There has to be significant improvements in containing the rate of inflation and the current account deficit of the balance of payments. Importantly, this recovery has not been systematically aided by exogenous factors like improved export earnings.
In looking at key issues in the country’s future development, it is crucial, however, to situate this recent recovery in a proper historical context.
Given the experience of the last two decades or so, it can be concluded on the whole, that the economy failed to systematically recover due to a combination of economic vulnerability and weak domestic policies.
Weak policies originated substantially from what an observer has characterized as “overlooking” of market economy fundamentals.
The country still has very large external imbalance which also reflects heavy dependence on external assistance. The saving-investment process remains weak - given the desirable range in the rate of aggregate growth. There has not been significant improvement in the ratio of investment to GDP.
It is clear that the over-arching objective for the economy is going to be the regeneration and acceleration of growth to decisively reverse the long-term decline trend of the past and reduce poverty.
The alarming economic decline of 2014 to 2018 is a painful reminder of the ever present dangers of reversal in the on-going momentum in policy and structural reforms and of destabilizing external shocks. The design of pro-growth and anti-poverty policies through partnerships will, therefore, be crucial in the coming years. This no doubt represents a complex set of issues.
An encouraging dimension in this regard should, however, be pointed out: the human and technical capacity for managing development policies, though still inadequate given the task at hand, has improved substantially since this Government came to power, but still needs considerable improvements in all areas of state governance, management and administration.
Significantly, there must be a stronger basis for shaping and managing the requisite policies, if other supportive elements in society are present. But, of course, the presence of these other elements, like a conducive political framework and good governance generally, cannot be simply assumed.
Important as well in looking at the possibilities for accelerated and sustained economic growth is the problem of structural vulnerability.
This, as was alluded to earlier, originated from the very limited diversification in the economy and from natural disadvantages, all of which imply limited flexibility-in terms of responding to possible (adverse) external shocks to defend an underlying growth dynamic.
Let it be understood, of course, that the existence of a reasonably strong domestic policy-framework and capacity would assist an economy in withstanding better the adverse of an external shock.
All in all, President Bio in bringing about an envisioned national prosperity that will uplift the 60 percent more poor in the country must concentrate policy on effecting significant structural changes - both in terms of export composition (overdependence on primary commodities) and industrialization of at least agriculture and fisheries.
The overarching economic issue this year and beyond will be the acceleration of broad-based growth to raise living standards and reverse the threatening trends in poverty. Key aspects in this objective would have to be the enhancement of the saving-investment process, and growth in total factor productivity.
Sierra Leone must position itself to benefit from the unavoidable process of globalization in trade and investment.
The political economy of all this implies that the state would have to play a strategic role in shaping pro-investment, pro-poor policies and in building critical human and institutional capacities to manage development affairs in the context of globalization.
Strategic partnerships would also need to be forged by the state with the domestic and international sectors, with the bilateral and multilateral donor agencies, and with neighbouring states for widening of regional markets.