The Country Representative of the International Monetary Fund (IMF) Iyabo Masha says the impact of Brexit on official development assistance from Britain to Sierra Leone is shrouded in uncertainties as her organisation the IMF does not know what the policy of the new Conservative Government on immigration and development assistance would be.
“England is one of the key supporters of Sierra Leone when it comes to budget support, projects, a lot of support in health, in energy, in education, in public finance management. They have a very big programme in Sierra Leone,” she said. “But what we don’t know is the direction a new conservative government would be. All of these are shrouded in uncertainties.”
There are Sierra Leoneans who have settled in the United Kingdom (UK) and the rest of Europe and remittances from them to support families and friends in Sierra Leone is key to the economy she noted.
“We are of the view that to the extent that there is substantial amount of remittances coming to Sierra Leone from Sierra Leoneans based in England, any policy that limits immigration or the access of immigrants to jobs and any policy that results in lower employment even in England could mean a decline in remittances from Sierra Leoneans who are based in England and Europe too,” Madam Masha stressed.
“We don’t know what shape or form Britain’s new association with the EU will take, what agreements they are likely to reach on things like immigration and key trade in goods and services,” she emphasized.
She discussed Brexit during a press briefing in her Freetown Office last week after reading the IMF press release that announced the disbursement of $34.12 million to the country. This is the fifth disbursement under the Extended Credit Facility (ECF) arrangement, bringing total disbursements under the arrangement to $226.45 million. There are usually 6 disbursements under the ECF. Meaning the country is hoping to get one more disbursement under the arrangement.
Discussing the issue of fuel subsidy, she noted that the current price structure has an implicit subsidy built in to the retail price of fuel and that is what the authorities are working on to see how they can arrive at a pricing structure that is more reflective of market condition and does not also cost the budget excessively. The retail price of Fuel is Le3,750 per litre. The commercial price is reviewed every fortnight.
“We absolutely support the president’s call on Sierra Leoneans to use the domestic currency more. This is one of the things that will increase the demand for the Leone and then reduce the demand for Dollars which will then result to a more stable exchange rate,” the IMF boss said. She related the depreciation of the Leone to major foreign currencies to the loss of some key exports due to the closure of the iron ore mines. The drop in exchange rate has been relatively rapid. There are some projections that commodity prices will recover. “That’s where we see the moderation of the exchange rate coming from,” Madam Masha said.
Monday July 11, 2016
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