By Sallieu S. Kanu
The rebased Gross Domestic Product (GDP) shows that Sierra Leone’s economy is bigger than we had previously estimated. The size of the Sierra Leonean economy has increased from about US$4.0 billion to US$8.0 billion with GDP per capita increasing from US$492 to US$857, the Minister of Finance said on Friday when delivering the ‘Government Budget and Statement of Economic And Financial Policies’ for 2025 in Parliament.
Sheku Ahmed Fantamadi Bangura said this is primarily driven by improved measurements of the agricultural and services sectors, as well as
increased coverage of informal activities across all sectors.
He said that the rebased GDP changes in the structure of the economy with the share of agriculture declining to 34 percent from 60 percent. “The services sector is now the largest sector accounting for 43 percent of GDP. The share of industry has also increased from 7 percent to 21 percent.”
He said that the macroeconomic implications of the rebased GDP are that, the debt to GDP ratio has dropped from 94 to 54 in 2022 and further down to 53.4 in 2023. “Total domestic revenue to GDP ratio declined from 12.4 to 7.2 in 2022. It increased to 7.9 percent of GDP in 2023. The lower ratios indicate that there is more room to improve on domestic revenue mobilization,” the finance minister said.
Fantamadi Bangura said the rebased GDP also shows that the economy is more resilient than we envisaged, the economy grew by 5.7
percent in 2023 after growing by 5.3 percent in 2022. “The economy continues to demonstrate resilience in 2024 and is projected to grow by at least 4 percent,” he said.
He noted that increased agricultural and mining activities and recovery of the services sector
combined with declining inflation and stable exchange rate are expected to boost
growth in 2024.
The finance minister said that high frequency economic indicators for the first half of the year, including improvement in the Composite Index of Economic Activity (CIEA), business sentiments, growth in credit to the private sector, and increased exports indicate that the economy is on track to attain the projected growth rate for 2024.
“Inflationary pressures which persisted in recent years, continue to ease in 2024, declining from a historic peak of 54.5 percent in October 2023 to
20.2 percent in September 2024, as tight macroeconomic policies take hold, global prices of food and energy softened, exchange rate stabilised, combined with increased domestic food production,” he said.
He said that the trade balance improved in the first half of 2024, narrowing to US$248.1 million from US$286.4 million in the corresponding period in 2023, on the back of strong growth in iron ore exports.
“Total merchandise exports increased by 18.2 percent to US$806.4 million in the first half of 2024 from US$682.1 million recorded in the same period in 2023. Mineral exports, which accounted for 88.2 percent of total exports
receipts, increased by 17 percent to US$711.0 million, with iron ore exports increasing by 21.3 percent to US$490.9 million.”
The finance minister told Parliament that the value of total merchandise imports increased by 8.8 percent to US$1.1 billion in the first half of 2024 from US$968.6 million in the corresponding period in 2023. He said that food imports declined by 12.3 percent to US$197.0 million. “Rice and petroleum imports amounted to US$72.9 million and US$260.1 million,
Respectively,” he said.