as post-disaster response, and limited access to insurance contribute significantly to these vulnerabilities. In particular, natural disasters exert long-term economic damage to the region’s economies, due to their adverse effects on human capital and infrastructure.”