Sierra Leone Economic Outlook
- The economy recovered from the after effects of the Ebola epidemic, growing by 4.3% in 2016 from -21.1% the year before.
- The country has introduced austerity measures in the 2017 budget, and is clearly moving towards a more restrictive trade regime by introducing new tariffs.
- To overcome the difficulty of accessing credit for SMEs, the National Strategy for Financial Inclusion (2017-20) was launched in late 2016.
Sierra Leone has achieved commendable economic growth rates in the post-war period that peaked at 20.7% in 2013 with the launching of the government’s Agenda for Prosperity 2013-18 (A4P). The continued double-digit gross domestic product (GDP) growth resulted from resumption in iron ore production combined with government investment in infrastructure as well as buoyant activities in agriculture, tourism and services. The impressive growth rates were, however, disrupted by the twin-shocks of: i) unprecedented decline in international ironore prices starting in late 2013; and ii) the outbreak of Ebola Virus Disease (EVD) in 2014, together culminating in GDP contraction of 21.1% in 2015. Sierra Leone is essentially a supply-constrained mono-cultural economy depending on a few commodities for output and export. Following these shocks, the authorities, in very close partnership with donors and other stakeholders, prioritised the country’s immediate strategic interventions in the context of the Post-Ebola Recovery Plan (PERP), which is a refocusing of the A4P as launched in late 2015.
With nominal GDP projected at SLL 22.69 trillion in 2016 (IMF projection of USD 4.289 billion for 2016), Sierra Leone is the 154th economy in the world and 38th in Africa but offering significant business opportunities. The economy is recovering from the twin shocks, and real GDP growth recovered from -21.1% in 2015 to 4.3% in 2016. Much of the recovery comes from the contribution of non-iron ore sectors reflecting improvements in agriculture, construction, electricity and other services. Although there is a modest recovery in iron-ore prices, the impact of the resumption of iron ore mining is yet to become buoyant due to its limited scale.