By zainab.joaque@awokonewspaper.sl
Freetown, SIERRA LEONE – The Central Bank’s recent analysis indicates a positive outlook among businesses, with business sentiment scores reaching 2 and 3 in January and February 2024, respectively. These scores reflect a general optimism and confidence regarding both current and near-future economic conditions.
In a comprehensive business perception survey conducted by the Bank during September, October, and November 2023, questionnaires distributed through Google Forms garnered a diverse response from businesses nationwide. The collected responses provided valuable data for the AFINN-111 lexicon model, analyzed using R software. Results showed sentiment scores of -2, 0, and -3 in September, October, and November, respectively, indicating a negative business perception during that period.
Furthermore, the Bank’s Composite Index of Economic Activities (CIEA) displayed positive growth in economic activity during 2023Q4, contrasting sharply with the contraction observed in 2023Q3. This growth is attributed to increased exports and currency in circulation, while growth in capital expenditure moderated. However, imports, wages and salaries, and goods and services tax saw decreases in the reviewed quarter.
Looking ahead, growth in Real GDP is projected to rebound to 4.7 percent in 2024 and 5.2 percent in 2025, compared to an estimated subdued growth of 2.7 percent in 2023. This anticipated momentum will be driven by robust growth in agriculture and mining, an upturn in the services sector, and investments in essential infrastructure, despite continued fiscal tightening acting as a drag.
While growth is expected to remain resilient over the medium term, the Bank notes downside risks due to potential larger government policy interventions, renewed depreciation of the Leone, and global supply chain disruptions stemming from geopolitical conflicts in Europe and the Middle East.
Excluding the iron ore and mining sector, real GDP growth is projected to increase to 4.6 percent and 5.0 percent in 2024 and 2025, respectively, from a weak growth rate of 2.6 percent in 2023. Even in 2025, real GDP growth excluding iron ore and mining is expected to remain robust at 5.0 percent and 4.7 percent, respectively. ZIJ/20/5/2024