The new Minister of Finance and Economic Development, Dr. Kaifala Marah has said that, “the economy is projected to expand by 15.1% in 2013 and further by 14.1% and 12.1% in 2014 and 2015 respectively.
Dr.KaifalaMarah made this statement during the reading of the 2013 Government Budget in the Well of Parliament at Tower Hill in Freetown on Friday 21st December 2012.
He pointed out that this forecasted growth would be driven mainly by “increased activities in the mining sector.” He however noted that excluding the iron ore “the economy is expected to grow by an average of 6% during 2013 to 2015.”
The Minister who was approved by parliament and sworn in the day before (Thursday 20th), gave an overview of the 2012 fiscal operations detailing overall budget deficit (excluding grants) of Le733.7billion which is 4.9% of GDP.
These he said would be financed “largely by external sources” like project and program loans, domestic financing, bank financing, non-bank financing and privatisation receipts.
He outlined policy reforms, the most important of which was directed at the mining sector. He disclosed that a “consolidated and comprehensive extractive industries revenue bill” has been drafted which will introduce “a Mining Resource Rent Tax” and a “Petroleum Resource Rent Tax”. These he said are to “enable government derive additional tax revenues from these activities in the event profits are above projections.”
The Finance Minister also disclosed that plans are underway for “the establishment of a Transformation Fund, where slice of all mineral and petroleum tax and non-tax revenues will be deposited.” He pointed out that the Transformation Fund would be a part of the consolidated revenue fund “so that all revenues (will) flow through the government budget.”
This fund however he noted will serve three complimentary purposes which are:- “Finance the implementation of transformative capital projects (ii) serve as a stabilisation fund in case of shortfall in non-extractive revenues and (iii) as a savings fund for surplus revenues.”
Agriculture, construction and services he expects, along with “scaling up infrastructure investments will be the main drivers of the non-iron ore economic growth in the medium term.
The Minister projects that inflation will return to single digits in 2013, and there will be “a significant growth in exports at 40% while imports will moderate to an average of about 11%.”
To achieve its aims, the Minister said that government will be “implementing a combination of proactive monetary policy, a cautious debt management policy and a prudent fiscal policy.”
After outlining the economic policies for 2013, in a process which took up the entire morning of, the Minister then put forward a Government Motion to authorize him pursuant to Section 113 of Act No 6 of the 1991 Constitution of Sierra Leone to withdraw over Le 831 Billion from the consolidated fund to meet necessary expenditure of Government for a period of four months, starting 1st January, 2013 or the coming into operation of the Appropriation Act of 2013, whichever is applicable.
Mr. Speaker puts the motion as was read by the Minister, the Deputy Minority Leader of SLPP, Ansu J. Kaikai in his contribution encouraged Members to support the motion, which without further deliberations was unanimously carried by the House. The Speaker then adjourned Parliament to the 17thJanuary, 2013.