Government of Sierra Leone has announced austerity measures, including huge cut in public spending across the board and freezing of all government projects. The government said that the aim is to stabilize its finances following a prolonged economic slump.
A meeting today, Tuesday, chaired by President Bai Ernest Koroma announced the austerity measures aimed at addressing a depreciating foreign exchange rate, lower prices of minerals such as iron ore and a poor tax compliance rate.
“These measures will be implemented up to the first half of 2017 in order to stabilise the current situation,” Koroma told cabinet ministers.
“If we are able to fight Ebola, we should be able to put up a fight that will turn around the economic fortunes of the country.”
Under the austerity measures the purchase of new cars and office equipment has been banned and domestic and international travel budgets slashed. Paid overtime has also been scrapped even as the government is also likely to consider addressing fuel subsidies after the International Monetary Fund (IMF) said that elevated levels of spending on petrol could leave it unable to pay civil servants salaries.
The the austerity measures are expected to bring in savings of 309 billion leones ($69 million), targeted within six months by cutting into ministry budgets, and enforcing more stringent revenue gathering.
The economic shock of the Ebola crisis and difficulties faced by the country’s key commodities sector have led the government to undertake the seven-month review of its finances. [myad]
