By Alusine Sesay
President Julius Maada Bio has asked the Governor of the Central Bank of Sierra Leone to proceed on leave, sources at the Bank said on Tuesday.
Professor Kelfala Kallon was said to have received a letter to the effect on Monday.
Dr Ibrahim Stevens, the substantive deputy governor, is to act as the governor of the central bank. The university professor has been Governor of the Central Bank of Sierra Leone since August 2018.
His sacking came at a time when Sierra Leone’s sustained economic growth has been constrained by exposure to multi-dimensional exogenous shocks (economic, epidemic, climatic); fragile institutions; and limited fiscal space.
During 2021, the economy grew by 4.1%, supported by a recovery in agriculture, mining and private consumption demand. During 2022, headline inflation accelerated to a decade-high of 30% (year-on-year) by July, compared to an average of 12% during 2021.
High food and fuel inflation has had significant social impacts. According to the World Food Programme (2022), about 73% of Sierra Leoneans are food-insecure. The poverty rate is estimated to have increased during the pandemic in early 2020. Fiscal pressures have intensified. In response to COVID-19, the deficit rose from 3.1% of GDP in 2019 to average 6.2% of GDP during 2020-21. During 2022, inflationary pressures have prompted authorities to increase energy subsidies and cash transfers to vulnerable households, slowing the planned fiscal consolidation.
According to the World Bank outlook, A nascent economic recovery was disrupted in 2022 by a net negative terms-of-trade shock with the onset of the war in Ukraine and the rise in global food and fuel prices (only partially mitigated by higher prices for key exports). The increase in fuel prices also resulted in pervasive power outages.
GDP growth is now projected at 3.6% during 2022, down from 5% projected at the end of 2021, according to the World Bank.
Over the medium-term, GDP growth is expected to average 4%, but remain below the long-term average of 4.3%, reflecting economic scarring from repeated shocks.