The International Monetary Fund (IMF) Chief of Mission in Sierra Leone- Norbert Toe has stated that the “consolidation of peace in Sierra Leone is creating a favourable environment for economic reforms needed to sustain macroeconomic stability, accelerate growth, and reduce poverty.”
The IMF chief of mission explained that real Gross Domestic Product (GDP) grew by 6.4 percent in 2007 and growth is expected to decelerate slightly in 2008 as a result of deterioration in the external economic environment- still better than many of other fragile sub-Saharan African countries.
“Inflation has reverted to double digits since 2007, largely due to global food and oil price developments. International reserves of the central bank, through declining, stand at a relatively comfortable level,”
Toe opined that “the main challenge is to generate fiscal space to raise growth-enhancing public spending as well as sustainable poverty-reducing expenditures.”
He noted the progress in modernizing the National Revenue Authority and the authorities’ effort to enhance the efficiency of public spending by strengthening governance, accountability, and transparency.
In this regard, the IMF envoy welcomed the recent enactment into law of the revised Anti-Corruption Act 2008 and encouraged the authorities to increase oversight over the operations of parastatals, including the National Power Authority.
“The mission concurred with the Bank of Sierra Leone on the need for greater exchange rate flexibility to enhance the effectiveness of monetary policy and contain the second-round effects of the global food and fuel crisis.
The mission welcomed the establishment of the new Monetary Policy Committee and the ongoing progress in implementing the financial sector development plan,” he said.